Monday, August 11, 2014

Old Normal Growth for US Nonfarm Business Output (excerpt)

The US economy dipped during the first quarter, with real GDP falling by 2.1% (saar). It then bounced back by 4.0% during the second quarter. There has been much angst about the subpar pace of economic growth during the current expansion. However, much of that is attributable to weakness in government spending.

That’s confirmed by last week’s productivity report showing that the real output of nonfarm business has been hovering around 3% y/y since Q2-2010, consistently higher than real GDP growth, which has been fluctuating around 2% over the same period, with the former up 2.9%, on average, while the latter is up 2.2%, on average. Over the past four quarters through Q2-2012, the former is up 3.2% while the latter is up 2.4%. During the latest quarter, real nonfarm business output jumped 5.2% (saar) after falling 2.4% during the first three months of the year.

Today's Morning Briefing: Buying Dips. (1) Bad news bulls. (2) Lots of dips. (3) Dips to 50-dma have been good buying opportunities since early 2013. (4) Russian and other barbarians at the gates. (5) Bond market continues to ease as Fed moves towards tightening. (6) Nine reasons to be bullish on bonds. (7) Draghi wants euro to keep dipping. (8) Despite Q1 dip, US economy continues to grow with solid gains in business sector. (9) “The Hundred-Foot Journey” (+ +). (More for subscribers.)

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