WSJ October Survey: Q3 Growth Revised Up, Q4 Down

In levels (incorporating revisions to actual GDP):

Figure 1: GDP as reported in 2020Q2 3rd release (black), WSJ April survey (tan), May survey (green), June survey (red), July survey (pink), August survey (blue), September (brown), and October (chartreuse), all in billions Ch.2012$, SAAR, all on log scale. Source: BEA, various vintages, WSJ survey, various vintages, author’s calculations.

The three most recent forecasts are for rising levels of Q4 GDP — arising partly from higher reported Q2 GDP at each revision, and mostly from upwardly revised estimates of Q3 growth (even as Q4 is revised downward).

The most optimistic forecaster (for the remainder of 2020) remains the ever consistently optimistic James Smith of EconForecaster. The most pessimistic is A.C. Cutts.

Figure 2: GDP as reported in 2020Q2 3rd release (black), James Smith/Economic Forecaster LLC (red), Amy Crew Cutts/A.C. Cutts & assoc.  (green), Daniel Bachman/Deloitte (pink), all in billions Ch.2012$, SAAR, on log scale. Source: BEA, 2020Q2 3rd release, October WSJ survey, and author’s calculations.

Daniel Bachman of Deloitte had the most “W”-ish recovery forecast — although the last stroke of the W is a bit limp.

The survey was taken between October 2-6. This period largely predates Mr. Trump’s announcement of the end of negotiations on the Phase 4 recovery package. It’s hard to know how to incorporate this annoucement, given the lack of credibility on the part of the administration. I compare the forecasts from Goldman Sachs research from early September and late “no deal” in this post.