Industrial production and Capacity Utilization lead to the sharp fall
The NY Fed’s Nowcast model for 1Q GDP growth fell sharply to 6.3% from 8.6% last week.
The biggest negative contributors to the sharp fall this week were from industrial production (-0.89%) and capacity utilization (-0.86%). Retail sales also led to a -0.58% decline in the models GDP growth estimate.
The biggest positive contributor came from data revisions (+0.27%). The Philadelphia Fed manufacturing business Outlook added 0.04%.
The fall in the NY Fed model, brings the estimate more in line with the Atlanta Fed model which pegs 1Q growth at 5.7%. They will announce a new estimate on March 24.
The Feds central tendencies for GDP in 2021 are looking for growth to come in between 5.8% 6.6%.