The Atlanta Federal Reserve’s GDP Now model translates economic reports into a GDP forecast for the present quarter. At the peak, the GDP Now forecast for Q1 reached 5.4%, but since has fallen to only 2.6%. Disappointing economic reports in retail sales, durable goods orders, capital goods orders, housing starts and pending home sales brought down the model estimate.
The Atlanta Fed’s web page explains:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 2.6 percent on February 27, down from 3.2 percent on February 16. After this morning’s Advance Economic Indicators and durable manufacturing reports from the U.S. Census Bureau, the nowcasts of the contributions of real nonresidential equipment investment and real inventory investment to first-quarter real GDP growth declined from 0.45 percentage points and 1.20 percentage points, respectively, to 0.37 percentage points and 0.95 percentage points, respectively. The nowcast of first-quarter real residential investment growth declined from 0.6 percent on February 16 to -4.5 percent on February 26 after housing market releases from the Census Bureau and the National Association of Realtors.