- Q3 2026 real GDP growth estimate: 3.7% annualized, down from 5.0% on September 25.
- Real consumer spending growth estimate: 3.5%, down from 4.2%.
- Real gross private domestic investment growth estimate: 20.7%, up from 18.7%.
- Net exports contribution: −2.60 percentage points, compared with −1.37 percentage points previously.
- Next GDPNow update: Thursday, October 1.www.atlantafed.org
Today’s August goods trade figures help explain the downgrade:
- Advance goods trade balance: −$132.6 billion vs −$115.0 billion expected.
- July goods trade balance: −$118.9 billion.
- The deficit widened by $13.7 billion from July, and was $17.6 billion larger than expected. investinglive.com
The Atlanta Fed lowered its GDPNow estimate for third-quarter US growth to 3.7% from 5.0%, following this morning’s Census Bureau and Bureau of Economic Analysis releases. Growth is still projected to be solid, but the downgrade takes some heat out of the outlook.
The US reported a much wider-than-expected August goods deficit of $132.6 billion, compared with $115.0 billion expected and $118.9 billion in July. That weaker trade result helps explain why GDPNow now projects net exports to subtract 2.60 percentage points from third-quarter growth, versus 1.37 percentage points previously. Softer projected consumer spending added to the downgrade, while stronger investment provided a partial offset. investinglive.com
Quick analysis: The headline is weaker, but the details matter. A larger trade deficit weighs on the GDP calculation without necessarily signaling a broad collapse in domestic demand. The consumer spending downgrade is the more direct sign of softer demand, while investment remains an offset. The update could ease pressure on Treasury yields and the dollar and temper expectations for further Fed tightening, although inflation and employment data will remain central to that decision.
What this report measures: GDPNow estimates inflation-adjusted gross domestic product using incoming economic data before the government releases its quarterly GDP report. Its seasonally adjusted annualized rate expresses growth as if the quarter’s pace continued for a full year. Imports are subtracted in the GDP calculation to remove foreign production already included in spending or investment; GDPNow is a changing model estimate, rather than an official forecast from Atlanta Fed policymakers.
This article was written by Greg Michalowski at investinglive.com.