GDPNow Forecast Rises, Nowcast Dips on Same Economic Data
GDPNow Forecast: 3.3% - January 12, 2018
- The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.3 percent on January 12, up from 2.8 percent on January 10.
- The forecast of fourth-quarter real consumer spending growth increased from 3.0 percent to 3.8 percent after this morning's retail sales report from the U.S. Census Bureau and this morning's Consumer Price Index release from the U.S. Bureau of Labor Statistics.
Nowcast Forecast: 3.9% - January 12, 2018
- The New York Fed Staff Nowcast stands at 3.9% for 2017:Q4 and 3.2% for 2018:Q1.
- News from this week's data releases decreased the nowcast for 2017:Q4 by 0.1 percentage point and decreased the nowcast for 2018:Q1 by 0.2 percentage point.
- A negative surprise from lower than expected retail sales accounted for most of the decrease.
The Nowcast model had a small negative surprise on retail sales but GDPNow had a significant positive surprise on the same data.
Once again, note the volatility pf the GDPNow forecast to that of Nowcast.
As I have often stated, it's not the data itself that matters, it's what the data shows vs what the model predicted that matters.
Friday's reports spell that out in spades.
Mike "Mish" Shedlock