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Image source: Pixabay

PNow and NY Fed nowcasts as of today:

FIgure 1: GDP (bold black), WSJ January survey mean forecast (blue), Bloomberg consensus (red square), GDPNow (light blue square), NY Fed nowcast (pink square), all in bn.Ch.2017$ SAAR. Source: BEA GDP 2023Q4 advance release, WSJ January survey, Bloomberg, Atlanta Fed, NY Fed, and author’s calculations.

GDP released yesterday far outstripped the WSJ mean forecasts, as well as Bloomberg consensus. GDPNow and NY Fed nowcasts are for 3% and 2.8% respectively for Q1 growth (q/q AR).

One could ask whether the growth rate reported in the advance release is plausible, or alternatively, if the level of activity is accurately tracked. Figure 2 reports GDO and the level of GDP implied by  GDP+.

FIgure 2: GDP (bold black), GDO (blue), GDP+ (brown), all in bn.Ch.2017$ SAAR. Figures on right are q/q AR growth rates. GDO estimate for 2023Q4 assumes nominal profits are at 2023Q3 levels. Source: Philadelphia Fed, and author’s calculations.

Clearly, output measured alternatively is not growing as rapidly as GDP, but still remains higher than 21Q4, when some observers worried about a downturn. What is true is output measured alternatively does not turn down in Q4.

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