GDPNow as of today is 5.1% q/q AR for Q3:
Figure 1: GDP (black), August Survey of Professional Forecasters (purple), GDPNow (light blue square), Goldman Sachs tracking (inverted chartreuse triangle), NY Fed 9/11 (red triangle), September FT Booth (blue +). Source: BEA 2nd rel., Philadelphia Fed, Atlanta Fed, GS, NY Fed, FT-Booth, and author’s calculations.
GDPNow is well above other nowcasts, with consumption nowcasted to grow 4.1%, and – perhaps more importantly – “core GDP” 4.7% q/q AR.
Interestingly, the just released FT-Booth forecast, for 2% q4/q4 growth, is more in line with the August SPF, and with the NY Fed nowcast and GS tracking (the FT-Booth 10/90 band is 1.5%-1.7%).
Who cares. GDP much like useries, jobless claims ete ete…since 1980 have become more and more useless. Past the financial crisis there is no debate. Covering a smaller and smaller part of the economy while poverty surges, the gig economy steps in with its independent models of employment which are not covered in these series. The industrial revolution is over. Government data is out of date. It needs a total overhaul.
Jora/Conniesimmons/Johnnydean/Realtruth/Zanni/Frederick Pauper/Mark Redding: Seriously, don’t you have something better to do than throw out a few criticisms of GDP and national income accounting, w/o any documentation?
If the Anglo-Saxon Chronicle is to be believed, the purpose if the Doomsday Book of 1086 (or so) was so that Willian could know what revenues were due him frim his new holdings and what resources he had.
William Petty’s “Down Survey” of Ireland, done at the behest of Cromwell, had the aim of knowing what resources Cromwell has to distribute in payment for services to his government. (Petty hecame rich as a result of producing the survey.)
Article I, Section 2 of the United States Constitution states:
“Representatives and direct Taxes shall be apportioned among the several States… according to their respective Numbers…”
Again, one goal was to know what resources were available to the government.
GDP is not a tally of all economic activity. It is a tally of all economic activity which involved the exchange of money or of other considerations which have monetary value – that is, of taxable transactions. GDP exists in large part to know what resources are available to government. Anyone who thinks the budget, debt and the deficit matter has reason to care about GDP.
Do the problems that Jora/Connie/Johnny/Mary Rosh has babbled about diminish the need to know what the U.S. tax base is? With the deficit at 5.8% of GDP during an expansion and the federal debt at an extraordinary 122.6% of GDP by the broadest definition of that debt, I’m pretty sure we have the same need for information as William and Cromwell and the Founding Fathers. Love to hear why Mary Rosh thinks otherwise.
Personal consumption is the latest increment added to the estimate, the result of new retail sales data. However, fixed investment and inventory investment together account for much of the growth in the GDPNow estimate. Inventories amount to a rebound from Q2, plus lots more; if the estimate is right, it’ll mean a drag in Q4. Equipment investment adding 1% to GDP would be high, but in keeping with recent AI-driven performance. Seems like politics might get in the way soon, if market sentiment doesn’t get in the way first.
The GDPNow estimate of final sales growth is 3.0%, quite good but nowhere near 5.1%.
I found this interesting – As of Sept 18 according to Bloomberg, Mark Niquette: “US factory output unexpectedly declined in August as manufacturers grappled with higher input costs and production of business equipment cooled. Production at manufacturers fell 0.3%, Federal Reserve data showed Friday. The median forecast in a Bloomberg survey of economists called for a 0.3% advance. Total industrial output, which also includes mines and utilities, stagnated. Utility production climbed 1.8%, while mining output edged up.”
Trump will pretend this Nowcast is the actual figure for a quarter yet to end while Kevin DOW36000 Hassett will pretend we can have 5% growth forever.
GDPNow’s 5.1% q/q AR is totally swamped by the 10.8% yearly All Items dollar based commodity inflation. Similarly the 59% past year’s inflation on crude oil paints a somber picture on any magical thinking about U.S. economic performance goosed by the Big Beautiful Bill, money expansion at 7%/year, and a fiscal deficit of 6.5% of GDP!