Yesterday we got the latest data on US Durable Goods Orders, which collapsed heavily in January (-6.1% MoM). It was the biggest drop since COVID lockdowns. However, the only input from the durable goods that enters into the GDP is nondefense capital goods shipments ex-aircraft (i.e. core capital goods), which rose 0.8% MoM. So quite a positive report 😊. Let's check how this data will affect GDP growth in Q1 2024.
After yesterday's update of the Atlanta FED GDP nowcast model, we know that core capital goods had a positive impact on Equipment's growth forecast in Q1 2024, which increased from -0.49% (saar) to -0.13% (saar). As a result, Equipment's contribution to the growth of overall GDP in Q1 2024 increased from -0.025 pp to -0.006 pp (see Figure 8, green line).
But in order not to lose the big picture, let's check the entire GDP model, which predicts quite strong growth in Q1 at the level of +3.25%. Figure 1 shows the contributions to the change in GDP of individual data series.
Figure 2 shows the GDP forecast, while Figures 3, 4 and 5 present consumer spending (the consumer is doing very well, but is increasing spending relatively much more on Services than Goods).
Figure 6 shows GDPI .. quite a strong rebound thanks to Residentials which jumped after the last New Home Sales report for January 2024. GDPI stands for Gross Private Domestic Investment.
Figure 7 shows Residential and an increase of 8.6% in Q1 (saar).
Figure 8 shows Structures, Equipment and Intellectual Property.
Figure 9 shows the change in Exports, Imports and Government spending.
Figure 10 shows the change in net exports to GDP growth in Q1 of +USD 10.92 billion (in this case, the change in change enters GDP). Figure 11 shows the same, but for inventory change (+$10.8 billion in Q1 2014).
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