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Heads Up!

May 2, 2016 | Weekly Commentary

The Gross Domestic Product (“GDP”) economic report has been released for the first quarter 2016.  It shows a meager .5% increase. But, we do not put much faith in its accuracy. The Bureau of Economic Analysis, according to the Wall Street Journal, uses a flawed calculation for the seasonal adjustment. The Bureau could make an adjustment but it has chosen not to thus far.

Given the math of seasonal adjustments, the first quarter growth is being understated and the three remaining quarters understated.

The take-away is to keep in mind the economy is stronger than it seems in the economic reports.

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