After today’s abysmal economic data, the Federal Reserve Bank of Atlanta’s GDPNow model was slashed for the third quarter.
On Thursday, the GDPNow estimate came in at 0.5% for the July-to-October period, down from the previous model figure of 1.3%.
It should be noted that the GDPNow estimate was as high as 2.6% before several downgrades.
From the regional central bank:
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 0.5 percent on September 15, down from 1.3 percent on September 9. After this week’s releases from the US Department of the Treasury’s Bureau of the Fiscal Service, the US Bureau of Labor Statistics, the US Census Bureau, and the Federal Reserve Board of Governors, decreases in the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth from 1.7 percent and -6.1 percent, respectively, to 0.4 percent and -6.4 percent, respectively, was slightly offset by an increase in the nowcast of third-quarter real government spending growth from 1.3 percent to 2.0 percent.”
Many economists and market watchers pay attention to GDPNow because it closely reflects how the Bureau of Economic Analysis (BEA) calculates the gross domestic product.
It is only typically off +/- a few basis points.
If the GDP contracts for the third consecutive quarter, how could anyone not declare this a recession?
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