The US economy surprises clearly
The US economy grew significantly stronger than expected in the second quarter, with a 2.8% increase. Experts are impressed by its resilience. However, a large negative reading in orders for long-lasting goods in June casts a slight shadow.
Despite the hawkish monetary policy of the central bank, the US economy more than doubled its growth tempo in the spring. The Gross Domestic Product (GDP) grew at an annualized rate of 2.8% between April and June, according to preliminary data from the US Department of Commerce. At the beginning of the year, a plus of 1.4% was recorded. Surveying experts had only anticipated 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 emerging 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, this was not yet apparent 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 has been distributing funds freely: The government spending recorded a 3.1% annualized increase in the second quarter over the previous quarter.
The 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 weighed down 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 central bank's tight monetary policy against 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 central bank, which many investors expect to remain on hold next week, is gearing up 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-Wuerttemberg.
A series of other economic data showed light and shadow. In the orders for long-lasting goods, there was a negative surprise in June with a decrease of 6.6%; experts had expected a plus of 0.3%. Experts attribute the decline to the volatile construction sector: Without this swing 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 impact on interest rate expectations should therefore be limited", according to Helaba Economist Ulrich Wortberg.
The robust economic growth of the United States, with a 2.8% increase in GDP during the second quarter, defied expectations despite Jerome Powell's tight monetary policy to curb inflation as the Federal Reserve Chairman. Despite this resilience, a significant decline in orders for long-lasting goods in June, specifically a 6.6% decrease, raised some concerns in the investment community.
