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Nowcasting and alternative output measures

GDPNow and New York Fed live forecasts as of today:

figure 1: GDP (bold black), WSJ January survey average forecast (blue), Bloomberg consensus (red square), GDPNow (light blue square), New York Fed live forecast (pink square), all The unit is 1 billion. Seasonally adjusted exchange rates for the 2017 quarter. Sources: BEA GDP Q4 2023 advance release, Wall Street Journal January survey, Bloomberg, Atlanta Fed, New York Fed, and author's calculations.

Yesterday's GDP figures were well ahead of the Wall Street Journal's average forecast and the Bloomberg consensus. GDPNow and the New York Fed's forecasts for first-quarter growth (q/q AR) are 3% and 2.8% respectively.

One may ask whether the growth rates reported in advance reports can be trusted, or whether activity levels are accurately tracked. Figure 2 reports the GDP levels implied by GDO and GDP+.

figure 2: GDP (bold black), GDO (blue), GDP+ (brown), all in billions. Ch.2017$SAAR. The picture on the right shows the quarterly AR growth rate. GDO's forecast for Q4 2023 assumes nominal profits at Q3 2023 levels. source: Philadelphia Fedand the author’s Calcalculate.

Obviously, the alternative measure of output is not growing as fast as GDP, but it is still higher than in the fourth quarter of 21, when some observers feared a recession. The fact is that measured output did not fall in the fourth quarter.

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