Accounting for gold, GDPNow for Q1 is at +0.4%.
Figure 1: GDP (black), GDPNow (red triangle), GDPNow adjusted for gold imports by Atlanta Fed (brown square), NY Fed (blue square), Goldman Sachs (inverted green triangle), Survey of Professional Forecasters (light blue), all in billion Ch.2017$ SAAR. Source: BEA, Atlanta Fed, Philadelphia Fed, NY Fed, Goldman Sachs and authors calculations.
Here’s the worksheet:
Source: Higgins/Atlanta Fed.
In the space of one week, the nowcast has declined by almost 2 percentage points (q/q annualized).
I am a little skeptical of the GDPnow estimate this quarter. I suspect it is being influenced by significant unresolved seasonality.
If you look at real personal consumption since the pandemic, in 2021 through 2023 the biggest monthly increases were all in January, with the exception of the March 2021 stimulus month, and the biggest monthly decreases were in November or December of the previous year.
The situation reversed in 2024 and this year, with big increases in the previous December and big decreases in January.
I went back and looked at GDPnow for Q1 of last year, and it did have a big decline in late February from 3% to 2%. I can’t tell whether or not that was due to the poor personal spending report for January. By the time the March data was released, the downdraft had disappeared.
I suspect the truer signal is given by averaging December and January, which was +.2% last year and +.1% this year. Of course, this year we also have the tariff frontrunning situation, which makes it even more complicated. But to cut to the chase, I expect much of the free fall in GDPnow will be reversed by the time we get to the actual GDP report.
Volatility in economic data has generally been higher in economic data in the current expansion than in the prior one. Covid messed with activity, as did government transfer programs and shitdowns when they began and ended. In the process, seasonal adjustment had a lot less to do with seasons and a lot more to do with Covid and the Covid response.
It’s rather quaint so see a seasonal mismatch as the result of weather.
“shitdowns”???
You need to sit down and turn off that shutty autocowrong program. I mean shot, shit that thing off.
Urk!!!
Economist Kevin Hassett today: “I can tell you that in the situation room I’ve seen photographs of fentanyl labs in Canada that the law enforcement folks were leaving alone. Canada’s got a big drug problem.”
They should attach a picture of Colin Powell holding up a vial. “I’ve seen photographs! In the situation room, no less!”
Kevin Hassett is flat out lying. They are using fentanyl as a “Weapons of Mass Destruction” excuse for tariffs because Section 232 of the law requires a national security emergency to allow Trump to independently enact tariffs without the permission of Congress. Nobody with a brain in their head believes that this is really about fentanyl, but there goes Hassett on nation TV telling a lie to the public around the world.
Unfortunately, economists are some of the worst people on the planet and use their profession to do enormous damage. It’s shameful. They need to police their own.
It gets worse. I saw Trump’s hapless Commerce Secretary blathering some nonsense about tariffs increasing the value of domestic goods which would lead to lower prices. Talk about cognitive dissonance. I have no idea what was spinning inside his brain…assuming he even has a brain.
You might want to consider that our hosts are economists.
Macroduck: (posted by MDC for Moses Herzog) I think Joseph was referring to the WORST of the profession, not the best of the profession, It’s frustrating to think that Hassett has these kind of credentials. Degrees people of low income would kill to even APPLY for—
Moses Herzog
The rich and powerful corrupt those whom they employ. It has always been so. I don’t know whether the rich have ever been better than they are today, but the powerful are quite bad now, and are in cahoots with the rich. They corrupt thier employees, or employ more corrupt people, than I’ve ever seen before. Colin Powell is an excellent example; his performance during the My Lai investigation made him the obvious choice to sell lies at the UN.
As a result, we get to see more of these corrupt people than we ever did before. Remember that Reagan – not a particularly good person – chose Paul Krugman and Larry Summers as economic advisors. Whatever we may think of Summers, he is not a partisan lackey. In the era of deficit reduction through tax cuts and better health through deregulation, Hassett has consistently found work as an advisor to Republican presidential candidates, never at a legitimate economics shop. He has regularly been criticized by other economists.
People like Hassett encourage people like E.J. Antoni to believe that corruption pays. However, it is because of people like Bush, Trump, Romney and McCain, places like AEI, that people like Hassett can thrive once they show themselves to be currupt. Bad economics is a symptom of a worse problem.
I think that “flat earths” and “holocaust denier” types have always existed, in all professions.
The contrarian personality type is not that rare and its extremes are people who get addicted to pretending they are right and everybody else are wrong. It actually makes them feel smarter than everybody else to make postulates that are widely rejected. The more you present verifiable facts and rational deductions against their postulates, the better/smarter they feel – and they can always fall back on the big “conspiracy and lies” when you “corner” them.
I would call them flat earth economists. They are about as impossible to argue with as a flat earth geologist. Their basic presumptions of reality and logic are just so different that you cannot have a meaningful exchange. I am not sure that they are driven by money as much as by the power of not being put in a corner and ignored.
What has changed (I would say since Fox news and Gingrich) is that these flat earth “experts” are being used for policy rather than entertainment. Politicians used to understand that to make good effective policy you had to try and connect with facts and deal with the world as it actually is – in order to change it to what you wanted it to be.
We may also have lost a lot of the good politicians and people of power who wanted to make a better society – and instead gotten more of the type that simply want to get more for themselves and theirs. Gingrich literally set up the K-street shops where people can write policies and get them passed in exchange for campaign contributions. McCain complained that Senators had stopped forming policies and become full time fund raisers.
The flat earth “experts” serves the purpose of placing some kind of cover over naked self-serving and greed. If you gather a crowd of 10,000 economists you can always find one that will argue a specific point that you want to hear argued. That will work for a politician who don’t care about understanding reality but simply want a cover for some kind of short term goal.
My apologies to our hosts. Like the police profession, I would not say that All Cops Are Bad. But there are an awful lot of bad ones that do a lot of damage and cast doubt on their whole profession. It’s not up to the rest of us to fix that problem.
May I suggest that by now this “Secretary” has earned the title of “Economist” Kevin Hassett