Now THAT was ugly. I’m talking about the disastrous report on U.S. GDP we just got. Second-quarter growth was a paltry 1.2%. That was less than half the market expectation.
First-quarter GDP was also revised down to 0.8% from a previously reported 1.1%.
The weakness was widespread, too. Private fixed investment plunged at a 3.2% rate, the worst drop in seven years. Inventories dropped the most since 2011 as companies coped with weak demand and oversupply.
Even residential investment dropped the most since 2010, while government spending fell by the most in two years. The only bright spot was consumer spending. But if I’m right about this being a pre-recessionary environment plagued by the popping of multiple “Everything Bubbles,” those gains will prove tenuous.
Bottom line? I’m still cautious on growth and the markets. So invest accordingly!
{ 4 comments… read them below or add one }
I wonder how much more disappointing it would have been if the government still reported real numbers? Probably disappointing enough to show that we are in a recession…
This is all a shell game. Final Q2 will likely come in much lower, therefore the govt had to revise Q1 lower to show some Q over Q “growth” as paltry as it might be.
stocks can go up even when the metrics don’t support a good market. it is a sign the mom and pops have finally entered the market.
Stocks are going up or holding steady because the Fed is buying equities. Just like the NSA spying programs, years from now this will all come out. You heard it here first…