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.
Latest forecast: 1.8 percent — March 23, 2018
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.8 percent on March 23, unchanged from March 16. After this morning’s advance durable manufacturing report from the U.S. Census Bureau, the nowcast of first-quarter real nonresidential equipment investment growth increased from 5.8 percent to 6.2 percent and the nowcast of the contribution of inventory investment to first-quarter real GDP growth decreased from 0.72 percentage points to 0.66 percentage points. The nowcast of first-quarter real residential investment growth increased from –3.1 percent to –1.6 percent after Wednesday's existing-home sales release from the National Association of Realtors, but fell back to –2.4 percent after this morning's releases on new-home sales and construction prices from the Census Bureau.
The next GDPNow update is Thursday, March 29. Please see the "Release Dates" tab below for a full list of upcoming releases.
- GDPNow Forecast
- GDPNow Model Data and Historical Forecasts
- GDPNow Release Dates
- GDPNow RSS feed
- GDPNow: A Model for GDP "Nowcasting," Working Paper 14-7
- macroblog on Building a Better Model: Introducing Changes to GDPNow
- Modifications to GDPNow Model Forecast
- GDPNow App for Mobile Phones
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In this video economist Pat Higgins, GDPNow's creator, discusses the difference between nowcasting and forecasting.
Going Inside GDPNow
In this Economy Matters podcast, Atlanta Fed policy adviser and economist Pat Higgins, the creator of GDPNow, discusses the tool, how it works, and some of the challenges involved in measuring the economy.
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.
The BEA’s advance estimates of the subcomponents of GDP use publicly released data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, and other sources. Much of this data is displayed in the BEA’s Key Source Data and Assumptions table that accompanies the “advance” GDP estimate. GDPNow relates these source data to their corresponding GDP subcomponents using a “bridge equation” approach similar to the one described in a Minneapolis Fed study by Preston J. Miller and Daniel M. Chin. Whenever the monthly source data is not available, the missing values are forecasted using econometric techniques similar to those described in papers by James H. Stock and Mark W. Watson and Domenico Giannone, Lucrezia Reichlin, and David Small. A detailed description of the data sources and methods used in the GDPNow model is provided in an accompanying Atlanta Fed working paper.
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.
©2017 Federal Reserve Bank of Atlanta. All rights reserved. Permission is granted to reproduce for personal and educational use only.
Frequently Asked Questions
Is GDPNow an official forecast of the Atlanta Fed or the Bank's president?
No, it is not an official forecast of the Atlanta Fed, its president, the Federal Reserve System, or the FOMC.
Is any judgment used to adjust the forecasts?
No. Once the GDPNow model begins forecasting GDP growth for a particular quarter, the code will not be adjusted until after the "advance" estimate. If we improve the model over time, we will roll out changes right after the "advance" estimate so that forecasts for the subsequent quarter use a fixed methodology for their entire evolution.
When will forecasts of GDP growth in a particular quarter start being made?
About 90 days before the "advance" estimate for GDP growth for the quarter is released. GDPNow forecasts generally begin the weekday after the BEA's "advance" estimate of GDP growth for the previous quarter is released. For example, the advance estimate of real GDP growth in the fourth quarter of 2014 was released on January 30, 2015. The GDPNow forecasts for real GDP growth in the first quarter of 2015 were tracked from February 2, 2015, until several days before the "advance" estimate released on April 29, 2015.
How frequently is the GDPNow forecast updated?
The model forecast is updated six or seven times a month on weekdays, with at least one following seven data releases: Manufacturing ISM Report on Business, U.S. International Trade in Goods and Services (FT900), Wholesale Trade, Monthly Retail Trade Report, New Residential Construction, Advance Report on Durable Goods Manufacturers, and Personal Income and Outlays. Other data releases, such as Industrial Production and Capacity Utilization and Existing-Home Sales, are incorporated in the model as well and their impact on the model's forecast will be shown on the next weekday with one of the data releases. The proprietary forecasts from Blue Chip Economic Indicators and Blue Chip Financial Forecasts shown in the chart are available from Aspen Publishers.
How can I access historical forecasts from the GDPNow model?
