The Atlanta Fed's GDPNow model is still forecasting that GDP growth in Q3 will be a red hot 4.9%. It was one thing to dismiss this early in the quarter, but as the model gets more and more data to work with it becomes more accurate. At this point, Q3 is just about over and the model has nearly all the data it will ever have. And it still thinks the economy is going gangbusters.
Nobody agrees with this, although, as you can see in the chart, the "blue chip consensus" of human forecasters has been steadily rising. Even if the GDPNow forecast is off, it look as if Q3 is going to turn out to be a surprisingly good one.
OMG we're going into RECESSION, everything is CRASHING we're gonna DIE ... wait, what? Oh. OMG it's INFLATION everything is BLOWING UP we're gonna DIE!!11!!
(and for a twofer: OMG the Fed's gonna raise rates again, everything is blowing up AND it's gonna crash! It's ... INFLACESSION!)
Headlines at the New York Times today:
New York Is Rebounding for the Rich. Nearly Everyone Else Is Struggling.
Plunging inflation and near-record-low unemployment: how are regular folk ever going to make it?
U.S. Government Shutdown Is Unlikely to Immediately Cause Recession
But a few months from now, who knows?
On Economy, Republicans Have One Answer: Blame Biden.
Again, plunging inflation and near-record-low unemployment: somebody's gotta take the blame for it.
+1
It is really amazing how so many people are seriously convinced everything is terrible and getting worse.
Can you walk a block in a commercial area without seeing a sign, "We're hiring!"
and try to hire people, especially for entry-level or non-career positions. No responses, or responders never show, or they show and then just leave without notice, or they stick around but are so thoroughly unreliable that you have to let them go, or or or ...
No wonder all the plutocrats like unemployment. Not only does it keep inflation from eroding the value of capital assets, it also leaves workers utterly powerless and dependent on employers.
Yes, economic forecasts are difficult, especially about the future. In fact economists in general have never established a record of success in making overall forecasts. One forecast may get it right, but then somebody usually wins the lottery and this is not considered a result of predicting the future. Why people keep believing economic forecasts is a mystery.
If it turns out that the Atlanta Fed is right this time and everybody else is wrong this should not boost confidence in forecasts.
Actually this is less a real forecast than interpreting mostly known data. Does the Atlanta Fed have some special information?
Headline is misleading. "Grown 5%" and "grown at a 5% annual rate" are quite different.
"but as the model gets more and more data to work with it becomes more accurate."
Don't you think that the top economists who are predicting numbers 2.5% lower than the Atlanta Fed are NOT USING the latest data?
The odds are excellent that the Atlanta Fed is far too optimistic. The odds are very good that the GDP will come in somewhere along the Blue band.
Am I wrong?
Everyone uses a model, but not all models agree. Like you say, those other economists are also using a model. Probably not as elaborate or sophisticated, but a model. Elaboration and sophistication are not the same things as "accurate".
I also would not be surprised that many of the other actors don't update their models daily, because they don't think it's important to do so, and that it doesn't increase accuracy enough to matter. They might be right about that.
They might also be mostly right about that, which is good enough most of the time. But sometimes things are unusually fluid. Possibly this is one of those times.
But as to who is right? Well, we'll have to wait and see about that, right?
GDP was negative two straight quarters last year, after revisions were made -- https://fred.stlouisfed.org/graph/?g=19pSN
We already haz soft landing?