U.S. GDP Likely to be Revised Lower

[West Coast Democrat]

http://www.marketwatch.com/news/yhoo/story.asp?guid=%7B5FD3B025-BDBB-4484-9906-E7B68931BD30%7D&siteid=myyahoo&dist=myyahoo

WASHINGTON (CBS.MW) - Financial markets are bracing for a downward revision to U.S. second-quarter gross domestic product to be released Friday.

The first estimate had U.S. economic growth slowing from a 4.5 percent pace in the first quarter to a 3 percent annual rate in the second quarter as consumer spending stalled. The revision on Friday should show growth was even slower. Economists surveyed by CBS MarketWatch are predicting a revision to 2.7 percent. The report will be released at 8:30 a.m.

"Treasuries may react to the expected knock to second-quarter GDP growth below 3 percent, as it may raise concerns about the expansion," said Michael Englund, chief economist for Action Economics. "Also, the concentration of weakness in the trade data will lead to questions about the historical unprecedented uptrend in the U.S. current account deficit."

(snip)

Later in the morning, the University of Michigan's consumer sentiment index will be leaked to the media. In early August the index surprisingly dropped to 94.0 from 96.7 in July. Analysts don't expect much change from the preliminary reading.

[scarletwoman]

1. But, but, but -- we've turned a corner, right?

The tax cuts are working, right? The economy is roaring ahead, right?

And I'm sure that the latest statistics about increasing poverty rates and increasing percentage of the population without health insurance REALLY mean that the economy is in great shape... :eyes:

sw

[BillZBubb]

2. This could be a clever deception.

They can lower last quarter's number below what it actually was and take a small hit. That would lower expectations. Then when they release the current quarter's number what was taken off before would be added in as new growth.

They could fudge up the current quarter's number by almost 1% using this and a "generous" interpretation of the current numbers. It's a friggin' boom, I tell ya!

Might not this be part of the October surprise package?

[daleo]

3. Short the market tomorrow

Time for the players to take their profits again, after building it back up to the 10100 range over the last week. Sorry suckers.

[Snazzy]

4. Heard that 4.5 number from 100's of GOP talking heads

Over and over. 8:30 am announcement, plus attacks on Iraqi oil pipes, plus all the numerous SEC and shareholder actions announced today, it ought to be brutal Friday. Only saving grace is it is a Friday--add RNC New York weirdness next week.

Krugman will whack them all over the head with this shortly.

[fearnobush]

5. If it comes in at 2.7, that will hit the panic button. It could start the

Wall Street revolt I am predicting if the numbers of GDP are below 3% and if August's Job's report is as weak or lower than July's. The wall street revolt is investers turning their back on Bush. It happened in 1992.

[Endangered Specie]

6. Turned a corner, fell into manhole.

[West Coast Democrat]

7. Revised to 2.8....

that means, they'll wait until next month to revise it further.