Scott gave us a run-down on the slew of US economic indicators that came out this morning (can be found here: highrockcapital.ca/scotts-blog/plenty-of-stuff-for-financial-markets-to-digest-this-morning). I will show what the effect may be on US economic growth.
There is a "model" for US GDP (Gross Domestic Product) that the Federal Reserve Bank of Atlanta (one of several regional offices of the US Central Bank) created a couple of years ago. This model is called GDPNow. It takes into account a pile of US economic indicators, weights them all, and then tries to spit out a guesstimate on what the next quarter's GDP will be.
As you will see, this Index is pretty volatile and reacts to the economic numbers as they come out and puts revised GDP forecasts out about 6-7 times per month. The economic indicators that go into this model are both "soft" data (being "surveys") and "hard" data (being real empirical data).
Today, the Atlanta Fed incorporated this morning's data into their model and moved their 1st Quarter 2017 (1Q17) GDP forecast from 2.5% on Feb 27th to 1.8%. Big move, but keep in mind it is volatile and subject to a strong economic indicator coming out next week.
Their reasoning for today's move was based on Real Personal Consumption Expenditures that fell from 2.8% to 2.1%, which was the lowest it has been since September 2009 and September 2001, before that. Those two dates alone should make us all pause, as neither were pleasant dates, for various and obvious reasons
Here is the GDPNow graph for the 1Q17 (remember, it is just for the 1Q17 and changes according to the input data):
As you can see, the model predicted that, back only one month ago, that the US GDP would be +3.4% (the peak in green). It then spent one month making it's way back closer to the 2.5% range. Today it dropped precipitously to 1.8%
Ironic, on a day when the Dow is +1.5%.