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…
Consumer Confidence Index
On Tuesday, the Conference Board reported that its consumer confidence index slipped to 126.4 in June. This was down from a robust reading of 128 in May. The current conditions component remains high, while the expectations component was largely responsible for the dip in consumer confidence. It is likely that higher energy prices impacted consumer expectations in June.
Durable Goods Orders
On Wednesday, the Commerce Department announced that durable goods orders declined 0.6% in May. This was better than economists’ consensus estimate of a 1.3% decline. Notably, May saw the biggest drop in new orders for cars and trucks since 2015–this was largely responsible for the decline in the durable goods report. Excluding vehicles, durable goods orders declined 0.3% in May.
April durable goods orders were also revised to reflect a 1% decline. This was higher than the previously estimated 1.7% decline. Overall, we have to keep a close eye on the automotive sector, since it is possible higher gasoline prices are now impacting consumer behavior.
Balance of Trade Report
On Wednesday, the Commerce Department reported that the trade deficit decline 3.7% to $64.8 billion in May. This was substantially better than economists’ consensus estimate of a $69.2 billion trade gap. Exports rose 2.1% in May, while imports only 0.2%. In the past 12 months, exports have risen 13.4%, while imports have risen 8.4%, so the trade deficit has significantly declined. This is good news, because a smaller trade gap boosts overall GDP growth.
Economists’ GDP Estimates
In the wake of the better-than-expected May trade deficit news, multiple economists revised their second-quarter GDP estimates higher. Some economists are now estimating as high as 5.3% annual second-quarter GDP growth, and the Atlanta Fed is currently estimating 4.5% annual growth.
That’s all I have for you this week. I’ll be in touch again next week with the latest ratings out of Portfolio Grader.
Until next week,