Aug. 24: Macro Update
Today is the first day of the updating model, so I wanted to explain what is driving the numbers around. On small changes like this, I don't plan on writing everyday -- but if the forecasts move significantly, I most certainly will -- but this is just for demonstration.
After a revision of the model, my forecast for quarterly annualized real GDP growth ticked down from 1.60 percent to 1.59 percent, adjusting to a slight disappointment in initial claims for unemployment and a decent day for stocks. (Note that I revised the forecast model again for GDP due to coding errors. That should be the last time.)
The model's unemployment rate forecast ticked up from 8.24 percent to 8.26 percent, responding solely to the initial claims data point.
Our forecast for CPI inflation did not move, holding at 1.50 percent. The forecast, as I'll explain tomorrow, is determined by lagging inflation and a weekly index of gas prices, and within the week by the spot price of WTI crude oil. WTI made no significant move today.