Q2 GDP Growth = 2.1%

The GDP report is out. The government said that GDP grew by 2.1% during the second three months of the year. That was 0.1% better than expectations.

This report is a big relief. I know a lot of folks who were scared that the economy was about to run off a cliff. For now, the economy is doing fine.

I will point out that the rate of growth has been very low for an expansion.

Businesses investment declined in the second quarter for the first time since early 2016, according to the report. Nonresidential fixed investment-which reflects spending on software, research and development, equipment and structures-fell at a 0.6% rate, compared with a 4.4% rise in the first quarter.

Shoppers picked up the slack however. Consumer spending, which accounts for more than two-thirds of the economy, rose at an inflation-adjusted, annualized rate of 4.3% in the second quarter, accelerating from the first quarter when it rose 1.1% and marking the strongest pace of growth since late 2017. Americans boosted spending on big-ticket items like cars as well as everyday goods like food and clothing. Government expenditures also boosted growth, rising at a 5.0% annual rate in the second quarter.

I don’t think this report will alter the Fed’s plans. It looks like the Fed will cut interest rates next week by 0.25%.

Posted by on July 26th, 2019 at 8:39 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.