Zacks: Is +2.5% GDP Good?

Is +2.5% GDP Good?

The economy has averaged around 2% growth since the end of the Great Recession. So you would think there would be more applause for the +2.5% reading for Q1 on Friday.

What gives?

First, expectations called for +3.1%. Second, last quarter was +0.4%. Average that out with this reading = same old +2% pace. Third, and most importantly, Q2 economic indicators are pointing lower. That could mean a pretty meager result on the way.

Interestingly, investors saw the early dip Friday as another buying opportunity. Likely they want to reserve judgment for the big economic reports on tap for this week. The fireworks start Wednesday with ADP Employment and ISM Mfg. Then Friday brings a grand finale with Government Employment and ISM Services.

The next move for the market relies on the quality of these reports. Let’s trade accordingly.



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