The U.S. economy is likely growing at a 2.7% annualized rate in the first quarter, based on the latest economic data, the Atlanta Federal Reserve’s GDPNow forecast model showed on Friday.
That compared to a 2.9% pace estimated by the Atlanta Fed’s GDP program earlier in the week.
Meanwhile, the New York Fed is less optimistic. The New York Fed Staff Nowcast stands at 1.7% for the first quarter.
"News from this week’s data increased the nowcast for 2020:Q1 by 0.2 percentage point.
Positive surprises from higher-than-expected exports and imports data were only partially offset by negative surprises from the ISM manufacturing survey," the New York Fed said.
The U.S. economy grew at a moderate 2.1% rate in the final three months of 2019, capping a year when growth slowed significantly due to a weaker global economy and trade war uncertainties.
The Fed revisions came hours after the Labor Department said U.S. job growth accelerated in January, with unseasonably mild temperatures boosting hiring in weather-sensitive sectors, indicating the economy will probably continue to grow moderately despite a deepening slump in business investment, Reuters reported.
The Labor Department's closely watched monthly employment report on Friday, however, showed the economy created 514,000 fewer jobs between April 2018 and March 2019 than originally estimated. The biggest downgrade to payrolls over a 12-month period since 2009 suggests job growth could significantly slow down this year.
"Strong job creation and firming wage growth in January provided reassurance that the record-long economic expansion still has room to run," said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York. "But this latest health report also points to a maturing labor market. Benchmark revisions indicate this labor market isn't as youthful as it has pretended to be over the last two years."
Nonfarm payrolls increased by 225,000 jobs last month, with employment at construction sites increasing by the most in a year amid milder-than-normal temperatures, the government's survey of establishments showed. There were also strong gains in hiring in the transportation and warehousing industry.
Economists polled by Reuters had forecast payrolls would rise by 160,000 jobs in January. Data for November and December was revised to show 7,000 more jobs created than previously reported. Job growth in January exceeded the monthly average of 175,000 in 2019.
But employment gains are expected to slow in February as the coronavirus, which has killed hundreds in China and infected thousands globally, disrupts supply chains, especially for technology companies such as Apple.
Material from Bloomberg and Reuters has been used in this report.
© 2021 Thomson/Reuters. All rights reserved.