4th-Quarter GDP Forecasts Off To Weak Start

-edited

GDPNow and Nowcast Forecasts for 4th-quarter GDP are 1% and 0.7% respectively.

The 4th-quarter GDPNow and Nowcast forecasts start off on a weak footing, 1% or less.

The saving grace for GDPNow is its estimate of Real Final Sales, the true bottom-line measure of the economy. The rest is inventory adjustment which nets to zero over time.

Thus, GDPNow sees Change in Private Inventories (CIPI) as subtracting 0.5 percentage points from GDP.

The Nowcast report does not break out CIPI.

Mike "Mish" Shedlock

Comments (41)
No. 1-13
Tony Bennett
Tony Bennett

"The 4th-quarter GDPNow and Nowcast forecasts start off on a weak footing, 1% or less."

...

Interested to see how housing holds up Q4.

August saw long end of yield curve tank 60 bps (most of that since erased). How many fencesitters et al jumped and locked in which drove activity for September (and lesser degree October)? Put me down for a slew of "unexpectedly" poor housing numbers thru year's end.

Mish
Mish

Editor

Bam_Man
Bam_Man

And imagine what GDP growth would look like if the stock market wasn't "magically" up 23%+ year-to-date. The tail wagging the dog.

Casual_Observer
Casual_Observer

Just as I had predicted many months ago. The hit from the tax cut has worn off. We are headed into the decade of 1/1/1 - 1% growth, 1% inflation and 1% rates.

Country Bob
Country Bob

The national average GDP growth rate is a meaningless number, and the economics PhDs have been getting it wrong now for years anyway.

GDP growth in some sectors is MUCH higher than 2%. And in other areas, it is much lower. It is not a normal distribution, so taking the average is misleading at best.

When the advertising companies and newspapers scaled back (or shut down), and a lot of advertising shifted to (mostly) Google... total GDP didn't change. It just moved. Did Google grow enough (in jobs, revenue, etc) to offset job losses etc at the NY Times and WaPo? To offset the shrinkage at Saatchi and Saatchi or Grey Advertising?

A lot of IPO based zombie companies (not just WeDontWork) are imploding. A lot of companies that supply to the shale oil farce (Caterpillar) are in deep trouble. But many other sectors are doing just fine.

Everyone focused on the national average is going to have a bad read (both directions)

Realist
Realist

Slogflation going forward for many years. Slow growth, low inflation.

numike
numike

what could go wrong? Reporter’s notebook: Fog the mirror mortgages are back
With 35% down, you don’t need tax returns, income stated on the application or debt ratio calculations. https://www.ocregister.com/2019/11/07/reporters-notebook-fog-the-mirror-mortgages-are-back/

thimk
thimk

it will be interesting to see how trump spins it .

Casual_Observer
Casual_Observer

Mish are these country bumpkin GDP numbers where you arbitrarily add or subtract inflation to your liking ?

jivefive99
jivefive99

Nobody believes any numbers coming out of this White House anymore

lol
lol

Nothing says dead rotting economy moar than printing forty plus trillion dollars in a single year to drive wait for it ………………….1-1.5 % GDP,lol!

Country Bob
Country Bob

GDP growth rates by state in the USA take nominal state GDP growth rates and subtract CPI (or some other national average)... but the cost of living varies widely around the country, as do the changes in cost of living (aka "inflation"). Most everyone knows this, except perhaps @Casual_Observer

Since CPI understates inflation in high cost areas like Califorinia, the "real" (after inflation) growth rates for CA are overstated (real GDP growth is lower than reported). In the same way, inflation in lower cost areas is below CPI, which means the real growth rates in low cost areas are understated.

Pretty sure Mish, like milllions of others, figured this out since he is moving from high cost Chicago to lower cost Utah. I left high cost New York City a few years back, and moved to a much lower cost locale.

@Casual_Observer saw the mess that is California and moved in to CA, so its not a surprise that he is a little slow