On Friday, GDPNow and the FRBNY Nowcast both posted third-quarter GDP estimates. GDPNow stands at 3.0%. The Nowcast is at 2.1%. Inquiring minds may be wondering what Hurricanes Harvey and Irma will do to their models. First, let’s review the latest forecasts.
GDPNow Forecast: 3.0 Percent — September 8, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.0 percent on September 8, up from 2.9 percent on September 6. The forecast of the contribution of inventory investment to third-quarter real GDP growth increased from 0.87 percentage points to 0.94 percentage points after this morning’s wholesale trade report from the U.S. Census Bureau.
FRBNY Nowcast Forecast: 2.1 Percent — September 8, 2017
When Will Hurricane Adjustments Take Place?
The answer is no adjustments per se will be made to the models.
Here is a Q&A between Pat Higgins, creator of GDPNow and me.
Mish Question to Pat Higgins
Hi Pat
Can I safely presume your model will not change because of hurricanes? Rather the data that comes in will impact the model, whatever it may be.
Do you have a personal opinion that you can share about the likely impacts of these hurricanes?
Thanks
Mish
Pat Higgins Reply to Mish
Hi Mish – your presumption is correct. GDPNow will only be impacted by the hurricanes to the extent they impact monthly data used by the model. And no adjustments are being made to the model’s forecasts of the yet-to-be released source data because of the hurricanes.
On your second question, I’m afraid I can’t be of much help since the impact of weather-related events on GDP is outside of the scope of GDPNow.
Best regards,
Pat
