- Preliminary 2Q GDP rose 3.3% versus estimates of a 2.7% gain and a prior estimate of a 1.9% increase.
- Preliminary 2Q Personal Consumption rose 1.7% versus estimates of a 1.6% gain and a prior estimate of a 1.5% increase.
- Preliminary 2Q GDP Price Index rose 1.2% versus estimates of a 1.1% gain and a prior estimate of a 1.1% increase.
- Preliminary 2Q Core PCE rose 2.1% versus estimates of a 2.1% gain and a prior estimate of a 2.1% increase.
- Initial Jobless Claims for last week fell to 425K versus estimates of 425K and 435K the prior week.
- Continuing Claims rose to 3423K versus estimates of 3390K and 3359K prior.
BOTTOM LINE: The US economy expanded faster than previously estimated in the second quarter, helped by a surge in exports, Bloomberg reported. Trade contributed the most to US growth in almost 30 years as the trade deficit shrank to the lowest level in 8 years. The expansion during 2Q was the fastest since 3Q 2007. Residential construction continued to substantially impact growth, falling a larger than initially reported 15.7% during 2Q. As well, inventories fell at a $49.4 billion annual rate during 2Q, which subtracted 1.44 percentage points from growth. I still believe 3Q/4Q GDP will exceed estimates on decelerating inflation, inventory rebuilding, better-than-expected domestic demand and strong, but slowing, exports.
The number of Americans filing new jobless claims declined last week, Bloomberg reported. The four-week moving average of jobless claims dropped to 440,250 from 446,250 the prior week. The jump in jobless claims in prior weeks due to the government’s extension of jobless benefits that was passed under the spending bill signed by President Bush still hasn’t been quantified by the government. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, rose to 2.6% versus 2.5% the prior week and the long-term average of 2.9%. I expect jobless claims to continue to improve modestly through year-end.
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