Is the US slowdown for real?

The crucial question is how much growth in the US has slowed since the middle of the year, and whether this will continue. This is the kind of question that economic “nowcasts” are best suited to answer, so let us examine the recent evidence. The graph below shows the recent tracking of the gross domestic product nowcasts by the Atlanta Fed — an increasingly popular source of up-to-date US activity estimates — along with the Fulcrum activity nowcast, and the consensus projection from the Blue Chip macroeconomic forecaster. The Atlanta Fed GDP nowcast is much weaker than the other two sources; and, in view of the fact that this model essentially nailed the growth rates in both 2015 Q1 and Q2, it needs to be taken seriously. It predicts that the 2015 Q3 GDP growth rate will be only 1.1 per cent, which is well below trend and suggests that the economy has significantly lost momentum since mid-year. Click the (VIEW LINK) to read more on the US slowdown.

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