Posted At : September 2, 2009 2:42 PM
The second look at 2nd quarter GDP this morning (8/27) contained a bit of a surprise to some economists, but no surprise here. The market had been expecting this revision by the Bureau of Economic Analysis (BEA) to show GDP declined at -1.5% rate for the quarter. (The BEA preliminary estimate last month showed a -1.0% decline in 2nd quarter GDP.) This BEA revision showed the 2nd quarter GDP contracted at only a -1.0% rate in the 2nd quarter; appreciably better than the -1.5% estimate. (The BEA will do a final revision of GDP next month.) The better than expected GDP number suggests that the economy may be getting better at a faster rate than previously thought. In addition to the BEA’s GDP revision reported today (8/27) the Department of Labor released jobless claims for the week ending August 22nd. Initial Jobless Claims were down -10,000 from the previous week to 570,000. The news was even more encouraging for the continuing claims (people who are currently unemployed, receiving benefits and filed for unemployment at least 2 weeks ago). Continuing Claims were down -119,000 to 6,133,000—the 3rd straight week of decline. If the labor sector has finally turned around, then the stage is being set for a recovery and jobless claims along with the unemployment rate should start to see improvement.
Regards – Keith Springer