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Commentary

Economic Growth Revised Downward for the Second Quarter

9/2/2010  

Consumer spending in the US was unchanged in April after an increase of 0

Economic growth in the United States for the 2nd quarter was revised downward today from an initial estimate of 2.4% to 1.6%. The main culprits to the lower growth estimate were lower inventories and a higher trade deficit than previously estimated. However, GDP was higher than analysts had expected. Personal consumption was revised higher to 2.0% in the 2nd quarter from an initial estimate of 1.6%. Core personal consumption expenditures (PCE), which excludes food and energy and is the Fed’s preferred measure of spending, was unchanged from the initial estimate of 1.1%. Gross private domestic fixed investment was also revised upward to 17.6% from an initial estimate of 17.0%. Exports were revised downward to 9.1% from an initial estimate of 10.3% and imports were revised upward to 32.4% from 28.8%, creating a higher trade deficit for the period.

 

The economy has slowed recently as consumers and businesses both remain cautious. High unemployment, lower home and equity values and tight credit continue to lead consumers to restrain spending. The Fed continues to monitor the economy for any further slowdown in growth.

 
Commentary

Kristin Brewer

Senior Portfolio Manager 


Review of Key Releases:

Review of This Week's Key Releases:

 

Tue, Aug 24-

Existing Home Sales

Jul

3.83M vs 5.26M r

Wed, Aug 25-

Durable Goods Orders

Jul

+0.3% vs -0.1% r

Wed, Aug 25-

Durables Less Transportation

Jul

-3.8% vs +0.2% r

Wed, Aug 25-

New Home Sales

Jul

276k vs 315k r

Wed, Aug 25-

House Price Index

Jun

-0.3% vs +0.4% r

Fri, Aug 27-

GDP QoQ

2Q S

+1.6% vs +2.4%

Fri, Aug 27-

Personal Consumption

2Q S

+2.0% vs +1.6%

 

 

 

 

 

 

 

 

Preview of Next Week's Key Releases:

 

Mon, Aug 30-

Personal Income

Jul Est

+0.3% vs +0.0%

Mon, Aug 30-

Personal Spending

Jul Est

+0.3% vs +0.0%

Tue, Aug 31-

Case-Shiller Home Price Index YoY

Jun Est

+3.5% vs +4.61%

Tue, Aug 31-

Consumer Confidence

Aug Est

51.0 vs 50.4

Tue, Aug 31-

FOMC Minutes

 

 

Wed, Sep 01-

ISM Manufacturing Index

Aug Est

53.0 vs 55.5

Wed, Sep 01-

Domestic Vehicle Sales

Aug Est

8.80M vs 9.11M

Thu, Sep 02-

Nonfarm Productivity

2QF Est

-2.0% vs -0.9%

Thu, Sep 02-

Unit Labor Costs

2QF Est

+1.4% vs +0.2%

Thu, Sep 02-

Pending Home Sales

Jul Est

-1.5% vs -2.6%

Fri, Sep 03-

Nonfarm Payrolls

Aug Est

-105k vs -131k

Fri, Sep 03-

Private Payrolls

Aug Est

+46k vs +71k

Fri, Sep 03-

Unemployment Rate

Aug Est

9.6% vs 9.5%

Fri, Sep 03-

ISM Non-Manufacturing Index

Aug Est

53.5 vs 54.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next FOMC Meeting:

 

Tue, Sep 21-

FOMC will balance long-term economic growth stability against upward inflationary momentum

Current target rate - - 0.0% to 0.25%

 

Additional economic and market information is available through ReSources, a bi-weekly report published by Southwest Corporate Investment Services' Advisory Services Group. Click here to view this week's edition.
 
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