Question

In: Economics

what's GDPNow, and explains the GDPNow module of Atlanta on 15, and 16 May, 2019.  

what's GDPNow, and explains the GDPNow module of Atlanta on 15, and 16 May, 2019.  

Solutions

Expert Solution

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2019 is 1.2 percent on May 16, up from 1.1 percent on May 15. After this morning's new residential construction release from the U.S. Census Bureau, the nowcast of second-quarter real residential investment growth increased from -5.4 percent to -3.6 percent.

The growth rate of real gross domestic product (GDP) measured by the U.S. Bureau of Economic Analysis (BEA) is a key metric of the pace of economic activity. It is one of the four variables included in the economic projections of Federal Reserve Board members and Bank presidents for every other Federal Open Market Committee (FOMC) meeting. As with many economic statistics, GDP estimates are released with a lag whose timing can be important for policymakers. For example, of the four scheduled 2014 release dates of an “advance” (or first) estimate of GDP growth, two are on the second day of a scheduled FOMC meeting with the other two on the day after the meeting. In preparation for FOMC meetings, policymakers have the Fed Board staff projection of this “advance” estimate at their disposal. These projections—available through 2008 at the Philadelphia Fed’s Real Time Data Center—have generally been more accurate than forecasts from simple statistical models. As stated by economists Jon Faust and Jonathan H. Wright in a 2009 paper, “by mirroring key elements of the data construction machinery of the Bureau of Economic Analysis, the Fed staff forms a relatively precise estimate of what BEA will announce for the previous quarter’s GDP even before it is announced.

The Atlanta Fed GDPNow model also mimics the methods used by the BEA to estimate real GDP growth. The GDPNow forecast is constructed by aggregating statistical model forecasts of 13 subcomponents that comprise GDP. Other private forecasters use similar approaches to “nowcast” GDP growth. However, these forecasts are not updated more than once a month or quarter, are not publicly available, or do not have forecasts of the subcomponents of GDP that add “color” to the top-line number. The Atlanta Fed GDPNow model fills these three voids.

As more monthly source data becomes available, the GDPNow forecast for a particular quarter evolves and generally becomes more accurate. That said, the forecasting error can still be substantial just prior to the “advance” GDP estimate release. It is important to emphasize that the Atlanta Fed GDPNow forecast is a model projection not subject to judgmental adjustments. It is not an official forecast of the Federal Reserve Bank of Atlanta, its president, the Federal Reserve System, or the FOMC.


