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And More Good News: GDP [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2024-07-25  

Today’s GDP report for the second quarter was a double that of the first quarter and blew past expectations. The 2.8% annualized rate was much better than the estimates of 2.1% and much better that the first quarter’s 1.4%. Within the numbers inflation indicators continue their fall.

The downsides here were mainly in building. However with the inflation numbers the probabilities of a FED rate cut either this meeting next week or the next Mid September are over 90%. That should start to re-accelerate the building sectors.

What we have here is a very strong economy that is broad based. Both people and business are responding to this and keeping their level of investment and spending robust. This is by all the data likely to continue for the remainder of this year and with a rate cut or two even bring that message home more clearly.

I’ve argued for some time that the administration’s handling of the reopening actually shifted the economic potential of the US higher. From a GDP trend of 2% annual growth I believe once interest rates are normalized a 3-4% trend will be established. The rebuilding, retooling, and reenergizing of the economy should produce that outcome.

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