GDPNow Nowcast Dips To 0.2 Percent With Real Final Sales At -0.4 Percent
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Pat Higgins at GDPNow has made official adjustments to its model to account for gold imports.
GDPNow forecast from Atlanta Fed, chart by Mish.
What Happened?
On February 28, 2025 I commented In Scramble to Beat Tariffs, Trade Deficit Soars by Amazing 25 Percent
The advance rush to beat tariffs hugely distorted trade data in January.
Email from Pat Higgins
The model doesn’t adjust for gold imports/exports. In the GDP accounts, the BEA does make adjustments for gold as described on pages 8-13 and 8-14 of https://www.bea.gov/resources/methodologies/nipa-handbook/pdf/chapter-08.pdf when the translate the Census data on imports/exports the GDP based measures.
The advance international trade report on goods doesn’t have details beyond the major categories, but additional data on gold imports/exports will be included in the full report released next Thursday. But as mentioned, the model doesn’t make adjustments based on those gold imports/exports.
Best regards,
Pat
Pat has now made adjustments to the official model, but posts as adjustments. I see no need to post the official forecast, known to be wrong.
So I post only the gold adjustments. Prior to today (or sometime recently that I missed), Pat only posted the gold adjustment and I estimated Real Final Sales.
He is now posting both as official figures.
Expect Another Distortion
Today, I noted a Second Massive Wave of Imports Shows More Tariff Front Running
The advance import-export data for February is another doozie. Three charts.
The next release of GDPNow may show another big drop.
I am unsure if the advance report has enough detail for a correct adjustment. His email to me says no. So the next report may be suspect (too low).
By the way, the number to watch is Real Final Sales. The difference between RFS and the base forecast is an inventory adjustment that net to zero over time.
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