Economy

Economic Data Roundup (06/24/2016)

6/24/16 12:00 PM

iStock_000009003675_Small.jpgThere were two important reports on the U.S. economy released this morning. First, data from the Census Bureau showed that new orders for U.S.-manufactured durable goods decreased by $5.3 billion (2.2 percent) in May to $230.7 billion. This is significantly worse than economists had expected and due largely to a 28 percent plunge in defense capital goods orders. Core durable goods orders, which exclude the volatile transportation component, also fell in May (-0.3 percent) and as a result have now declined on a year-over-year basis for seventeen consecutive months, a pattern rarely seen outside of a recession. Further, orders for nondefense capital goods excluding aircraft, i.e. core capital expenditures, an important gauge of business spending, fell by 0.7 percent last month and are 3.6 percent lower compared to this same period last year. Millan Mulraine, deputy head of U.S. macro strategy for TD Securities, added that “It’s a reflection of the uncertainty we’ve seen emerging, not only in the U.S. but also globally. The outlook is likely to soften even more. We may see a further downdrift in investment activity.”

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Elsewhere, the popular consumer sentiment index from the University of Michigan ended June at 93.5, down slightly from 94.7 in May but still the second-highest reading in a year. Consumers’ views of current conditions improved this month to the best level since January 2007 thanks in part to continued optimism about personal finances. Expectations for the future, though, deteriorated in June and are now 9.5 percent below the 2015 peak. While surveyed consumers do not currently anticipate an economic recession occurring over the next twelve months, an increasing number of respondents expect an overall slower pace of economic growth in the year ahead. The Survey of Consumers’ chief economist Richard Curtin added that “Although the data are consistent with GDP growth falling slightly below 2.0% in 2016, real consumer spending can be expected to rise by 2.5% in 2016 and 2.7% in 2017.”

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Sources: Econoday, Reuters, Twitter, ZH, U.S. Census Bureau, UoM, Reuters, FRBSL

Post author: Charles Couch