U.S. GDP Grew 2.5% — Beating Expectations

When is good news bad news?

Turn to the recently released U.S. gross domestic product (GDP) numbers.  They’re up more than expected at 2.5% so that should be good, right?  Wrong.

Initially, the number was thought to be 1.7%. However, in the inverted world of financial calculus, a higher than anticipated GDP also suggests that the Fed will interpret the results to mean that “all is well” and potentially be inclined to begin tapering earlier.

Less easy money frightens the easily-swayed financial markets, so a plus becomes a minus.

So what was behind the added growth? The U.S. exported more and imported less.  Concurrently,  business investment greatly increased, and the housing market shows signs of life.

 

 

Category: Featured, General Update