GDPNow: No Growth of U.S. Economy in 2015-Q1

Earlier this morning, we revealed what dividends were saying about the health of the U.S. economy in the first quarter of 2015.

Via its GDPNow near-real time indicator, the Federal Reserve Bank of Atlanta has a more optimistic assessment (the link is to most recent, “live” update for the GDPNow forecast – the Atlanta Fed’s comments on 2 April 2015 are quoted below):

Federal Reserve Bank of Atlanta GDPNow - 1 April 2015

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 0.0 percent on April 1, down from 0.2 percent on March 30. Following this morning’s construction spending release from the U.S. Census Bureau, the nowcast for real residential investment growth increased from -1.1 percent to 1.8 percent. This was more than offset by declines in the nowcasts for real nonresidential structures investment growth (-19.3 percent to -22.5 percent) and real state and local government spending growth (0.3 percent to -0.8 percent).

Note also the decline in the forecast range of the nation’s “Blue Chip” forecasters, who are even more optimistic than the Fed’s GDPNow forecast.

What we think is likely is that when the U.S. Bureau of Economic Analysis begins reporting its official estimates of U.S. GDP growth in 2015-Q1 near the end of April 2015, it will initially announce a positive figure that will be subsequently revised lower over the next two estimates as it catches up with delayed data reporting.