July 15 2016 Nowcast Update

Let’s check in and see what the various Nowcast models are predicting for 2016: Q2 GDP.

Follow these links to see the NY and Atlanta FED Nowcast reports:

https://www.newyorkfed.org/research/policy/nowcast

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

Why you should care:  The Nowcast and GDPNow are both a “sneak preview” into the thoughts of the FED and a highly probably future.    Economists John Faust and Jon Wright sum it us this way, “…by mirroring key elements of the data construction machinery of the Bureau of Economic Analysis, the Fed staff forms a relatively precise estimate of what BEA will announce for the previous quarter’s GDP even before it is announced.”

Excellent.  This is what we’re looking for!

Taking action:    As I’m certain the FED uses the Nowcast and the Atlanta’s GDPNow (‘GDPN‘) in their deliberations, we must watch it carefully.   Use it to make business and investment decisions ahead of GDP releases.   Stay up with it each week or two – and you’ll be far more educated than your competition!

THE BLOG:  Both the NY and ATL FED have great ‘Nowcast’ graphics:

This week, both readings are closely aligned.  The NY Fed is nowcasting a 2.2% Q2 GDP and the ATL Fed is projecting a 2.4% number.

It’s worth noting that Q2 is behind us.  Thus, while neither of these readings is the ‘true’ GDP number, I suspect the ‘Advance Estimate‘ due out on July 29th will be in the range of these two figures.

How about the third quarter?  Here is the July 15 NY Fed chart Nowcasting 2016:Q3:

Early in the quarter, the NY Fed is forecasting a Q3 GDP of 2.6%.  Yet again, it appears that while the US economy isn’t on fire, neither is chillingly weak.   Once again, steady as she goes.

• Terry Liebman