Monthly US GDP declined 0.9% in February following a 1.7% increase in January that was revised higher by 0.3 percentage point. The decline in February came off of a level in January that we believe was boosted by fiscal stimulus. Also, we estimate that unseasonably harsh winter weather conditions in February subtracted about 0.3 percentage point from growth. By component, declines in domestic final sales (mainly personal consumption expenditures) and net exports in February were partially offset by an increase in nonfarm inventory investment. Implicit in our latest estimate of 5.2% annualized GDP growth in the first quarter is a 1.8% increase in monthly GDP in March.

Our 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 April 2021 by Ben Herzon, US Economist, Insights and Analysis, S&P Global Market Intelligence and

William Magee, Economist, Economics & Country Risk, S&P Global Market Intelligence