Growth Views
Will GDP Continue To Head Lower?
The Prometheus Asset Allocation program offers a stable, macro-focused approach to asset management. Prometheus Asset Allocation aims to outperform a traditional stock and bond portfolio by leveraging our proprietary systematic macro process to rotate between 3 ETFs monthly.
Our systems place real GDP growth at 0.93% versus one year prior. On a monthly basis, this sequential deceleration was primarily driven by neutral consumption and negative trade dynamics. However, it is worth noting that the trade data is extremely volatile and may over-emphasize the underlying pressures.
Nonetheless, zooming into cyclical components of the economy, such as real estate and industrial manufacturing, we continue to see ongoing weakness. While nominal sales remain subdued, wages continue to remain high.
The constellation of these factors suggest significant headwinds for future growth conditions. In the context of markets, our Alpha Strategies remains short stocks and commodities.
For the latest data through December, our systems place Real GDP growth at 0.93% versus one year prior. Below, we show our monthly estimates of Real GDP relative to the official data:
In December, nominal GDP increased by 0.2%, with real GDP growth of -0.13% and inflation of 0.34%. Below, we show the weighted contributions to the most recent one-month change in real GDP, along with the recent history of month-on-month GDP. Additionally, we show the contribution by sector to monthly GDP in the table below:
