There is no way to spin the GDP report that came out this morning as anything but very bad. It was just last May that the consensus was that second-quarter GDP would be 3.3%. That had been revised down to 2.7%, but the number came in at 1.3%.

John Mauldin at Business Insider

EXCERPTS:

Normally, at this time in a recovery we are growing at close to 3 times that number, or 3.6%. (You can read the press release and see the data I write about at http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm.)

Even worse, the first-quarter number was revised down from 1.9% to an anemic 0.36%. For new readers, note that the first estimate of a quarter’s growth is just that, an estimate. There are three monthly revisions that follow, and after a few years it is revised yet again with the aid of hindsight. And the 4^th quarter of 2010 was taken down from 3.1% to 2.35%!

Joan McCullough notes:

“Working from Q309, forward, read GDP as follows:

“1.7, 3.8, 3.9, 3.8, 2.5, 2.3 … now here it comes: 0.4 … and then today’s 1.3%.

“I won’t keep you in suspense any more. Here’s my take: MOMENTUM IS BROKEN. A big, ol’ monkey wrench, courtesy of input arising from the change in inventory and Imports. And once momentum stumbles, then H2 growth becomes a wild card, right?”

FULL ARTICLE

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