US GDP grew at an annualised rate of 2.4 per cent in the second quarter, according to Commerce Department data released on Friday. From the release:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.4 percent in the second quarter of 2010, (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.
Ouch. Flashes, via Reuters:
RTRS-US ADVANCE Q2 GDP +2.4 PCT (CONSENSUS +2.5 PCT), Q1 +3.7 PCT; FINAL SALES +1.3 PCT (CONS +1.8 PCT), Q1 +1.1 PCT
RTRS-US ADVANCE Q2 GDP DEFLATOR +1.8 PCT (CONS +1.0 PCT), Q1 +1.1 PCT
RTRS-US Q2 GDP BUS. INVESTMENT IN STRUCTURES +5.2 PCT, FIRST RISE SINCE Q2 2008, VS Q1 -17.8 PCT
A little bit of grist to the mill for the debate on whether we’re sliding into double-dip territory, or just face sluggish growth — which has also spilled over into whether we need QE2 from the Fed.
On that, here’s a wise bit of comment from Monument Securities’ Stephen Lewis, raking over the spat between Fed board members James Bullard (we need QE to prevent Japan-style deflation) and Richard Fisher (no we don’t):
Mr Fisher declared that central bankers could do no more to boost the economy. He believed that no amount of monetary easing could offset the retarding effects on growth of heightened uncertainty… At the same time, Mr Bullard acknowledged that downside economic risks were increasing. Central bankers seem close to recognising that the actions they take do not determine the economy’s performance. They can no longer demonstrate, or credibly claim, the omnipotence attributed to them by credulous markets in the era of the Greenspan cult. Market participants, however, give every appearance of lagging behind central bankers in their understanding of what macroeconomic policy can achieve. They still look to the Fed and to other central banks to engineer an improvement in the situation. When they grasp how circumscribing are the limits on the efficacy of central bank action, there is likely to be a major reassessment of market valuations.
Related links:
A humpy US curve – FT Alphaville
Inflationista! – FT Alphaville