Here’s what the Atlanta Fed said today about the latest update to the GDPNow real-time tracking gauge:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.5 percent on July 16, up from 3.9 percent on July 11. The nowcast of second-quarter real consumer spending growth increased from 2.7 percent to 3.1 percent after this morning’s retail sales report from the U.S. Census Bureau. The nowcast of second-quarter real federal government spending growth increased from 1.4 percent to 5.6 percent after the Monthly Treasury Statement release on Thursday, July 12, from the U.S. Department of the Treasury’s Bureau of the Fiscal Service.
That’s a huge number. Notice the upward movement in consensus estimates.
As I’ve been saying, the economic numbers coming out of the US show that this recovery has legs. There is zero indication that we are in trouble over the near term.
All that a flattening yield curve says is that the Fed is moving toward overtightening mode. But it still has time to retreat before that overtightening is fatal. There is no need for doom and gloom yet.
Right now, it’s about as good as it gets.