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About That 4% GDP Increase in 2Q14 July 31, 2014

Posted by geoff in News.
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So the GDP dropped by 2.1% in the first quarter of this year, and then increased by 4% in the second quarter (at least on a very preliminary basis). What does that really mean?

It means that so far in 2014, we’re averaging about 2% annual growth. The CBO uses an estimate of 2.3% growth for its deficit projections, which are already very high.

Yippee.

Comments

1. Nanny G - July 31, 2014

Thanks for explaining this.
I was thinking that our growth was so slow that it made a seemingly large growth appear if any growth took place at all.
But the Fed has scared Wall Street into losing over 175 on the Dow and 70 on NAS.
The traders must believe this seemingly high growth number means Fed easing will slow or stop.

2. geoff - July 31, 2014

It’s scheduled for October, isn’t it? The end of QE, that is.

3. Mr Black - August 2, 2014

That 4% cannot possibly hold. I would expect an examination of the data will show some unusual one-time events and the usual high-side estimates we’ve come to expect. I’d imagine the final, final revision will be a lot closer, possibly under, 2%.

The administration cannot and will not allow an “official” recession to occur and I have no doubt that after the terrible numbers of last quarter they made sure by all available means that this quarter would be a headline grabber.


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