Unrestrained Economic Boom?: Atlanta Fed GDPNow forecast has flipped from -2.8% to +2.5%

[Gaius]

In early March, barely 30 days in President Trump’s 2nd term,
I started this thread:

Recession?: Atlanta Fed Q1 GDPNow forecast has dropped to -2.8% from -1.5%

The Atlanta Fed’s GDPNow forecast has been around since (checks Grok) 2011. Pre pandemic it was considered a damn good indicator of what the actual GDP will be. Anyway, last week the model forecast q1 2025 GDP would shrink 1.5% annualized. Over the weekend that was revised to shrinking 2.8% (also annualized.) Forecast 1: https://www.bloomberg.com/news/articles/2025-02-28/atlanta-fed-gdpnow-sees-economy-shrinking-after-friday-data Revised Forecast:

and linked this article

https://www.bloomberg.com/news/articles/2025-02-28/atlanta-fed-gdpnow-sees-economy-shrinking-after-friday-data
.
.
.
Well the model has taken a supergigantic swing in the other direction and now forecasts postive GDP growth (2.5% annulaizedrate)

Oops!

[biggestal99]

yur previous threads on stagflation look more realistic. unemployment and inflation are rising. maybe you can show us some charts.

Allan

[biggestal99]

consenus GDP for 3q2025 is about 1.00. hardly the stuff to be crowing about.

i am worried about the job numbers.

Allan

[Gaius]

I am not (yet) optimistic on the economy.

I reached peak bearishness when the economy had two quarters of consecutive decline in real GDP

And I still believe much of the current ecnomic state is smoke and mirrors
driven primarily by

• a ton of sidleine money leftover since COVID
• the fact that the Fed is right now already expanding money faster than the GDP is expanding. (“That giant pile isn’t giant enough. Let’s make it gianter.”)

Now however when good economic news comes out I am in a strange postion.

• I feel vindicated because it shows that tariffs will not crush the economy, and that when we dis-employ a bunch of landscapers, landscaping wages rise, as bosses seek replacements.

• But then I feel sheepish because . . . well deficits, money printing etc.

[Gaius]

@biggestal99

yur previous threads on stagflation

As far as Stagflation itself . . .

In Jan 2023 the World Bank projected US GDP to grow only 0.5% in 2023
and I responded

@Gaius

according to the World Bank US GDP growth is expected to be only 0.5% in 2023. With a growth rate so close to zero (and below zero in real terms) I think there is a real possibility of 2 consecutive quarters of stagflation.

I got a lot of guff for that.
As if I had declared something I had not

and in fact, the working class did enter a 9-12 month period of stagflation. But overall the economy turned out to be K-shaped during that period. The Nov 2022 launch of ChatGpT may have had something to do with it.

[Gaius]

Yes, it is good to watch unemployment numbers.

When they rise they tend to rise a ot and very quickly.