US OUTLOOK/OPINION: Atlanta Fed Nowcast GDP Sharply Downgraded For Q4
Jan-29 14:58
The Atlanta Fed's GDPNow forecast for Q4 - the final reading for the quarter ahead of Thursday's official GDP release - has been downgraded significantly.
- They now see 2.3% growth, down from 3.2% yesterday. As we had flagged earlier today, the much larger than expected goods trade deficit reading for December would be negative for GDP - while inventories also came in on the weak side:
- "After this morning’s Advance Economic Indicators release from the US Census Bureau, the nowcast of fourth-quarter real gross private domestic investment growth decreased from 0.1 percent to -0.9 percent, while the nowcast of the contribution of net exports to fourth-quarter real GDP growth fell from 0.10 percentage points to -0.61 percentage points."
- The 2.3% forecast equals the lowest for the quarter made by the Atlanta Fed, and compares to a high of 3.4% reached on Dec 11. It's also below the 2.7% consensus. Note, Q3 GDP was 3.1%.
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US DATA: MNI Chicago Report™: Most Plan Rise In Inventory Due To Strike Risk
Dec-30 14:51
The Chicago Report™ also asked firms in December “Have you put any contingency plans in place in the event of a further port worker strikes?” Of the respondents that answered:
- Almost half (48%) were looking to increase inventories of raw materials.
- A third (33%) expressed plans to increase finished goods inventory.
- Only 10% selected plans to increase production.
- Again none planned to increase employment levels and 24% selected “Other”.
US TSYS: Post-Chicago Business Barometer™ React
Dec-30 14:50
- Treasury futures extend a little higher after lower than expected Chicago PMI for December. The Mar'25 10Y futures contract trades 108-29.5 last (+15.5), still well below technical resistance at 110-03.5 (20-day EMA).
- Curves still mixed: 2s10s -.453 at 28.839, 5s30s +2.856 at 38.263. Tsy 10Y yield -.0766 at 4.5487.
US DATA: MNI Chicago Report™: Over 50% Plan Higher Inventories With Tariff Risk
Dec-30 14:49
In December, the Chicago Report™ asked firms “With potential tariff increases in the coming months, is your business taking any of the following precautions/considerations?" Of the respondents that answered:
- Over half (55%) said they are taking precautions by increasing inventories
- 41% are looking into on-shoring
- 36% are considering new suppliers
- A further 36% are looking to increase prices
- No respondents reported increasing employment levels
- 14% reported ‘Other’– noting cost reductions and some being minimally impacted due to diverse supplier bases