These forecasts are available in this downloadable spreadsheet. See the tab "ReadMe" in the spreadsheet for hyperlinks to the historical forecasts and other data for the model. In particular, the tab "TrackingDeepArchives" has forecasts for the 2011:Q3–2014:Q1 period (before the model went live), the tab "TrackingArchives" has forecasts from 2014:Q2 through the last quarter for which an advance estimate of GDP has been released by the BEA, and the tab "TrackRecord" has a comparison of the historical GDPNow model forecasts with the actual "advance" real GDP growth estimates from the BEA.
Where can I read about the methods and source data used in the model?
A detailed description is given in a working paper describing the model. To summarize, the BEA's NIPA Handbook provides very detailed documentation on both the source data and methods used for estimating the subcomponents of GDP. The late Nobel Prize–winning economist Lawrence Klein pioneered many of the "bridge equation" methods used for making short-run forecasts of GDP growth using this source data; a 1989 paper he coauthored with E. Sojo describes the approach. Kathleen Navin, an economist at Macroeconomic Advisers, provides a bird's-eye view illustrating how to use a bridge equation approach in practice to improve GDP forecasts in this 2017 presentation. The econometric techniques used in our GDPNow model were heavily adapted from the GDP nowcasting models described in a 1996 Minneapolis Fed Quarterly Review article by Preston J. Miller and Daniel M. Chin and a 2008 paper by the Board's David Small and economists Domenico Giannone and Lucrezia Reichlin.
Where can I find alternative forecasts of GDP growth?
For model forecasts from other Reserve Banks, see the New York Fed Nowcasting Report, the Minneapolis Mixed Frequency Vector Autoregression (MF-VAR) model, the Philadelphia Research Intertemporal Stochastic Model (PRISM), and the Federal Reserve Bank of Cleveland's prediction model for GDP growth based on the slope of the yield curve. Moody's Analytics and Now-Casting.com produce proprietary model short-run GDP forecasts. For survey-based forecasts, see the Philadelphia Fed's quarterly Survey of Professional Forecasters, which includes forecasts of real GDP and its major subcomponents. The Wall Street Journal's Economic Forecasting Survey occurs monthly, and the Moody's Analytics/CNBC Rapid Update survey generally occurs several times a week. Neither of these surveys includes forecasts of the subcomponents of GDP.
How accurate are the GDPNow forecasts? Are they more accurate than "professional" forecasts?
The chart below shows GDPNow's real-time forecasts made just prior to the release of the "advance" (initial) estimate of the annualized growth rate of real GDP along with the advance estimates from the U.S. Bureau of Economic Analysis.
Since we started tracking GDP growth with versions of this model in 2011, the average absolute error of final GDPNow forecasts is 0.61 percentage points. The root-mean-squared error of the forecasts is 0.79 percentage points. These accuracy measures cover "advance" estimates for 2011:Q3–2017:Q4. Some further analysis of GDPNow's forecast errors is available in macroblog posts located here and here. We have made some improvements to the model from its earlier versions, and the model forecasts have become more accurate over time (the complete track record is here). When back-testing with revised data, the root mean-squared error of the model's out-of sample forecast with the same data coverage that an analyst would have just before the "advance" estimate is 1.15 percentage points for the 2000:Q1–2013:Q4 period. The figure below shows how the forecasts become more accurate as the interval between the date the forecast is made and the forthcoming GDP release date narrows.
Overall, these accuracy metrics do not give compelling evidence that the model is more accurate than professional forecasters. The model does appear to fare well compared to other conventional statistical models.
How are revisions to data not yet reflected in the latest GDP release handled?
In general, the model does not attempt to anticipate how data releases after the latest GDP report will affect the revisions made in the forthcoming GDP release. The exception is the "change in private inventories" subcomponent, where revisions to the prior quarter's reading affect GDP growth in the current quarter. Users of the GDPNow forecast should generally use the forecasts of the change in "net exports" and the change in the "change in private inventories," and not forecasts of the levels. Revisions to retail sales are used to anticipate revisions to real monthly expenditures in the "PCE control group" and revisions to housing starts are used to anticipate revisions in the monthly value of private residential construction spending put in place.
Do you share your code?
At this point, no. However, the Excel spreadsheet gives the numerical details—including the raw data and model parameters—of how the monthly data map into forecasts of the subcomponents of GDP.
What are the differences between GDPNow and the FRBNY Nowcast models? Why do the two models have different forecasts?
