The GDPNow model estimate for real GDP growth (seasonally adjusted annual
rate) in the fourth quarter of 2024 is 3.3 percent on December 9,
unchanged from December 5 after rounding. After recent releases from the US
Census Bureau and the US Bureau of Labor Statistics, a decrease in the nowcast
of fourth-quarter real personal consumption expenditures growth was offset by
increases in the nowcasts of fourth-quarter real gross private domestic
investment growth and fourth-quarter real government spending
growth.
Almost everyone is currently predicting good fourth quarter (GDP) growth.
Bank of America and Goldman Sachs are predicting it stays in the 2 percent range
of past quarters. The Atlanta Fed GDPNow estimate for Q4 is an outlier,
predicting 3.3 percent growth.
Why the seeming growth pickup? Consumer confidence has improved, for
starters, as consumers earned enough and have enough savings to keep buying for
the holidays. Next week’s retail sales figures will tell us more. Dow Jones is
predicting
sales could increase as much as +0.6 percent in November, up from +0.4 percent
in October.
The Conference Board reported
“Consumer confidence continued to improve in November and reached the top of
the range that has prevailed over the past two years,” said Dana M. Peterson,
Chief Economist at The Conference Board. “November’s increase was mainly driven
by more positive consumer assessments of the present situation, particularly
regarding the labor market. Compared to October, consumers were also
substantially more optimistic about future job availability, which reached its
highest level in almost three years.
This is confirmed by the recent
JOLTS survey from the Labor Department that reported there were still more
than 7 million job openings, and 5.3 million hires in October.
The Atlanta Fed based its higher GDP growth estimate on increased government
spending, such as the $2 billion investment for Intel’s new chip factory in
Arizona (part of the CHIPS Act), and higher private capital expenditures. Much
of the capex spending is in the expansion of AI production, like NVIDIA’s, the
leading AI chip manufacturer that has become the darling of Wall Street.
Donald Trump’s re-election might also be an ingredient, as he has been named
Time Magazine’s Person
of the Year for a second time. There is no question that he is dominating
our national psyche.
“Since he began running for President in 2015, perhaps no single
individual has played a larger role in changing the course of politics and
history than Trump,” said Time Magazine’s announcement.
The question is will it mean better times for most Americans?
Harlan Green © 2024
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
