Part 1: What Recession?

Aug 28, 2023 | Macro Insights, No Bull Economics

Atlanta Fed 3Q23 Projections Post Banner

The Atlanta Fed’s GDPNow model is estimating a shocking +5.9% y/y real GPD increase for 3Q23 (official reporting date 10/26) which is notably adjusted for inflation. While this forecast is substantially higher than the Blue-Chip consensus estimates (the high-end of the range is still under 3%), it points to considerable retail strength…


  • The story starts with the 3Q retail outlook & the Atlanta Fed is now forecasting that real consumption expenditures (adjusted for inflation) will increase +4%. This contrasts with weak consumption during 2Q & and a possible 4Q deterioration with the resumption of student loan payments.
  • As reported in this post, retail sales increased an impressive +0.7% m/m in July, with +1.4% growth from eating places.
  • The bullish GDP forecast also factors in impressive strength in residential housing construction which increased +6.7% y/y in July despite record high mortgage rates.
  • In summary, government economic data tells a story of tremendous consumer strength driving substantial 3Q economic growth. In part 2 of this post, we will compare notes with the financial performance of the leading retail consumer companies.
Atlanta Fed Estimates 3Q23

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