The FRBNY Nowcast model of real GDP growth is based on a dynamic factor model described in this Liberty Street blog entry. The Chicago Fed National Activity Index and Aruoba-Diebold-Scotti Business Conditions Index are both indicators of economic activity estimated from factor models. The latest nowcast from the FRBNY Nowcast model along with some related Q&A is available here.
The Atlanta Fed's GDPNow also uses a dynamic factor model—based on a model from one of the New York Fed economists who coauthored the Liberty Street blog entry—but uses the factor only as an input to fill in the yet-to-be-released monthly source data for GDP. The estimates of this dynamic factor are available in the Factor tab of this Excel file.
The monthly source data are then used to estimate the subcomponents of GDP, which are then aggregated up to a real GDP growth nowcast. Besides a dynamic factor model, GDPNow uses several other econometric techniques, including "bridge equations" and Bayesian vector autoregressions, to nowcast the subcomponents of GDP. The exact methods are described in this working paper. The numerical details—including the raw data and model parameters—translating the monthly data into nowcasts of the subcomponents of GDP in the latest GDPNow forecast are available in this Excel file (see the ReadMe tab).
Because GDPNow and the FRBNY Nowcast are different models, they can generate different forecasts of real GDP growth. Our policy is not to comment on or interpret any differences between the forecasts of these two models.
Subcomponent Contribution Charts
These charts show how the forecasted GDP subcomponent contributions to growth aggregate up to GDPNow's real GDP growth forecast for each update day in a particular forecast quarter and how changes in the subcomponent contribution forecasts aggregate up to changes in the GDP growth forecasts. Whenever a user hovers the cursor over a bar in one of the charts, the pop-up box displays the data releases for the date of the bar as well the numerical values for the GDP growth forecast and either the levels or changes in the subcomponent contribution forecasts. For previously reported quarters, the final date in the top chart shows the official first estimates of real GDP growth and the subcomponent contributions to growth from the Bureau of Economic Analysis (BEA). The final date in the bottom chart shows the forecast errors of the final GDPNow projections of the BEA's first estimates of real GDP growth and the subcomponent contributions to growth.
Release times shown are from the original source. The GDPNow model is usually updated within a few hours following these times.
Release Date of release Time of release ISM Manufacturing Index, Construction spending 1/3/2018 10:00 a.m. International trade (full report), Employment situation, M3 Manufacturing (full report), ISM Nonmanufacturing Index 1/5/2018 10:00 a.m. Wholesale trade, Import and export prices 1/10/2018 10:00 a.m. Retail sales + inventories, Consumer Price Index 1/12/2018 10:00 a.m. Housing starts 1/18/2018 8:30 a.m. Advance Economic Indicators, New-home sales
1/25/2018 10:00 a.m. Personal income and outlays 1/29/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 2/1/2018 10:00 a.m. International trade (full report) 2/6/2018 8:30 a.m. Wholesale trade 2/9/2018 10:00 a.m. Retail sales + inventories, Consumer Price Index 2/14/2018 10:00 a.m. Housing starts, Import and export prices 2/16/2018 8:30 a.m. Advance durable manufacturing, Advance Economic Indicators 2/27/2018 8:30 a.m. Personal income and outlays, ISM Manufacturing Index, Construction spending 3/1/2018 10:00 a.m. International trade (full report) 3/7/2018 8:30 a.m. Wholesale trade, Employment situation 3/9/2018 10:00 a.m. Retail sales + inventories, Producer Price Index 3/14/2018 10:00 a.m. Housing starts, Industrial production and capacity utilization 3/16/2018 9:15 a.m. Advance durable manufacturing, New-home sales 3/23/2018 10:00 a.m. Personal income and outlays 3/29/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 4/2/2018 10:00 a.m. International trade (full report) 4/5/2018 8:30 a.m. Wholesale trade, Producer Price Index 4/10/2018 10:00 a.m. Retail sales + inventories 4/16/2018 10:00 a.m. Housing starts, Industrial