The Ghosts of GDP

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Gross Domestic Product showed another positive figure for the Q2-2010 period but not as good as seen before and a  less than what economists were expecting.  The Commerce Department reported that GDP rose by 2.4% in the second quarter.  Estimates from Dow Jones and other sources had a consensus target from economists at 2.5%.

The Commerce Department also revised the first quarter of 2010 GDP higher by a full percentage point to 3.7%.  Unfortunately, earlier reports were revised slightly lower and that is what accounted for the large Q1 revision.  The Q4-2009 period was revised lower to 5.0% from 5.6%.  The area of strength in the second quarter was business spending for equipment and software with gains of more than 21%.

Dallas Fed President Fisher was just talking about a low period of growth for an extended period.  There is still an argument about whether a true double-dip recession is coming and whether inflation will be replaced by deflation.

There is economic recovery happening.  It just is not bringing jobs along with it.  If you are one of the “one in six” Americans who is unemployed or underemployed, the notion of the economic recovery is even less robust than these dull GDP figures this morning.

JON C. OGG