31 July 2012

Updated GDP Forecast for 2012-Q2 and a Peek at Q3

Since the U.S. Bureau of Economic Analysis revised the data we use to project future GDP for the U.S., we're updating our forecast accordingly from what we had previously posted:

Real GDP vs Climbing Limo vs Modified Limo Forecasts, 2004-Present, 2012-Q1 Final (Revised)

Going by our preferred Modified Limo forecasting technique, we now see a 50% probability that real GDP in 2012-Q2 will be finalized at a value over $13,608.0 billion, and a 50% probability that it will be finalized under that level.

The BEA's first advance estimate for the quarter is $13,558.0 billion, so at present, it appears that we overshot the target by 0.37%, although we are still within our originally projected forecast range (where we had given a 68.2% probability of that 2012-Q2 real GDP would fall between $13,367.7 billion and $13,649.9 billion in terms of constant 2005 U.S. dollars.

Peeking ahead, using the BEA's first estimate of 2012-Q2's GDP (they will "finalize" the estimate for the quarter with their third estimate in September 2012), we would project real GDP in 2012-Q3 to be roughly $13,617.1 billion in the inflation-adjusted terms of chained 2005 U.S. dollars, with a 68.2% probability of falling between $13,475.3 billion and $13,758.9 billion.

All-in-all, that suggests a pretty lackluster GDP growth rate is in store for the third quarter of 2012.