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GDPNow Real Final Sales Estimate Dives to 1.1%

Following today's retail sales numbers, the GDPNow forecast fell to 1.9% with real final sales at 1.1%

The GDPNow Forecast took another dive today.

Latest forecast: 1.9 percent — March 14, 2018

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. After yesterday's Consumer Price Index release from the U.S. Bureau of Labor Statistics and this morning's retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth fell from 2.2 percent to 1.4 percent.

Real Final Sales

Real Final Sales is the bottom-line estimate of GDP. That GDPNow forecast sits at 1.1%. On February 1, it was 4.1% with the Nowcast at a whopping 5.4%.

At that time I said "Take the under, way under" (in reference to a sports betting over-under line).

I believe GDPNow has messed up ISM modeling. I discussed this at least twice before, most recently on March 7 in Another GDPNow ISM Spike Fades where I shared some Emails with Pat Higgins, creator of GDPNow.

Mike "Mish" Shedlock

This report screams for two warnings to be issued: One to the report generator(s) to update their resume(s) in the event they produce a future such disgrace, and one to any potential down stream users to disregard it's contents.

But Bloomberg keeps telling us that this is a Goldilocks economy? Over and over and over again!

Again, they has been no recovery, and we don't have anything that resembles free trade with China.

I disagree Tony. There has been a steady slow economic recovery throughout the US and the world over the last 9 years. It’s just that the beneficiaries of that recovery have been primarily those at the top. Very little trickles down to the average person. As Mish likes to say, they need deflation to help improve their standard of living in any significant way. (Or as I always say, they need better skills and a better job.)

At this point, it's all goal-seeked mythology. Has been since 2008. If the general public knew the truth, guillotines would be flying off the shelves. I believe we have reached a point where we should concentrate not on macro economic events, but bring it down to the local level. Get to know the neighbors, find a niche in the local community, figure out what we can contribute to enhance quality of life for others in our direct vicinity and ourselves. Some investment choices will need to be made, as well. Are we better off sending our hard earned and saved capital off to Wall Street, and it's .gov sponsors, to be managed by Pareto's Foxes, or should we bring it home to the local level where it can do more for us and those around us, and is under our more direct supervision? Bottom line, the center in this grand Central Planning scheme is exhibiting signs of weakening. As it loses it's grip, those who depend on it are going to find themselves less and less secure. No time like the present to prepare for the inevitable demise of a center that just can't hold. Bedtime reading suggestion; "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay. I read that one 45 years ago, and have benefited ever since. Another, though not for the timid, is "Human Action," by Ludwig von Mises. And a third, "America's Great Depression." by Murray Rothbard. Cheers.

No amount of cheer leading about the gain-buster Trump economy by Fox news, gleefully reporting every bonus, wage increase, or factory opening, can change the fact that the economy continues to add around 200,000 jobs/month and grow at 2%, just like Obama. Now with tariffs and even more immigrant restrictions on the road ahead even 2% is unlikely.

Well put AWC. Each of us, individually, cannot change the overall course of global events, but we can have an effect on our own affairs, and make an impact at the local level. This has been my focus throughout my lifetime, and I don’t think that my approach will ever change; because it works.

Spot on Shamrock.

I've always said GDP forecasts are just quackery.

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