GDP has Mostly Been a Disappointment - What Now?

Mish Shedlock |

Gloomy.jpgGDP Bounce: A Mixed Bag of Expectations and Revisions

Yesterday morning, the BEA reported Second Quarter GDP was 2.3%. That was at the low end of the Consensus Range of 1.9% to 3.5%. On the plus side, though, the first quarter was revised way higher.

Revisions

  • First quarter 2015 revised up from -0.2% to +0.6%
  • 2013 GDP revised lower from 2.2% to 1.5%
  • 2012 GDP revised lower from 2.3% to 2.2%

Evolution of First Quarter 2015 GDP

  • +0.2% Initial
  • -0.7% Revised
  • -0.2% Revised
  • +0.6% Revised

GDP is the most lagging of all indicators. By the time all the revisions are in (years later), no one even cares. I suspect after the "final" revision, first quarter 2015 GDP will be back in the negative column, with all of 2015 revised lower as well. Don't hold your breath waiting.

A Weak First Half

Meanwhile, the first half of the year looks pretty weak. Last year, a first quarter GDP of -0.9% was followed by a huge second quarter surge to +4.6%, sustained with a strong third quarter at +4.3%. In comparison, this bounce was feeble.

Where to Go from Here?

If retail sales do not pick up, and especially if auto sales slide (as I suspect they will), the third quarter will shock the economists who believe this economy is strong and getting stronger.

For more of Mish's insights and opinions on markets in the US and across the globe, follow this link to Mike Shedlock’s blog.  

 

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