Forecasting, as we all know, tries to predict the future. For FRED’s purposes, that prediction is how a statistic will evolve. Nowcasting, a variant of forecasting, looks at the current state of a statistic that hasn’t yet been released because the period of coverage is not yet over. Nowcasting is one way to examine current economic activity; another was discussed in a previous post.
GDP is a popular target for nowcasting, and FRED covers the nowcasts of several Federal Reserve Banks—with the Federal Reserve Banks of Atlanta (GDPNow) and St. Louis nowcasts shown here along with the final GDP numbers released by the Bureau of Economic Analysis. To gaze into the future, focus on the very last data point for each nowcast (Q4 2017, shown here), as this is what nowcasting is all about.
The earlier data points for the nowcasts are the last estimates before the first (early) GDP release by the BEA, which is typically revised over time to create the green line. Like the BEA’s GDP numbers, the nowcasts are revised several times per month.
We see that there are disparities between the nowcasts. While they are in principle all based on the same information, estimates can differ because of different statistical methodologies and how they are revised over time. And what about the differences between the nowcasts and the final data? The BEA obviously has the advantage of access to more raw data and more time to refine the numbers.
How this graph was created: Search for “nowcast” and all the series you want should appear. Select the relevant series and click “Add to Graph.” From the “Edit Graph” menu, use the “Add Line” option to search for and select “real GDP” (use the growth rate series). Finally, start the graph in October 2011, the first data point of GDPNow.
Suggested by Christian Zimmermann.
