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

Comments (23)
No. 1-23
Tony_CA
Tony_CA

The US economy is heading for the moon.

tedr01
tedr01

Looks to me like a recession is right around the corner.

formula57
formula57

So latest is 2.6%, from 3.2%, from 4.0%, earlier from 5.4% - all since February 1!!! I know you have explored GPDNow's methodology and doubtless it makes a valiant effort but what is the utility of taking notice of such wild fluctuations?

Greggg
Greggg

Lumber price/1000 bf when trump was sworn into office was $253.60, today's price $523.00. Plus higher interest rates, housing starts down. My question is who is behind the SJW scheme that is taking lumber companies to court here in the Northwest and stopping them?

lol
lol

gov't will never allow a negative gdp print (ever),unemployment "rate" will never rise again (ever),inflation "rate" will never go above 2% (ever)think stawk market will never correct (ever),in a planned gov't /central bank controlled economy the numbers ALWAYS match the gov't narrative(until they don't) or in the words of Bernie Madoff "the numbers are all that matters"

Ambrose_Bierce
Ambrose_Bierce

whats China's GDP doing?

Realist
Realist

As always, some are predicting a boom in the economy from Trump. Others are predicting a recession or depression coming soon. I will continue to take the slow growth middle ground; roughly 2% growth for the next few years (just like the last 9 years).

MorrisWR
MorrisWR

I am expecting a crash or at least a slow deflation/recession. Time will tell.

Realist
Realist

Hey Morris; the future is indeed hard to predict. You never know when the next black swan event will happen and cause a recession/depression. My fear is that Trump’s US first policies will trigger a trade war that leads to the next global recession. Of course, I expect cooler heads to prevail and prevent it. Who knows what might happen in the future?

KidHorn
KidHorn

I expect a big change to occur before the end of the year. Don't know what it will be exactly, but a big change will have to happen. Anyone looking at our 2019 fiscal situation can see a train wreck coming. Biggest deficits ever with rising interest rates and the FED shrinking their balance sheet is a recipe for disaster.

theplanningmotive
theplanningmotive

Economy slowing down in both USA and China. Japanese industrial production fell sharply. Where is this world boom they are all talking about

Realist
Realist

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.

Realist
Realist

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.

Ambrose_Bierce
Ambrose_Bierce

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?

KidHorn
KidHorn

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.

Richmando
Richmando

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......

TheLege
TheLege

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

TheLege
TheLege

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 ;)

Realist
Realist

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.

Realist
Realist

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