production and capacity utilization 4/17/2018 9:15 a.m. Advance durable manufacturing, Advance Economic Indicators 4/26/2018 8:30 a.m. Personal income and outlays 4/30/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 5/1/2018 10:00 a.m. International trade (full report), M3 Manufacturing (full report), ISM Nonmanufacturing Index 5/3/2018 10:00 a.m. Wholesale trade, Producer Price Index 5/9/2018 10:00 a.m. Retail sales + inventories 5/15/2018 10:00 a.m. Housing starts, Industrial production and capacity utilization 5/16/2018 9:15 a.m. Advance durable manufacturing 5/25/2018 8:30 a.m. Personal income and outlays 5/31/2018 8:30 a.m. ISM Manufacturing Index, Construction spending, Employment situation 6/1/2018 10:00 a.m. International trade (full report) 6/6/2018 8:30 a.m. Wholesale trade 6/8/2018 10:00 a.m. Retail sales + inventories, Import and export prices 6/14/2018 10:00 a.m. Housing starts 6/19/2018 8:30 a.m. Advance durable manufacturing, Advance Economic Indicators 6/27/2018 8:30 a.m. Personal income and outlays 6/29/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 7/2/2018 10:00 a.m. International trade (full report), Employment situation 7/6/2018 8:30 a.m. Wholesale trade, Producer Price Index 7/11/2018 10:00 a.m. Retail sales + inventories 7/16/2018 10:00 a.m. Housing starts 7/18/2018 8:30 a.m. Advance durable manufacturing, Advance Economic Indicators 7/26/2018 8:30 a.m. International trade (full report), Employment situation, ISM Nonmanufacturing Index* Possibly 8/3, but to be determined TBD Wholesale trade, Producer Price Index 8/9/2018 10:00 a.m. Retail sales + inventories, Industrial production and capacity utilization 8/15/2018 10:00 a.m. Housing starts 8/16/2018 8:30 a.m. Advance durable manufacturing 8/24/2018 8:30 a.m. Personal income and outlays 8/30/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 9/4/2018 10:00 a.m. International trade (full report) 9/5/2018 8:30 a.m. Wholesale trade 9/11/2018 10:00 a.m. Retail sales + inventories, Import and export prices, Industrial production and capacity utilization 9/14/2018 10:00 a.m. Housing starts 9/19/2018 8:30 a.m. Advance durable manufacturing, Advance Economic Indicators, GDP (Q2, 3rd estimate) 9/27/2018 8:30 a.m. Personal income and outlays 9/28/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 10/1/2018 10:00 a.m. International trade (full report), Employment situation 10/5/2018 8:30 a.m. Wholesale trade, Producer Price Index 10/10/2018 10:00 a.m. Retail sales + inventories 10/15/2018 10:00 a.m. Housing starts 10/17/2018 8:30 a.m. Advance durable manufacturing, Advance Economic Indicators 10/25/2018 8:30 a.m. Personal income and outlays 10/29/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 11/1/2018 10:00 a.m. International trade (full report), Employment situation, M3 Manufacturing (full report) 11/2/2018 10:00 a.m. Wholesale trade, Producer Price Index 11/9/2018 10:00 a.m. Retail sales + inventories, Import and export prices 11/15/2018 10:00 a.m. Housing starts 11/20/2018 8:30 a.m. Advance durable manufacturing, Existing-home sales 11/21/2018 10:00 a.m. Personal income and outlays 11/29/2018 8:30 a.m. ISM Manufacturing Index, Construction spending 12/3/2018 10:00 a.m. International trade (full report), M3 Manufacturing (full report) 12/6/2018 10:00 a.m. Wholesale trade, Employment situation 12/7/2018 10:00 a.m. Retail sales + inventories, Industrial production and capacity utilization 12/14/2018 10:00 a.m. Housing starts 12/18/2018 8:30 a.m. Advance durable manufacturing, Personal income and outlays, GDP (Q3, 3rd estimate) 12/21/2018 10:00 a.m.
* GDPNow updates following economic releases, on July 31, 2018, August 1, 2018 and August 3, 2018, when GDPNow updates would typically occur, will be delayed until the Bureau of Economic Analysis (BEA) releases updated underlying detail tables (http://www.bea.gov/iTable/index_UD.cfm) reflecting the 2018 comprehensive revision of the National Income and Product Accounts (NIPA). This will likely push back the initial third-quarter GDPNow forecast to August 3 or August 6. Information regarding the BEA’s release timeline following the comprehensive revision has not been released yet; see https://www.bea.gov/national/an1.htm for information about past NIPA revisions.