Atlanta Fed GDP Tracker Win Second-Quarter Forecasting Race

By Michael S. Derby 

        In the contest to accurately estimate second-quarter economic growth, a tracker created by the Federal Reserve Bank of Atlanta once again did better than private-sector rivals.
        The Commerce Department reported Thursday that U.S. gross domestic product, a broad measure of economic activity, increased at a 2.3% annual rate in the April-through-June period.
        A small number of private firms also publish so-called GDP trackers that they constantly update with new data to estimate economic growth in real time. The Atlanta Fed's GDPNow indicator, last updated Monday, got closest. It predicted second-quarter GDP would come in at a 2.4% pace. For comparison, The Wall Street Journal consensus forecast had been for a 2.7% rate.
        The silver medal goes to Macroeconomic Advisers' tracker. The research firm on Monday forecast a 2.6% annualized rate of growth. Meanwhile, Barclays Capital came in a distant third with a very optimistic expectation of 3.4%.
        Broadly speaking, predicting GDP is very difficult. The department also revised its first-quarter figures to show the economy expanded slightly in the January through March period, rather than shrinking slightly as it had earlier estimated.
        That said, the Atlanta Fed's formula seems to be doing a pretty good job at taking the economy's pulse, and it is worth keeping an eye on.
        Write to Michael S. Derby at michael.derby@wsj.com
        (END) Dow Jones Newswires
        July 30, 2015 16:27 ET (20:27 GMT)

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