GDP Estimates Have Tumbled Since Dismal ISM Report

Authored by Michael Shedlock via MishTalk,

GDPNow and other GDP estimates took a dive today on weaker than expected manufacturing reports.

The GDPNow forecast for third-quarter GDP fell to 1.8% today on weak economic reports.

Gold and Treasuries Rally

Manufacturing ISM Worst Since 2009 on Severe Contraction of Export Orders@IanShepherdson “First-ever recession caused by actions of the president”https://t.co/POOo9lT110

— Mike “Mish” Shedlock (@MishGEA) October 1, 2019

Nothing like this stinker of a number to turn around #Gold and #Treasuries. . .and cause a reality check for #stocks https://t.co/MBiODT0cM3

— Chris Temple (@NatInvestor) October 1, 2019

GDP Estimates

Q3 GDP growth estimate changes on Friday

Morgan Stanley ⬇️ from 2.1% to 1.5%
Macro Economic Advisors ⬇️ from
2.2% to 1.6%
NY Fed ⬇️ from 2.24% to 2.04%
Atlanta Fed ⬆️ from 1.9% to 2.1%

— UPFINA (@UPFINAcom) October 1, 2019

Oxford Estimate

The disappointing August real consumption and core capital goods orders growth caused many Q3 GDP growth estimates to plummet.

Oxford Economics’ estimate fell from 1.8% to 1.3%.
(h/t) @GregDaco

Article: https://t.co/U89Q4iCAwI pic.twitter.com/Wo76YSsOwR

— UPFINA (@UPFINAcom) October 1, 2019

Real Final Sales

The important number is “Real Final Sales“.

That’s the bottom line estimate for the economy. The rest is inventory adjustment which nets to zero over time.

The GDPNow estimate of Real Final Sales fell to 1.6% yesterday, a new low for the series. It’s near, and possibly below the economic stall point.

Also, please see my report today: Manufacturing ISM Worst Since 2009 on Severe Contraction of Export Orders.