GDP NOW as of 09-29-2023

 

The GDPNow model from the Atlanta Federal Reserve is a nowcasting model for gross domestic product (GDP) growth. It synthesizes the bridge equation approach relating GDP subcomponents to monthly source data with factor model and Bayesian vector autoregression approaches.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter.

The latest GDPNow estimate for the third quarter of 2023 is 4.92 percent. This is a slight increase from the previous estimate of 4.9 percent.

The following is a breakdown of the GDPNow components for the third quarter of 2023:

• Nowcast for Real Personal Consumption Expenditures: 3.63%
• Nowcast for Real Gross Private Domestic Investment: 9.94%
  • Nowcast for Real Gross Private Domestic Investment: Fixed Investment: Residential: 4.93%
  • Nowcast for Real Gross Private Domestic Investment: Fixed Investment: Business: 2.53%
• Nowcast for Real Exports of Goods and Services: 6.72%
• Contributions to percent change in GDPNow: Real Change of Inventory Investment: 1.14%
• Nowcast for Real Gross Government Investment: 1.86%
  • Nowcast for Real Gross Government Investment: Federal Government: 2.35%
• Nowcast for Real Imports of Goods and Services: 2.15%

Personal consumption expenditures (PCE) is the largest component of GDP, accounting for about two-thirds of total spending. The Nowcast for Real PCE is 3.63 percent for the third quarter of 2023. This is a slight increase from the previous estimate of 3.6 percent.

Gross private domestic investment (GPDI) is another important component of GDP. It includes spending on new equipment, structures, and inventories. The Nowcast for Real GPDI is 9.94 percent for the third quarter of 2023. This is a slight increase from the previous estimate of 9.9 percent.

Net exports is the difference between exports and imports. It is a relatively small component of GDP, but it can have a significant impact on growth. The Nowcast for Real Net Exports is 4.57 percent for the third quarter of 2023. This is a slight decrease from the previous estimate of 4.6 percent.

Government spending is the other major component of GDP. It includes spending on goods and services, as well as transfer payments. The Nowcast for Real Government Spending is 1.86 percent for the third quarter of 2023. This is unchanged from the previous estimate.

Overall, the GDPNow model is projecting strong economic growth for the third quarter of 2023. However, it is important to note that this is just a nowcast, and the actual GDP growth rate could be different.

Source:https://www.atlantafed.org/cqer/research/gdpnow.aspx?panel=1

Auto Sales and Inventories, Monthly, Seasonally Adjusted as of August 2023

 The US auto industry is recovering, with recent sales growth, but faces challenges due to the chip shortage. Some metrics, like heavy truck sales and domestic auto production, show positive changes. However, there are concerns, as Mexican auto imports and auto exports have declined, indicating reduced global competitiveness. Various metrics related to inventories and sales show mixed results, reflecting ongoing industry uncertainty. Overall, the US auto industry faces challenges and opportunities, with the chip shortage, rising costs, and foreign competition, making its future uncertain, but positive trends like heavy truck demand offer hope. It's important to consider other economic factors as well.

Auto Sales and Inventories

The auto industry in the United States is showing signs of recovery, with sales increasing in recent months. However, the ongoing chip shortage is still a challenge for automakers, and inventories are likely to remain tight in the near term.

Last Percent Change

The last percent change for the following metrics is concerning:

• Mexican Auto Imports: -4.38%
• Auto Exports: -6.68%

This suggests that the auto industry in the United States is becoming less competitive globally.

The last percent change for the following metrics is positive:

• Motor Vehicle Retail Sales: Heavy Weight Trucks: 6.47%
• Domestic Auto Production: 5.89%

This suggests that the demand for heavy-duty trucks is increasing, and that the domestic auto industry is ramping up production to meet this demand.

The last percent change for the following metrics is mixed:

• Domestic Auto Inventories: 84.05%
• Auto Inventory/Sales Ratio: 50.96%
• Canadian Auto Imports: 41.50%
• Motor Vehicle Retail Sales: Foreign Light Weigh Trucks: 32.04%
• Motor Vehicle Retail Sales: Domestic Autos: 21.76%
• Motor Vehicle Retail Sales: Domestic Light Weight Trucks: 15.41%
• Motor Vehicle Retail Sales: Foreign Autos: 7.67%

Source:https://www.bea.gov/data/gdp/gross-domestic-product#collapse86

Debt to Gross Domestic Product Ratios

 

• The Federal Debt: Total Public Debt as Percent of Gross Domestic Product is 119.47%. This means that the total amount of money that the US government owes is equal to 119.47% of the country's economic output.
• The Federal Surplus or Deficit [-] as Percent of Gross Domestic Product is -5.34%. This means that the US government is running a budget deficit, which means that it is spending more money than it is collecting in taxes.
• The Federal Debt Held by Federal Reserve Banks as Percent of Gross Domestic Product is 20.41%. This means that the US Federal Reserve owns 20.41% of the US government's debt.
• The Federal Debt Held by Private Investors as Percent of Gross Domestic Product is 75.21%. This means that private investors own 75.21% of the US government's debt.
• The Federal Debt Held by Agencies and Trusts as Percent of Gross Domestic Product is 25.31%. This means that US government agencies and trusts own 25.31% of the US government's debt.

