bee Calculated Risk On 3/03/2025 01:59:00 PM
On Friday, I Noted: Q1 GDP Tracking: Wide Range, Gdpnow Goes Negative
Gdpnow from the Atlanta Fed Went Strongly Negative in the Most Recent Reading: “The gdpnow model estimate for Real GDP Growth (Seasonally Adjusted Annual Rate) in the First Quarter of 2025 is -1.5 Percent on February 28 “.
Gdpnow is an excellent tracking model, however, The January Surge in Imorts – Especially for Gold – Caused the model to move negative. As the Atlanta fed noted: “The contribution of Net Exports to First -Quarter Real GDP Growth Fell from -0.41 Percentage Points to -3.70 Percentage Points”.
Usually there would be an off -setting increase in inventories, but that is a lagging indicator. This is a short-term distortion and will balance out over the next month or so. I don’t expect negative GDP in Q1.