by Calculated Risk on 3/14/2025 11:36:00 AM
From BofA:
Our 1Q GDP tracking remains unchanged at 1.9% q/q saar and our 4Q GDP tracking is
down two tenths to 2.3% q/q saar since our last weekly publication. [Mar 14th]
emphasis added
From Goldman:
We lowered our Q1 GDP tracking estimate by 0.3pp to +1.3% last week. [Mar 10th estimate]
Atlanta Fed Economist Patrick Higgins put out a special note For GDP Forecasters, Some Gold Doesn’t Glitter We generally take a hands-off approach in updating and distributing our GDPNow model forecasts. With one exception, once a forecast quarter begins, the code of the model does not change. Any tweaks to the model are made at the beginning of the subsequent quarter.
The one exception was in spring 2020, when changes were made so that some monthly indicators showing steep declines early in the COVID-19 pandemic wouldn’t be treated as outliers and ignored as they normally would.
While not on that level, the unusual widening of the January trade deficit that led to much of GDPNow’s sharp decline on February 28, and the circumstances surrounding that decline, was also unprecedented in one respect. That is, as we now know from the March 6 full international trade report—but could only strongly suspect based on anecdotal and non-US government data until then—much of the widening of the trade deficit in January was due to an increase in nonmonetary gold imports from $13.2 billion in December to $32.6 billion in January. This accounted for nearly 60 percent of the widening of the goods trade deficit.
Although GDPNow does not distinguish gold from other imports, the Bureau of Economic Analysis does, in tallying up the total of the net exports, subaggregate within GDP. Removing gold from imports and exports leads to an increase in both GDPNow’s topline growth forecast and the contribution of net exports to that forecast, of about 2 percentage points. The topline growth forecasts also increased today—standard model -2.4 percent to -1.6 percent, “gold adjusted” model -0.4 percent to 0.4 percent—as data from today’s labor market report came in stronger than the model was expecting based on the limited February data the model received prior to that release.
The attached forecast tables include both the standard GDPNow forecast and the gold adjusted forecast. We will continue to update the standard GDPNow model through at least the end of the quarter but will add at least some occasional updates from the gold adjusted version as well.
The next update for GDPNow will be on March 17th. Currently the gold adjusted GDP tracking is 0.4% for Q1.
