WEEKLY UPDATE FOR 10-28-2011

The growth of the U.S. economy is measured via the Gross Domestic Product (GDP).  This is a measure of all the goods and services produced by our economy.  The first estimate of GDP growth for the first quarter of 2011 (3Q11) has been reported as +2.46%

This is a great improvement considering some of the negative news of late.  In addition, it is significantly better then 1Q11 at +.36% and 2Q11 at +1.34%!

My complaint on the GDP growth number is the inflation rate used by the government to attain this "real", or after inflation, growth number.  The inflation rate used does not include food or energy cost increases, which are both up significantly.  However, it does include housing costs which are down significantly.  These few items artificially push the GDP growth number up.

I continue to suggest inflation is closer to 6%.  If this more realistic inflation rate were used in the GDP growth rate the 3Q11 GDP would be closer to -1.02% versus the reported +2.46%.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.  All performance referenced is historical and is no guarantee of future results.  All indices are unmanaged and may not be invested into directly.