Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

October 13, 2018 | GDPNow vs Nowcast Gap Widens Again, Huge GDPNow Inventory Contribution

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
The Atlanta Fed GDPNow Model Forecasts 4.2% GDP Growth. Nowcast is 2.3%. Inventories contribute 2.2 % to GDPNow.

The gap between the GDPNow and Nowcast Third-Quarter GDP estimates widened slightly to 1.9 percentage points.

The latest estimates are 4.2% for GDPNow on October 10 and 2.3% for Nowcast on October 12.

The inventory contribution for GDPNow is a whopping 2.2 percentage points, with real final sales at 2.0%. Real final sales is the bottom line GDP estimate. Inventory adjustments balance out over time.

Nowcast does not break out inventory contribution.

At least one of these models is way off base.

Mike “Mish” Shedlock

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

October 13th, 2018

Posted In: Mish Talk

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.