My overall conclusion: This morning the market is looking at solid numbers on the growth side and weak inflation growth. If there is any conclusion to be drawn from one month’s numbers, it’s that the Federal Reserve, looking at this data, won’t see any reason to rush ahead with another interest rate increase.
Yesterday the International Monetary Fund lowered its forecast for U.S. economic growth to 2.1% for 2017 (from 2.3%) and to 2.1% in 2018 (from 2.5%.) The fund had included a likely infrastructure spending bill and a tax cut/tax reform package in its earlier forecast. Now the IMF ha removed those potential stimulus actions from its forecast. The IMF also poured cold water on assumptions in the draft administration budget for economic growth of 3% in 2021.
Existing home sales in May rose to a seasonally adjusted annual rate of 5.62 million. Economists surveyed by Briefing.com had projected a 5.52 million annual rate. The May total is up from April’s revised total of 5.56 million and is 2.7% above the pace in May 2016.
What? Did the regional Federal Reserve banks all miss their money coffee? Their GDP forecasts released today all sure were grumpy. The most visible of the bunch, the Atlanta Fed’s GDPNow forecast calls for 2.9% growth in the second quarter. The forecast was looking for 3.2% growth on Wednesday.
Modestly disappointing economic numbers released today ahead of tomorrow’s report on first quarter GDP. Not that much seems to matter with the market transfixed by wrangling in Washington over a potential government shutdown, a possible Saturday vote in the House on repealing and replacing Obamacare and speculation just about everywhere on what President Donald Trump’s one-page tax cut proposal actually means
Amidst all the guessing about what Congress and the President will do this week to head off a possible government shutdown when spending authorization ends on April 28, we should remember that we get important data from the real economy on Friday, April 28 as well. At morning we get the initial estimate for first quarter GDP growth. Everyone believes that growth will be weak in the quarter. The question is “How weak?”
In spite of a vote of confidence from the International Monetary Fund and solid first quarter GDP growth in China, the market’s faith in economic growth strong enough to move U.S. stocks up from current levels is fading.
This morning the Bureau of Labor Statistics reported that the U.S. economy added just 98,000 jobs in March. That was the weakest gain since May 2015 and way under the 180,000 jobs expected by economists surveyed by Briefing.com and the 263,000 jobs added according to the private ADP Employment Situation Report on Wednesday. But…
