GDP Estimate

MUFGs rates strategist director John D. Herrmann said their model "forecast for 4Q-2020 real GDP growth is +4.168% q/q SAAR – very close to the consensus estimate of +4.20%. That said, market expectations follow a near bimodal distribution, with modes at close to +5.00% and to +4.00%. It is unusual to see a bimodal distribution of expectations (in GDP, Payrolls, etc.). In our models, the "statistical hand-offs" for many components of consumer spending have weakened in the 4^th Quarter, and, likely, much of the $600.0 per adult income transfers in January only may repair the weakness there - rather than to "accelerate" the economy. Still, over the course of the year 2021, our models continue to glean risk of a significant improvement in employment and economic activity."