Thursday, August 28, 2008

Q2 GDP Was Even Higher than Brian Wesbury Predicted

Last month, First Trust economist Brian Wesbury estimated that the U.S. economy grew at at a 3% annual rate in the second quarter ("Did the U.S. Economy Grow at a 3% Annual Rate in Q2?"). Today the Commerce Department reported that the economy grew at a 3.3% annual rate in Q2.

5 comments:

Barry Ritholtz said...

You are ignoring inflation, which is radically under reported.

GDP data should inform you about the amount of economic activity (i.e., genuine growth), and to do that, you need to accurately understand how much of the nominal gains are price inflation. Even a negative 0.6% overstates true growth.

Say you live in a country that produced $100X worth of widgets in Year 1. In Year 2, it produced $110X worth of widgets. What was your GDP gains? 10% ? 0% ? Or something in between?

If you want to know what the real -- not nominal -- rate of growth is, you have to know how much of that gain was inflation. Understate inflation and you overstate growth.

DaveinHackensack said...

Thanks for the comment, Barry. What do you believe the actual rate of inflation is currently, as opposed to the reported rate?

Anonymous said...

7 - 10%

ravinsu said...

OT

Today I read about some of the new offerings CLAAS is coming up in 2009. These include GPS equipped steering systems using LaserPilot & factory fitted GPS Pilot and CLAAS Baseline for RTK accuracy .

CLAAS

CLAAS seems to be happy with all these systems, so I am not sure how Hemisphere GPS is going to get an entry to this OEM space. May be this is a question for Koles.

With AGCO opting for TSD (along with Beeline as per IR), Stara is the only player left here. Now frankly I think if HEM plays its cards right, Stara can make up for all these lost opportunities and I think thats what the management is also shooting for. Brazil & Argentina (even with the confused lady at the helm) are kicking butt farming more land to feed the world. An interesting article which compares the two bread baskets.

Brazil & Argentina

DaveinHackensack said...

Ravinsu,

Let's hope you're right, but I mentioned to Daniel in response to his e-mail to us yesterday that analysts seem to be bringing down their price targets on HEM. Brazil could be a huge opportunity though. Interesting IHT article comparing the economic mismanagement by Cristina Kirchner in Argentina versus the more pragmatic approach by Lula in Brazil.