Following a series of soft data points such as retail sales and CPI both the New York and Atlanta Federal Reserves lowered their second and third Quarter GDP estimates. This follows just two days after the FOMC raised Interest rates.
Following a series of soft data points such as retail sales and CPI both the New York and Atlanta Federal Reserves lowered their second and third Quarter GDP estimates. This follows just two days after the FOMC raised Interest rates. Again the motives and efficiency of the Fed is brought into question.
NY Fed Nowcast
2Q GDP revised down to 1.9% from 2.3% last week, Q3 estimate lowered to 1.5%.
Atlanta Fed GDPNow
2Q GDP revised down to 2.9% down from 3.2 % on June 14.
Jun 16, 2017: New York Fed Staff Nowcast
The New York Fed Staff Nowcast stands at 1.9% for 2017:Q2 and 1.5% for 2017:Q3.
News from this week’s data releases reduced the nowcast for Q2 by 0.4 percentage point and for Q3 by 0.3 percentage point.
The decrease in the nowcast was driven mainly by negative surprises from housing and retail sales data that were only partly offset by positive surprises from surveys and manufacturing data.
The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release.
Latest forecast: 2.9 percent — June 16, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9 percent on June 16, down from 3.2 percent on June 14. The forecast for second-quarter real residential investment growth decreased from 1.8 percent to 0.4 percent after this morning’s housing starts release from the U.S. Census Bureau. The forecast of the contribution of net exports to second-quarter growth declined from -0.23 percentage points to -0.34 percentage points after yesterday’s Import/Export Price Index release from the U.S. Bureau of Labor Statistics.