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The Atlanta Federal Reserve just bumped up their Q2 GDP forecast to 2.7% on a day when the economic news was largely bad. As in mortgage applications, personal income, personal spending, and real personal spending were all down from the previous week/month.
So here is what the Atlanta Fed said:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.7 percent on June 29, up from 2.6 percent on June 24. The forecast for second-quarter real consumer spending growth increased from 4.1 percent to 4.3 percent after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis. This was partly offset by a decline in the forecast of the second-quarter change in net exports in 2009 dollars from $14 billion to $11 billion after Monday’s advance report on international trade in goods from the U.S. Census Bureau.
Here is a more troubling chart. The public debt for the US has exploded since 2008 while real GDP growth per capita has slowed. In fact, annual rate of growth of real GDP per capita has been below 2% since 2008 with the highest rates being in 2010 at 1.9% growth with 2013 and 2014 at 1.7% growth. Now the Atlanta Fed said that Q2 Real GDP growth is on track for 2.7%.
All that debt and 1.7% real GDP growth per capita in 2013 and 2014. 2015 was 1.2% growth. 2009 growth was -1.1%, and 2011 was 0.9% growth.
The Atlanta Fed must have The Incredible Burt Wonderstone doing their GDP magic act. Particularly in an election year.
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