Courtesy of Mish.
Yesterday, the Atlanta Fed GDPNow Model upped its forecast for first quarter GDP from 2.3% to an impressive 3.4%.
Does anyone buy that forecast?
Latest forecast: 3.4 percent — February 1, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 3.4 percent on February 1, up from 2.3 percent on January 30. After this morning’s ISM Report On Business from the Institute for Supply Management and the construction spending release from the U.S. Census Bureau, the forecasts for first-quarter real personal consumption expenditures growth and real private fixed investment growth increased from 3.0 percent to 3.8 percent and 4.7 percent to 8.0 percent, respectively.
Contributions
| Item | 30-Jan | 1-Feb | Change |
|---|---|---|---|
| 1-PCE | 2.08 | 2.62 | 0.54 |
| …..2-PCE Goods | 0.80 | 1.22 | 0.42 |
| …..3-PCE Services | 1.28 | 1.40 | 0.12 |
| 4-GPDI | 0.32 | 0.88 | 0.56 |
| …..5-Fixed Investment | 0.75 | 1.28 | 0.52 |
| ……….6-BFI | 0.65 | 0.99 | 0.34 |
| ……………7-Equipment | 0.39 | 0.62 | 0.23 |
| ……………8-Intellectual Property Products | 0.23 | 0.24 | 0.00 |
| ……………9-Structures | 0.02 | 0.13 | 0.10 |
| ……….10-Residential | 0.11 | 0.29 | 0.18 |
| 11-Government | 0.25 | 0.23 | -0.02 |
| …..12-Federal Govt | 0.14 | 0.13 | -0.01 |
| …..13-&L | 0.11 | 0.10 | -0.01 |
| 14-Imports | -0.89 | -1.08 | -0.19 |
| …..15-Goods imports | -0.76 | -0.94 | -0.18 |
| …..16-Services imports | -0.13 | -0.14 | -0.01 |
| 17-Exports | 0.60 | 0.73 | 0.13 |
| …..18-Goods exports | 0.44 | 0.56 | 0.12 |
| …..19-Services exports | 0.16 | 0.17 | 0.01 |
| Change in net exports | -0.30 | -0.35 | -0.06 |
| 0.00 | |||
| Change in inventory investment | -0.44 | -0.40 | 0.04 |
| GDP Nowcast | 2.34 | 3.38 | 1.03 |
| Final Sales | 2.78 | 3.78 | 0.99 |
Exports, imports, government, and inventories did nothing. Personal Consumption Expenditures (PCE), and Gross Private Domestic Investment added 1.1 percentage points.
This is the largest jump I have seen watching GDPNow.
ISM Report
The ISM numbers were very good, but not enough to trigger that jump in GDP estimates.
From Econoday…
