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Well, if the object is to make GDP match Income, then an across the board
adjustment of all GDP numbers backward would have to be done. I believe that
this would show overall economic growth has been stronger than anticipated for
quite a while.
JW
abprosys@xxxxxxx
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> From: LHonigAtl@xxxxxxx
> To: abprosys@xxxxxxx; realtraders@xxxxxxxxxxxxxx
> Subject: Re: GDP vs. Income
> Date: Wednesday, July 09, 1997 5:21 AM
>
> On the issue of federal adjustments to numbers, I have the following two
> observations. First, there are various "favorite" or "watched" numbers, and
> these vary over the years and months. (When I started out, M1, M2 etc. were
> the key numbers that moved the markets.) Today, GNP is somewhere in the top
> group, but not at the top, in part because traders believe it is a really
> lagged number - e.g., current companies' earnings and sales reports, auto
> sales, etc. give a better handle of the current state of the economy. Second
> observation: Revisions in prior numbers are generally a yawn to the markets.
> I couldn't tell from your post if you think 1st quarter GDP will be
> adjusted, or an overall adjustment, or an adjustment reflecting the 2nd
> quarter GDP. I suspect you mean 1st quarter, thus a yawn. If 2nd quarter
> GDP is a screamer (say, above 4%), the bond market for sure will be spooked
> (and go down) but I don't have a clue as to what stocks would do.
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