Friday, June 26, 2020

Q2 GDP Forecasts: Probably Around 33% Annual Rate Decline

by Calculated Risk on 6/26/2020 11:23:00 AM

Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 33% Q2 decline is around 9% decline from Q1 (SA).

Note: I'm just trying to make it clear the economy didn't decline by one-third in Q2.  Previously I just divided by 4 (an approximation) to show the quarter to quarter decline.  The actually formula is (1-.36) ^ .25 - 1 = -0.095 (a 9.5% decline from Q1)

From Merrill Lynch:

2Q GDP tracking fell to -36% qoq saar from -35% following weak trade and inventory data. [June 26 estimate]
emphasis added
From Goldman Sachs:
We left our Q2 GDP forecast unchanged at -33% (qoq ar). We continue to expect -27% in the initial vintage of the report, reflecting incomplete source data and non-response bias. [June 23 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at -16.3% for 2020:Q2 and 1.5% for 2020:Q3. [June 26 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -39.5 percent on June 26, up from -46.6 percent on June 25. [June 26 estimate]