Today’s first take on real GDP growth for 2010Q2 showed the U.S. economy expanded at an annualized rate of 2.4 percent and 3.2 percent in the past year. This is roughly in line with the average rate of real GDP growth during the post-WWII era, but given the fact that growth tends to be above-average during the earliest stages of a recovery it becomes easy to see why one cannot characterize this as a robust v-shaped rebound. Worse yet, the report also showed growth for prior quarters was revised downward, suggesting an even deeper recession and milder recovery than previously estimated.

Fortunately, some pockets of improvements have emerged that suggest some upside for the recovery—most notably, business investment. Spending on equipment and software has jumped by an average annualized rate of 19 percent during the past three quarters. While this rate of increase could ebb as the initial pop in replacement demand subsides, rising capital spending activity does point to businesses becoming confident enough about the recovery to put their accumulated cash reserves to work.


Leave a Reply

Your email address will not be published. Required fields are marked *

*


7 + = nine

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>