The Atlanta Fed has released its most recent nowcast of next quarter’s GDP growth, and it may be alarming:
This is NOT a metaphor.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2019 is 0.3 percent on March 4, unchanged from March 1. After this morning’s construction spending release from the U.S. Census Bureau, the nowcast of first-quarter real nonresidential structures investment decreased from -0.8 percent to -2.7 percent and the nowcast of first-quarter real residential investment increased from -13.2 percent to -11.0 percent.
I’m not familiar with this model with respect to its reliability, though, so I’ll turn to Kevin Drum to cover that:
Obviously GDPNow is much more volatile than the actual quarterly estimates from the BEA, but they’re usually in the same ballpark. Sudden spikes up and down are sometimes accurate and sometimes not. On the other hand, the three previous drifts downward to near zero were all missed calls, so maybe this one will be too. Stay tuned.
It doesn’t look all that accurate to my untrained eye. But it’s something worth keeping an eye on.
