What to make of the GDP?
What to make of the GDP?
Untitled DocumentThursday, Aug. 28
Posted 4 p.m. Eastern
What to make of the GDP?
The revised Gross Domestic Product for the second quarter was issued this morning, and the number was surprisingly high. The economy expanded at a 3.3 percent annualized pace during the second quarter, a sharp upward revision from the 1.9 percent pace reported just one month ago. Much of the revision is attributable to exports - in other words, goods purchased not by American consumers, but consumers in other countries.
With other major economies around the globe in even worse shape than the U.S. economy (Japan, Germany and the United Kingdom to name a few), such a boost is unlikely to be sustained.
While the GDP figure shows the economy isn’t dead, let’s not kid ourselves - it isn’t sunshine and daffodils either, regardless of what the GDP suggests. With the economy continuing to shed jobs every month, that alone is a sufficient indicator of recession.
Let me know what you think about the state of the economy. I’ll post some of your responses in an upcoming entry.