Look for an Upside Surprise in the GDP Report

The final and official second-quarter gross domestic product figures won't be known for several weeks. But the advance report on second-quarter GDP comes out Friday, and the pick here is that the number might come in ahead of the 0.9% consensus (first-quarter GDP was revised to 1.2% from an initial 2%).

"The risks against our estimate have now swung to the upside," Goldman Sachs' economics group commented Wednesday. "A 1% or slightly higher figure would not be at all surprising, whereas a flat or negative one seems quite unlikely."

Goldman, which maintains a 0.5% forecast, suggested Commerce Department officials have "some flexibility" with the data. The big disparity between the April and May trade balance figures, and the fact that second-quarter GDP accompanies the annual revisions to the national income and product accounts, "gives [the Commerce Department] a good deal of leeway," Goldman noted. ...