The Bureau of Economic Analysis will be releasing its advance estimate of fourth quarter 2015 GDP on January 29, and the Atlanta Fed — the trendiest forecaster of late — doesn’t think it will look good.
The Atlanta Fed’s GDPNow model aims to forecast GDP by monitoring the same economic statistics that the Bureau of Economic Analysis uses in its initial estimates of GDP. GDPNow is updated frequently by the Atlanta Fed as new data become available.
On Monday, the model, which once nailed the GDP report, projected that GDP grew by an anemic 0.7% in the fourth quarter of 2015. That was a drop from the model’s last prediction from December 23 that forecasted growth of 1.3%. The Atlanta Fed noted that the drop in the prediction came after disappointing net exports, construction spending, and ISM manufacturing numbers were released in the last week.
Here’s how the GDPNow projection has evolved, and a comparison to Wall Street economists’ projections for GDP. The model’s predictions have gotten worse over the last few months: