Monthly GDP rose 0.6% in August following a 1.5% increase in July that was revised lower by 0.4 percentage point. The increase in August was the smallest so far in the recovery and left the level of GDP still about 4% shy of the February peak. The modest increase in August reflected positive contributions from domestic final sales (mainly personal consumption expenditures) and nonfarm inventory investment partially offset by a decline in net exports. The level of GDP in August was 33.9% above the second-quarter average at an annual rate. Implicit in our latest estimate of 32.8% annualized GDP growth in the third quarter is roughly no change in monthly GDP in September. This would extend the pattern of deceleration exhibited through August.

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 01 October 2020 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