NEW YORK, NY – Wall Street economists are adjusting their GDP growth forecasts based on recent data releases, all while keeping a close eye on the impacts of Trump’s tariffs. The Atlanta Fed’s GDPNow tool, a predictor of quarterly economic growth using existing data, now suggests a 2.2% decline in GDP for the first quarter of the year. This marks an improvement from its previous estimate of a 2.4% drop on April 9.
The latest update comes after the release of the retail sales data for March, showing a 1.4% increase, in line with expectations. Notably, the control group within the report, which excludes certain volatile categories and influences the GDP calculation, saw a 0.4% uptick. This figure fell slightly below the anticipated 0.6% growth. Additionally, manufacturing, accounting for three-quarters of total production, experienced a 0.3% increase for the fifth consecutive month. However, industrial production declined by 0.3%, mainly due to a sharp decrease in utility output.
Goldman Sachs economists, in a client briefing, acknowledged the stronger-than-expected retail sales report, including the upward adjustments to February’s data, which led to a more positive outlook on GDP growth for the first quarter. They raised their estimate by 0.2 percentage points, now expecting a 0.4% growth on an annualized quarter-over-quarter basis. Moreover, they revised their forecast for Q1 domestic final sales, increasing it by 0.3 percentage points to 1.9%. The next GDP report is due on April 30, offering further insights into the state of the economy.
The ongoing fluctuations in economic data, especially in sectors like retail and manufacturing, continue to influence Wall Street economists’ predictions for GDP growth in the current quarter. As analysts closely monitor these indicators and their potential impact on overall economic performance, adjustments in forecasts are expected as new data becomes available. The upcoming GDP report will provide a comprehensive overview of the economy’s health and offer valuable insights for policymakers and businesses alike.