U.S. second quarter GDP growth was revised upwards today to an 3.7% annualized rate, an increase of 1.4 percentage points from the prior estimate. None of the economists surveyed by Bloomberg forecast that big a revision. In addition, contracts to purchase previously owned homes climbed in July for the sixth time in the last seven months.
U.S. stocks opened hugely lower with the Dow Jones Industrial Average plunging 1000 points at the open for a 6.6% loss and the Standard & Poor’s 500 tumbling to a 5.3% decline. But then U.S. stocks rallied into midday and held on to much of those gains in the early afternoon so that at 2:30 p.m. New York time the Dow was “only” off by 363.5 points (2.21%) and the Standard & Poor’s was down “only 2.64%.
Companies added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3%, the U.S. government announced today, August 7. The financial markets are behaving today like this report confirms the growing consensus of a September increase—but a very modest increase that would be usher in a very slow flight path toward higher interest rates
The problem is that wages and salaries just aren’t going up fast enough to assure steady growth in the U.S. economy. The second quarter increase was just 0.2% from the first quarter. That’s the smallest increase since the Labor Department starting keeping records of this number back in 1982
The U.S. economy added 223,000 jobs in June. Decent news on job growth but certainly not the picture of an economy about to see inflation skyrocket or growth accelerate.
Consumer spending in the United States surged in May, according to the Department of Commerce. That’s up from a revised 0.1% increase in April and is the biggest gain since August 2009/. Economists surveyed by Bloomberg had expected a 0.7% gain.
In May the U.S. economy added a net 280,000 jobs. That was up from a revised 223,000 jobs added in April and above the average monthly gain of 251,000 jobs over the last 12 months
To me the revisions were worse than the headline numbers indicate. Real final sales, which takes volatile changes in inventory levels out of the data, showed a 1.1% decline from the first quarter of 2014. That’s the worst drop in real final sales since the 3.3% decline in the first quarter of 2014 and just edged out the 1% decline in real final sales in the first quarter of 2014.
