Sunday marked President Trump’s 100th day in office. Markets are higher with many indexes hitting all-time highs, businesses seem happy to have a pro-business President, and everything is awesome--or is it? Real, so-called ‘hard’, economic data may be collapsing. The Atlanta Fed produces a “real-time” gauge of GDP called “GDPNow”, which is based on ‘hard data only’ (i.e., no projections or guesses about the future or measures of sentiment – known as ‘soft data’). As the weak first quarter GDP print showed, optimism and sentiment alone can’t lift the real economy. The following chart shows the current level of divergence between two economic indexes--the New York Fed’s GDP estimate, called the NOWCAST index (which includes loads of soft data), and the Atlanta Fed’s GDPNOW index (which contains none).
