GDPNow Forecast Is 4 Miles High And Falling Fast

Real Final Sales at 2.3 percent is the number to watch.

The quarter is over half over but data lags so badly that we have less than a month to chart.

I started my third quarter chart today. The next GDPNow report is on August 26.

Key Numbers

• Baseline GDP Nowcast: 4.0 percent down from an amazing 6.2 percent.

• Real Final Sales: 2.3 percent down from 4.2 percent

• Real Final Private Domestic Sales: 2.7 percent down from 5.0 percent.

Evolution of 2026 Q3 vs Blue Chip Consensus

The initial reports are often wild, as was the case here. I seldom discuss the initial numbers and did not comment on the 6.2 percent Nowcast.

With GDPNow at 6.2 percent, the Blue Chip consensus was roughly 2.2 percent.

The Number to Watch

Real final sales is the bottom-line estimate of the economy.

The difference between the base forecast and real final sales is Change in Private Inventories (CIPI) that nets to zero over time.

Contributions GDP

CIPI is the largest contribution to the nowcast at 1.73 percentage points.

Unfortunately, there is no clean way to extract all of the AI-related components but we can see nonresidential equipment at 0.40 PP and Intellectual Property ay 0.38 PP.

How Much Did AI Spending Contribute to Second-Quarter 2026 GDP?

On July 31, I addressed the question How Much Did AI Spending Contribute to Second-Quarter 2026 GDP?

Five charts show the AI impact for every quarter starting 2025 Q1.

AI-Related Percent of Change in Real Private Fixed Investment

• 2025 Q1: 123.06 percent

• 2025 Q2: 124.74 percent

• 2025 Q3: 121.22 percent

• 2025 Q4: 357.48 percent

• 2026 Q1: 126.40 percent

• 2026 Q2: 68.81 percent

Click for more details.

This economy is extremely unbalanced.