Despite economists expecting a downward revision for US second quarter GDP, they were proven wrong. Second quarter GDP was unchanged at -1% vs. an expected -1.5%.
The good news:
- Inventories came down more than expected.
- US exports fell slightly less than expected.
- Residential fixed investment fell less than expected.
The bad news:
- Business spending fell 10.9% vs. an expected 8.9%
Sure the economy still contracted 1%, but we knew that already and people expected worse. Thus the data was good news for the market. More inventory de-stocking in the second quarter also means less to hold us back in the third.
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