Economy

Economic Data Roundup (06/28/2018)

6/28/18 8:00 AM

iStock-119520974.jpgOrders for U.S.-manufactured durable goods (items meant to last at least three years) fell in May by $1.4 billion (0.6 percent) to $248.8 billion, according to a new report from the Census Bureau. “Core” durable goods orders, which exclude the volatile transportation component, also declined in May (-0.3 percent), as did orders for nondefense capital goods excluding aircraft, i.e. core capital expenditures, an important proxy for U.S. business investment (-0.2 percent).

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Although May was a disappointing month for capital goods demand (relative to analysts’ forecasts), the April figures across the board were revised much higher and the annual pace of growth remains firmly in positive territory. Altogether this suggests that recent trade policy uncertainty has yet to have a significant effect on the underlying trend in business investment, which bodes well for U.S. gross domestic product (GDP). In fact, the latest projection from the Federal Reserve Bank of Atlanta implies that GDP growth will have rebounded from 2.0 percent in Q1 to 4.5 percent in Q2. If true that will have been the best quarter for the U.S. economy since Q3 2014 (+5.2 percent), but even more conservative forecasts still see GDP growth accelerating in Q2.

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Sources: Econoday, U.S. Census Bureau, FRBA, FRBNY, FRBP

Post author: Charles Couch