⬆️ GDP Nowcast: Q2, 2025: +1.5%
Growth is looking sub-par for Q2
For the first time in 10 quarters, the economy contracted in Q1 (-0.5%). My model thought growth would be weak, but it didn’t think it would be that bad. Though, to be fair, some forecasts were expecting much worse Q1 numbers. Q2 is looking better than Q1, but still weaker than the last few years, and there are a lot of mixed signals. The market has had a stunning comeback. On the other hand, consumer sentiment is near rock bottom. Of the 216 data points collected this quarter, 122 have been 'good' for a net positive score of +6.5%. The GDP nowcasting model is showing just +1.5% growth for Q2.
Citi Group’s Economic Surprise Index has rebounded from the abyss, but it’s still negative. My sense is that GDP will surprise to the upside in Q2. How are other nowcasts/forecasts looking for Q2, 2025?
New York Fed Staff Nowcast: ↑+1.6%
Atlanta Fed GDP Now: ↑+2.6%
Goldman Sachs (via Calculated Risk): ↑+3.0%
St. Louis Fed Nowcast: ↑+1.3%
Daniel Bachman’s The Nowcast Substack: ↑+9.8%