Friday, August 27, 2010

GDP Redux

After looking at the numbers, this report looks like a one-off. Consider the following points (please reference the posts below).

1.) PCEs are still increasing in line with the previous three quarters.
2.) PCEs of durable goods increased 6.9%.
3.) Service expenditures increased the most in a few years.
4.) Gross private domestic investment increased at a strong rate
5.) Equipment and software investment continues
6.) Residential investment was positive as well.

As I noted in the initial post on GDP, the real issue in the 2nd quarter was a huge increase in imports.