Third Quarter Development vs. Benchmark Revisions

Boring progress is now forecast for the third quarter by the Atlanta Fed (0.3% SAAR), slightly quicker by Goldman Sachs (1.2%). It is very important do not forget that the affect on the implied degree of GDP might be overshadowed by the annual benchmark revision. And for the primary time, the annual assessment of the benchmark index will happen on September 29, moderately than the top of July.

Determine 1: GDP (black), GDO (blue), GDPNow nowcast (chartreuse sq.), Goldman Sachs nowcast (crimson triangle), all in billion Ch.2012$ SAAR. The NBER has outlined peak-to-trough recession dates as shaded. Supply: BEA Q2 second launch, Atlanta Fed (9/27), Goldman Sachs (9/26), NBER and writer’s calculations.

We do not know what the revision will do to the trajectory of GDP, however we do know that general, the GDO higher predicts what the revised GDP will in the end appear like than the reported GDP. The primary annual assessment of the benchmark index can typically end in vital modifications. For instance, the 2018 annual benchmark implied that first-quarter GDP was 0.4 proportion factors larger than initially reported.

Revisions are mentioned intimately on this EBA article.