The headline is 1.6%, which is ahead of the 1.3% analysts had been looking for. However, this is a major downward revision from the initial 2.4%.
Stocks are rallying, bonds are sagging. and the yen is getting hammered.
Again, it’s still an ugly, thin number, but the fact that it wasn’t a huge miss maybe gives the Fed a little breathing room. Maybe?
Background: Analysts are looking for a number of around 1.3% for Q2 GDP, which compares unfavorably o the initial estimate of 2.4% growth in the quarter. A very wide trade deficit is what prompted analysts to aggressively slash their numbers, and the sagging macro data we’ve seen elsewhere suggests that this is well justified.
Of course, the big story is already Q3 GDP, which is seen by many as likely coming in below 1.0%. Whether Bernanke is still scribbling notes to his speech — based on this number — is unclear.
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