Friday, July 31, 2009

GDP: 2nd Quarter 2009 Neagtive 1%

Score one for the green shoots crowd. The second-quarter gross domestic product report Friday clearly showed that the economy is in fact stabilizing.

For the most part, stocks finished the day slightly higher on the GDP news -- a bit of a surprise considering that investors had appeared to already factor in that the nation's gross domestic product probably shrunk at a much lower rate than in the previous two quarters...

Still, consumers don't appear to be convinced just yet that the worst is over. Many are still hunkering down and adding to savings instead of spending. Personal consumption expenditures dipped at a 1.2% rate in the second quarter.

And with the unemployment rate currently at 9.5% and widely expected to rise above 10% before long, the average American many not care if the recession is nearing an end.

"Although the recovery is about to begin, it is a technical recovery. The economy will be growing, but growth will be so modest that 70% to 80% of the population won't notice it," said Bill Hampel, chief economist for the Credit Union National Association. "The unemployment rate is not going to improve for some time so it will look, feel and taste like a recession well until next year."

read the CNN article

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