Monthly US GDP slipped 0.1% in May, following a 0.3% increase in April that was revised up by 0.2 percentage point. The slight decline in May reflected negative contributions from personal consumption expenditures, fixed investment, and net exports that were nearly offset by positive contributions from nonfarm inventory investment, the portion of monthly GDP not covered by the monthly source data, and government consumption and gross investment.

Monthly GDP edged just above the February 2020 peak in April and slipped back below it in May. In our forecast, monthly GDP surpasses the pre-pandemic peak on a sustained basis in June.

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 02 July 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