The GDPNow Model forecast for 1st quarter 2017 GDP plunged 0.5 percentage points to 1.3% following recent economic data.
Today’s dismal trade data was not a factor. Advance trade data on February 28 showed the trade deficit in goods jumped 7.6% to $69.2 billion, and that data was already factored into the model.
The reason for today’s plunge was light vehicle sales on March 2 and the factory orders data yesterday.
Latest forecast: 1.3 percent — March 7, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 1.3 percent on March 7, down from 1.8 percent on March 1. The forecasts for first-quarter real personal consumption expenditures growth and real nonresidential equipment investment growth fell from 2.1 percent and 9.1 percent, respectively, to 1.8 percent and 7.3 percent, respectively, after Thursday’s motor vehicles sales release from the U.S. Bureau of Economic Analysis. The forecast of the contribution of inventory investment to first-quarter growth fell from -0.50 percentage points to -0.72 percentage points after yesterday’s manufacturing report from the U.S. Census Bureau.
GDP Release Dates
What Happened?
Meanwhile, and in a switch in roles from a month or so ago, it is the New York Fed Nowcast Model that seems wildly high.
Competing Models
The Markit forecast was made by Chris Williamson, Markit Chief Economist. For details, please see PMI Services Lowest Reading in 5 Months; ISM Services Highest Reading Since October 2015.
