Bill King notes in the Think Tank that GDP was actually worse than consensus expected.
How is a minus 1% worse than a minus 1.5% ? He looks at the first half of 2009, and blames the Q1 revisions:
“We will again utilize basic math to illustrate the scam. If Q4 08 GDP was 100 units, and Q1 09 was reported at -5.5% and Q2 09 GDP was expected to be -1.5%, the expectation was for GDP of 100 units minus 5.5% or 94.5 units, minus 1.5% or 93.08 units.
With the revision of Q1 09 GDP to -6.4% the Q1 GDP units become 100 minus 6.4% or 93.6 units. So Q2 is minus 1% or 92.664. Ergo aggregate GDP was worse than expected!”
The 0.5% GDP beat comes on top of a 0.9% downward revision. Hence, the net surprise was a compounded negative 0.4%.
And that’s before the likely downward revisions to Q2 . . .