Economy is Weak, Stocks Are In A Bubble, And Washington Must Change Course

The strength or weakness of the U.S. economy is measured each quarter by its GDP. About 30 days after each calendar quarter the Bureau of Economic Analysis (BEA) releases its report on how the economy performed during the previous quarter. That’s known as the first report. About 30 days later, the BEA issues a revision, known as the second report. Thirty days later, the BEA issues its third and final report on GDP which is the one logged into the public record. The reason for the three releases is that additional information is obtained each time and the report’s accuracy is improved.

The first release for the first quarter 2015 indicated that the U.S. economy grew at a rate of 0.2%. The second release which was issued on May 29th revised this lower to a negative 0.7%. The third and final release will come at the end of June. In any event, the economy is slow – actually contracting, which is never a good thing for stock prices, jobs, or much else really. If the economy were to contract during the second quarter we would officially be in recession.
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