Q4 GDP Forecasts: Mid-to-High 2s, Estimate of Shutdown Impact on GDP

Merrill Lynch estimate of impact of government shutdown on GDP: We think a deal to reopen the government will be reached eventually, but only after economic, financial and/or political pain is felt. Every two weeks of a shutdown will trim 0.1pp from growth; additional drag is likely due to delays in spending and investment. From Merrill Lynch: 4Q GDP tracking remains at 2.8% . We forecast 1Q GDP growth of 2.2%, but downside risks are emerging due to the government shutdown. [Jan 11 estimate] emphasis added From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for......(read more)

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