Forecasting Tomorrow's Q2 GDP
Tomorrow morning we get the Advance Estimate for Q2 GDP from the Bureau of Economic Analysis. Earlier this months I reported on the GDP forecasts in Wall Street Journal's July survey of economists (available here). Their estimates ranged from a low of 0.7 percent to a high of 2.5 percent. The average of the 50 responses was 1.7 and the median (middle) response was 1.8 percent. The WSJ survey was conducted July 6-10, which predates a bit of the more recent eurozone turmoil in the news.
The forecast I routinely follow is the consensus at Briefing.com, which is 1.2 percent. Briefing.com's own forecast is a more pessimistic 0.4 percent.
Earlier today, an article on the International Business Times website has the intriguing title In Advance Of Q2 US GDP Release, Forecasting Economists Race To The Bottom. The article points out that Bloomberg's survey of 80 economists has a median forecast of 1.4 percent and that the 74 economists surveyed by Thompson Reuters produced a median of 1.5 percent.
The most striking news in the IB Times article is the documentation of the series of lowered forecasts by Goldman Sachs, cleverly illustrated with this chart.
Here's a reminder of the Federal Reserve's GDP projections, which are annual forecasts only. The most recent Federal Reserve economic projections date from June 20th, which are available here. But to save you the click, here is a snapshot of the GDP data.
As I pointed out in my report on the recent WSJ survey, the July 27th Advance Estimate for Q2 GDP will have more at stake than the just Q2 GDP. We get the annual revision wild card, which could bring adjustments to the past 13 quarters.
|The annual revision of the national income and product accounts (NIPAs), covering the first quarter of 2009 through the first quarter of 2012, will be released along with the "advance" estimate of GDP for the second quarter of 2012 on July 27, 2012.|
Annual revisions have produced some rather remarkable changes (more here). Could we see surprises of similar magnitude tomorrow?
Tomorrow I'll post multiple reviews of the latest GDP.