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Friday, July 08, 2022

Q2 GDP Forecasts: Slightly Negative

by Calculated Risk on 7/08/2022 12:22:00 PM

Note: We've seen two consecutive quarters of negative GDP before without a recession (that isn't the definition). If Q2 is negative, it will mostly be due to inventory and trade issues. No worries. My view is the US economy is not currently in a recession, see: Predicting the Next Recession

From BofA:

We are now tracking -1.2% qoq saar growth for 2Q, down from 0.0% qoq saar previously.

It is reasonable to dismiss some of the signal from the GDP declines that may have taken place in the first two quarters of the year on account of the large negative contributions from net trade and inventories. In addition, there is a larger-than-normal gap between GDP and GDI which, historically, has been resolved by GDP getting revised toward GDI, suggesting that some of the as-reported weakness in activity may get revised away over time. [July 8 estimate]
emphasis added
From Goldman:
We left our Q2 GDP tracking estimate unchanged at +0.7% (qoq ar). [July 8 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.2 percent on July 8, up from -1.9 percent on July 7. [July 8 estimate]