Analysts Far Too Bearish On GDP


The final revision for US second quarter GDP came in much better than expected.

Today’s Department of Commerce release shows that the US economy shrank at only a 0.7% annual rate, less than the 1% decline reported in last month’s GDP revision.

Positive surprises include better than expected inventory, trade balance, government spending, and business investment data.

The latest number represents a substantial rebound from the first quarter’s 6.4% GDP drop.

Furthermore, the release caught analysts, as polled by Reuters, off guard. These analysts had expected the final GDP revision to be worse than the last, at -1.2%. Thus they were off by a relatively large 0.5% margin.

Read the Commerce Department release here.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.