The Monthly GDP Index slipped 0.1% in October. This followed a 0.1% increase in September that was revised higher by one-tenth. The slight decline in October reflected a decline in net exports that was partially offset by modest increases in domestic final sales and nonfarm inventory investment. The level of GDP in October was only 0.3% above the third-quarter average at an annual rate. Implicit in our latest tracking forecast of 2.5% GDP growth in the fourth quarter is a solid, 0.7% increase in monthly GDP in November, driven by increases in inventory investment and net exports.
The Monthly GDP Index is consistent with the NIPA's 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.
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.
Chris G. Christopher, Jr. is the Executive Director of US Macro, Global Economics, and Consumer Markets for IHS Markit.
Ben Herzon is an Executive Director at Macroeconomic Advisers By IHS Markit.
Kathleen Navin is a Director at Macroeconomic Advisers By IHS Markit.
Posted 28 November 2017