Atlanta Fed Cuts Q2 GDP Forecast to 1.8% Just One Day Before Release

The Federal Reserve Bank of Atlanta has reduced its forecast for second quarter growth, releasing the updated projection just a day prior to the official advance reading. The Atlanta Fed’s updated estimation, referred to as nowcast, has been lowered to 1.8%, down from the previous 2.3%. This adjustment follows the U.S. Census Bureau’s first release of its advance economic indicators report, which includes data on retail and wholesale inventories as well as foreign trade in goods.

According to the report, the contribution of net exports to second-quarter real GDP growth has decreased from 0.17 percentage points to –0.10 percentage points. Additionally, the nowcast for the contribution of inventory investment to growth has fallen from –0.63 percentage points to –0.79 percentage points.

Despite this adjustment, consensus expectations had still pointed towards an advanced figure indicating a growth of 2.6% for the upcoming report, a significant increase from the first quarter’s growth of 1.1%.

In light of Wednesday’s durable goods orders data, both Morgan Stanley and JP Morgan have revised their forecasts down to 2.2%, from the previously anticipated 2.3%, due to slightly lower outlooks for fixed investment and inventory changes.