Gross Domestic Product(GDP) begins slowing
The GDP growth slowed in the second quarter. Down nearly 3 percent from it’s 5.6% growth in the first quarter.
“What does it all mean Basil?” - Austin Powers
The GDP is a “broad measure of the nation’s economic activity.” A lower percentage of growth means that there was less of an increase in the money changing hands in this nation. As I see it, this is almost surely a result of the higher gas prices we’ve been suffering through.
How many of us have either skipped or cut short our summer travel plans because the cost of gas has risen? Maybe you kept that vacation money in your savings account instead of injecting it into the economy. Maybe you kept it in the suitcase buried in your backyard.
Another side effect of the lower growth is that the Fed might be a little more hesitant to raise the prime rate again. That means steadier interest rates and possibly a rush on lending. Which in turn will put more money out there to be spent and keep the growth going.
Technorati Tags: GDP, Fed, Interest rates, rates, vacation, gas prices
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