Friday, January 11, 2019

Q4 GDP Forecasts: Mid-to-High 2s, Estimate of Shutdown Impact on GDP

by Calculated Risk on 1/11/2019 12:50:00 PM

Merrill Lynch estimate of impact of government shutdown on GDP:

We think a deal to reopen the government will be reached eventually, but only after economic, financial and/or political pain is felt. Every two weeks of a shutdown will trim 0.1pp from growth; additional drag is likely due to delays in spending and investment.
From Merrill Lynch:
4Q GDP tracking remains at 2.8%. We forecast 1Q GDP growth of 2.2%, but downside risks are emerging due to the government shutdown. [Jan 11 estimate]
emphasis added
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Jan 11 estimate]
And from the Altanta Fed: GDPNow
The current GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 remains 2.8 percent on January 10. [Jan 10 estimate]
CR Note: These estimates suggest GDP in the mid-to-high 2s for Q4.