GDP Rose More Than Expected; Stocks Top Record Again

As recently as Thursday, the GDPNow forecast designed by the Atlanta Federal Reserve Bank, some of the world's best economists, updated its growth projection to 1.3%. To be clear, the Atlanta Fed's real time forecast of 1.3% on Thursday underestimated the actual rate of growth announced by the government on Friday morning by 60%! An independent real-time projection by the New York Federal Reserve Bank, for 1.5% growth, also sharply underestimated actual second quarter growth of 2.1%.

Consumer spending — which accounts for 70% of U.S. economic activity — fueled the confounding growth. Personal consumption expenditures spiked.

Despite declines in two of the four factors in U.S. growth — net exports and business investment — the surprising surge in consumer spending drove GDP to grow faster than what generally had been expected.

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This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

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