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GDP forecast – preliminary 2009:Q3

In Forecast on October 25, 2009 at 4:42 PM


Preliminary UK results on third quarter GDP are now out, read here.

Interestingly, the UK result of -0.4 surprised 35 analysts polled by Reuters; they had expected, on average, +0.2. Not a single negative number had been forecasted! That said, US results on third quarter GDP will be issued October 29, so there is speculation out there on what the number and direction will be.

Above are some graphics comparing the growth bars for the two countries by eye, with data sourced through the ONS and the BEA, click here and here, respectively.

I have regressed UK quarterly numbers on US quarterly results, spanning 1955:Q2-2009:Q2, to see how Anglican measures might produce significant or insignificant contemporaneous forecasts.

In short, the simple bi-variate dynamic model tests significantly, proven at the 99 percent confidence interval; see the regression results above.

Interpretation reads, for every 1 percent increase in UK GDP, there is an associated 0.2 percent increase in US GDP, all else equal.

Accordingly, the forecast for US 2009:Q3 seasonally adjusted real GDP growth is +0.56. That number is scheduled for release this Thursday at 8:30 AM, read here.

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