October 14, 2016

3Q16 GDP Estimates Continue Trending Down

Filed under: Economy,Taxes & Government — Tom @ 3:31 pm

Apparently the retail sales news didn’t impress the caretakers of the GDP-predicting model at the Atlanta branch of the Federal Reserve, which has just cut its 3Q16 GDP prediction to an annualized 1.9 percent — half of what it was forecasting in early August.

Moody’s, featuring max Hillary Clinton contributor Mark Zandi, still has 2.3 percent.

Neither outfit cited today’s August Manufacturing and Trade Inventories and Sales report from the Census Bureau. Inventories went up a seasonally adjusted 0.2 percent, as did sales. August sales were the same as a year ago, while inventories came in 0.8 percent higher. So a large portion of the past year’s pitiful GDP growth occurred because inventories have been built up, not because people have actually bought more stuff.


UPDATE: From Bloomberg:

Consumer confidence unexpectedly fell to a one-year low in October as Americans soured on the outlook for the economy amid a contentious presidential election campaign.
The University of Michigan preliminary index of sentiment declined to 87.9 from 91.2 in September, according to a report Friday. …

A sustained acceleration in worker pay has remained elusive even as companies keep adding jobs at a solid pace …”

Worker pay not going up much? How can that be? Mark Zandi tells us every month on the ADP conference call that wages are rising. (/sarcasm)


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