Atlanta Fed Sees GDP Rocketing to 5.4% in First Quarter

Fireworks explode over the National Mall as the US Capitol (R) and National Monument are seen on July 4, 2017, in Washington, DC. / AFP PHOTO / PAUL J. RICHARDS (Photo credit should read PAUL J. RICHARDS/AFP/Getty Images)
PAUL J. RICHARDS/AFP/Getty Images

The American economy is on track to grow at a 5.4 percent annualized rate in the first quarter of this year, the Atlanta Federal Reserve’s GDPNow forecast model showed on Monday.

The regional Fed’s forecast rose from last week’s 4.2 percent growth following a report on manufacturing that showed more expansion than expected. The forecast of real consumer spending growth rose from 3.1 percent to 4.0 percent, while the forecast of investment growth soared from 5.2 percent to 9.2 percent.

This is an early reading, based on just one-months data. Even the most optimistic economists do not expect the economy to expand at that rate in the first quarter.

Both the Atlanta Fed’s GDPNow and the New York Fed’s Nowcast had readings for the fourth quarter of 2017 that were substantially higher than the official initial estimate, which came in at a 2.6 percent annual growth rate.

.