Related Solutions

On pages 6-15 and 6-16 (Section 6-3b), the text explains that taxpayers are not allowed a...
On pages 6-15 and 6-16 (Section 6-3b), the text explains that taxpayers are not allowed a business deduction for political contributions or for expenses incurred for lobbying activities. How does the IRS define what is a “political contribution” that cannot be deducted? Is the disallowance limited to outright gifts, or does it extend to less direct methods of providing funds to a candidate or party? If the latter, please explain the circumstances in which the disallowance applies to something that...
Historical demand for a product is DEMAND January 15 February 12 March 16 April 15 May...
Historical demand for a product is DEMAND January 15 February 12 March 16 April 15 May 17 June 16 a. Using a weighted moving average with weights of 0.60 (June), 0.20 (May), and 0.20 (April), find the July forecast. (Round your answer to 1 decimal place.) b. Using a simple three-month moving average, find the July forecast. (Round your answer to 1 decimal place.) c. Using single exponential smoothing with ? = 0.30 and a June forecast = 11, find...
David immediately placed his car in service when he purchased it on May 16, 2019, for...
David immediately placed his car in service when he purchased it on May 16, 2019, for $23,500. He did not claim bonus depreciation and he used the car 55% for business. What is David's greatest allowable depreciation deduction amount for the second year, assuming the same business use percentage? $5,500 $8,855 $10,000 $16,000
What's the blockchain technology and how it may affect the profession?
What's the blockchain technology and how it may affect the profession?
After the JPR Corporation paid its employees on May 15, 2019, and recorded the corporation's share...
After the JPR Corporation paid its employees on May 15, 2019, and recorded the corporation's share of payroll taxes for the payroll paid that date, the firm's general ledger showed a balance of $1920 in the Social Security tax Payable account, a balance of $394 in the Medicare tax Payable account, and a balance of $2200 in the Employee Income Tax Payable account. On May 16, 2019, the business issued a check to deposit the taxes owed in the local...
2. (6 marks) On May 15, 2019, President Trump issued an executive order that bans the...
2. On May 15, 2019, President Trump issued an executive order that bans the export of U.S. technology to Chinese mobile phone manufacturing firms. As a result, the cost of chips that produces mobile phones becomes more expensive. According to Research Report of Mobile Phone Exports in China, the price of Chinese manufacturing mobile phones changed by 10% while the sales volume changed by 15% due to the executive order. a. With the above figures, calculate the relevant price elasticity...
Brand   Tar   Nicotine   CO American_Filter   16   1.2   15 Benson_&_Hedges   16   1.2   15 Camel   16   1   17...
Brand   Tar   Nicotine   CO American_Filter   16   1.2   15 Benson_&_Hedges   16   1.2   15 Camel   16   1   17 Capri   9   0.8   6 Carlton   1   0.1   1 Cartier_Vendome   8   0.8   8 Chelsea   10   0.8   10 GPC_Approved   16   1   17 Hi-Lite   14   1   13 Kent   13   1   13 Lucky_Strike   13   1.1   13 Malibu   15   1.2   15 Marlboro   16   1.2   15 Merit   9   0.7   11 Newport_Stripe   11   0.9   15 Now   2   0.2   3 Old_Gold   18   1.4   18 Pall_Mall   15   1.2   15 Players   13   1.1   12...
Deneen's Manufacturing plan had 600 adding machines on hand May 1, 2019, each costing $16 each....
Deneen's Manufacturing plan had 600 adding machines on hand May 1, 2019, each costing $16 each. Purchases and sales during May: MONTH MONTH DATE PURCHASES SALES MAY 12 150 @17 200 @ $25 14 100 @ $18 29 30 150 @ $30 DENEEN DOESN'T KEEP PERPETUAL INVENTORY RECORDS. SHE COUNTED 200 ADDING MACHINES ON HAND 5/31/2019. 1. WHAT WAS THE AMOUNT OF ENDING INVENTORY AT MAY 31, 2020, AND COST OF GOODS SOLD FOR THE MONTH ENDED MAY 31, 2019,...
The Video "What's Wrong With What We Eat?" explains our health care crisis. Using appropriate college-level...
The Video "What's Wrong With What We Eat?" explains our health care crisis. Using appropriate college-level writing, engage in a class discussion by responding in detail to the following three questions: 1. Discuss the message of this video in detail including: plant vs. animal consumption food pyramid locavore history of our food in the U.S. his advice on action     2. What is your reaction to this video?     3. In your opinion, what should we do to improve this...
Test #3 - Chapters 15-17 EX.16-163 MC.16-125 MC.16-050 MC.17-069 MC.15-150 MC.15-071 MC.16-083.ALGO EX.17-174 MC.17-074 EX.16-162 EX.16-170...
Test #3 - Chapters 15-17 EX.16-163 MC.16-125 MC.16-050 MC.17-069 MC.15-150 MC.15-071 MC.16-083.ALGO EX.17-174 MC.17-074 EX.16-162 EX.16-170 MC.16-060 MC.16-071 EX.16-172 EX.15-169 MC.16-124 MC.16-108 MC.15-068 EX.17-163 Hide or show questions Progress:8/19 items Calculator Zang Co. manufacturers its products in a continuous process involving two departments, Machining and Assembly. Prepare journal entries to record the following transactions related to production during June: If an amount box does not require an entry, leave it blank. a. Materials purchased on account, $180,000. b. Materials requisitioned...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT