- Advance 2Q Personal Consumption rose 2.5% versus estimates of a 2.1% increase and a 4.8% gain in 1Q.
- Advance 2Q GDP Price Index rose 3.3% versus estimates of a 3.5% increase and a 3.3% gain in 1Q.
- Advance 2Q Core PCE rose 2.9% versus estimates of a 2.9% gain and a 2.1% increase in 1Q.
- The 2Q Employment Cost Index rose .9% versus estimates of a .8% increase and a .6% gain in 1Q.
- The Final Univ. of Mich. Consumer Confidence Index rose to 84.7 versus estimates of 83.0 and prior estimates of 83.0.
BOTTOM LINE: The US economy grew at a 2.5% annual rate last quarter, less than half the pace of the previous three months, as companies and consumers reined in spending, Bloomberg said. A separate report from the Labor Dept. showed wages rose by the most in three years. Business Fixed Investment, which includes spending on commercial construction as well as equipment and software, increased at a 2.7% annual rate in the second quarter after a 13.7% gain in the first quarter. I continue to believe the Fed is done hiking rates for this cycle and that inflation fears have peaked. The 10-year T-note, the best predictor of future inflation, is rallying on this report.
Confidence among US consumers came in above estimates this month despite higher gas prices, a stock market correction and increased violence in the Middle East, Bloomberg reported. I expect Consumer Confidence to make new cycle highs over the intermediate-term as gas prices fall, stocks rise, inflation decelerates, mortgage rates fall, housing stabilizes and the job market remains healthy.
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