GDP growth in the third quarter was revised upward by 0.1% (SAAR). Real GDI is released; taking the average of GDP and GDI reveals the possibility that the actual growth rate is faster than that indicated by the GDP alone. Although the forecast levels have been lowered in the past few months, recent nowcasts indicate an acceleration.
figure 1: GDP (black), GDI (tan) and arithmetic average (blue) are all in billions. Ch2012$, Thrall. NBER defines the date of the recession, from peak to trough, in shades of gray. Source: BEA, second release in 2021Q3, NBER.
GDP growth rate (Average of GDP and GDI) Is 4.4% (SAAR), while the reported GDP is 2.1%. Compared with the same period last year, these figures were 7.0% and 4.9%, respectively.
What is the outlook for measured GDP? Figure 2 shows the median forecast of the professional forecaster survey in the past three surveys and the nowcast as of today.
figure 2: GDP (black), median forecast of professional forecasters survey in May (tan), August (green) and November (red), Atlanta Fed Nowcast (pink square), Goldman Sachs tracking (light blue square). NBER defines the date of the recession, from peak to trough, in shades of gray. Source: BEA, the second release in Q3 2021, Atlanta Fed (11/24), Goldman Sachs (11/24), NBER and the author’s calculations.
In the past three surveys, the level of forecast has decreased, especially since the August survey. This decline was mainly driven by the low growth in the third quarter of 2021. Interestingly, the nowcast for the fourth quarter showed a larger rebound than expected in the November SPF survey (responses between October 28 and November 9).this Atlanta Fed Nowcast Indicates that the SAAR growth rate in the fourth quarter was 8.6% q/q.
In the near term (end of 2021), the nowcast of the Atlanta Fed puts us in the position indicated by the August SPF median (in terms of implied level).
In short, it looks like growth (and job growth) is slowing in the third quarter (because some of us warn). However, growth seems to have picked up at the end of the year.
