Atlanta Fed shock sounds ‘Trumpcession’ warning

“Trumpcession.”

If you haven’t heard the term before, you will now, as a closely watched real-time U.S. economic weathervane is signalling that GDP is shrinking at the fastest pace since the pandemic lockdown.

The Atlanta Fed’s GDPNow model estimate for annualized growth in the current quarter was a stunning -2.8% on Monday, down from +2.3% last week. A month ago the model showed that growth in the January-March period was tracking close to +4.0%.

These estimates are published regularly as new economic data is released, and can be quite volatile. There were 11 in February alone. Friday’s shock reading of -1.5% was led by a record-high $153 billion trade deficit in January, most likely as firms front-loaded imports ahead of tariffs, and Monday’s decline was driven by soft manufacturing activity.

There’s every chance -2.8% turns into a positive reading in a few weeks.