GDP growth expectations look to be picking up. The GDPNow forecast from the Atlanta Fed is 2.5% for 3Q. The more bullish indicator for me is the pickup in the 4Q Nowcast forecast from the New York Fed. Unlike the Atlanta Fed model which only forecasts the upcoming quarter, the New York Fed model forecasts the upcoming 2 quarters.
As you can see from the 3Q and 4Q forecasts from the New York Fed, there is an expectation of a 1% pickup in growth from 3Q into 4Q. Both the Atlanta and the New York models are indicating firm growth, and this has probably helped buoy U.S. equities this week. Looking at the breakdown of the data impacting the forecast, it was Monday's strong ISM Manufacturing survey which moved the model estimate of 4Q GDP growth up 0.5%.
Michael Grove, CFA