Atlanta Fed Just Slashed Q4 GDP Forecast To Barely Positive 0.7%, Down 1.2% In Ten Days
Just before the aborted Santa Rally took off in earnest, on December 23 the famous US economic growth prognosticators at the Atlanta Fed (famous because unlike Wall Street they actually are right) slashed its Q4 GDP forecast from 1.9% to 1.3% citing weakness in real consumer spending and poor existing-home sales.
Moments ago, in its latest Q4 GDP revision, the Atlanta Fed just pulled the rug from under the economy (and the market now that bad news for the economy is bad news for stocks), and slashed its latest quarterly forecast by another 50%, from 1.3% to a barely positive 0.7%, a print which matches the "abysmal" Q1 2015 GDP, which as a reminder had to be double seasonally adjusted higher to compensate for the "harsh winter."
Does that mean that when "triple seasonally adjusting" for warm weather that the real Q4 GDP was negative?
This is what the Atlanta Fed said:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 0.7 percent on January 4, down from 1.3 percent on December 23. The forecast for the contribution of net exports to fourth-quarter real GDP growth fell 0.1 percentage points to -0.4 percentage points on December 29 after the U.S. Census Bureau's advance report on international trade in goods. The nowcast for real GDP growth fell 0.5 percentage points this morning following the Census Bureau's release on construction spending and the Institute for Supply Management's Manufacturing ISM Report On Business.
Said otherwise, according to the Atlanta Fed, Janet Yellen launched a rate hike cycle in a quarter when GDP will be just 0.7%, and which when averaged across the prior 3 quarters, would mean that the US will have grown at just 1.8% in 2015, a 25% drop from the 2.4% GDP growth in 2014.
Perhaps this is indicative of the Fed's new normal thinking: the lower the GDP print, the higher the Fed Funds rate?
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More likely the thinking is creating a platform for launch of QE4 but certainly a "pause" for rate hikes which seem to be hurting "confidence".
So... STFR? (if there is one)
The Fed: Forecasting the Past Since 1913.
What's worse is, Fed's IQ slashed from 100 to 80!!!
from slightly stupid, to full Retard!!
What will be left to save the markets once the Fed is audited and we find that they are holding a TRILLION in equities! on top of the $4 TRILLION in bad loans they bought from the banks?
May there be mass prosecutions, and jail time for these arch criminals.
I think Atlanta is a bit optimistic I'd cut those numbers in half...at best.........
Two things you need to remember about government numbers:
1. Extremely Subjective
2. Often Revised
Depending on the calculation, the GDP measurement has a margin of error of between 1.5 and 3%.
I think their historical rate of error is high, thus their revision isn't worth a breath used to mention it.
Here is your first revision. You just can't make this shit up. They want to revise GDP higher to include private residential improvements.
http://www.marketwatch.com/story/heres-how-the-government-miscalculated-...
When in doubt, cut 'em by half, then half again, til we approach ZILTCH, ZIRP, then NIRP, then full currency melt-down.
Keep the faith in FIAT, because it is all you have left.
LOL! Rate hikes? What rate hikes? Look at the ten year!
If you learn how to step through the looking glass, you can think up a dozen impossible things before breakfast........
yes, but of course ideas are free.
https://www.youtube.com/watch?v=RZHaQ3C3xQo
The Fed will be reversing that rate hike in an emergency meeting any day now.
These guys have been pretty accurate. Why are they allowed to exist?
Agreed. Weird bifurcation of the Fed's main narrative.
1. It speaks to genuine discord in the Fed ranks.
and/or
2. It is part of building a narrative of "one bank made of many banks" (much as Ghordius reminds us about the ECB and Eurozone national banks).
Either way, it looks like the ground is being laid for some blame shifting.
Is the Atlanta Fed Jewish? Perhaps they actually have a diverse membership...
Trying to be optimistic here...
Maybe part of that "saved or created" job thing?
Now if they used accurate inflation numbers, GDP growth would be 5% to 8% lower.
There is no real growth in America. Inflation is adjusted lower to create a fake growth
The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2014 worked out to -6.2%, -6.5%, -6.5%, -4.1% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
Being a Fed bank they are restricted with the numbers they can use. That said, they don't have an Eccles building turd polishing machine.......
This stock bull ain't over by a damn sight. Prepare to get trampled by the Bulls, fearful Zeroes!
who gives a chit...anyone in paper deserves whatever they get......just keep physical silver and gold cheap with their ponzi paper
You must be right. I plan on buying two iPhone 6s plus, one for each hand. Then I'm going to the movies twice as much, and donating $50. a week to the fracking companies.
And how bout that Netflix downgrade today? So only FAG is left propping up the market.
Ha!
Close enough for gubmint work!
Subtract the proper correction of 1.5 points, then it agrees with what i see out the window.
Ouch!... Thats going to leave a mark...
Look at the bond "market" and what happened around noon today. The Fed's corner is getting smaller and smaller...
The only thing they really control are those Federal Reserve promissory/debt notes...
So long as productive people still accept FRNs in exchange for their labor, the Fed will survive, hence they will try and defend the FRN to the death...
They will talk about all kinds of other bullshit and keep giving paper/digits to the club members but this will ultimately be the only focus/concern indefinitely.
And the Fed is tightening, and the 10-year UST yield is 2.20%, while the German 10-year Bund yields 0.57%.
Bizzarro World.
ROFLMAO.
Unemployment is near 5%, Zeroes. And American know-how, ingenuity and pull-yourself-up-by-your-bootstraps vigor is in our DNA, chart chimps.
No market can match America's!
Thus spoke the Romans
Practice stupid in private.
Standard Disclaimer: Saves on bandwidth...
off in the distance helicopters are coming, yellen's got dollars to drop so the citizens scum can pay the vig to the banksters, rise the interest on the people to pay the banksters vig..beautiful if you are in the club.
" Yes we can! "
I predict the market rallys back 400 points by the close then remains flat for the next 3 months...
Optimist!
sold my short (tvix) position this morning, cause markets only go up.
right yellen?
still long oil, cause violence and madness are the common human trait in ME.
I read a book, Economics Rules by Dani Rodrik, that stressed the importance of economists' choosing the correct models. Someone ought to suggest that one to Grandma Yellen.
My for is for Hillary/Prison 2016 !!
This never ending recovery is going to impoverish all of us.
His name was ?. I forgot his name. But he was right.
Been bouncing at the bottom around 350 all day,,, the 2:00 ramp should begin if they're going to try to save it.
Dont worry any realy bad numbers can be changed to ensure solid growth is reported.