How strong will the fourth quarter economic recovery be?

Last week, researchers at the Atlanta Federal Reserve made waves when they released an updated “nowcast” for 4Q 2020 GDP growth. Unlike the official GDP report from the Bureau of Economic Analysis (BEA), which is released with a delay, the Atlanta Fed’s “nowcast” seeks to approximate present economic activity using available economic data for the quarter. If the “nowcast” is to be taken at face value, then, economic data have improved dramatically. According to the Atlanta Fed, recently released figures point to a strong increase in personal consumption and a surge in inventories, resulting in a 4Q GDP growth rate of 11% annualized, far above consensus expectations.