Atlas Analytics Predicts Q1 2025 More Accurately than the Federal Reserve
Atlas Analytics' Weekly Subscriber Update
Atlas Analytics forecasts the economy using satellite imagery, and we have been predicting the U.S.’s macro situation weekly for Q1 2025 since January 2025. This week, the official GDP numbers indicating U.S. economic growth were released by the Bureau of Economic Analysis (BEA) on Wednesday, April 30.
The official GDP first estimate was -0.3%.
On April 5, Atlas Analytics’ made an official prediction of +0.6%, which we documented in a YouTube video and subsequent Substack post well in advance of the official BEA release.
The New York Federal Reserve Staff Nowcast and the Atlanta Federal Reserve GDPNow predicted +2.6% and -2.7% respectively, suggesting that Atlas Analytics was both far more accurate and timely than the legacy forecasters.
First, as I’ve commented several times, it’s quite strange how wide the dispersion of forecasts was from different banks within the Federal Reserve System. In fact, the Atlanta Fed and the New York Fed diverged by 5.3 percentage points (pp).
Second, both forecasts were quite errant. As the table below shows, the New York Fed missed by 2.87 pp, and the Atlanta Fed was off by 2.42 pp. In contrast, Atlas Analytics’ forecast faltered by only 0.86 pp, nearly a fourth of the error rate of the New York Fed and a third of the Atlanta Fed.
Keep in mind that the BEA’s -0.3% is the first estimate of the three statistics it will release for Q1 2025. The final data for Q1 will be released at the end of June (nearly three months after the quarter has ended). Given the highly volatile nature of economic activity currently, I anticipate a potentially large revision this quarter, and I expect the number to likely be revised upward. Given Net Exports subtracted a whopping 4.8 pp from overall headline GDP, I suspect this component will be changed in particular (recall that I estimated it at approximately -3.5 pp). Based on the Advance Trade in Goods data from the Census Bureau for March released on April 29 (after my formal GDP prediction), I predict this Net Exports number will be closer to a 4-handle at the final release.
Atlas Analytics’ performance this quarter is not a coincidence. For the past three quarters, Atlas Analytics’ public forecasts have been extremely accurate, with an average error rate of 0.57 pp. Recall that in Q3 2024, we predicted 2.7% (actual was 3.1% final), and in Q4 2024, we predicted 2.8% (actual was 2.4% final).
In fact, our track record is highly accurate over the longer time period as well.
GDP data is the quantitative measure of economic activity and, therefore, is critical to all businesses in nearly every industry as it measures the lifeblood of the economy serving their commercial operations. From manufacturing to industrials to finance, all major enterprises monitor GDP in some capacity since it directly impacts each business’s bottom line. Our Atlas Analytics solution allows companies to stay ahead of the curve by knowing where the economy is heading in real time before the competition.
Next week, I will continue with my live economic forecasts with a first look at the weekly data for Q2 2025 and the accompanying proprietary financial forecasts.
In this ever-changing economic climate, real-time insights empowering proactive investment decisions is increasingly important. With Atlas Analytics, you can add this capability to the resources and data intelligence you use to stay a step ahead with your business. For more information on how to get started with Atlas Analytics, reach out here on Substack or through our website at www.AtlasAnalytics.com.
As always, please reach out if you have any questions.
All my best,
Jake