Home » Market News » Weekly Economic Recap: The U.S. Economy Plows Ahead

Weekly Economic Recap: The U.S. Economy Plows Ahead

U.S. Business Fair Better
U.S. Business Sales Rise

The U.S. released a whole slew of economic data last week which showed solid growth for the third quarter. Retail sales were up 0.6 percent, July’s number was revised higher 0.3 percent. NFIB small business index was higher as well. It is now at a record level not seen since October 2007. Business inventories showed there should be less drag on the GDP going forward. Overall not a bad week and it reinforced our view that the U.S. economy is plowing along towards a gross domestic product growth of three percent for Q3.

With the 0.6 percent growth in consumer spending allayed fears that spending would be weak in this current quarter. Auto sales also climbed 1.5 percent, boosting big ticket sales. Building materials, sporting goods and miscellaneous goods were also strong. The only soft spots were for gasoline stations, thanks to lower gas prices and general merchandise sales. We are expecting retail sales activity to remain strong for the rest of 2014 into next year.

The NFIB small business survey was also up to 96.1. Capital outlays was up four points, indicating strong business capital investments for the year. The biggest disappointment was down three points for the month. Business continue to find to find it hard to higher qualified workers. The skills mismatch continues to plague the labor markets. Small businesses are not happy with taxes, soft sales and new regulations. However, we still expect small businesses to turn around the latter half of the year as lending standards have been eased a bit.

Business inventories were up 0.4 percent in July. This was the same number we saw for June. Sales were up 0.8 percent for the month. This is keeping the inventory to sales ration steady near 1.3 months. This means inventories should be less of a drag on economic (GDP) growth for Q3 and hopefully the fourth quarter as well. It is expect it to be better than the 1.4 percent contribution it was in Q2. Inventory swings have been a big contributor to GDP volatility.

Weekly Economic Calendar:

United States
Monday: Industrial Production
Wednesday: CPI (inflation)
Thursday: Housing starts

About ForexMarketz

Check Also

euro

Euro Currency falls below 1.2080 to Challenge 1.2070

0.0 00 Looking at the benchmark EUR/USD currency exchange rate, the euro currency has fallen …

Leave a Reply

Your email address will not be published.