Friday, June 25, 2004

Economy Watch: Government and NYT agree with Oldman

Okay I said I wasn't going to be blogging until I got back from my friend's wedding but when I saw this item on GDP growth from the NYT I couldn't resist throwing it up quickly.

Economy Grew More Slowly in 1st Quarter Than First Thought

Published: June 25, 2004

WASHINGTON (Reuters) - The U.S. economy grew much more slowly than previously thought in the first quarter while inflation was higher, a government report showed on Friday.

The surprise downward revision to gross domestic product - which measures total output within the nation's borders - cut growth to a 3.9 percent annual rate in the first three months of 2004 from the 4.4 percent reported a month ago and below the 4.1 percent pace in the final quarter of last year.

Wall Street analysts had not expected the Commerce Department to change the GDP estimate. The department said the reduction in its final measure of first-quarter economic growth resulted from a sharp upward revision to imports - which subtract from GDP - and a downward revision to the amount consumers spent on bank services.

The government also ratcheted up a key measure of inflation, confirming an acceleration in price rises that has fueled expectations the Federal Reserve will begin raising interest rates next week to head off inflation.

As the oldman indicated in his previous posting: The Lollapalooza Indicator anyone who had been watching rock concert ticket sales for the summer would have found this news no surprise whatsoever. The oldman just scooped the market. Right now I'm writing from the waiting lobby of the local Honda dealer while I have my oil changed before my trip out east for my friend's wedding. Seeya all when I get back!


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