FYI: The second reading of Q3 GDP was released by the Bureau of Economic Analysis this morning and it was a notably stronger than expected reading. Wall Street economists were looking for a revision downward from 3.5% quarter-over-quarter seasonally-adjusted annual rate (SAAR) growth in the initial reading from one month ago to 3.3% QoQ SAAR. The report ended up much stronger than that, with a 3.9% QoQ SAAR reading. The total figures suggest that economic momentum remained strong in Q3, with the economy growing at its fastest two-quarter pace since Q3 and Q4 of 2004, coming in at 2.1% (4.2% annualized) for the six months ending in September. Year-over-year growth remained tepid at 2.4%, in the middle of the range that it's occupied since Q1 2010, but annualized growth has been 3.5% or more for four of the last five quarters. GDP is always measured on an extremely lagged basis, so we can't be too optimistic about these numbers as other more forward-looking indicators deteriorate slightly, but the consistency of the growth does increase the probability that the US economy has finally "shifted gears" up to 3% baseline growth.
Regards,
Ted
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