How Good is the Rebound?

The stock market today is unlikely to reverse Tuesday’s pullback following this morning’s soft economic data. The market wasn’t looking for much strength in this morning’s data about Q1 GDP and Durable Goods to begin with, but they came short of even those modest expectations.

The final look on Q1 GDP shows that the U.S. economy was in an even worst shape than many expected. Contrary to consensus expectations of Q1’s growth getting revised down to -2% from the prior -1% decline, the decline came in at -2.9%. Importantly, personal consumption expenditures or consumer spending was materially revised down to a growth of only +1% from the +3.1% growth at the second look.

All components of consumer spending were revised down, but the revisions were notably severe on the services side – up +1.5% now vs. +4.3% in the second look. The investments side of the ledger didn’t see much change, with non-residential fixed investments down -1.2% in Q1 and investments in equipment down -2.8%.

Continue Reading at Zacks Investment Research

Photo: HckySo via photopin cc

— Zacks Investment Research

You May Also Like

About the Author: Zacks Investment Research