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Friday, July 17, 2020

Q2 GDP Forecasts: Probably Around 35% Annual Rate Decline

by Calculated Risk on 7/17/2020 11:18:00 AM

Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 35% Q2 decline is around 10% 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-.35) ^ .25 - 1 = -0.102 (a 10.2% decline from Q1)

From Merrill Lynch:

2Q GDP tracking was unchanged at -36% qoq saar as the June surprise in retail sales was offset by negative May revisions. [July 17 estimate]
emphasis added
From Goldman Sachs:
Our Q2 GDP tracking estimate remained unchanged at -33% (qoq ar). We expect -29% in the initial vintage of the report, reflecting incomplete source data and non-response bias [July 16 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at -14.3% for 2020:Q2 and 13.2% for 2020:Q3. [July 17 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 -34.7 percent on July 17, down from -34.5 percent on July 16. [July 17 estimate]