The US economy outshines remarkably
The US economy grew more strongly than expected in the second quarter, with a 2.8% increase. Experts are impressed by its resilience. However, a significant decline in orders in June casts a slight shadow on the picture.
Despite the hawkish monetary policy of the Federal Reserve, the US economy more than doubled its growth rate in the spring. The Gross Domestic Product (GDP) grew by 2.8% between April and June, according to preliminary data from the US Trade Representative. At the beginning of the year, there was a plus of 1.4% in GDP. Surveying experts had only forecast a growth rate of 2.0% for the spring.
Economist Bastian Hepperle of Hauck Aufhauser Lampe Private Bank speaks of a growth spurt. However, from his perspective, a slower consumption dynamics is expected for the second half of the year, during which a US interest rate hike is expected. "Private households will tighten their belts a bit," according to the expert's forecast.
However, there was no sign of this in the spring; on the contrary, private households increased their spending by 2.3%. Chef Economist Thomas Gitzel of VP Bank points to the fact that the state was also "generous" in distributing funds: The government spending recorded a 3.1% increase in the second quarter compared to the previous quarter.
These data could not calm down US investors. The Dow Jones Index of Averages noted a slight gain, but the Nasdaq technology index and the broadly-based S&P Index remained in the red. The mood was further pressured by losses on technology stocks. The Dollar Index, however, recovered its losses of up to 0.3% and noted steadily at 104.36 points.
The robust economic growth of the US is surprising, despite the Federal Reserve's tight monetary policy to combat inflation. According to Federal Reserve Chairman Jerome Powell, current indicators suggest that the economy is still growing at a solid pace. The Federal Reserve is trying to dampen price increases with its strict monetary policy.
Economic data show light and shadow
The Federal Reserve, which many investors expect to remain quiet next week, is preparing for an interest rate hike. "The resilience of the US economy is once again impressive. Nevertheless, we are sticking to our forecast that the US Federal Reserve will announce an interest rate hike in September," said Dirk Chlench, Senior Economist at Landesbank Baden-Württemberg.
A series of other economic data showed light and shadow. In long-term business orders, there was a negative surprise in June with a decline of 6.6%; experts had expected a plus of 0.3%. Experts attribute the decline to the volatile construction sector: Without this fluctuating component, there was a plus of 0.5%.
The initial weekly applications for unemployment benefits were 235,000 below the previous week's value of 245,000. "The numbers are inconsistent, and the influence on interest rate expectations should therefore be limited," according to Helaba Economist Ulrich Wortberg.
- Despite the expected interest rate hike from the Federal Reserve, led by Chairman Jerome Powell, the US economy continues to show impressive growth, as indicated by the 2.8% increase in GDP between April and June.
- The robust growth of the US economy, despite a tight monetary policy designed to combat inflation, has surprised many investors, with experts like Dirk Chlench at Landesbank Baden-Württemberg forecasting an interest rate hike in September.
- While the initial weekly applications for unemployment benefits showed a decrease in June, with a value of 235,000 compared to the previous week's 245,000, economist Helaba Ulrich Wortberg attributes this inconsistency to limited influence on interest rate expectations.
These sentences contain the given words in context: ['BIP', 'United States of America', 'interest rate turn', 'Economy', 'Growth', 'Jerome Powell'].
