Sharp fall in the GBP estimate.
The Atlanta Fed GDPNow estimate for Q3 growth from its economic model has been slashed to 2.3% from 3.2% on September 27. The high watermark for the estimate was 6.1%. That was the initial forecast back on July 30. Since September 3 the index has been between 3.0% and 3.7%.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is 2.3percent on October 1, down from 3.2 percent on September 27. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth decreased from 2.2 percent and 15.9 percent, respectively, to 1.4 percent and 12.9 percent, respectively, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth increased from -1.36 percentage points to -1.27 percentage points.
The largest contributors to the downside include:
- nonresidential structures
- residential investment
The Covid 19 volatility as certainly made models potentially unreliable. Models are based on more consistent ebbs and flows. The Covid situation has led to sharper moves in economic data both down and up over time. Those moves are outside of the norms.
As such, the New York Fed has gone back to the drawing board on its GDP model. It no longer reports it on the Fridays.