September 7, 2018 / 4:04 PM / 18 days ago

N.Y. Fed raises U.S. economic growth view for 2018 second half

NEW YORK (Reuters) - The New York Federal Reserve on Friday increased its estimates on U.S. economic growth in the second half of 2018 following stronger-than-forecast data on manufacturing sector activities in August, the New York Federal Reserve’s Nowcast model showed on Friday.

The American flag hangs over 33 Liberty St. The New York Federal Reserve Bank in New York's financial district March 25, 2015. REUTERS/Brendan McDermid

“Positive surprises from the ISM manufacturing survey drove the increase,” the N.Y. Fed said on its website.

The N.Y. Fed program estimated gross domestic product is expanding at a 2.23 percent clip in the third quarter, compared with a 1.98 percent pace calculated a week ago.

It projected GDP in the fourth quarter is growing at a 2.76 percent rate, quicker than the 2.00 percent clip estimated the week before.

These GDP estimates were slower than the 4.2 percent pace in the second quarter reported by the government last week.

On Tuesday, the Institute for Supply Management said its index on factory activity unexpectedly climbed to 61.3 in August, its strongest reading since May 2004.

Strength in the ISM figures led the New York Fed model to add nearly 0.4 point to its third-quarter GDP estimate and 0.9 point to its fourth-quarter GDP projection.

The upbeat ISM manufacturing data was offset by the negative impact of the latest ADP private jobs report on Thursday and the government’s payroll survey on Friday.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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