The Atlanta Fed GDPNow growth estimate for 2Q falls to 1.5% from 1.7% after recent data. In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 1.5 percent on July 3, down from 1.7 percent on July 1. After this morning’s releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic growth decreased from 1.5 percent and 6.9 percent, respectively, to 1.1 percent and 6.5 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth increased from -0.94 percentage points to -0.78 percentage points.
The next GDPNow update is Wednesday, July 10.
The Atlanta Fed GDPNow index near 4.3%. It is at its lowest level and below what is considered trend growth near 2%.
Although Fed chair Powell reiterated yesterday that the Fed will remain patient as inflation still remains above the 2% target, and does not expect that target to be reached before 2025. With slower growth, and the Fed Chair indicating that disinflationary forces were being reestablished, further surprises in the inflation may get the Fed to cut rates sooner rather than later.
Employment will also be closely monitored. The June non-farm payroll report will be released on Friday with expectations near 190 K. Today the ADP private sector national employment growth came in at 150K.
The ISM nonmanufacturing Index was also much weaker than expected at 48.8 versus 52.5. The employment component stayed below the 50 level for the 5th consecutive month at 46.1 versus 47.1 last month.
At 2 PM, the FOMC meeting minutes from the last meeting will be released.