GDPNow Still Points to Strong Third-Quarter Growth

The latest Atlanta Fed GDPNow estimate places annualized real GDP growth for the third quarter of 2026 at 3.6%. The reading is slightly below the 3.7% estimate from October 6, representing a modest downward adjustment rather than a major change in the underlying growth outlook.

GDPNow is a nowcast rather than a conventional economic forecast. It is updated as new economic data become available and attempts to translate incoming information into an estimate of current-quarter GDP growth. Consequently, the figure can move significantly before the government’s initial GDP release as additional data alter the model’s inputs.

The latest 3.6% estimate remains a relatively strong growth rate. It also represents a substantial improvement compared with the lower levels shown in the Blue Chip consensus and its forecast range during portions of the period displayed in the chart.

The Growth Gap With Private Forecasts Is Significant

One of the most notable features of the chart is the gap between the Atlanta Fed’s green GDPNow estimate and the blue Blue Chip consensus. GDPNow climbed above 5% during late July and early August before gradually declining toward the current 3.6% level.

By contrast, the Blue Chip consensus remained considerably lower, generally around the 2%–3% range during the period shown. The chart also displays the range of the top 10 and bottom 10 average forecasts, illustrating the considerable uncertainty surrounding the outlook for third-quarter economic activity.

The difference does not necessarily mean one approach is correct and the other is wrong. GDPNow responds mechanically to incoming economic information, while private forecasts incorporate economists’ broader assessments of consumer spending, business investment, trade and other components of economic growth.

What Strong Growth Means for Markets

A 3.6% GDPNow estimate would point to an economy maintaining substantial momentum during the third quarter. Stronger growth can support corporate revenues, employment and consumer spending, but it can also complicate the outlook for monetary policy if economic resilience prevents inflation from cooling as quickly as policymakers would prefer.

For investors in the U.S. and Israel, the growth estimate is therefore relevant across both equity and fixed-income markets. Stronger economic activity can provide support for earnings expectations, while simultaneously keeping interest-rate expectations elevated if investors conclude that the Federal Reserve has less reason to ease policy quickly.

The key issue now is whether GDPNow stabilizes near the current 3.6% level or continues to decline as additional third-quarter data arrive. The estimate remains substantially above the consensus forecasts shown in the chart, making the next series of economic releases particularly important for determining whether the gap narrows before the official GDP figures are published.