GDP Update for Q2 2008
I missed an opportunity to post this last week, but there has been a revision to the GDP number for the 2nd quarter of 2008. Originally the number was 1.9% growth, but now the number is 3.3%. Analysts expected a higher revision, but the 3.3% beat the predicted 2.7%. (The Q2 GDP has since been revised to 2.8% on 9/26/08)
So what are the reasons for the good number (3.3% is a good number)?
So what are the reasons for the good number (3.3% is a good number)?
- Stimulus checks helped, but weren't necessarily the engine.
- Business inventories were less than expected meaning their goods are being purchased.
- Global Trade! The weak dollar is the main reason for the upswing in the GDP. However, the US being weak causes a ripple effect in the world economy and that ripple is finally reaching some areas like China.
I think the BEA analysis is erroneous at best. Both at the initial GDP tally and the adjusted GDP. There is no doubt that the GDP is in contraction. How much it is hard to tell. But the contraction is in the US and overseas. All the signs and characteristics demonstrate a depression and sliding downward. Especially coupled with the high unemployment.
A downward slide of home values can only continue
even after the unemployment picture improves. Could be years. Retailers are having problems again. The stock market could be headed for another bubble about to burst. They will expect to be saved again. If the auto industry goes down
so will the US economy. We can make cookies as our nation product.
Reply to this