Atlanta Fed Slashes Q4 GDP Forecast in Half

The Federal Reserve Bank of Atlanta’s GDPNow estimate released today forecast a dismal 4th quarter GDP number. The forecast was nearly cut in half from 1.3% on December 23rd to 0.7% today. It remains much worse than the mainstream consensus estimates:

Here’s what the Atlanta Fed had to say, citing the same manufacturing numbers Peter Schiff shared this morning:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 0.7 percent on January 4, down from 1.3 percent on December 23. The forecast for the contribution of net exports to fourth-quarter real GDP growth fell 0.1 percentage points to -0.4 percentage points on December 29 after the U.S. Census Bureau’s advance report on international trade in goods. The nowcast for real GDP growth fell 0.5 percentage points this morning following the Census Bureau’s release on construction spending and the Institute for Supply Management’s Manufacturing ISM Report On Business.”

This seems to be a trend for the GDPNow forecast. As we reported back in October, the Atlanta Fed’s model also slashed its 3rd quarter estimate in half after similarly disappointing economic data.

Now the Atlanta Fed’s estimate for 4Q GDP matches the 0.7% GDP from the 1st quarter of the year. The only problem is that poor number had to be seasonally adjusted upwards several times, as Peter Schiff explained last spring. With an unseasonably warm late fall and early winter, what will the government’s excuse be for a poor 4Q?

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