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…
On Thursday, the Commerce Department revised first-quarter GDP growth up to a 1.4% annual pace, up from its previous estimate of 1.2% annual growth. The primary reason for the upward GDP revision was that exports rose at a 7% annual pace (up from 5.8% previously estimated) and consumer spending rose at a 1.1% annual pace (up from 0.6% previously estimated). The optimism for second-quarter GDP growth remains high and most economists expect that GDP growth will at least double to a 2.8% annual pace.
On Tuesday, the Conference Board announced that its consumer confidence index rose to 118.9 in June, up from 117.6 in May. This was substantially higher than economists’ consensus estimate of 116. Furthermore, the present situation component rose to 146.3 in June, up from 140.6 in May and is now near a 16-year high. Obviously, consumers are in a good mood and low gasoline prices may be a factor in putting more money in their pockets.
Durable Goods Orders
On Monday, the Commerce Department reported that durable goods orders declined 1.1% in May. This was the largest drop in six months and well below economists’ consensus estimate of a 0.4% decline. A 30.8% drop in military aircraft orders and a 11.7% decline in commercial aircraft orders were largely responsible for the decline in headline durable goods. Excluding military and commercial aircraft orders, durable goods rose by 0.1% in May. In the first five months of 2017, durable goods have risen 2.8% compared to the same period a year ago. I should also add that industrial production rose 2.2% in May compared to a year ago, led by a 1.4% gain in manufacturing. Overall, business investment continues to expand, which bodes well for GDP growth going forward.
That’s all I have for you this week; I’ll be in touch again next week with the latest ratings updates out of Portfolio Grader.
Have a great weekend,