What Is GDPNow? How the Atlanta Fed's Real-Time Gross Domestic Product Tracker Works

Learn how the Atlanta Fed's GDPNow tool estimates current US GDP growth, how to interpret the data, and why it's useful.

What is GDPNow?

GDPNow is a nowcasting model for measuring gross domestic product from the Atlanta Fed. The data tool produces a running estimate of US real GDP growth for the quarter right after the most recent one with an official government estimate, updating whenever new economic data is released.

The tool provides an early read on the status of the economy, serving as a data-informed GDP "nowcast," not an official prediction subject to adjustments.

How does GDPNow work?

GDPNow provides a real-time estimate for how the US economy is doing. Instead of just anticipating the government's official GDP report, GDPNow uses the latest data (consumer and construction spending, international trade, business inventories, etc.) to show where the GDP may be headed.

The model forecasts 13 subcomponents that together make up GDP and aggregates these statistical projections into a top-line number much like the official number is ultimately calculated. So, this allows for a "nowcast" model, one improved from some other GDP nowcasts because of its timeliness, level of detail, and public availability.

How accurate is GDPNow?

Generally, the model's forecast is relatively close to what the US Bureau of Economic Analysis (BEA) will announce for the previous quarter's GDP. The GDPNow estimate typically becomes more accurate as a given quarter progresses and new source data becomes available, adding more nuance to the nowcast. But non-negligible forecast errors are possible even just before the BEA's official advance GDP release.

What is GDP and how do you calculate it?

GDP measures the total value of goods and services produced in a country within a particular period (year, quarter, etc.). By measuring the total market value of everything a country produces, GDP serves as an important indicator of the economic state of a country, the size of various economies, and long-term growth over the years.

Nominal GDP can be measured by summing up a country's consumer spending, business and residential investment, government spending, and net exports—known as the expenditure approach, one of the most common methods of calculation. Real GDP is calculated by price adjusting these components and combining them using Fisher chain weighting formulae named after the former American economist and statistician Irving Fisher.

How do you interpret GDPNow?

Think of the presented number as the model's best estimate for how the economy is growing, based on all the latest data. GDPNow expresses the current GDP as a percentage growth rate. The tool should not be interpreted as an official forecast from the Atlanta Fed.

Why is GDPNow useful?

GDPNow fills an important economic information gap. Users can access a real-time and empirically driven forecast of US GDP growth before official estimates are released. The frequent updates to the tool make it useful for economists, journalists, and anyone who wants to track broader economic shifts before the official reports and forecasts.

Additionally, users can access information about the forecasted contributions of various GDP subcomponents (like consumer spending, for example) to the overall GDP growth calculation.

Where can I find GDPNow and learn more about the data tool?

You can explore the latest GDPNow forecast, methodology, historical comparisons, and data on the Atlanta Fed's website or with the EconomyNow app.

Where can I find alternative forecasts of GDP growth?

For model forecasts from other Reserve Banks, see the New York Fed Nowcasting Report, the St. Louis Fed Economic News Index: Real GDP Nowcast, the Philadelphia Research Intertemporal Stochastic Model (PRISM), and the Federal Reserve Bank of Cleveland's prediction model for GDP growth based on the slope of the yield curve. Moody's Analytics and Now-Casting.com produce proprietary model short-run GDP forecasts. For survey-based forecasts, see the Philadelphia Fed's quarterly Survey of Professional Forecasters (SPF), which includes forecasts of real GDP and its major subcomponents, and The Wall Street Journal's quarterly Economic Forecasting Survey, which is administered and released about a month after the SPF.

What are the differences between GDPNow and the New York Fed Staff Nowcast models? Why do the two models have different forecasts?

The New York Fed Staff Nowcast model of real GDP growth is based on a dynamic factor model described in this Liberty Street blog entry. The Chicago Fed National Activity Index and Aruoba-Diebold-Scotti Business Conditions Index are both indicators of economic activity estimated from factor models. The latest nowcast from the New York Fed Staff Nowcast model along with some related Q&A is available here.

The Atlanta Fed's GDPNow also uses a dynamic factor model but uses the factor only as an input to fill in the yet-to-be-released monthly source data for GDP. The estimates of this dynamic factor are available in the Factor tab of this Excel file.

The monthly source data are then used to estimate the subcomponents of GDP, which are then aggregated up to a real GDP growth nowcast. Besides a dynamic factor model, GDPNow uses several other econometric techniques including "bridge equations" and Bayesian vector autoregressions, to nowcast the subcomponents of GDP. The exact methods are described in this working paper. The numerical details—including the raw data and model parameters—translating the monthly data into nowcasts of the subcomponents of GDP in the latest GDPNow forecast are available in this Excel file (see the ReadMe tab).

Because GDPNow and the New York Fed Staff Nowcast are different models, they can generate different forecasts of real GDP growth. Our policy is not to comment on or interpret any differences between the forecasts of these two models.