WDI - How Much Will Q2 GDP Grow?

• During much of last quarter, the Atlanta Fed’s GDPNow model indicated an annual rate over 10% for the second quarter, but last Friday, they downgraded their estimate to the lowest number we’ve seen since the quarter began - an annual pace of just 7.8%, down from +8.6% on July 2.
• We haven’t seen U.S. GDP above 7.2% (1984’s rate) for a full year since 1951, so this could be a history-making recovery year after the short and sharp pandemic-caused recession of 2020.
• One indication of the rapid recovery is the continuing double-digit annual-pace rise in home prices. The National Home Price Index produced by S&P CoreLogic Case-Shiller accelerated to a 14.6% annual growth rate in April, up from a 13.3% annual rate in March - the fastest appreciation rate in over 30 years.
• Dueto a rising unemployment rate and the fact that 6.8 million jobs havedisappeared in the pandemic, the Fed now has more room to be accommodative,since unemployment is one of its two major mandates.

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