This morning the second revision for 1st quarter GDP came in at a dismal -2.9%. Most of the revisions came on healthcare spending and exports. As they have in the previous few years, the Fed projected a 3% growth rate for the year. Based upon what Granite Group is seeing, there is no way that projection will come to fruition. The economy picked up a bit in the second quarter, but the type of growth we need is still nowhere in sight. Spending makes up roughly 66% of GDP and second quarter GDP numbers are looking like sub 3% for the second quarter. While the economy is slowing moving forward, the stock market has continued its trajectory. The markets are at a point of fair value, but Granite Group believes that the melt up only has a little further to go in the short term. Let’s hope that the economy can grow like gangbusters in the 3rd quarter and show a brighter light at the end of the tunnel.
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