Friday, November 13, 2020

A comment on Q4 GDP

by Calculated Risk on 11/13/2020 11:45:00 AM

Most economists are revisiting their Q4 forecasts. In their previous forecasts, many assumed some additional disaster relief in Q4, and many underestimated the current surge in COVID.

Goldman Sachs economists noted this morning:

European and US economies are likely to slow significantly in Q4/Q1 as colder weather puts upward pressure on case growth, in turn triggering restrictions, but reaccelerate sharply in Q2/Q3 following warmer weather, the end of European lockdowns, and mass vaccination.
One well known private forecaster (with a great track record) in now forecasting negative GDP in Q4. Depending on further delays in disaster relief, and the impact of the COVID surge, we might see others move to negative GDP soon.

From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at 2.86% for 2020:Q4. [Nov 13 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2020 is 3.5 percent on November 6, up from 3.2 percent on November 4. [Nov 6 estimate]