GDP Growth Is About To Explode

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Last Wednesday, several economists significantly raised their GDP growth forecasts for the December quarter. While the September quarter’s growth appears to be over 2% after two quarters of over 6% growth, it appears that the December quarter’s growth could even exceed the first half’s growth rate.

The US Bureau of Economic Analysis estimates that September quarter growth was 2.1%, The chart below shows various analysts’ estimates for the December quarter, in the range of 7.0% to 9.0%. The graph is distorted due to the very low growth rate in the June quarter last year and the subsequent rebound in the September quarter.

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If growth comes in at 7.0% or more, it will be the best quarter since June 2000 at 7.5%, except for the September 2020 quarter. The best quarter was 8.0% or better back in March 1984. While the latest COVID version may affect the final result, its full impact, if any, may not be visible until next year.

GDP growth

Atlanta Fed Models GDP Growth at 8.6%

The Federal Reserve Bank of Atlanta publishes data and a graph that forecast GDP growth for the current quarter. NS GDPNow Model Showing growth of 8.6% in the December quarter compared to the blue chip consensus range of 3.7% to 6.2%. Keep in mind that the blue chip estimates shown in the graph are about three weeks old (there is a delay between the numbers in the graph and their current forecasts).

In addition, the Atlanta Fed’s GDPNow projection is based on a formula from previous quarters and the impact of COVID-19 could have a material impact on estimates.

Gregory Dako is at 8.0% at Oxford Economics

Gregory Dako is the Chief American Economist at Oxford Economics. one in Tweet on Wednesday He raised his growth forecast from 5.6 percent to 8.0 percent. As of November 9, it was 5.2%.

Jefferies is at 9%

Anita Markowska, Chief Economist at Jefferies, and Thomas Simmons, Jefferies Money Market Economist, publish a report on a weekly basis titled “Tracking the U.S. Economy’s Re-opening with Real-Time Data.” It is a compilation of various economic indicators that show how the economy is performing long before many of the official US government reports are ready.

In Monday’s report, he wrote, “The JEF US Economic Activity Index rose 1 point last week to 102.7, the highest level since a new pandemic. As life returns to normal, consumers are accessing their additional savings, as evidenced by strong card spends and growth in retail foot traffic. Foreign traveler inflows are consolidating domestic consumer strength, with all signs pointing to strong retail sales in November. ,

As he increased his forecast on Wednesday, he wrote, “real consumption is now on track for growth of 6%, notable in the face of rapidly rising prices (and which is accompanied by demand-pull rather than cost-push inflation). more consistent). is improving.

He further added, “We were already assuming strong growth in the fourth quarter, but today’s figures point to even higher growth. We are thus reducing our fourth quarter GDP forecast from 7% to 9%. Revised till.

JPMorgan is at 7.0%

Michael Feroli and Daniel Silver at JPMorgan raised their growth forecast on Wednesday to 7.0% from 5.0%. In his note, he wrote, “This morning we received a slew of data reports relating to October spending, and they were a bit stronger than generally expected; as a result we are reducing our tracking of the current quarter’s real annual GDP growth to 5.0%. “The overall improvement in data may be the first fruit of a modest easing of supply chain issues evident in some survey data,” he said.

Morgan Stanley is at 8.7%

Ellen Gentner is the Chief American Economist at Morgan Stanley. On Wednesday she wrote, “Added with very strong spending in wage compensation-driven earnings, the savings rate slowed to 7.3% from 8.2%. GDP revision in the September quarter, stronger spending, stronger inventory, stronger durable goods orders and Incorporating the wealth of today’s data, including new home sales growth, we increase our fourth quarter GDP tracking from 3.0% to 8.7%.

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