The first official third-quarter report on US GDP is more than two months away, but the preliminary nowcasts point to a softer-but-still-solid gain, based on several estimates compiled by The Capital Spectator. The question is whether escalating trade-war tension and Turkey’s financial crisis that’s roiling emerging markets will take a bite out of the rosy projections for the US?
For the moment, several widely followed estimates for GDP nowcasting are painting an upbeat profile for the current quarter. The median projection is 3.4% for Q3, based on the numbers presented in the chart below. Although that’s down from Q2’s strong 4.1% gain, a real 3.4% increase in economic output (at a seasonally adjusted annual rate) is a robust advance that will keep the nine-year-old expansion bubbling.
At the high end of current estimates is the Atlanta Fed’s GDPNow model, which is looking for a slight acceleration in growth to 4.3% in Q3 (as of Aug. 9). By contrast, the low number in our sample at the moment is the New York Fed’s 2.6% estimate (Aug. 10).
Relative to those extremes, economists overall are looking for a relatively middling 3.1% gain, based on the average forecast in yesterday’s monthly release of The Wall Street Journal’s economic survey.
It’s still early for Q3 data, of course, and so the current estimates should be taken with a grain of salt. A lot can happen over the remaining two months of the current quarter. Indeed, a lot has happened already, including Turkey’s largely self-inflicted financial crisis that’s reverberating across global markets.
Although Turkey’s economy is tiny fraction of global economic activity, its recent convulsions are resonating near and far. Katie Nixon, chief investment officer for wealth management at Northern Trust, explains why this risk can’t be dismissed, via a recent research note, CNBC reports.
