GDP Q2: The Necessity of Context with Data & The "Tricky" Details

A Distilled Perspective Commentary from Patrick T Bulger Analytics

•    GDP 2nd Quarter
Today, the Second Quarter Gross Domestic Product (GDP) was announced. 
While headlines may focus on the top-line numbers, 
the real story is found in the critical context.

•    Keeping it simple,
Nominal or Gross GDP is calculated, 
Then to get Real GDP it is subjected to or reduced by the Personal Consumption Expenditure Data (PCE), 
A form of inflation measure.

•    Key Observations:
A PCE of 2.0 & 2.5 Excluding Food & Energy were used.
This is a critical observation, 
Especially when compared to the First Quarter, 
Which used PCE data north of 3%.

Future revisions?
Also, Imports were down… and are now being framed as good…

Did the economy suddenly become self-sustaining in a quarter?
Or is demand, as referred to in prior posts, genuinely weak?

•    Let’s visit one of the single best learning points in GDP Data:

The example shows 2001, A recessionary year, 
How GDP was first reported, then how it ended up.

Brought to us by:
Source:
Chief Economist Anna Wong, Bloomberg, X:
https://x.com/AnnaEconomist/status/1820894752759541778

•    Key Takeaway for your portfolio:
A 3.3 with the context above is being viewed as a statistical outlier,
Just like we called out past Jobs Reports. 
Surrounding data is not in agreement with this frequently revised, lagging headline data point.

Understanding this multi-dimensional data set is imperative for serious investors. 
For data & risk insight,

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Great weekend to All!

The views stated in this blog are not necessarily the opinion of Cetera Wealth Services, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results.

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