U.S. economic hole looking shallower

July 10, 2009

May’s U.S. trade figures have economists feeling quite a bit better about second-quarter GDP. The surprising strength in exports should provide a big lift.

JPMorgan economist Michael Feroli thinks trade may contribute almost 2 percentage points to second-quarter growth, and he adjusted his Q2 GDP forecast to a  much-less-dire decline at a 0.5 percent annual rate from his earlier view of -2.0 percent. Goldman Sachs economist Jan Hatzius is also looking at a less-ugly Q2.

“Absent significant downside surprises in either retail sales or business inventory data next week, this report suggests that our standing estimate for real GDP in Q2 — down 3 percent at an annual rate — is too negative,” he wrote in a note to clients.

Of course, considering that the rest of the world is also in a recession, it begs the question — where are these exports going?

3 comments

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I dont agree,

Shallower due to oil going back down, it will grow much more deeper in 9-12 months, when Inflation will kick in trust me.

Inflation will cause economy to most likely remain stagnant for at least 2-3 years.

Posted by Ian | Report as abusive

I think we are still only seeing the tip of an economic iceberg. Bank failings, business closures and bankruptcies and the continuing collapse of commercial read estate will drag us deeper into rescission for the foreseeable future.

Posted by Pobept | Report as abusive

Wishful thinking Emily.. Just because you see a little hiccup in oil doesn’t mean we are pulling out of this. We are flat lining, that little blip on the screen is just nerves. We are on this road for years! so buckle up and stop asking “are we there yet?”

Posted by larry | Report as abusive