GDP Miss Due To Decrease In Government Spending [CHART]

GDP Miss Due To Decrease In Government Spending [CHART]

GDP Miss Due To Decrease In Government Spending by Todd Sullivan, ValuePlays

The important point of this is that a we’ve been saying for a while the private economy continue to hum along at a 3%+ growth rate. It also means if this is just a calendar issue with gov’t expenditures, given that Q1 2014 GDP fell 1%, should those expenditures get pushed into Q1 along with normal spending, we could see a blowout GDP number in Q1 2015…

Finally, net exports caused a 1% decline in GDP. As actual numbers come in I’d expect this to be revised down and GDP revised up

“Davidson” submits:

Macro Hedge Funds Earn Huge Profits In Volatile Macro Environment

Yarra Square Investing Greenhaven Road CapitalWith the S&P 500 falling a double-digit percentage in the first half, most equity hedge fund managers struggled to keep their heads above water. The performance of the equity hedge fund sector stands in stark contrast to macro hedge funds, which are enjoying one of the best runs of good performance since the financial crisis. Read More

US Real GDP for 4Q2014 was reported at rising 2.6%(this will be revised in future reports). By separating out Govt spending from the whole, you can see that Govt spending fell somewhat while the remainder continued to trend as it has since early 2009. This can be seen in the chart below.

Some have feared that falling oil prices are a result of a slowing US economy. Not so! Equity prices should respond to continued economic expansion by trending higher. Bond yields should rise(prices should fall) as investors eventually recognize that economic expansion continues.

Updated on

Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.
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