Investing.com – The Federal Reserve (Fed) Bank of Atlanta slashed their forecast for second quarter (Q2) growth on Thursday, just a day ahead of the official advance reading.
Specifically, the Atlanta Fed cut the projection, named nowcast, to 1.8%, from the prior 2.3%, due to the U.S. Census Bureau's inaugural release of its advance economic indicators report, which covers retail and wholesale inventories and foreign trade in goods.
“The contribution of net exports to second-quarter real GDP growth declined from 0.17 percentage points to –0.10 percentage points and the nowcast of the contribution of inventory investment to growth declined from –0.63 percentage points to –0.79 percentage points”, the report explained.
Consensus had still expected the advanced GDP data to show an expansion of 2.6% on Friday, up sharply from the first quarter growth of 1.1%.
However, after Wednesday’s durable goods orders, both Morgan Stanley (NYSE:MS) and JP Morgan had cut their outlook to 2.2%, from the prior 2.3% after the data was released due to the slightly lower outlooks for fixed investment and inventories.