Bob Stein from First Trust Advisors comments on the GDP report:

There were two big stories in today’s GDP report: First, the drop in GDP has been deeper and longer than previously estimated; second, the recovery will be stronger than the consensus expects. New figures show that real GDP peaked a year ago and has declined in all four quarters since then, the deepest contraction in the post-WWII era. This helps explain why the unemployment rate moved up even faster than previously reported GDP numbers suggested it should have. Also, notice the absence of an impact from “stimulus” legislation earlier this year, as real personal consumption fell at a 1.2% annual rate in Q2 after rising slightly in Q1. Part of the reason for greater recessionary weakness was that inventory reductions were even more forceful than previously thought. As a result, as companies slow down inventory liquidation in the quarters ahead, real GDP will quickly accelerate. Boosting growth further will the continued decline in the trade deficit and a turnaround in home building, which is now a record low 2.4% of GDP, roughly half the norm. In other recent news, the Chicago PMI, a measure of manufacturing in that area, increased to 43.4 in July, the highest since September 2008. The increase in the Chicago PMI was led by a 6.4 point increase in the new orders index to 48.0. Yesterday it was reported that new claims for unemployment insurance increased 25,000 last week to 584,000. However, the four-week moving average of new claims fell to 559,000, the lowest since January and 100,000 below the peak in April. Meanwhile, continuing claims fell 54,000 to 6.197 million.