How can the Q2 US GDP miss so badly?

Posted Friday, July 29, 2016 by
Skerdian Meta • 1 min read

The US GDP for Q2 was just released and it doesn´t look good. In fact, it looks pretty bad. The expectations were for a 2.6% increase but the numbers came at 1.2%. That´s a huge miss. This puts the Q2 GDP at the same level with the Q1 GDP when the US economy was performing pretty bad. Mind you, this is only the first estimate which often is misleading. Remember the Q1 GDP? The first estimate was 0.5%, the second 0.8% and the last estimate showed a 1.1% increase. 

But, let´s have a look at the details. The consumer spending grew by a hefty 4.2%, the durable and non durable goods increased by 8.4% and 6% respectively and the services grew by 3%. That shows that the US consumer is pretty strong and is carrying the economy. But, the housing investment, business investment and the structures showed some sharp decline. The inventories are down as well but that´s a good sign for the next quarters. Anyway, the first estimate is never to be trusted so let´s wait for the final numbers. Meanwhile, the USD has taken a beating. 

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