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Richard's Remarks


From economist John Williams (condensed): courtesy of Investment Rarities


The downside "second" revision to first-quarter GDP was particularly severe and should help to move consensus expectations away from a second-quarter economic boom, and towards a second-quarter economic contraction. Two back-to-back quarterly contractions to GDP would meet most definitions of a formal recession. The economic factors that pulled the first-quarter GDP into a deep contraction continue to promise trouble for the second quarter. Keep in mind that consensus outlook had been for ongoing positive GDP growth in the first quarter, until the initial headline reporting hit.


Odds remain high of a second-quarter contraction, given early indications from the widening April trade deficit, and likely outright inventory liquidation in the quarter, as opposed to the first quarter's "slowing" of inventory growth. Additionally, the consumer surge in utility consumption that still props up the current negative growth rate in the first quarter GDP, should reverse in ... Log in or subscribe to continue reading.

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