Courtesy of Mish.
It was not at all obvious how today’s allegedly “solid” retail sales report would affect third quarter GDP estimates. As I have pointed out before, good reports do not necessarily translate that way. It all depends on what the models expected.
The FRBNY Nowcast expected a weaker retail sales report boosting its GDP estimate slightly.
However, the Atlanta Fed GDPNow Model expected a better retail report and its GDP forecast ticked lower.
GDPNow Latest Forecast: 1.9 Percent — October 14, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 1.9 percent on October 14, down from 2.1 percent on October 7. The forecast of third-quarter real personal consumption expenditures growth fell from 2.9 percent to 2.6 percent after this morning’s retail sales report from the U.S. Census Bureau.
Nowcast October 14, 2016: Highlights
- The FRBNY Staff Nowcast stands at 2.3% for 2016:Q3 and 1.6% for 2016:Q4.
- Positive news from this week’s data releases pushed the nowcast up for both Q3 and Q4.
- Higher than expected retail sales data had the largest contribution, particularly for Q4.
