2Q GDP up, but growth still slow

A container ship being unloads in the Port of Long Beach, Calif.

TEXT OF INTERVIEW

Steve Chiotakis: Right now we're gonna ask today's big question. And it has everything to do with the amount of oomph the economy has and whether a modest recovery can continue. We got the first assessment of how the economy did in the second quarter. The government today reported the nation's Gross Domestic Product rose by 2.4 percent. That's about what analysts were expecting, but it's slower than first quarter growth and way below what would be seeing if we had strong growth going on. David Kelly is chief market strategist for JP Morgan Chase. He's with us live from Boston for some analysis. Good morning David.

David Kelly: Good morning.

Chiotakis: So what does 2.4 percent GDP growth tell you about where we are?

Kelly: Well, it tells us that we're in a slow but clear recovery from a very deep recession. They did revise the numbers going back a number of years, it shows that this was the worst recession since World War II. But over the last year, we've grown by 3.2 percent. That is clear economic growth, it's just not as fast as any of us would like.

Chiotakis: Was that a surprise going back to last year, that growth was even worse, that the slowdown was even worse?

Kelly: No, it wasn't a huge revision, we knew it was a very deep recession and this just shows it was a little worse than we thought. But they said originally that GDP had fallen by 3.8 percent in the recession, now they say 4.1 percent. It's pretty ugly but it's not much different from what they originally said.

Chiotakis: Remind us about the GDP, where we get it and why its so important to look at?

Kelly: You know, GDP is the best measure we have of how we're all doing in this economy. These are numbers which are released every quarter by the Commerce Department, and what's particularly interesting this morning is they've released numbers going over the last few years. So we actually get a sense not just of how we're doing right now, but how deep was the recession and how strong is the recovery so far.

Chiotakis: And this by no doubt is not the last time we're going to hear about second-quarter GDP, we'll get further revisions, right? From here on out.

Kelly: That's right, they'll revise the numbers. But the real question is also not just what was going on in the second quarter, but there were a lot of questions about, you know how much is this economy slowing down? And right now, we do think there is a soft patch in economic growth, but we believe the economy will regain momentum as we go into next year. So we still think continued growth rather than a double-dip recession.

Chiotakis: David Kelly, chief market strategist for JP Morgan Chase. Thank you.

Kelly: You're very welcome.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.

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