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US Economy and Credit Markets Ended July 27, 2018
Real U.S. GDP grew at a robust 4.1% annual rate in the second quarter, the highest growth rate since 2014, while growth in the first quarter was revised upward to 2.2%. A rebound in consumer spending contributed 2.7 percentage points to the growth rate compared to 0.4 percentage points in the first quarter, as consumers were likely emboldened by a strong labor market and tax cuts. Business investment grew at a 7.3% annual rate in the second quarter compared to 11.5% in the first quarter but was still strong despite the slowdown. However, residential fixed investment declined for the second quarter in a row, falling at an annual rate of 1.1% in the second quarter after a 3.4% decline in the first quarter. Treasuries gained following the report. The Federal Open Market Committee meets Tuesday and Wednesday this week but is widely expected to leave rates unchanged. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: July Conf. Board Consumer Confidence (126.5, 126.4), June Personal Income (0.4%, 0.4%), June Personal Spending (0.4%, 0.2%), July Chicago Purchasing Manager (61.8, 64.1); Wednesday: August 1 FOMC Rate Decision – Upper Bound (2.00%, 2.00%), July ISM Manufacturing (59.3, 60.2), July 27 MBA Mortgage Applications (N/A, -0.2%), July Final Markit US Manufacturing PMI (55.5, 55.5), July ADP Employment Change (185k, 177k), June Construction Spending MoM (0.3%, 0.4%); Thursday: July 28 Initial Jobless Claims (220k, 217k), June Final Durable Goods Orders (N/A, 1.0%), June Factory Orders (0.7%, 0.4%); Friday: July Change in Nonfarm Payrolls (193k, 213k), July Unemployment Rate (3.9%, 4.0%), June Trade Balance (-$46.1b, -$43.1b).
Tuesday, July 31, 2018 @ 7:10 AM
These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.