The Federal Reserve Bank of Atlanta is closely followed for its GDPNow forecasts.

The Atlanta Fed explains its work this way:

The GDPNow model forecasts GDP growth by aggregating 13 subcomponents that make up GDP with the chain-weighting methodology used by the US Bureau of Economic Analysis.


The Federal Reserve Bank of Atlanta’s GDPNow release complements the quarterly GDP release from the Bureau of Economic Analysis (BEA).


The Atlanta Fed recalculates and updates their GDPNow forecasts (called “nowcasts”) throughout the quarter as new data are released, up until the BEA releases its “advance estimate” of GDP for that quarter.

Historically, the Atlanta Fed says its Nowcasts are accurate within 0.83 basis points on either side of the actual GDP number.

The Atlanta Fed’s current GDP forecast for the third quarter, which ends September 30, is 5.8% annualized growth.

That’s right. A U.S economy supposedly heading into recession will grow by nearly 6% in Q3.

However, as Axios puts it:

Yes, but: There are plenty of reasons to be skeptical.

The so-called GDPNow forecast is a running estimate based solely on available economic data.

It swings around as more data points come in.

  • It’s early days: Q3 is still underway, with plenty more economic releases to come that could influence the outlook.
  • Put simply, “…as more monthly source data becomes available, the GDPNow forecast for a particular quarter evolves and generally becomes more accurate,” the Atlanta Fed website says.

Between the lines: Think of it like a weather forecast, Atlanta Fed economist Patrick Higgins tells Axios. “

“You’re obviously going to have a better forecast for the weather tomorrow than three months from now.”

  • Higgins says the final GDPNow estimate ultimately tends to be around 0.8 percentage points above or below the official GDP figure released by the government.
  • “We’re a long way out from that. Right now, it’s probably not that accurate,” Higgins says.

Bloomberg Economics takes it further by suggesting the economy has been juiced temporarily by the Barbie and Oppenheimer – Barbenheimer – phenomenons, and by massively successful concerts tours by Taylor Swift and Beyonce.

Add in higher inventories due to lack of demand and you’ve got a Nowcast number that could easily eventually come in much lower.

Here are excerpts from a Bloomberg article:


By Anna Wong (Economist) and Eliza Winger (Economist)

(Bloomberg Economics) — The latest reading from the Atlanta Fed’s GDPNow model — 5.8% growth for 3Q — exceeds the forecasts of even the most optimistic analysts.

Our analysis suggests GDP growth for the quarter will indeed be stronger than usual, but it won’t last.

A large chunk of that strength comes from temporary factors – the “Barbenheimer” summer blockbusters, and concert tours by Taylor Swift and Beyonce – as well as factors that don’t necessarily reflect underlying strength, such as a build up of inventories amid slowing demand.

These factors create a mirage of resilient consumption, when in fact it’s running out of steam.

We maintain our forecast that GDP growth will dip below zero in 4Q23, when a recession will likely begin.

Barbie and Oppenheimer, which both opened in July, had racked up $852 million in combined domestic ticket sales as of the time of writing.

On top of tickets, the typical movie-goer spends $15 on food and drinks — and including that, we estimate the two movies provided a boost to demand of about $2 billion.

Further including international ticket sales – which add $1.1 billion to exports – the films’ total contribution to 3Q GDP could be as much as $3 billion.

Separately, Taylor Swift’s “The Eras” tour had 14 concerts scheduled in 3Q, with the average stadium capacity being 54,000 people.

The typical Swiftie reportedly spends $1,500 to attend the concert, which includes outlays on tickets, hotels, flights, food and other items.

Beyonce’s “Renaissance” tour, which began its US leg in July, may have an even bigger economic impact, with a total of 34 concerts planned during the third quarter.

Average stadium capacity for Beyonce’s shows is 70k, and a typical member of the Bey Hive spends $1,800 to attend.

Both tours will end in 3Q.

Based on these numbers, we expect them to boost 3Q GDP by $5.4 billion.

After consumption, the biggest contributor to Atlanta GDP nowcast reading was change in inventories, accounting for slightly more than 1 ppt.

There are two possible reasons for the increase in private inventories: Either firms are expecting higher demand and are building up inventories, or firms are seeing unwanted inventory build up from a lack of demand.

Both avenues contribute positively to GDP growth, but they have opposite implications for the future.

The former would suggest faster economic growth ahead, while the latter suggests a downturn ahead that will lead more firms to want to destock inventory.

We believe the more relevant story for 3Q is the latter — particularly for cars.

While firms in most retail categories have destocked excess inventories over the past year, the automotive sector has only just begun that process.

Even with the supply of cars normalizing, auto inventories are surging because of a slump in demand.

Auto loans have fallen 3.5% year over year as lenders increasingly reject applicants amid rising delinquencies.

Autos are an interest-rate sensitive sector, and the current correction there reflects past Fed rate hikes at work.

Looking ahead, Bloomberg Economics expects a steeper retrenchment in consumption in 4Q.

Moreover, with mortgage rates rising again, residential investment will again become a headwind to growth.

That’s why we still expect a recession to unfold toward year-end.


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