The David Lin Report Will Q2 Be Officially A Recession? Atlanta Fed Economist Forecasts | Patrick Higgins
May 22, 2025
Patrick Higgins is a Policy Adviser and Economist at the Federal Reserve Bank of Atlanta, known for his expertise in economic forecasting. He shares insights on the predicted 2.4% economic growth for Q2 2025 after a rocky Q1. The discussion dives into the importance of both hard and soft economic data in forecasting accuracy, the challenges of predicting recessions, and contrasts the Atlanta Fed's predictions with those of business economists. Patrick also explores the complexities behind GDP trends and the impact of consumer spending on the economy.
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Net Exports Drive Q2 Recovery
- The large negative impact from net exports in Q1 lessens significantly in Q2, contributing to projected GDP growth improvement.
- Strong consumer spending growth, especially from March data, supports the positive GDP forecast for Q2 2025.
Inventory Data Influenced Q1 Forecast
- The Atlanta Fed GDPNow forecast predicted Q1 2025 negative GDP growth due to lower inventories and net exports.
- Inventories didn't rise as much as expected per Census Bureau data versus BEA data, affecting the negative GDP prediction.
Blue Chip Consensus as Reality Check
- The Blue Chip Consensus averages forecasts from 40 business economists as a reality check for the GDPNow model.
- GDPNow often provides a more optimistic but not an outlier forecast compared to the consensus.