Friday, July 10, 2020

Q2 GDP Forecasts: Probably Around 36% Annual Rate Decline

by Calculated Risk on 7/10/2020 11:17:00 AM

Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 36% 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-.36) ^ .25 - 1 = -0.095 (a 9.5% decline from Q1)

From Merrill Lynch:

2Q GDP tracking remains at -36.0% qoq saar. [July 10 estimate]
emphasis added
From Goldman Sachs:
We left our Q2 GDP forecast unchanged at -33% (qoq ar). We expect -29% in the initial vintage of the report, reflecting incomplete source data and non-response bias [July 9 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at -15.3% for 2020:Q2 and 10.1% for 2020:Q3. [July 10 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 -35.5 percent on July 9, down from -35.2 percent on July 2. [July 9 estimate]