Awaiting 2nd Quarter GDP

Well the time has arrived for the release of the only economic number of the week that could have moved the markets–but it has now been talked about so much that it is likely to be a minor blip, at the most, on stock and bond markets.

Predictions have ranged from growth of 3.5% to over 5%.  Almost everyone who predicts these things says this is a ‘one off’ show of strength.

Seems to us that only a very large miss from the expected range is likely to be meaningful–a 2% growth rate or a 6% rate for instance would probably move markets but something in the 3.5% to 5% range will be a big yawn.

The 10 year is trading at 2.98% this morning so a number in the high end of the range could push  rates over 3%, but since every prediction includes the statement that this is a one off we think the likelihood of a big move is quite remote at this time.



4 thoughts on “Awaiting 2nd Quarter GDP”

  1. 1% of the GDP growth caused by soybean exports ahead of tariffs? If that is really correct (as being reported by news media) that’s 3.1% without the tariff issue. Here I go again, not seeing the good news here. After the tax-cuts, 3.1% is not a good report. Just one man’s opinion

    1. Keep in mind, this is just the “preliminary” GDP report and that it will be revised numerous times before being finalized.

      Also keep in mind that even if you back out the 1% attributed to the ‘news’ reports. the GDP 2nd qtr growth print is still the highest number achieved since about 3 full years ago.

      I think we’re heading in the right direction for a change.

      1. I’ll stay with the Fed GDP forecast until I see something better. I believe that is around 2.8% – 2.9% for 2018. Since 2014, the annual growth rates are 2.5%, 2.9%, 1.6% and 2.2%. Certainty 2.8% to 2.9% is headed in the right direction. But given the size of the fiscal stimulus – not as much as I’d like to see since that is also a factor in creating higher interest rates.

        Would have been more optimistic if the 4.1% did not including any one time events not in forecast like like the soybeans tariff item. Why? If you pull things forward then you are open to downward surprises in next quarters reading. Maybe not, time will tell.

  2. In the second quarter, the U.S. economy grew at an annualized rate of 4.1%, almost double the 2.2% growth rate seen to start the year.

    This marks the fastest pace of growth for the U.S. economy in any quarter since the third quarter of 2014.

    This rate of growth, however, was less than what was forecasted by economists. Economists polled by Bloomberg expected the report to show the economy grew at an annualized rate of 4.2% in the second three months of the year. (Y!)

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