GDPNow Forecast Is Negative 51.2 Percent
Mike (Mish) Shedlock | May 31, 2020 01:47AM ET
In the wake of a disastrous Income and Outlays report, the GDPNow forecast is an astonishing -51.2%
The Atlanta Fed GDPNow Model forecasts a number we all hope is wrong.
After this morning's Advance Economic Indicators report from the U.S. Census Bureau and personal income and outlays release from the U.S. Bureau of Economic Analysis, the nowcast of second-quarter real personal consumption expenditures growth decreased from -43.3 percent to -56.5 percent and the nowcast of the contribution of change in real net exports to second-quarter real GDP growth decreased from 2.07 percentage points to 0.73 percentage points.
The New York Fed Nowcast estimate took a dive to -35.5% from -30.5%.
Annualized Numbers
Both numbers are seasonally-adjusted annualized quarterly-numbers so the estimate is awful, but not as bad as it looks.
Income Surges as Spending Drops Most on Record
The forecasts plunged due to a BEA report that showed income surges as spending drops most on record
Income and Outlays
- Income: +10.5%
- Disposable Personal Income: +12.9%
- Real Disposable Income: +13.4%
- Personal Consumption Expenditures: -13.6%
- Real Personal Consumption Expenditures: -13.2%
Amazing Leap in Savings Rate to Record 33 Percent
As a result an alleged rise in Disposable Personal Income of 12.9% and a drop of -13.6% in spending, the Personal Savings Rate jumped to 33.0%.
There are also a couple of reasons that income may not have risen as much as reported. Please see the link for details.
Original Post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.