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A large drop in the Atlanta Fed’s GDPNow prediction

October 1, 2015

The Atlanta Fed has been very accurate at predicting GDP reports weeks to months in advance. I regularly check the GDPNow website (which can be found by clicking here) to see what they are thinking.

Starting in August where GDP was predicted to be just under 1% we saw an intital drop but then a steady rise the whole way to just under 2%. Today the estimate was updated and it is not looking good. The GDP estimate dropped almost a full percent the whole way back down to where it stated back in August.

Something must have changed in the minds of those doing the predictions over at the Atlanta Fed or in the formulas used. The short blurb explaining why is as follows…

The GDPNow model nowcast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 0.9 percent on October 1, down from 1.8 percent on September 28. The model’s nowcast for the contribution of net exports to third-quarter real GDP growth fell 0.7 percentage points to -0.9 percentage points on September 29 following the advance report on U.S. international trade in goods from the U.S. Census Bureau.

The key takeaway being US exports falling. We all know the world is struggling but it seems as though the US is not as sheltered as it would like to be. We now all need to be prepared for GDP in the third quarter to be sub 1%…

Below is the chart.

Evolution of Atlanta Fed GDPNow real GDP forecast

Discussion
3 Comments
    Oct 01, 2015 01:53 PM

    Hey CORE! Looks like the Plunger Team stepped in to pump up the deflating balloon again today.

      bj
      Oct 01, 2015 01:37 PM

      Think the best they can do in the big picture going forward is a controlled crash landing. Very few major corporation are growing organically or have top line revenue grow .

    Oct 05, 2015 05:01 PM

    Keep the diverse news coming Cory! Thanks for all you do.