The Atlanta Fed this morning revised its GDP growth estimate for the second quarter up to 2.8%–a substantially stronger projection for economic output vs. the virtually flat 0.5% gain in Q1 (seasonally adjusted annual rate). The catalyst for today’s update: retail sales posted a strong rebound in April following a slump in March.
It’s still early in the current quarter to be taking too much for granted regarding the official release of the Q2 GDP report, which is more than two months away—the “advance” data arrives on July 29. But for the moment, there’s more evidence for expecting that the weak Q1 data will give way to a firmer trend in Q2.
Note, however, that today’s Q2 nowcast update via New York Fed is considerably weaker at 1.2%. That’s still an improvement over Q1, the softer projection for the April-through-June period via the New York bank is a reminder that the outlook is still fluid. But until further notice, the latest round of projections are at least moving in the right direction.
In short, the probability is low that the US fell into an NBER-defined recession in April, based on the available data to date. That’s been the message in the US Business Cycle Risk Report in recent weeks and that analysis isn’t likely to change in this weekend’s update.