WASHINGTON (MarketWatch) — The U.S. economy sprang back to life in second quarter and expanded at the fastest pace since last fall, fueled by a upturn in consumer spending on big-ticket items such as cars and trucks as well as a sharp rebound in business investment.
Big ticket items like cars and light trucks financed with sub prime mortgages? Here's more.
The rebound in growth offers further proof that a plunge in
first-quarter GDP was an outlier. The economy contracted sharply in the
first three months of the year mainly because of an unusually harsh
winter and a decline in health-care spending tied to the introduction of
Obamacare.
The second-quarter rebound “provides evidence that the economy is
healthy and will continue to grow at an above-average rate in the second
half of this year and into 2015,” asserted Douglas Handler, chief U.S.
economist at IHS Global Insight.
Further down in the story the writer states:
Consumers mostly shelled out for major items such as cars and trucks. Spending on goods designed to last three years or more shot up 14%, the largest gain since 2009.
Consumers mostly shelled out for major items such as cars and trucks. Spending on goods designed to last three years or more shot up 14%, the largest gain since 2009.
All this may be true, but it doesn't mitigate that as an investor one needs to be aware of the cheerleaders out there. See our recent post, "Clunker Dunkers."
Wouldn't all of us like to get two revisions per quarter of our paychecks. Most of us most likely would revise it up or down?
GDP is revised twice after its initial release. The second estimate will
come out next month, and sometimes the revisions are quite large. The
drop in first-quarter GDP, for instance, was initially reported as 0.1%
before eventually being lowered to show a much larger decline.
So here's a simple question: How solid do you think these numbers are?
No comments:
Post a Comment