Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 2 August 2015

US economy expands at 2.3 per cent in Q2


A quick look at what's going down in the world's largest economy.

US GDP increased at a 2.3 per cent pace in the second quarter, slightly below market forecasts.

However, the first quarter - which had previously been reported as a slight contraction - was revised up to a positive result, being a 0.6 per cent increase. 

Overall, therefore, economic growth in the first half of 2015 was a little better than expected, which suggests that the Federal Reserve may finally begin hiking interest rates later this year. 

Consumer spending rose at a solid 2.9 per cent annualised pace.

On the flip side, as is the way of these things, the economic data was revised back to 2012 and the new figures showed the speed of the recovery in economic growth as being slower than had previously been reported. 

The below chart, which records real GDP in 2009 chained dollars, now suggests a shallower rate of recovery in economic growth than before. 

Jobless claims close to 43 year low

Also last week, on Thursday the US Department of Labor released its initial jobless claims data, which is a useful indicator of layoffs.

Although jobless claims rose marginally by 12,000 to 267,000 from the preceding week, this data series slightly beat forecasts and continues to hover at close to its lowest level in 43 years. 

Indeed the 255,000 claims reported in the previous week to July 18 was the lowest figure on the survey since November 1973, an extraordinary statistic.

The 4 week moving average now sits at just 274,750.

Overall then, fairly positive news.