GDPNow Bounces to 2.9% Following Durable Goods Report

On the back of a greater than expected increase in Durable Goods Orders this morning, the Atlanta Fed GDPNow model rose from 2.5% to 2.9%.

Latest GDPNow Forecast: 2.9 Percent — May 26, 2016

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.9 percent on May 26, up from 2.5 percent on May 17. The forecast for second-quarter real gross private domestic investment growth increased from -0.3 percent to 0.4 percent following this morning’s durable manufacturing release from the U.S. Census Bureau. After yesterday’s advance report on international trade in goods from the Census Bureau, the forecast for the contribution of net exports to second-quarter real GDP growth increased from -0.04 percentage points to 0.16 percentage points.

2nd Quarter GDP Estimates

1. Atlanta Fed: 2.9% – Updated May 26
2. New York Fed: 1.7% – Updated May 20
3. Markit: 0.7% – Updated May 25

Markit bases its forecast on a weakening service sector. For details, please see Service Sector Growth Weakest Since 2009; Markit Economist Estimates 0.7% GDP.

Mike “Mish” Shedlock