Economy

Consensus Forecast for Q1 2019 GDP Slighter Stronger than Prior Year

‘Advance’ Q1 2018 GDP Came in at 2.0%, Was Revised Higher in Final

For all the talk of a potential recession earlier this year, the consensus forecast for first quarter (Q1) 2019 gross domestic product (GDP) matches last year.

UPDATE: The Bureau of Economic Analysis (BEA) “advance” estimate for first quarter (Q1) 2019 gross domestic product (GDP) came in at a 3.2% seasonally-adjusted annual rate (SAAR). Read full story here (no paywall).

The “advance” estimate is due out Friday morning from the Bureau of Labor Statistics (BEA), and if it holds it will be slightly stronger than the “final” 2.2% seasonally-adjusted annual rate (SAAR) reported for Q1 2018.

Seasonally-Adjusted Annual Rates (SAAR)	Prior	Consensus Forecast	Forecast Range
GDP core price index – Q/Q ∆	2.0%	1.6%	1.3 % to 2.2 %
Real GDP – Q/Q ∆	2.2%	2.3%	1.4% to 2.8%
GDP price index – Q/Q ∆	1.7%	1.7%	1.2% to 2.8%
Real Consumer Spending – Q/Q ∆	2.5%	1.1%	0.3% to 2.6%

“The ‘academic economists’ are way behind the ‘market-driven economists’ in revising their Q1 GDP estimates,” Tim Anderson, PPD contributing economist and analyst at TJM Investments said. “They are responding to improvements in both raw data and consensus surveys during March and into April.”

“For all the talk about a slowing economy in 2019, many will find it hard to reconcile a Q1 GDP report that matches or beats the ‘advance’ Q1 report in 2018.”

Mr. Anderson noted that the advance or initial read for Q1 2018 GDP came in at 2.0%, and was revised higher to 2.2% in the final. The advance estimate due out tomorrow at 8:30 AM EST should be compared with that number accordingly.

The BEA will release a more complete “second estimate” for Q1 2019 GDP — along with Corporate Profits — on May 30. The final and “third estimate” to the former and a revision to the latter is scheduled to be released on June 27.

The Atlanta Fed’s final GDPNow model forecast for Q1 2019 GDP was revised to 2.7% on Thursday, April 25. That’s down from 2.8% on April 19.

It was the result of real residential investment growth declining from 3.5% to 1.3%, and did not include the stronger-than-anticipated 2.7% gain in durable goods orders reported earlier this morning. That data will not be included in the BEA’s advance estimate due out tomorrow, either.

The New York Fed Nowcasting model, which hasn’t been updated since April 13, stands at just 1.4% and is even more incomplete.

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Richard D. Baris

Rich, the People's Pundit, is the Data Journalism Editor at PPD and Director of the PPD Election Projection Model. He is also the Director of Big Data Poll, and author of "Our Virtuous Republic: The Forgotten Clause in the American Social Contract."