I’ll take the under on this opening Nowcast number.
With no data in, the GDPNow model starts off the second quarter with a nowcast of 2.4 percent.
A deeper dive into the model data has Real Final Sales at 2.6 percent to start the quarter.
Until we get at least a month of economic data reports, these reports are suspect.
As we near the end of the quarter with most data in, the Atlanta Fed model has been remarkably good. In contrast the New York Fed Nowcast is laughable.
I see no reason to do anything with the NY Fed Nowcast other than suggest the NY Fed abandon that model as useless.
Final 2025 Q1 Forecast
- NY Fed: +2.63 Percent
- Bloomberg Econoday: +0.2 Percent
- Bloomberg Econoday range: -1.5 Percent to +1.1 Percent
- GDPNow: -1.5 Percent, Real Final Sales -1.8 Percent
- Actual: -0.3 Percent, -2.5 Percent Real Final Sales
The GDPNow model was too low on the base model by 1.2 percentage points but too high on Real Final Sales by 0.7 percentage points.
This was a respectable showing in light of trade gyrations.
I did not estimate the base number but did estimate RFS at -1.4 percent.
My Estimate for Real Final Sales on March 27 in reader comments was -1.4 percent. I will stick with that.
I suspect GDPNow may be a bit off on its gold adjustment for March.
GDPNow was off its import adjustment but in the opposite direction. This added to the base GDP number as inventory investment but subtracted from real final sales.
The difference between the base number and RFS is Change in Private Inventories (CIPI) that nets to zero over time.
For about 8 quarters, the GDPNow final forecast was very close to the actual results.
April 30, 2025: ADP Employment Report Much Weaker than Expect, Large Employment Stalls
Economists expected 125,000 jobs. ADP reported 62,000 with negative revisions.
April 30, 2025: Real GDP Down 0.3 Percent, Real Final Sales Down 2.5 Percent, Inventories Soar
Front-running tariffs led to a collapse in real final sales, the bottom-line estimate of GDP