5 Items to Look Out for When the GDP is Announced
The Bureau of Economic Analysis released an advanced estimate of the United States GDP for the second quarter earlier today. After what many would have designated as a weak first quarter, the US economy gained some momentum in the second quarter and came in stronger than anticipated. The report showed the GDP increasing at a rate of 4%, respectively to a 2.1% decline in the first quarter.
Today’s announcement has a substantial impact on nearly everyone within the US economy. However, is just knowing the numbers really enough? There are certain thoughts that should be placed into question when the GDP is announced. After all, this is an assessment that is used as an indicator of our standard of living. Below we offer five items to look for when the GDP is announced:
- The offset of the loss in GDP in the first quarter with second quarter growth. During the first quarter of 2014 GDP declined by 2.9%. During the second quarter of 2014, the GDP was forecasted to grow by 3%. However in an advanced estimate that was released today, it showed the GDP actually increased by 4% These two quarters essential have left the economy flat for the first six months of 2014.
- What are consumers up to? Discretionary purchases and household spending represent about two thirds of the economy. Depending on consumer sentiment could foreshadow increases in demand which was necessary because the first quarter of 2014 demand increased by 1%. The government blamed the lack of consumer confidence on the “Polar Vortex” or bad weather.
- Business inventories; how high or low are they? In the first quarter they rose by 1.7% which means goods were not being shipped. Unless this trend has been reversed it could spell trouble for business sales and consumer confidence.
- Will the Government revise their numbers? Should the government increase the negative growth percentage for the first quarter of 2014 it could have negative implications for the balance of 2014. If the revise it in a positive manner it will yield positive results for growth for the balance of the year.
- If GDP increases beyond the forecast of 3% then there is a chance that business confidence has increased as well. This translates into higher production rates and hopefully increased sales and employment.
After a negative first quarter, the GDP rebounded back at an annual growth rate of 4% due to an increase in household spending and business inventories. At Capstone Business Funding, LLC we feel as if this growth may blossom into other opportunities. Capstone is a factoring company here to help your new business start, grow, and thrive. We pride ourselves as a factor whose objective is to help you succeed. We offer single invoice factoring which can provide you with the capital you need to accelerate your cash flow and help your business continue to grow and thrive in today’s market.
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