The U.S. economy is on track to grow 0.9 percent in the third quarter after a bigger-than-expected widening of the trade gap for goods in August, the Atlanta Federal Reserve's GDPNow forecast model showed on Thursday.

This was a much slower rate from the regional Fed bank's prior estimate of 1.8 percent on Monday, the Atlanta Fed said on its website.

The advance August trade reading, which showed a deficit of $67.187 billion which was the largest since March, led the regional Fed's program to estimate a drag of 0.9 percentage point on U.S. growth, which was 0.7 point bigger than the previous estimate on Monday.

The Atlanta Fed GDPNow model also mimics the methods used by the Bureau of Economic Analysis (BEA) to estimate real GDP growth. The GDPNow forecast is constructed by aggregating statistical model forecasts of 13 subcomponents that comprise GDP. Other private forecasters use similar approaches to “nowcast” GDP growth.

However, these forecasts are not updated more than once a month or quarter, are not publicly available, or do not have forecasts of the subcomponents of GDP that add “color” to the top-line number. The Atlanta Fed GDPNow model fills these three voids.

"It is important to emphasize that the Atlanta Fed GDPNow forecast is a model projection not subject to judgmental adjustments. It is not an official forecast of the Federal Reserve Bank of Atlanta, its president, the Federal Reserve System, or the FOMC," the Atlanta Fed's website notes.