Friday, February 15, 2019

Q4 GDP Forecasts: High-1s, Low-2s, 2018 Annual GDP around 2.8%

by Calculated Risk on 2/15/2019 11:58:00 AM

The BEA has announced that the Q4 advanced GDP report will be combined with the 2nd estimate of GDP, and will be released on Feb 28th.

From Merrill Lynch:

Weak retail sales data and inventory build caused a 0.8pp decline in our 4Q GDP tracking estimate to 1.5% from 2.3% [Feb 14 estimate]
emphasis added
From Goldman Sachs:
The retail sales report indicated a considerably weaker pace of fourth quarter consumption growth than we had previously assumed. Reflecting this and lower-than-expected November business inventories, we lowered our Q4 GDP tracking estimate by five tenths to +2.0% (qoq ar). [Feb 14 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at 2.2% for 2018:Q4 and 1.1% for 2019:Q1. [Feb 15 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 1.5 percent on February 14, down from 2.7 percent on February 6. [Feb 14 estimate]
CR Note: These estimates suggest GDP in the high 1s for Q4.

Using the middle of these four forecasts (about 1.8% real GDP growth in Q4), that would put 2018 annual GDP growth at around 2.8%.  This would be the best year since 2015, but lower than many forecasts.