GDPNow "Real Final Sales" Forecast Dips to 1.6%

Poor housing reports and poor economic reports on durable goods and international trade took a toll on GDP estimates.

The latest GDPNow forecast is 2.6%, down from and 3.2% on February 16, 4.0% on February 2, and 5.4% on February 1.

  • After this morning's Advance Economic Indicators and durable manufacturing reports from the U.S. Census Bureau, the nowcasts of the contributions of real nonresidential equipment investment and real inventory investment to first-quarter real GDP growth declined from 0.45 percentage points and 1.20 percentage points, respectively, to 0.37 percentage points and 0.95 percentage points, respectively.
  • The nowcast of first-quarter real residential investment growth declined from 0.6 percent on February 16 to -4.5 percent on February 26 after housing market releases from the Census Bureau and the National Association of Realtors.

The previous report was on February 16, but GDPNow posts intermediate points on release dates.

Evolution of the Quarter

The previous report was on February 16. Intermediate effects from February 21 and 26 were posted today.

Real Final Sales

Real final sales are the true measure of GDP. Fluctuations in inventory balance out over time.

Inventory contributes a full percentage point to the GDPNow first-quarter estimate of 2.6%

If we get another bad retail sales report, we can see under 2% GDP, with real final sales close at or below 1%.

Mike "Mish" Shedlock

The economies of US and China are not “slowing down”. They are both still growing, just not as fast as some would want (US 2+%, China 6+%). Again, I don’t see a boom coming, nor do I see a bust coming. Just steady slow growth.

Kidhorn. People have been expressing the same concerns you mention for decades. It’s possible you are correct about the timing of the coming “disaster”, but I wouldn’t be surprised to see predictions of disaster continue for decades without it actually occurring.

I don't believe GDP can drop very much as long as they raise rates, the two are directly correlated, and with GDP really flat line the analysts tend to get worked up over too small to matter moves, however if GDP did fall out of bed then, along with CPI, and throw in housing, etc, then you might surmise that the IMPLIED interest rate is much lower and that the market is actually working, which would come as a shock to everyone, esp the Fed. My question is et tu LIBOR?

Realist. It's different in 2019 than past years. We've never had US debt held by the public increase by close to $2 trillion in a single year. And higher interest rates will make things worse. There is going to be an awful lot of USD sucked out of the economy/stock market in 2019. Smart people will figure this out before the end of this year and start to shift their assets.

Correct me but wasn't libor part of a price fixing scandal, that said! Did you not expect the new sheriff to not come on as a heavy. Passive investing with the stars s garnering the largest percent of the ETF cash flow, while management busily funds share buyback's ergo keeping the loop going......but please someone tell me how does this end......

Indeed. Just watch CNBC enough and you'll know it's true

Realist, what bowls me over is the authority with which you state that China's GDP is growing at 6%. Even most China bulls accept that Chinese official data is fabricated. Obviously you have the inside track ;)

Ambrose, I've read many of your comments and, with respect, I don't think you have a proper grasp of either economics or finance. It's a free world, of course, and you're welcome to air your opinion but you may want to engage some alternative sources for edu-ma-cation purposes.

Hey Lege; what numbers do you want me to use? I was simply saying that both economies are still growing according to official numbers, as opposed to contracting as was implied by planning motive.

What is your authority? Are you privy to some numbers that the rest of the world doesn’t know about?