The latest economic indicators aren’t supporting our resilient-economy thesis. Nevertheless, we are sticking with it for now. Consider the following:
(1) Atlanta Fed’s GDP Now & CESI. The Atlanta Fed’s GDPNow tracking model lowered the estimated growth rate of Q1’s real GDP from 2.5% (q/q, saar) to -1.5% on Friday and then further to -2.8% on Monday (Fig. 3 below). Friday’s downward revision was attributable to a huge increase in imports during January and to a significant drop in consumer spending during the month. Monday’s downward revision was attributable to weak construction data in January and to a drop in the new orders index of February’s M-PMI.
The Citigroup Economic Surprise Index (CESI) has turned negative over the past few days and was -16.5 on Friday (Fig. 4 below).
