July 2, 2014

The Markets

Last week, the U.S. Department of Commerce delivered news that was as welcome as a great white shark sighting at a popular beach on the Fourth of July: the Commerce Department’s third revision of its estimate for economic growth in the United States during the first quarter of 2014 was revised downward. Instead of contracting by 1 percent, the Commerce Department is now reporting that it instead shrank by 2.9 percent.

Some unique factors that contributed to the economy’s first-quarter reversal included a reduction in healthcare spending sparked by the Affordable Care Act and the end of emergency unemployment benefits in January. However, experts warned against making too much of backward-looking data.

ING economist James Knightley told The Guardian that the reaction to the news should be fairly muted as many economists expect second quarter numbers to show significant improvement.

Weekly Focus

“Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don’t turn up at all.”

Sam Ewing, American baseball player

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