Written by Steven Hansen
Headline second quarter advance GDP estimate is 1.2 %, up from last quarter’s downward revised 0.8 %. Yet the year-over-year GDP growth declined from 1.6 % to 1.2 %. The real story is the backward revision of data starting in 2013 which now correlates to Econintersect‘s economic forecasts.
There was a significant change to the GDP numbers since 2013.
My position was that the economy has been decelerating since the beginning of 2015 – and now GDP now is telling the same story.
Econintersect published its economic index for August showing improvement – but not yet breaking the long term downward trend which began at the beginning of 2015.
Comparison before GDP revision:
Current Comparison
My opinion is that we have reached the trough in the current economic cycle, and that a MODEST acceleration in economic growth is the mathematical result. However, since the trough is not being analyzed in hindsight, there is little to say if the trough will be of short or long duration.
And consider that the resulting “better” data is relative, and that the USA in not close to returning to the growth of the “good ole days”.
Other Economic News this Week:
The Econintersect Economic Index for August 2016 is no longer in contraction but its level correlating to snail’s pace economic growth. The index remains near the lowest value since the end of the Great Recession.
Bankruptcies this Week: Halcon Resources, Atlas Resource Partners
