Leaders.com
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
Markets

A modest GDP revision speaks to negative market trends (Maxim Hopman/Unsplash)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

Aug 30, 2023

U.S. GDP Is Trending More Negative Than Expected 

The federal government has announced that last quarter’s gross domestic product (GDP) was lower than initially calculated. 

Key Details

  • The Bureau of Economic Analysis reported last month that annualized growth for the second quarter was 2.4% but revised it on Wednesday to show the real number is closer to 2.1%. 
  • Downgrades in inventory investment and business spending cut against economists’ expectations that the GDP would not be revised this quarter, with moderate investments outweighing consumer spending. 
  • Revised statistics show inventory investment declined by $1.8 billion rather than growing by $9.3 billion, while household spending increased to 1.7%. Gross domestic income rose 0.5% after two quarters of contraction. 
  • The current GDP rate is still considered strong relative to the Federal Reserve’s expected non-inflationary rate growth of 1.8%. 
  • The economy grew by 2% in the first quarter, and some economists predict a bullish 5.9% growth rate for the third quarter. 

Why It’s Important 

Wednesday’s modest adjustment is not earthshattering in its implications, but it does have implications for economic expectations going into the late part of the year—particularly for how the Federal Reserve will respond with its rate hikes. Economic growth is still resilient in spite of the pressures against the economy. Inflation remains high at 3.2%, and job growth has slowed in recent weeks. 

From the perspective of the Fed, Wednesday’s announcement may be a welcome sign of change. The Fed has raised interest rates by 5.25% since March 2022 in a desperate attempt to uproot entrenched inflation, which peaked at 9.1% in June 2022. Aggressive interest rate hikes have reduced inflation, but the final goal of reducing inflation to 2% is proving tricky. The Fed wants to see the economy cooling off as a side effect that interest rates are having the desired effect. 

As we previously reported, a similar correction in June revealed that large portions of Europe have been under a recession for the past several months as GDP flatlined. 

Notable Quote 

“But what I did find interesting is that we did get the first release of real gross domestic income which is an alternative way of measuring output… that came in at just half a percent. [It] suggested that growth was a fair bit weaker, and that sort of continues a trend and divergence that’s occurred over the last four quarters… it suggests to us that potentially the economy isn’t as strong as the headline real GDP numbers are suggesting,” Macquarie Group economist David Doyle tells Yahoo Finance Live.

“The details of the report continue to point to an economy with positive underlying momentum and that demonstrated resilience in the face of elevated interest rates, tighter credit conditions, and a weak global backdrop,” EY-Parthenon economist Lydia Boussour tells Reuters.

Home / News / U.S. GDP Is Trending More Negative Than Expected 
Share
FacebookTweetEmailLinkedIn

Related Stories

61% Of Americans Are Living Paycheck-To-Paycheck 

by Tyler Hummel Leaders Staff
Markets

Sep 8, 2023

Nearly two-thirds of Americans are feeling pinched by inflation. 

Key Details

  • LendingClub’s newest research shows that 61% of adults lived paycheck-to-paycheck in July 2023, increasing from 59% in July 2022. 
  • Even with inflation decreasing from 8.5% to 3.2% in 12 months, consumers still struggle to get by.  
  • A portion of this is attributed to irresponsible spending, with 21% of survey respondents saying nonessential spending is responsible for their financial issues. 
  • Low-income consumers—making less than $50,000 per year—were among the hardest hit by tightening wallets, Fortune reports. 
  • Bankrate’s Annual Emergency Fund Report earlier this year found that 57% of Americans cannot afford a $1,000 emergency. 

Go deeper

FacebookTweetEmailLinkedIn

Google Cracks Down On A.I. Election Ads

by Tyler Hummel Leaders Staff
Tech

Sep 7, 2023

Political campaigns using artificial intelligence (AI) generated content must disclose this information in Google and YouTube content. 

Key Details

  • Google has revealed a new disclosure policy that will force election advertisers to label AI content distinctly from real content. 
  • As of mid-November, generative AI content must receive a label to make it clearly identifiable to avoid spreading election misinformation. 
  • Google’s digital ad business joins companies like Meta Platform’s Facebook and Instagram in cracking down on deep fakes and spreading misinformation. 

Go deeper

FacebookTweetEmailLinkedIn

Vivek Ramaswamy’s Anti-ESG Firm Is Worth $1 Billion 

by Tyler Hummel Leaders Staff
Environment

Sep 7, 2023

The third most popular GOP presidential candidate has built his name fighting “wokeness”—and that reputation is paying off for his asset management company. 

Key Details

  • Ohio-based Strive Asset Management is an anti-activism fund company that promises investors higher-quality returns and investments.  
  • It was partly founded by Peter Thiel and Bill Ackman to rival investors at environmental, social, and governance (ESG)-friendly firms. 
  • On Tuesday, the firm announced that its accumulated assets now exceed $1 billion, slightly more than a year after it launched in 2022. 
  • The company is also currently facing lawsuits from two former employees arguing that it mistreats staff and engages in securities violations.

Go deeper

FacebookTweetEmailLinkedIn
Investing

Sep 7, 2023

Bill Gates Makes a $96.6 Million Bud Light Bet

by Tyler Hummel Leaders Staff
Cryptocurrency

Sep 6, 2023

Cathie Wood Bets Bullish On Big Tech 

by Tyler Hummel Leaders Staff
Some U.S. companies are finding it easier to hire help, after a rough few years
Hiring

Sep 6, 2023

Promotions Can Increase the Number Of Employees Quitting 

by Tyler Hummel Leaders Staff

Recent Articles

Leadership

Sep 14, 2023

Maladaptive Daydreaming Signs + 4 Ways to Manage Them

Maladaptive daydreaming involves daydreams that interfere with daily functioning

Hiring

Sep 13, 2023

40 Smart Questions to Ask at the End of an Interview to Get Hired

Impress hiring managers with these thoughtful questions

Business

Sep 12, 2023

S Corp vs. C Corp: 7 Factors to Consider When Choosing a Corporate Structure

Entrepreneurs face a pivotal decision when starting a business: the C corp or the S corp

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2023 Leaders.com - All rights reserved.

Search Leaders.com