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Early US GDP Forecast Puts Q3 Rate At 5.7 Pct

The U.S. gross domestic product (GDP), a broad measure of economic activity, grew at an annualized rate of 5.7 percent during the third calendar quarter of 2021, which ends in about a week, the Federal Reserve Bank of Atlanta estimates.

The projection, called GDPNow, is an unofficial forecast based on a methodology similar to the one that the federal Bureau of Economic Analysis (BEA) uses to generate official GDP data. The official GDP figure for the third calendar quarter is due on Thursday (Aug. 26) at 8:30 a.m. Eastern Time.

The Atlanta Fed advance estimate released on Aug. 18 had GDP growth at a zippier 6.1 percent for the third quarter.

The Atlanta Fed released the data accompanied with a long list of caveats that read, in part, “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow — the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.”

The Bureau of Labor Statistics’ early announcement of second-quarter GDP (each figure is updated later as “revised” data) put the growth rate at 6.5 percent. The revised figure for the first quarter of calendar 2021 was a 6.3 percent annual rate.

A separate unofficial forecast from the Altanta Fed put real gross private domestic growth at an annual rate of 26.5 percent, down from 29.2 percent a week ago.

The GDP forecast is based on data from the U.S. Census Bureau, and is one of four major economic data points used by the Federal Reserve Board to generate economic forecasts. The interest rate-setting Federal Open Market Committee (FOMC) uses those forecasts in its deliberations.

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