U.S. Real GDP Rose 2.6% in Q2
​The headline real GDP gain was about as expected and the conventional wisdom analysis will say growth picked up in the second quarter. However, quarterly changes in GDP are virtually meaningless in our judgment (especially on first release). Year-over-year growth in real GDP was 2.1% in the second quarter versus 2.0% in the first quarter and ‘core’ demand growth of private domestic final sales was 2.8% on a year-over-year basis. With total private sector hours worked up 1.9% on a year-over-year basis, the growth in national output is barely faster than the growth in labor input, so productivity growth continues to languish. It is encouraging to see a modest pickup in corporate capital spending but 3.9% year-over-year growth is still too slow to move the needle on productivity. The income side of the data look a little odd to us with downward revisions to wage and salary growth (this doesn't square with the payrolls data) and to the savings rate.
RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.
Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.
The founders of RDQ Economics, John Ryding and Conrad DeQuadros, have a combined experience of 26 years on Wall Street, 12 years of experience in central banking at the Federal Reserve and the Bank of England and nine years in the independent research space. John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.
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