This Friday will mark the first look at Q2 preliminary Gross Domestic Product. The GDP, or the GNP if you learned it before the mid-1990’s, is expected to show another quarter of decline as our Great Recession continues on. But the National Association for Business Economics has come out and tried to front run this number with a prediction of its own. And yes, we are expected to see another decline in GDP.
The NABE issued a release noting that a group of 16 NABE Outlook Survey panelists participated in a “forecast auction exercise” using a website designed by Professor Charles Plott’s experimental economics laboratory at the California Institute of Technology.
The panelists gave forecasts of second-quarter real GDP, with a new generated estimate that GDP fell by -1.6% in the second quarter. The median estimate was -1.5% and just under half of survey group predicted that GDP fell by less than 1.5% or rose in the quarter. The implication noted was that there is roughly a 50% chance that GDP was down by -1.4% or less. Of course, the other 50% chance is for a worse reading.
Bloomberg has a consensus economist estimate as of Wednesday listed as -0.7% in the real GDP, but has a +1.3% gain expected based on the Chain-Weighted Price Index. Dow Jones has these consensus estimates as -1.5% for the headline GDP and +0.8% on the Chain-Weighted Price Index. Do not be surprised at all if last minute revisions come in over the next 40 hours or so.
Bloomberg analysis has also noted that we will get to see the BEA’s benchmark revisions to historical GDP, and these are not just annual revisions. This essentially rebases real GDP from year 2000 chain dollars up to 2005 chain dollars. That means that there will be “significant methodology changes” in several of the individual component categories. That in turn will offer better insight into just how bad this recession has really been. Details Here.
Stay tuned on Friday morning, because this data out of the U.S. Bureau of Economic Analysis has a chance of being a significant market-moving event.
JON C. OGG
JULY 28, 2009
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