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      Atlanta Fed Lowers Q3 US Growth Estimate to 3.7% Amid Trade Deficit

      The Atlanta Federal Reserve has revised its GDPNow estimate for third-quarter growth in the United States to 3.7%, a decrease from the previous estimate of 5.0%. This adjustment follows the release of trade data from the Census Bureau and the Bureau of Economic Analysis, which indicated a significant widening of the trade deficit in August.

      The advance goods trade balance for August showed a deficit of $132.6 billion, surpassing expectations of $115.0 billion and widening from a deficit of $118.9 billion in July. This larger trade deficit is expected to subtract 2.60 percentage points from GDP growth, a notable increase from the previously estimated 1.37 percentage points. Additionally, real consumer spending growth has been adjusted down to 3.5% from 4.2%, although real gross private domestic investment growth has increased to 20.7% from 18.7%.

      While the downgrade in growth estimates reflects softer consumer demand, the increase in investment provides a partial offset. Analysts suggest that this report may ease pressure on Treasury yields and the US dollar, potentially tempering expectations for further tightening by the Federal Reserve. The next update from the Atlanta Fed is scheduled for October 1.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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