GDPNow Forecast For First-Quarter GDP Sinks To 1.9 Percent

Note: This is the change from March 31 to April 1. Another report is due today.

Looking at the data, I would have expected an increase.

Understanding GDPNow

GDPNow is a “Nowcast Estimate” not a prediction. It’s a running estimate of what the BEA would report IF the BEA were to produce a GDP report at the current time.

Initial estimates often look and often are ridiculous. That’s not a bug it’s a design feature.

As economic reports come in, the nowcasts tend to stabilize, at least somewhat.

GDPNow Current Numbers

• Headline GDP Nowcast: 1.9 percent

• Real Final Sales: 1.4 percent

• Real Final Private Sales: 1.6 percent

Real Final Sales vs GDP

The difference between GDP and Real Final Sales (RFS) is Change in Private Inventories that nets to zero over time.

RFS is the actual bottom line number. For that reason, the BEA would be wise to throw the headline number in the garbage.

The Fed focuses on Real Final Private Domestic Sales. It’s currently between RFS and the topline estimate, but it could be the highest or lowest. It just happens to be in the middle now.

Dip on Strong Reports

The Atlanta Fed GDPNow model dipped to 1.9 percent despite strong economic reports.

The two reports that went into this nowcast were retail sales and ISM.

Both were stronger than consensus expectations.

For example, the Bloomberg consensus retail sales estimate was 0.4 percent with actual sales at 0.6 percent. And the Commerce department revised January up 0.1 percent from -0.2 percent to -0.1 percent.

But I repeat my key points on estimating GDPNow reactions.

Key Point on Analyzing GDPNow Reports

It’s not the data that matters, but rather what the GDPNow model expected that really matters.

This is why people don’t understand how the model often reacts opposite the data reports.

For whatever reason, the model expected something better than the posted results for retail sales, ISM, or both.

Trade Data

My view is that January trade data, especially imports, were weak because importers held back waiting for the Supreme Court tariff decision.

On February 20, the Supreme Court ruled against Trump. Then the International Trade Court mandated refunds.

I now expect a surge in imports reversing the January numbers.

Given typical 20–36 day ocean transit + clearance, the real “mad rush” import catch up lands mostly in March data.

Later today we have much delayed trade data. But it’s for February, not March.

I doubt the GDPNow model expects bad numbers. But those bad numbers may be delated for a few more weeks.

Related Posts

February 20, 2026: Supreme Court Strikes Trump’s Reciprocal Tariffs In 6-3 Vote (I Told You So)

Forgive me for bragging, but I got every justice correct.

March 11, 2026: Year-Over-Year CPI Inflation Will Worsen for at Least Three Months

This is an easy forecast. And it does not even include gasoline prices.

Do models expect that?

I worked on this report not realizing we have another GDPNow update later today. If there is a significant change, I will update my charts.