GDPNow Forecast Dips Slightly to 1.7%, Nowcast Steady

-edited

Economic news took a tenth of a percent off the Atlanta Fed GDPNow forecasts. The New York Fed Nowcast was stable.

The latest Atlanta Fed GDPNow and New York Fed Nowcast were little changed on economic news this week.

The Nowcast was steady at 2.0%.

The GDPNow base forecast and real final sales forecast slipped to 1.7% on October 9 from 1.8% on October 4 following wholesale trade report from the U.S. Census Bureau.

These are muddle through, not recessionary numbers.

Mike "Mish" Shedlock

Comments (23)
No. 1-6
lol
lol

Virtually all growth now is in the public sector,and they're borrowing $300 billion a month to drive that 1-2 % GDP "rate",and an inflation/shrinkflation rate of 12% YOY,quick math,big govt will need to increase borrowing by roughly.wait for it....2 trillion every year to maintain that 1-2% GDP...…..such is life living on a credit card!

Tony Bennett
Tony Bennett

"These are muddle through, not recessionary numbers."

...

I would liken it to the drunk stumble ... on the edge of a 10 story building.

WHEN he finally goes head over heels ... it will be a quick fall ... then Splat.

Light switch moment.

Carl_R
Carl_R

So far the prediction of "slogflation" has been accurate. My expectation that declining growth rates, even in the absence of a recession, would precipitate a bear market, has not happened. To the extent that the proper PE is 1/growth rate, you'd expect that with little growth ahead, PEs would contract. On the other hand, with falling interest rates, to the extent that PEs should be 1/(Interest rate), then PEs can continue to rise. Right now those two forces are working in opposite directions with the result that the market has been largely moving sideways for the last year.

For now it appears that we will need to see actual signs of a recession to initiate a bear market, and that in the absence of that, continued slogflation will lead to a continuation of the sideways market.

FromBrussels
FromBrussels

The present economic situation reminds me of that Keanu Reeves movie 'Speed' about a schoolbus with a bomb on it that will go off when it slows down. Our economic bus drives on cheap debt which is not a endlessly renewable form of energy, so unless a miracle happens the bomb will go off at one point, no doubt about it !

Realist
Realist

Thanks so much Carl for using my “slogflation” term. Slow growth, slow inflation: slogflation.

When do I get my Nobel prize in economics? LOL

Seriously though; the economy continues to do what I have been saying for years. We have had close to a decade of slow, 2% growth.

My projection has been for continued, slow, 2% growth until 2020. This will then slow to 1-2% growth for a few more years, followed by 1% average growth heading to 2030.

After that, growth will essentially zero out for the foreseeable future.

Of course, there will be some variability in each quarter’s Numbers, and my projections are merely averages.

I won’t go into the details for my forecast here as I have given them before.

Maximus_Minimus
Maximus_Minimus

1.7 % GDPNow growth, minus 2% inflation, gives -0.3%. Oh my bad, GDP is always adjusted to the magic inflation number to show perpetual growth.