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Investing Specialists

GDP Shocker Means Many 2014 Growth Forecasts Will Be Coming Down (but Not Mine)

A sharp downward revision to first-quarter GDP will have many economists reaching for their erasers, but I'm taking a wait-and-see approach, writes Morningstar's Bob Johnson.

It was a wild week for economic data, but markets generally took the news in stride. Housing data looked surprisingly healthy, showing that we are now well past the bottom in the housing market, but still a few months away from housing sales finally stimulating more economic growth.

Speaking of economic growth, the GDP revision was a huge bomb, now showing a massive and unexpected first-quarter decline of 2.9%. Two thirds of the revision was due to negative revision to the effects of the Affordable Care Act, and a third was due to an expected revision in net exports.