Monthly GDP Index rises 0.4% in July 2018

Monthly GDP rose 0.4% in July following a flat reading in June that was revised up from a previously reported 0.2% decline. The increase in July was more than accounted for by a jump in nonfarm inventory-building. Final sales to domestic purchasers were essentially flat in July, as solid growth of PCE was offset by a sharp decline in fixed investment in aircraft. The level of GDP in July was 2.5% above the second-quarter average at an annual rate. Implicit in our forecast of 3.1% GDP growth in the third quarter are increases in August and September that average 0.2% per month (not annualized).

Macroeconomic Advisers by IHS Markit's index of Monthly GDP (MGDP) is a monthly indicator of real aggregate output that is conceptually consistent with real Gross Domestic Product (GDP) in the National Income and Product Accounts. The Monthly GDP Index is consistent with the NIPAs for two reasons: first, MGDP is calculated using much of the same underlying monthly source data that is used in the calculation of GDP. Second, the method of aggregation to arrive at MGDP is similar to that for official GDP. Growth of MGDP at the monthly frequency is determined primarily by movements in the underlying monthly source data, and growth of MGDP at the quarterly frequency is nearly identical to growth of real GDP.

Posted 28 August 2018 by Ben Herzon, US Economist, Insights and Analysis, S&P Global Market Intelligence and

Kathleen Navin, Economics Executive Director, US Macroeconomics, S&P Global Market Intelligence