Brisk Pace for GDP

The U.S. Bureau of Economic Analysis reported that the Gross Domestic Product (GDP), the largest measure of goods and services, expanded at a brisk annualized pace of 2.8% in the second quarter.

That’s up from 1.4% in the first quarter and well ahead of Bloomberg's estimate of 2.0%.

Respectable consumer and business spending offset weakness in housing construction. Stripping out inventories, trade, and government spending, a key measure of underlying demand rose 2.6% for the second straight quarter (Bloomberg).

The second quarter number is ‘backward-looking.’ It reviews economic activity from April through June, and we are set to enter August.

Still, the upbeat pace is encouraging and bodes well for the general economy and the Federal Reserve, which hopes to guide economic activity toward a soft landing.

The Fed is once again hinting at reducing interest rates since it is aware that maintaining high rates over an extended period could cause problems for the economy.

Such a scenario would likely bring the rate of inflation down even faster, but the price would be high—millions of job losses.

Please let me know if you have questions or would like to discuss any other matters.

Clark S. Bellin, CIMA®, CPWA®, CEPA

President & Financial Advisor, Bellwether Wealth

402-476-8844 cbellin@bellww.com