Economic Growth? Unlikely

The Atlanta Federal Reserve has released its latest GDPNow forecast for how the economy will fare in the first quarter of 2022—not well.

The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2022 is 0.1 percent on January 28. The initial estimate of fourth-quarter real GDP growth released by the US Bureau of Economic Analysis on January 27 was 6.9 percent, 0.4 percentage points above the final GDPNow model nowcast released on January 26

From 6.5% forecasted growth in the fourth quarter of 2021 to 0.1% in the very next quarter is a pretty steep drop—and right on the verge of forecasting outright contraction.

That is about as clear a warning signal as one can get on the economy. We’re in trouble.