GDP GROWTH SOLID IN SECOND QUARTER

From Action Economics via BusinessWeek:

For the preliminary U.S. second-quarter GDP report, the figures revealed an upward bump to growth of 4.0% from the 3.4% advance estimate released in July. The median forecast of economists surveyed by Action Economics was for an upward revision to 4.1%.

GDP growth averaged 2.3% through the first half of 2007, and we continue to expect a 2.8% pace in the third quarter. August economic data will be watched closely for clues as to the impacts of current financial dislocation, and we have thus far marked down our fourth-quarter GDP estimate to 2.8% in response to these effects. But solid growth up to August will provide a floor to any revisions to third-quarter growth, as will the strong GDP component mix that has boosted third-quarter prospects.