Fed projected GDP for 2014 will fall short again

Posted: Jun 25, 2014 4:14:59 PM

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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