Economy to grow at 54 rate in first quarter
The economy is on track to put up blockbuster growth numbers in the first quarter, according to the latest forecast from the Atlanta Fed.
GDP is expected to surge 5.4 percent to start 2018, the central bank branch estimated in its latest rolling look at how the economy is progressing.
If the forecast holds, it would be the best quarter since the Great Recession ended in 2009. The previous highest was third quarter of 2014, which hit 5.2 percent.
However, the Atlanta Fed's tracker has shown to have reliability issues in the past. In particular, the model's sensitivity to the ISM manufacturing index has led the gauge astray multiple times, causing growth to be overstated.
The ISM numbers were the principle impetus for the raise in growth projections Thursday.
Real consumer spending jumped from 3.1 percent to 4 percent amid a sharp savings drawdown, and private fixed-investment growth surged from 5.2 percent to 9.2 percent.
Since 2015, ISM boosts have caused the Atlanta Fed to overstate growth by 0.8 percentage point on average, including 1.9 percentage points in the fourth-quarter tracking on Nov. 1, according to CNBC calculations.
That comes as jobless claims hover around generational lows and the unemployment rate is at 4.1 percent. Productivity, however, continues to be lackluster, falling 0.1 percent in the fourth quarter against an expected rise of 1 percent.