Courtesy of Pam Martens
By Pam Martens and Russ Martens: September 9, 2021 ~
The highly respected and closely watched Atlanta Fed’s GDPNow forecast for the third quarter has been slashed by 41 percent since August 2 – from 6.3 percent GDP growth to a tepid 3.7 percent projected GDP growth on September 2. The next update to its forecast will occur tomorrow after the Producer Price Index (PPI) is released at 10 a.m. (The GDPNow update typically occurs within a few hours of a new data release.)
The Atlanta Fed’s GDPNow model is the seasonally adjusted annual rate. It comes with the following caveat:
“GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow – the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.”
Despite this dramatic deceleration in growth prospects for the U.S. economy in the current quarter, the following headline ran at Bloomberg News yesterday: “Fed Says Growth Downshifted Slightly July-Aug, Cites Delta.”
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