- The Atlanta Fed's initial GDPNow estimate for Q2 2025 remains at 2.4%, with no revision to 1.1% as of latest data.
- Markets await the next scheduled update on May 1, which could adjust the forecast based on incoming economic indicators.
- The model's Q1 final estimate missed actual GDP by 2.4 percentage points, highlighting its limitations as a real-time tracking tool.
Steady Growth Projection for Q2
The Federal Reserve Bank of Atlanta's GDPNow model continues to project 2.4% growth for the second quarter of 2025, maintaining its initial April 30 estimate despite speculation about potential downward revisions. The next update, expected later today, will incorporate the latest economic data and could shift this projection.
Unlike traditional forecasts, the GDPNow model provides a running estimate of quarterly GDP growth based solely on available economic data, without subjective adjustments. "It's important to remember this isn't an official Fed forecast," noted one financial analyst who tracks the indicator closely. "The model reacts mechanically to data surprises, which explains why its Q1 estimate diverged significantly from the actual -0.3% print."
Awaiting Fresh Signals
Market participants are watching for today's update, which comes after mixed economic signals in recent weeks. The model's methodology weights incoming data differently throughout the quarter, with early estimates being particularly sensitive to high-frequency indicators.
Some traders had anticipated a potential downward revision following softer manufacturing data, but the 2.4% figure remains intact for now. "We're in that uncertain period where the model hasn't yet incorporated enough hard data to make meaningful adjustments," said a fixed income strategist at a major bank, speaking on condition of anonymity.
Correction: An earlier version of this article suggested the GDPNow estimate might have been revised to 1.1%. The model's latest published estimate remains 2.4%. We regret the error.