Atlanta Fed's Q3 GDP forecast steady at 3.6% as consumer spending lifts

The Atlanta Federal Reserve's GDPNow growth estimate for Q3 stayed at 3.6% following this morning's economic data releases. The bank described it as follows:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2026 is 3.6 percent on October 15, unchanged from October 8 after rounding. After this morning’s retail sales and inventories reports from the US Census Bureau, an increase in the nowcast of third-quarter annualized real personal consumption expenditures growth from 3.4 percent to 3.6 percent was partly offset by a decrease in the nowcast of the contribution of inventory investment to third-quarter GDP growth from 1.96 percentage points to 1.87 percentage points.

The next GDPNow update is scheduled for Tuesday, October 20. The model provides a live estimate of U.S. economic expansion ahead of the official Bureau of Economic Analysis release.

How the GDPNow model works

The GDPNow model draws on monthly data such as retail sales, trade, construction and inventories to estimate the components of gross domestic product. Its methodology mirrors that of the Bureau of Economic Analysis, which produces the official GDP figures. As fresh data become available, the model updates its projection. Federal Reserve Bank of Atlanta

Several points help clarify what the figure means:

• The estimate comes purely from a model. It is not an official Atlanta Fed or Federal Reserve forecast, and no economists make subjective adjustments to the results.
• It measures real growth, meaning growth after adjusting for inflation.
• The rate is seasonally adjusted and annualized. A 3.6% reading indicates the pace if that quarter's growth continued for a full year.
• The number updates with each new economic report. It serves as an early indicator for the official GDP release, though the final figure remains uncertain. Federal Reserve Bank of Atlanta

Q1 and Q2 GDP outcomes (revised)

Based on the latest BEA estimates available as of October 15, all on the same real, annualized basis:

• Q1 2026: +2.5%, revised upward from +2.1% in the September 30 annual update.
• Q2 2026: +2.2%, revised up from +1.5% in the third estimate released September 30. U.S. Bureau of Economic Analysis (BEA)
• Q3 2026: The GDPNow estimate stands at +3.6% per today's update. The BEA's first official Q3 estimate is scheduled for October 29 at 8:30 AM ET. U.S. Bureau of Economic Analysis (BEA)

Notable in the latest revision

The top-line number was unchanged after rounding, but its composition shifted. Projected real consumer spending growth improved from 3.4% to 3.6%, while the expected inventory contribution fell from 1.96 to 1.87 percentage points.

The improvement in consumer spending is a positive sign. However, inventories are still expected to account for roughly half of the headline growth estimate. That mix merits attention: stronger consumer spending supports the demand narrative, whereas a large inventory boost may be less durable if companies later slow their stockbuilding.