Home > Main > Look for a Knockout GDP number today

Look for a Knockout GDP number today

January 28, 2011

Obama spending started in Q3 of 2009.   High government spending means high corporate profits one year later.  It is difficult to have high corporate profits without lots of economic activity.  I need to pull the data out of this chart and run a regression between change in RGDP and change in Real Corporate profits, but just eyeballing it tells me there is a decent relationship.

The gap between change in corporate profts and change in GDP is the greatest its been in the FRED data.  I expect a huge upside surprise in GDP – perhaps as high as 5.5%.

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