It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
First-Quarter GDP (Third Estimate)
On Tuesday, the Commerce Department announced that it revised its first-quarter GDP growth estimate higher. GDP is now estimated to have increased 1.1% in the first quarter, up from previous estimates for a 0.8% increase. April and May retail and home sales boosted first-quarter estimates after both data points rose higher this spring. While the first-quarter GDP report was encouraging, the strengthening U.S. dollar could hamper global demand and business inventories going forward, which could, in turn, weigh on economic growth.
The Conference Board reported on Tuesday that is Consumer Confidence index increased sharply to 98 in June, up from 92.4 in May. The Present Situation component rose to 118.3 last month, up from 113.2 in May. Overall, this was an encouraging report, but the survey was taken before the Brexit vote last week. So we’ll have to wait for the July surveys to find out if the Brexit had any adverse impact on consumer sentiment.
On Wednesday, the Commerce Department released its personal income report for May, which showed personal income climbing 0.2%. That missed economists’ estimates for a 0.3% increase. April’s personal income figure was revised higher to show a 0.5% jump. Personal spending rose 0.4% in May, in line with estimates.
Initial Claims for Unemployment
For the week ending June 25, initial claims for unemployment increased by 10,000 to 268,000, which was higher than economists’ estimates for jobless claims to rise to 265,000. The four-week moving average remained unchanged at 266,750. Jobless claims have now remained below the 300,000 threshold for 69-consecutive weeks.
And then this morning, the Commerce Department reported that construction spending dropped 0.8% in May. April construction spending was revised lower to show a 2% decline, which was its largest drop in more than five years. On the other hand, the Institute for Supply Management (ISM) announced that its index of national factory activity increased to 53.2 in June, up from 51.4 in May. Overall, though, the decrease in construction spending has led to speculation that second-quarter GDP estimates will need to be revised lower.
That’s all I have for you this week; I’ll be back online on Monday with your weekly ratings changes.
Have a great weekend,