The Atlanta Fed just shaved its real-time GDP growth estimate for the first quarter of 2026 down to an annualized 1.6%, a notable drop from the 1.9% figure it published just one day earlier. The culprit: a combination of deteriorating net exports and softer consumer spending.
Back in late February, the GDPNow model’s initial nowcast pegged Q1 growth at 3.1%. Watching that number get whittled down to 1.6% over the span of a few weeks tells a story about an economy that’s cooling faster than most expected.
What’s dragging the number down
The biggest weight on the revised estimate comes from international trade. Net exports dragged GDP growth lower by an estimated 0.76 percentage points.
The model’s nowcast for personal consumption expenditures growth slipped to 1.4%, a reading that suggests American households are pulling back on purchases.
