By Kevin Kliesen, Business Economist and Research Officer
The St. Louis Fed’s Economic News Index (ENI) predicts that real gross domestic product (GDP) will increase at a 3.3 percent annual rate in the fourth quarter. The current estimate is modestly less than the previous week’s estimate of 3.9 percent and largely reflects weaker-than-expected data for private housing starts and industrial production in November. (See figure below.)
Several key data used in the ENI will be released this week:
If real GDP advances at a 3.3 percent rate in the fourth quarter, then the U.S. economy will have grown by 2.2 percent this year, modestly stronger than the 1.9 percent gain seen in 2015 (measured on a fourth-quarter-to-fourth-quarter basis).
As noted in a previous On the Economy blog post, the St. Louis Fed’s ENI uses economic content from key monthly economic data releases to forecast the growth of real GDP during that quarter.1 This simple-to-read index is updated every Friday. Starting in early January, it will be posted regularly on the St. Louis Fed’s FRED (Federal Reserve Economic Data) database.
1 See Grover, Sean P.; Kliesen, Kevin L.; and McCracken, Michael W. “A Macroeconomic News Index for Constructing Nowcasts of U.S. Real Gross Domestic Product Growth,” Federal Reserve Bank of St. Louis Review, Fourth Quarter 2016, Vol. 98, Issue 4, pp. 277-96. The ENI will not produce forecasts for the major components of GDP, such as real nonresidential fixed investment.
