2nd Quarter GDP revised to 3.3% growth

The markets have been holding up lately and one of the little surprises life threw at us was that 2nd quarter GDP was revised up from 0.9% growth to 3.3% growth. 3.3% is no insignificant number. In any other situation I would say that our economy is rollin!

But that`s any other situation.

Economists had predicted GDP to be around 2.7% based off the fact that the tax rebates would help stimulate consumer spending. And spend they did.

Consumer spending added 1.24 percentage points to GDP in the second quarter after adding 0.61 percentage points to GDP in the prior quarter.

The main drivers of our economy in the second quarter were the tax rebates and a rise in exports thanks to our very friendly debilitated dollar.

Real exports of goods and services were revised up sharply to a 13.2% gain from the 9.2% gain first reported. That's the biggest increase since the third quarter of 2007. Real imports fell 7.6%, which is the biggest drop since 2001.

If your currency is weak does that mean exports rise and imports fall? Yup.

Remember the first estimate of 2nd quarter "growth" was 0.9%. A jump to 3.3% is rather good news. However, because this was fueled by a one-time tax rebate, we know that it's not sustainable. That's all we care about, because we're trying to value companies for the future.

Plus, with wages dropping/stagnating the way they are while inflation rises, do you really think consumers can afford to spend more?