Q4 GDP Forecasts: Mid-to-High 2s, Estimate of Shutdown Impact on GDP

Jan 11 17:01 2019 Print This Article

Merrill Lynch estimate of impact of government shutdown on GDP: We think a deal to reopen the government will be reached eventually, but only after economic, financial and/or political pain is felt. Every two weeks of a shutdown will trim 0.1pp from growth; additional drag is likely due to delays in spending and investment.From Merrill Lynch:

4Q GDP tracking remains at 2.8%. We forecast 1Q GDP growth of 2.2%, but downside risks are emerging due to the government shutdown. [Jan 11 estimate]emphasis added

From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Jan 11 estimate]And from the Altanta Fed: GDPNowThe current GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 remains 2.8 percent on January 10. [Jan 10 estimate]CR Note: These estimates suggest GDP in the mid-to-high 2s for Q4.

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Calculated Risk

A full time blogger, Bill McBride retired as a senior executive from a small public company in the '90s. Mr. McBride holds an MBA from the University of California, Irvine, and has a background in management, finance and economics.

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