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USA: very disappointing consumption numbers in July

July consumption data were very disappointing. However, as fundamentals are pointing to robust growth in consumer spending, we are reluctant to cut our Q3 forecasts by too much. Overall, we remain optimistic on consumption and overall GDP growth in H2. Real consumer spending contracted in July Real personal consumption expenditure declined by 0.2% m-o-m in […]

United States: housing market

Following their slump during the winter months, home sales and residential construction bounced back in Q2. Data available are pointing to further progress in Q3. We remain optimistic and believe things will continue to improve progressively in the US housing market. Substantial recovery in existing home sales Following a weather-induced slump in Q1, existing home […]

USA: retail sales started Q3 on a soft note

Today’s retail sales report was weaker than expected. Consumption started Q3 on a soft note. However, we remain relatively optimistic and expect consumer spending will grow by some 2 1⁄2% q-o-q annualised in Q3. Nominal retail sales remained unchanged m-o-m in July, below consensus expectations. July’s sales were negatively influenced by a 0.2% m-o-m fall […]

USA: ISM indices rose further markedly in July

The ISM surveys – together with most other economic data published recently – show encouraging signs that the US economy continued to grow robustly in July. We remain quite optimistic for Q3 growth. The ISM manufacturing survey for the month of July was published last Friday. The headline index climbed from 55.3 in June to […]

US employment report: job creation robust once again in July

In July, job creation was robust, although slightly below expectations. The unemployment rate bounced back but the downward trend appears intact. Together with other data available for July, the employment report gave further credence to our scenario that economic growth will settle at around 3% in H2. We remain optimistic overall on the US economy. […]

USA: GDP growth well above expectations in Q2

Q2 GDP growth was well above expectations, and growth in Q1 and H2 2013 were revised for the better. Despite these upbeat numbers, average GDP growth was certainly very weak overall in H1. Nevertheless, this set of data most probably understates the health of the US economy. Most other economic indicators were far more upbeat […]

US capital investment: prospects for investment in equipment are improving

Private fixed investment in equipment contracted in Q1. However, indicators available point to a noticeable rebound in Q2, and the prospects for H2 2014 and 2015 actually appear quite encouraging. Business investment in equipment fell by 2.8% q-o-q annualised in Q1. However, this contraction must be seen in context, as the series can be quite […]

United States: sharp fall in consumption in Q1, improvement soft so far in Q2

First-quarter consumption was revised sharply down, and monthly data for May were on the soft side of expectations. However, similar to GDP data, it appears that consumer spending data suffered some distortions of late. We nevertheless remain optimistic on consumption and overall GDP growth in Q2 and H2.   Q1 growth in healthcare spending revised from […]

United States: recent pick-up in inflation is more than statistical “noise”

Inflation has picked up somewhat over the past 2-3 months. Janet Yellen described the move as “noise”. However, the uptick is widespread and with labour market slack diminishing rapidly, inflation is likely to gradually inch higher, a scenario that seems far from being completely priced in by financial markets. Core PCE inflation moved up to […]

United States: the housing market bounces back noticeably

We are optimistic that things will continue to improve progressively in the housing market. Modest rebound in existing home sales Yesterday’s data on existing home sales confirmed that following a weather-induced slump in Q1, sales rebounded in April and May. Last month, sales reached an annualised pace of 4.89 million units, 6.5% higher than in […]

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