US real GDP beat expectations (+3.0pct vs. +2.3pct according to consensus) but “Growth” is misleading.
Q2 real GDP +3.0% was inflated by a +5.6% boost from COLLAPSING imports (a subtraction in GDP math). Real economy: Investment -2.1% Exports -0.19% Consumer spending only +0.8% So ‘real economy’ is not collapsing but looks soft Source: The Coastal Journal
Economists who translate the CPI and PPI into the PCE expect monthly core inflation firmed in June. BEA reports this on Thursday.
Core PCE estimate: +0.29% (highest since February), which would push the year-over-year to 2.8% Headline PCE: +0.32% (y/y rises to 2.5%) Source: Nick Timiraos @NickTimiraos
The US has got the softest inflation surprises on Earth...
Could this influence the FOMC tomorrow??? Source: Andreas Steno Larsen @AndreasSteno, Macrobond
June JOLTS job openings rate (white) down to 4.4% vs. 4.6% prior ... quits rate (blue) unchanged at 2%
Source: Bloomberg, Kevin Gordon
The IMF has upgraded its global growth forecast amid signs that Donald Trump’s trade war will do less damage to the world economy than initially feared, helped by a weaker US dollar
Source: FT
"Never bet against America" said Warren Buffet. Innovation, free market and truly entrepreneurial spirit always win in the long run.
Source: Michel A.Arouet
In Germany, the latest Ifo Business Climate Index suggests the economy is holding up surprisingly well despite rising tariffs.
The index edged up from 88.4 in June to 88.6 in July – slightly below expectations (89.0). This marks the 7th consecutive monthly improvement, this month driven mainly by better assessments of current business conditions. However, underlying growth remains weak. According to Capital Economics, the survey results remain consistent w/a GDP contraction based on long-term historical patterns. That said, the Ifo has not been a reliable predictor of GDP in recent years. Source: Bloomberg, HolgerZ
German business activity continued to grow marginally in July, though at a slightly slower pace than in June.
The German flash composite PMI fell to 50.3 points in July, down from 50.4 in June and below the 50.7 forecast in a Reuters poll. Source: Bloomberg, HolgerZ
