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Real Time Insight

Revised GDP growth matched consensus, more or less. Real U.S. GDP expanded at a +2.4% annual pace in Q4-13 instead of +3.2% as originally reported.  
Consumers did not spend quite as much, the refreshed government data said. Consumer spending growth was lowered to +2.6% from +3.3%.  U.S. consumers spent less than initially calculated on big-ticket items such as autos, appliances, and electronics.
Reduced estimates for U.S. export growth, and fall in inventory spending, and a sharper decline in government spending also contributed to the downward revision.

  • Exports rose +9.4% instead of +11.4%,
  • Inventories climbed $117.4 billion and not $127.2 billion.
  • Government spending fell a stiffer -5.6% instead of -4.9%.  State and local governments actually cut outlays instead of increasing them. 

Folks, that’s a pure “muddle-through” rate of demand expansion. Exclude inventories, and final sales of U.S. goods and services were trimmed to +2.3% from +2.8%.   
One major positive showed its face. Company spending on equipment - a key signal of improved business conditions - was revised up to show a +10.6% gain versus +6.9%.
Inflation as measured by the PCE index was little changed, rising at a +1% annual pace or by +1.3% excluding food and energy. 
My RTI question:  Can Business Spending Relieve the Consumer?

Zacks Releases Their 7 Best Stocks for August, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new visitors free of charge.

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