Wall Street economists are tweaking their GDP growth estimates as new data trickles in, with Trump’s tariff whipsaw still firmly in the background.
The Atlanta Fed’s GDPNow tool, which uses already released data to forecast the quarterly pace of economic growth, now projects that GDP fell by 2.2% in the first three months of the year, an improvement from its prior April 9 projection of negative 2.4% growth.
The update follows Wednesday’s retail sales data, which rose 1.4% in March, matching forecasts. The control group in the release, which excludes several volatile categories and factors into the GDP reading for the quarter, rose 0.4%. Economists had expected a 0.6% increase. The metric’s February rise was revised higher to 1.3% from a prior reading of 1%.
Meanwhile, separate data released Wednesday showed manufacturing, which makes up three-quarters of total production, rose 0.3%, for the fifth straight month. However, industrial production fell 0.3%, dragged by a significant drop in utility output.
In a client update released Wednesday afternoon, Goldman Sachs economists said this morning’s retail sales report, including the upward revisions to February’s data, came in stronger than they had expected based on their prior GDP forecasts. In contrast, the industrial production data tied to GDP tracking came in a bit weaker than anticipated.
As a result, the firm boosted its first quarter GDP growth estimate by 0.2 percentage points to 0.4% growth on an annualized quarter-over-quarter basis and increased its forecast for Q1 domestic final sales by 0.3 percentage points to 1.9%.
The next GDP reading is scheduled for April 30.