The Federal Reserve Bank of New York has reported that its Staff Nowcast ticked up by 1.6 percentage points for the first quarter of 2021. At 8.35% the Nowcast is at its highest point this year. It stood at 5.22% on December 31, 2020.
What is Nowcast? you may be wondering. It’s a purely statistical model that uses historical relationships to estimate the implication of macroeconomic data, as they are released, for current and next quarter GDP growth.
The NY Fed has been publishing its Nowcast on Fridays for the past four years or so to provide updated predictions for real GDP growth based on the data released each week. In 2019, the NY Fed used historical data to publish its Nowcast for the previous fourteen years to provide extended historical archives and make it easier to better understand the model and its performance during different cyclical episodes.
Researchers at the Fed said the uptick was due to, “Positive surprises from advanced retail sales, building permits, IP, and capacity utilization data drove the increase.”