Suitably Flip

2nd Quarter Growth Ahead Of Expectations, Fastest In a Year, Above 5-Year Average

This morning's advance second quarter GDP report from the Commerce Department had its work cut out for it, if it was to change the gloomy sentiment on Wall Street.  An hour ahead of the opening bell, futures indicated a significantly lower opening, supplementing yesterday's bloodletting.

And while the report wasn't a screamer, it appears to have been just solid enough to convince the market to dry its eyes and tiptoe cautiously back into positive territory.

Second quarter GDP grew at an annualized rate of 3.4%, the swiftest pace since since 1Q06, when the economy poured on 5.6% growth.  Economists were expecting today's number to come in at 3.3%.

Additionally, GDP growth for 2004-2006 was revised down to an average pace of 3.2% per year (from 3.5%), meaning the most recent quarter appears to be above-trend, compared with the average growth rate over the 5+ years since the end of the post-bubble recession.

The anemic 0.7% growth seen in the first quarter of this year had people a little spooked about whether housing woes, tightening credit, and high oil prices might be taking a big enough toll on consumer spending to derail the Goldilocks-style (hot enough to sustain solid growth and low unemployment, cool enough to avoid problematic inflation) economy we've been enjoying these last few years.

To be sure, some day the bears will come for Goldilocks (see what I did there?), but - despite the market having turned negative again over the course of my typing this post - that day is not today.

Comments

2nd Quarter Growth Ahead Of Expectations, Fastest In a Year, Above 5-Year Average

This morning's advance second quarter GDP report from the Commerce Department had its work cut out for it, if it was to change the gloomy sentiment on Wall Street.  An hour ahead of the opening bell, futures indicated a significantly lower opening, supplementing yesterday's bloodletting.

And while the report wasn't a screamer, it appears to have been just solid enough to convince the market to dry its eyes and tiptoe cautiously back into positive territory.

Second quarter GDP grew at an annualized rate of 3.4%, the swiftest pace since since 1Q06, when the economy poured on 5.6% growth.  Economists were expecting today's number to come in at 3.3%.

Additionally, GDP growth for 2004-2006 was revised down to an average pace of 3.2% per year (from 3.5%), meaning the most recent quarter appears to be above-trend, compared with the average growth rate over the 5+ years since the end of the post-bubble recession.

The anemic 0.7% growth seen in the first quarter of this year had people a little spooked about whether housing woes, tightening credit, and high oil prices might be taking a big enough toll on consumer spending to derail the Goldilocks-style (hot enough to sustain solid growth and low unemployment, cool enough to avoid problematic inflation) economy we've been enjoying these last few years.

To be sure, some day the bears will come for Goldilocks (see what I did there?), but - despite the market having turned negative again over the course of my typing this post - that day is not today.