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Real Time Insight

Forecasters are looking for the U.S. government to report on Friday the U.S. expanded at a healthy +3.0% pace in Q1 after a +0.4% gain in Q4. 

Don’t put too much stock into this backward-looking and preliminary real GDP report.

Yet, a few signs of another mid-year slowdown are already evident

  • Softer consumer spending,
  • A barely growing manufacturing industry,
  • A slow March pace of private-sector hiring,
  • Recent softness in existing home sales

The same forecaster’s outlook for Q2 shows growth slowing to +1.8%.

Sequestration cuts have yet to kick in.

The chart below shows a real GDP view of the last 10 years.  We now have a real economy that is +2.7% greater in size than in 2008.

 

My RTI questions for you: 

A similar seasonal pattern occurred in 2012 and 2011. 

Is a summer seasonal slowdown a permanent feature of our economy now, or is this a more serious event in the 2013 context, given sequestration? 

Will the stock market care this time around, or is the overall higher level of real GDP going to push the S&P 500 to new highs?

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 Zacks.com visitors free of charge.

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