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Q3 GDP Forecasts

Summary:
From Merrill Lynch: We expect 2Q GDP to be unrevised at -31.7% qoq saar in the third and final release. We continue to track 27% qoq saar for 3Q GDP. [Sept 25 estimate]emphasis addedFrom Goldman Sachs: The details of the durable goods report were broadly consistent with our expectations. We left our Q3 GDP tracking estimate unchanged at +35% (qoq ar). [Sept 25 estimate] From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 14.1% for 2020:Q3 and 5.0% for 2020:Q4. [Sept 25 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2020 is 32.0 percent on September 25, unchanged from September 17 after rounding. [Sept 25 estimate]It is important to note that GDP is reported at a

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From Merrill Lynch:
We expect 2Q GDP to be unrevised at -31.7% qoq saar in the third and final release. We continue to track 27% qoq saar for 3Q GDP. [Sept 25 estimate]
emphasis added
From Goldman Sachs:
The details of the durable goods report were broadly consistent with our expectations. We left our Q3 GDP tracking estimate unchanged at +35% (qoq ar). [Sept 25 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at 14.1% for 2020:Q3 and 5.0% for 2020:Q4. [Sept 25 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2020 is 32.0 percent on September 25, unchanged from September 17 after rounding. [Sept 25 estimate]
It is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR).  A 30% annualized increase in Q3 GDP, is about 6.8% QoQ, and would leave real GDP down about 4.2% from Q4 2019.

The following graph illustrates this decline.

Q3 GDP ForecastsClick on graph for larger image.

This graph shows the percent decline in real GDP from the previous peak (currently the previous peak was in Q4 2019).

This graph is through Q2 2020, and real GDP is currently off 10.2% from the previous peak.  For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak.

The black arrow shows what a 30% annualized increase in real GDP would look like in Q3.

Even with a 30% annualized increase (about 6.8% QoQ), real GDP will be down about 4.2% from Q4 2019; a larger decline in real GDP than at the depth of the Great Recession.

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