2Q09 US GDP contracted by an annualized pace of 1% - brilliant, IMO, as this clearly tell us a bottom is in place and we have a good chance of seeing positive growth next quarter.
So, why isn’t the Dow soaring? Well it’s starting to right now but there was a disheartening figure in the GDP report - The Consumer Spending number was way off. Spending fell at a 1.2% rate - greater than the rate of GDP decline. What offset this greatly was government spending.
We, like much of the world, were on government life support from November to about June. The government spending money definitely eased the plunge in GDP. This is happening in China also, where government spending accounts for the majority of their GDP growth.
In any case, it’s a good number, the Dow is up 26 at 9,180, the 500 is up 1 at 987, and the Nizzy is up 2 at 1,986.
-Nik
Tags: 2q09, GDP, GDP report, Second Quarter