S&P Lowers GDP Growth Estimate


2Q  lowered from 4% to 1.7%.

2011 lowered from 3.1% to 2.4%

Additional 2Q forecasts:          July      March

Unemployment                        9.1%      8.9%

Consumer spending                  .60         2.9

Equip. Investment                    4.7        17.2

Resid. Construction                  3.8         12

Fed Government                       4.5         0.9

Overseas operations account for 46% of S&P; company earnings, meaning the majority still generated in the US.  If the domestic economy ratchets down, will have an impact.

S&P; research shows that whenever we have two or more successive quarters of subdued growth (2% or less), either we’re already in a recession or will be entering one within 12 months.

A video interview can be seen here.


S&P Lowers GDP Growth Estimate — 3 Comments

  1. I think you're right about the reaction thus far. But, a default might cost the players more than even Bernanke would reimburse. If the market rocks along, safe and secure in it's little trading range all week, why should Congressional types take threats of financial Armegeddon seriously? More would be tempted to dig in their heels and stick to their (harrumph) principles? I think something has to happen to put the fear of God (or, at least unemployment) in them. I nominate a 100 point drop in SPX.

  2. Got a link?

    Can be significant. But the herd has not taken S&P; seriously.

    Beohner's new proposal (an hour ago) makes even less likely a deal can be reached. People pretend they can deal with this rationally.