GDPNow Estimate for 4Q2014 Comes In Unchanged at 2.3%

image7 300x253 GDPNow Estimate for 4Q2014 Comes In Unchanged at 2.3%

GDPNow Forecast for 4Q2014 GDP Remains Unchanged at 2.3% through November 26th

The positive trend from this past week has not translated in the GDPNow forecast through November 26th.

The Atlanta Fed reports that “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2014 was 2.3 percent on November 26, unchanged from a week ago. The nowcasts for real personal consumption expenditures, real equipment investment, and the change in real net exports fell slightly over the past week. This was offset by an increase in the nowcast for real residential investment growth from 4.5 percent to 14.9 percent following this morning’s new single-family home sales release from the U.S. Census Bureau.”

We remain optimistic that November and December economic data releases will turn the tide to a 3% GDP Growth Rate for the last quarter.

us-economy-exposed-debt-crisis

Tweet Peeks at 4Q2014 GDP – Thanksgiving Edition

@KeithEOuellette: Thanksgiving 10-Day Edition: Current Economic Conditions are still not having much of an impact on Stock Market Indexes, which continue to hit record highs. However, US Economic Trends turned positive this past week and a half, impressively moving the needle between the 2-3 O’Clock range. Last week, the 2nd Estimate of 3Q2014 GDP was revised upward to 3.9% thanks to lowered inflation-adjusted rates. The latest GDPNow Forecast of 4Q2014 fell from 2.6% to 2.3% growth on November 19th. We continue to believe we will attain 3% GDP growth for the balance of the year, but there are signals that the U.S. Economy is slowing down.

The key is to align the economic news items with the weighted average to determine their impact on GDP. We have done just that in estimating GDP growth, utilizing our simple rating model.
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For an explanation of the ratings, please refer to the post describing the Rating System.
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SUMMARY OF 4Q2014 RATINGS
POSITIVE = 10
NEUTRAL = 6
NEGATIVE = 7
As of November 26, 2014

______________________

  • October Retail Sales increases 0.3% after having contracted in September. The bounce is not much higher than August. http://t.co/lEKj02JeCJ
    RATING = 2
  • ***************

  • Michigan Consumer Sentiment Index hits another Post-Recession high and sits at 89.4, well beyond expectations. http://t.co/a3bqF8OhD1
    RATING = 2
  • ***************

  • Industrial Production edged down slightly by 0.1 in Oct after gaining 0.8 in Sept. Two of the Big 4 are in for Oct. http://t.co/zNFUCJKO9r
    RATING = <2>
  • ***************

  • The Empire State Manufacturing Survey for business activity rose 0.4 to 10.1 indicating continued growth in Oct. http://t.co/UaQGc6qVU3
    RATING = 2
  • ***************

  • The Philly Fed’s Business Outlook continues to be bright as its General Activity Index accelerates. http://t.co/0KTzUagi7b
    RATING = 2
  • ***************

  • Initial Jobless Claims come in higher than forecasted. The up/down roller coaster continues, but still trending down. http://t.co/OkffPY6OYs
    RATING = 1
  • ***************

  • Big 4 Economic Indicators appear to have stopped rolling over. Retail Sales recovered but only to Aug spend levels. http://t.co/6k7qyBTtP4
    RATING = 1
  • ***************

  • The Chicago Fed National Activity Index moderated in October, illustrating continued growth in the US Economy. http://t.co/YMJ8Ymps3D
    RATING = 2
  • ***************
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    GDPNow Forecast of 4Q2014 is Currently at 2.3%

    image6 300x250 GDPNow Forecast of 4Q2014 is Currently at 2.3%

    GDPNow Forecast of 4Q2014 Falls Again to 2.3% Growth

    After another poor report on Industrial Production and a slight uptick in new residential construction, the GDPNow Forecast for 4Q2014 decreases from 2.6% to 2.3% through November 19, 2014.

    The Atlanta Fed says “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2014 was 2.3 percent on November 19, down from 2.6 percent on November 14. The GDP nowcast fell 0.4 percentage point to 2.2 percent on November 17 after the industrial production release from the Federal Reserve. Following this morning’s new residential construction release from the U.S. Census Bureau, the GDP nowcast ticked up 0.1 percentage point to 2.3 percent.”