It is important to note that the Federal Debt: Total Public Debt as Percent of Gross Domestic Product has been increasing in recent years. This is due to a number of factors, including the COVID-19 pandemic and the war in Ukraine.

The US government's ability to repay its debt is dependent on a number of factors, including economic growth, tax revenue, and interest rates. If the US economy continues to grow and tax revenue remains strong, then the government should be able to repay its debt without any major problems. However, if the economy slows down or tax revenue declines, then the government may face challenges in repaying its debt.

It is important for the US government to develop a plan to reduce the Federal Debt: Total Public Debt as Percent of Gross Domestic Product. This could involve reducing spending, increasing taxes, or a combination of both.

Source:https://fred.stlouisfed.org/graph/?id=GFDEGDQ188S,FYFSGDA188S,HBFRGDQ188S,HBPIGDQ188S,HBATGDQ188S,FYONGDA188S,FYOIGDA188S,FYFRGDA188S,GFDGDPA188S,FYGFGDQ188S,FYPUGDA188S,HBFIGDQ188S

Commercial Banking Balance Sheet as of August 2023

The provided bank balance sheet data indicates a widespread decline in assets and liabilities among both small and large domestically chartered commercial banks. 

Here's a detailed breakdown of the data:

**Small Domestically Chartered Commercial Banks:**

- Deposits increased by 1.06%.

- Loans and Leases increased by 1.05%.

- Total Assets decreased by 0.21%.

- Total Liabilities decreased by 0.07%.

**Large Domestically Chartered Commercial Banks:**

- Deposits decreased by 1.08%.

- Loans and Leases increased by 0.19%.

- Total Assets decreased by 0.91%.

- Total Liabilities decreased by 1.02%.

Two significant trends emerge from this data:

1. **Decline in Treasury and Agency Securities:** Both small and large banks have experienced a decrease in their holdings of Treasury and Agency Securities. This is likely a consequence of the Federal Reserve's interest rate hikes, which cause the value of existing bonds to fall.

2. **Increase in Deposits for Small Banks:** Small banks have seen an increase in deposits, possibly because they are perceived as safer than larger banks, especially during times of economic uncertainty.

In summary, while the banking industry appears to be generally healthy, there are signs of stress reflected in the decline of assets and liabilities. These trends are likely driven by a mix of factors, including ongoing economic uncertainty and the Federal Reserve's efforts to control inflation through interest rate hikes. Vigilant monitoring of the banking industry is essential to ensure its continued stability.

Real Residential property prices for selected countries as of September 2023

The following plots display real property prices for a set of countries, sourced from the Bank of International Settlements and published on September 27, 2023. 

The quarterly data on real residential property prices changes from previous year for the countries you listed shows that Singapore, Mexico, and Japan are the only countries with positive price growth. All other countries experienced negative price growth, with Canada experiencing the largest decline (-19.13%).

The following is a more detailed analysis of the quarterly data:

• Singapore: Real residential property prices in Singapore increased by 4.98% in the third quarter of 2023, compared to the same period last year. 
• Mexico: Real residential property prices in Mexico increased by 3.93% in the third quarter of 2023, compared to the same period last year.
• Japan: Real residential property prices in Japan increased by 1.12% in the third quarter of 2023, compared to the same period last year. This is the second consecutive quarter of price growth. 
• All other countries: Real residential property prices in all other countries experienced negative price growth in the third quarter of 2023. The largest decline was seen in Canada (-19.13%), followed by Germany (-15.48%), Australia (-13.76%), and the United Kingdom (-5.89%). The negative price growth is attributed to a number of factors, including rising interest rates, inflation, and a slowdown in economic growth.

Overall, the quarterly data shows that the global real estate market is cooling down. However, there is still some positive price growth in a few countries, such as Singapore, Mexico, and Japan.

It is important to note that this is just a snapshot of real residential property prices in selected countries as of September 27, 2023. Prices can fluctuate over time, and other factors, such as location, type of property, and market conditions, can also affect prices.

Source: https://www.bis.org/statistics/pp_selected.htm