Last week, the Department of Commerce reported that the nation’s gross domestic product, or GDP, grew at an annual rate of 4% during the second quarter. Although this figure is an advanced estimate and will be revised at some point in the future, it is still a huge improvement from the -2.1% GDP figure that was reported for the first quarter. It is also significantly higher than the 3% median figure that 80 economists who were surveyed by Bloomberg were expecting. The positive GDP report and June’s robust job gains have given Federal Reserve officials additional information to consider in their deliberations on when to raise interest rates. Before the Fed does decide to raise rates, senior living providers and investors who are seeking inexpensive capital should contactCambridge Realty Capital to learn more about the different financing programs that it offers for acquisitions, sale/leasebacks, joint ventures and other purposes as well.

The second quarter’s GDP growth was not only a huge improvement from the first quarter, but it was also a significant improvement from a year ago, when GDP grew at only 2.4% during the quarter. This year’s second quarter growth was driven largely by gains in the housing sector, government output, and international exports. The housing sector benefited strongly from the end of the extreme winter the country experienced and consumer spending also increased as people no longer had to worry about braving the elements and could finally go out and do some shopping. For example, consumer spending, which accounts for roughly two-thirds of the economy, grew at 2.5% during the second quarter, which is more than twice the rate it grew at during the first quarter. Businesses also boosted inventory which typically means that they are expecting sales to grow and want to be prepared when this happens and customers start calling them more frequently to make purchases.

Economists across the country expressed excitement at the economy’s second quarter growth and also expect growth to continue at a steady rate during the remainder of the year. They acknowledge that there are still some risks to the economy such as growing instability overseas in the Middle East and Ukraine that could disrupt financial and energy markets. Also, although the housing market picked up after the winter ended, it still has a ways to go before it reaches a level that most economists consider would consider healthy. But for the most part, economists expect the economy to do well with many of them projecting GDP growth of at least 3% during the remainder of the year. If GDP does continue to grow at that rate it would be cause for celebration because it has been almost a decade since the economy recorded three consecutive quarters of GDP growth greater than 3%.

Only time will tell if these projections are realized, but judging from the second quarter’s GDP figures, June’s robust job gains and recent data that was published in the Federal Reserve’s July Beige Book, the economy appears to be on the right track and is poised for continued growth during the second half of the year.

Recent Posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Start typing and press Enter to search