    We are still hopeful for a strong Retail Sales Report and continued jobs creation, although most will be on a part-time basis for the Holiday Season, to recover to 3% growth by year-end.

    us-economy-exposed-debt-crisis

    Tweet Peeks at 4Q2014 GDP for W/E 11-14-2014

    @KeithEOuellette: Current Economic Conditions are not having much of an impact on Stock Market Indexes, which continue to hit record highs and also in spite of the end of the Fed’s QE Programs. The initial Overall rating started 4Q2014 GDP on a positive note, but ended this week with some negative trends. Last week, the latest GDPNow Forecast of 4Q2014 fell from 3.1% to 2.6% growth. We continue to believe we will attain 3% GDP growth for the balance of the year, but there are signals that the U.S. Economy is slowing down.

    The key is to align the economic news items with the weighted average to determine their impact on GDP. We have done just that in estimating GDP growth, utilizing our simple rating model.
    |
    For an explanation of the ratings, please refer to the post describing the Rating System.
    |
    SUMMARY OF 4Q2014 RATINGS
    POSITIVE = 5
    NEUTRAL = 4
    NEGATIVE = 6
    As of November 14, 2014

    ______________________

    • Multiple jobs held by individuals reveal a dramatic shift in Employer hirings. Clearly, they are avoiding ObamaCare. http://t.co/E5OTCzRDqT
      RATING = <2>
    • ***************

    • Demographic trends in Employment of the 50-year old an over workforce illustrates some jaw-breaking statistics. http://t.co/g1EO1YEJzf
      RATING = 1
    • ***************

    • Ratio of PT versus FT Employment remains stubbornly high in relation to full-time jobs lost in The Great Recession. http://t.co/AVjq2vyuZp
      RATING = <2>
    • ***************

    • Light Vehicle Sales per Capita continues its growth since the Recession. Will it continue. . . that is the question? http://t.co/eAa9LRohv1
      RATING = 2
    • ***************

    • Oil Price/Barrel has finally broken the $100 price and now sits under $80 per barrel, as it translates to the pump. http://t.co/xf2l5RVjuz
      RATING = 2
    • ***************

    • Real Earnings and Average Hours Worked by Private Employees continue to slightly improve, but painfully slow. http://t.co/sbcjpe3ozb
      RATING = 1
    • ***************

    • Employee Compensation as a percent of GNP deteriorates, while Corporate Profits to GNP ratio accelerates. GAP widens. http://t.co/wZvc4XTgq9
      RATING = <2>
    • ***************

    • Have we reached Full Employment at a 5.8% UE rate? Initial Unemployment Claims increase unexpectedly. http://t.co/4abvCnYBZW
      RATING = <2>
    • ***************
      @@@@@@@@@@@@@@@

    GDPNow Forecasts 2.6% Growth for 4Q2014

    image5 300x253 GDPNow Forecasts 2.6% Growth for 4Q2014

    GDPNow Forecast For 4Q2014 moves down 0.9% to 2.2%, and then bounces back up to 2.6%

    Over the last 10-day period, GDPNow Forecast fell from 3.1% to 2.2% and then bounced back to 2.6% on November 14, 2014. A volatile beginning to the estimated 4Q2014 GDP Growth Rate. The trend has been revised down by the Blue Chip Consensus estimates, ranging now from 2.3% to 3.4% and settling in at 2.7% estimated growth, a 10% negative adjustment.

    The Atlanta Fed states “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2014 was 2.6 percent on November 14, down from 3.1 percent on November 3. The GDP nowcast fell 0.9 percentage point to 2.2 percent on November 7 following the U.S. Bureau of Labor Statistics’ employment situation release. Over the past three days the nowcast increased 0.4 percentage point following the wholesale and retail trade releases from the U.S. Census Bureau and the monthly budget report from the U.S. Department of the Treasury.

    We are now well into the Holiday Season when some Merchants attain 40% of their Total Annual Sales. The good news is that the University of Michigan’s Consumer Sentiment Index has hit another Post-Recession high at 89.4 in October’s Advance Estimate. The Michigan Index tracks fairly close to the Conference Board’s Consumer Confidence Index, which is still below its Pre-Recession high, but still trending up. The 3rd piece of good news is that the Conference Board’s Small Business Optimism is also close to its Post-Recession high.

    Based on these confidence indexes, we are hopeful that Retail Sales will accelerate consumer spending during this Holiday Season.

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