7/31/13 9:05 AM – US Growth Stronger Than Expected

At the end of 2012 the economy slowed to roughly 1% growth and came in about the same for the 1Q of 2013. The forecast for 2Q was about the same.

Instead US GDP growth came in at 1.7% as reported today, which is a pleasant surprise. That’s still pretty slow growth but much better than expected.And, the growth for all of 2012 was revised up from 2.2% to 2.8%.

Part of the increases may have come from the Commerce Dept. revision of how GDP is calculated. They added some things formerly uncounted like spending on research & development and entertainment.

Right now, the stock market is in the good news is bad news mood because better economic growth means the Federal Reserve can sooner quit buying so many bonds, a strategy that has kept interest rates low and provided fuel for the stock market. It’s a strange time when artificial stimulus is more important to the stock market than economic growth.

A half hour ahead of the opening bell, stock futures are slightly higher.