Atlanta Fed’s Fresh GDP Growth Estimate at 4.1%
The US economy is growing at a 4.1% annualized rate in Q-3 following the government’s construction-spending report and other recent economic data, the Atlanta Federal Reserve’s GDPNow forecast model showed Tuesday.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in Q-3 of Y 2018 is 4.1% on October 1, up from 3.6% on 28 September.
The nowcast of Q-3 real government spending growth increased from 1.0 to 1.7% after Monday’s construction spending report from the US Census Bureau.
The nowcast of Q-3 real personal consumption expenditures growth increased from 3.5 to 3.7% after Tuesday morning’s Manufacturing ISM Report On Business from the Institute for Supply Management (ISM).
The nowcast of the contribution of inventory investment to Q-3 real GDP growth increased from 1.88 to 2.14% after the release of July manufacturing and trade inventories Friday by the US Bureau of Economic Analysis and Tuesday morning’s ISM report.
The next GDPNow update is Friday, 5 October
The Atlanta Fed’s revision came just hours after data said US manufacturing activity slowed in September as growth in new orders moderated sharply, but factories hired more workers, pointing to sustained strength in the sector.
The Institute for Supply Management (ISM) said its index of national factory activity dropped 1.5 points to a reading of 59.8 last month from 61.3 in August, which was the highest since May 2004. A reading above 50 indicates growth in manufacturing, which accounts for about 12% of the US economy.
The ISM continued to describe demand as remaining “robust.” The ISM also noted that “the nation’s employment resource and supply chains continued to struggle, but to a lesser degree.” It said factories continued to be “overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations.”
President Donald Trump’s “America First” trade policy have the United States in trade disputes with China, and the European Union.
The Canada and Mexico NAFTA revisions, now UCMCA, have been resolved and the US’ favor.