U.S. GDP to Soar in the Second Half of 2025, and Perhaps As Soon as Quarter 2

Atlas Analytics' Weekly Subscriber Update

Recession? What recession?

Just over two weeks ago, the Bureau of Economic Analysis (BEA) released Q1 2025 GDP at -0.3%. Recall that just the day before, the Federal Reserve Bank of Atlanta was forecasting -2.7% while the Federal Reserve Bank of New York was predicting +2.6%. In contrast, Atlas Analytics offered its prediction that GDP would be +0.6% (essentially flat) nearly a month beforehand, and we were by far the closest. 

Keep in mind that this is just the BEA’s first estimate and is subject to two more revisions with the final number released at the end of June. Although the BEA has an average revision rate of 0.3 percentage points (pp), we expect this quarter to potentially have a rather large correction due to the highly variable state of the economy recently and also the large question marks regarding the import and export (Net Exports) data. 

Atlas Analytics suggests that not only will the revision be large but also likely positive given the deleterious -4.8pp that Net Exports contributed to headline GDP (as we’ve written, using our own Net Exports forecasting, we expect this number to be around ~-4pp). 

In essence, Atlas Analytics’ forecast for Q1 was already the closest by far and, based on our supposition that GDP will be revised up, we believe our accuracy may actually improve with the release of the final number in June (we train our ROY algorithm to predict the final number and not the first estimate).

So this begs the question: What will happen in Q2 (and beyond)? As many  Atlas Analytics clients and partners have asked: Are we heading for a recession?

I Repeat: We Are Not Heading for a Recession.