CNN recently reported that the second quarter gross domestic product report due early Friday will show that estimations of growth will not be met. Various factors contribute to this new expectation, including a drop in the Dow Jones industrial average, a drop in home sales, and the looming fact that the US dollar has again fallen to the Euro as well as other comparable nations. However there were references to a low filing of first-time unemployment insurance claims, yet nothing else seemed too encouraging or reassuring for the economy. Reading this report I was curious as to how much a small shift in GDP from quarter to quarter actually effects the economy as a whole and how well it can predict what the next quarter will do--this being evidenced by the notion that originally estimated growth in GDP will likely not occur. Also, how does a quarterly reading of GDP compare to what will happen in a full calender year?
Interestingly a different analysis of the same statistic reported that first-time unemployment filings remained high - same number but different interpretations. Neither gave much analysis, so it is difficult to decide whether this number is cause for optimism or simply adds to the already dreary outlook.
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