US GDP is expected to grow 2.0% in 2013’s first quarter, according to the latest update of The Capital Spectator’s average econometric nowcast. That’s up slightly from the previous 1.9% nowcast for Q1, which was published on February 5. Today’s nowcast reflects updates to several indicators used for computing the estimates. This year’s official Q1 data is scheduled for release on April 26, when the Bureau of Economic analysis will publish its initial GDP estimate for the first three months of 2013. (GDP percentage changes are quoted as real seasonally adjusted annual rates.)

Last year’s fourth-quarter GDP declined 0.1%, BEA reported last month. The second revision for 2012’s Q4 data will be released this Thursday (Feb. 28). Analysts are expecting a modest upward revision to 0.5%, based on the consensus forecast, according to Briefing.com.
Meanwhile, here’s how The Capital Specatator’s average Q1:2013 nowcast compares with other estimates and actual data in recent history:

Next, here’s a look at The Capital Spectator’s individual nowcasts:

Here’s a recap of how the Q1 nowcasts have evolved so far:

Finally, here’s a brief profile for each of The Capital Spectator’s nowcasts:
R-4: This estimate is based on a multiple regression in R of historical GDP data vs. quarterly changes for four key economic indicators: real personal consumption expenditures, real personal income less government transfers, industrial production, and private non-farm payrolls. The model estimates the statistical relationships from the early 1970s to the present. The estimates are revised as new data is published.
R-10: This model also uses a multiple regression framework based on numbers dating to the early 1970s and updates the estimates as new data arrives. The methodology is identical to the 4-factor model above, except that R-10 uses additional factors—10 in all—to nowcast GDP. In addition to the data quartet in the 4-factor model, the 10-factor nowcast also incorporates the following six series:
• ISM Manufacturing PMI Composite Index
• housing starts
• initial jobless claims
• the stock market (S&P 500)
• crude oil prices (spot price for West Texas Intermediate)
• the Treasury yield curve spread (10-year Note less 3-month T-bill)
ARIMA-GDP: The econometric engine for this nowcast is known as an autoregressive integrated moving average. This ARIMA model uses GDP’s history, dating from the early 1970s to the present, for anticipating the target quarter’s change. As the historical GDP data is revised, so too is the nowcast, which is calculated in R via the “forecast” package, which optimizes the prediction model based on the data set’s historical record.
ARIMA 4: This model combines ARIMA estimates with regression anlaysis to project GDP data. The ARIMA 4 model analyzes four historical data sets: real personal consumption expenditures, real personal income less government transfers, industrial production, and private non-farm payrolls. This model uses the historical relationships between those indicators and GDP for projections by filling in the missing data points in the current quarter with ARIMA estimates. As the indicators are updated, actual data replaces the ARIMA estimates and the nowcast is recalculated.
VAR-4: This vector autoregression model uses four data series in search of interdependent relationships for estimating GDP. The historical data sets in the R-4 and ARIMA 4 models above are also used in VAR-4, albeit with a different econometric engine. As new data is published, so too is the VAR-4 nowcast. The data sets range from the early 1970s to the present, using the “vars” package in R to crunch the numbers.