The economy is on track to put up blockbuster growth numbers in the first quarter, according to the latest forecast from the Atlanta Fed.
GDP is expected to surge 5.4 percent to start 2018, the central bank branch estimated in its latest rolling look at how the economy is progressing.
If the forecast holds, it would be the best quarter since the Great Recession ended in 2009. The previous highest was third quarter of 2014, which hit 5.2 percent.
However, the Atlanta Fed's tracker has shown to have reliability issues in the past. In particular, the model's sensitivity to the ISM Manufacturing Index has led the gauge astray multiple times, causing growth to be overstated.
The ISM numbers were the principle impetus for the raise in growth projections Thursday.
Real consumer spending jumped from 3.1 percent to 4 percent amid a sharp savings drawdown, and private fixed-investment growth surged from 5.2 percent to 9.2 percent....MORE
As is often the case, the New York Fed Nowcast is at considerable variance, with Q1 2018 GDP growth projected at 3.09% but the spread seems to be greater than just the difference in methodologies would imply.."The Atlanta Fed also was optimistic about the 2017 first quarter, estimating growth at one point to be 3.4 percent, where the final reading came in at 1.2 percent."
Here's the Atlanta Fed's GDPNow page.
If interested see also our May 2016 post "Evaluating The Accuracy Of The Atlanta Fed's GDPNow Forecasts"