GDP Bounce: A Mixed Bag of Expectations and 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.
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