The Federal Reserve Bank has released its views for second quarter gross domestic product (GDP). This may seem rosy on the heels of such a poor payrolls report on the same morning, but second-quarter GDP has a tendency of snapping back after the first quarter of each year.
A forecast called GDPNow from the Atlanta Fed (dated June 3) calls for 2.5% GDP growth in the second quarter. The GDPNow model forecast is for real GDP growth and is seasonally adjusted at an annualized rate. What matters here is that this was the same forecast made earlier in the week, meaning that the dismal payrolls report for May has not changed the Fed’s outlook.
Friday’s report said:
Following this morning’s economic releases, the second-quarter forecast for real gross private domestic investment growth increased from –1.8 percent to –1.0 percent. Offsetting this increase was a decline in the forecast of the contribution of net exports to real GDP growth from 0.32 percentage points to 0.23 percentage points after this morning’s international trade release from the U.S. Census Bureau.
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It should be stated that the Atlanta Fed’s model changes based on newly available economic reports. The forecast was for 2.9% growth as recently as May 31. The forecasts started out at 1.8% on April 29, and the forecast generally drifted higher throughout May with a blip back down.
Be advised that this is economic report-driven. The Atlanta Fed GDPNow forecast is a model-based projection. It is not subject to judgmental adjustments, and it is not an official forecast of the Atlanta Fed, nor is it a forecast made by its president, the Federal Reserve System or the Federal Open Market Committee (FOMC).
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