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However, GDP still decelerated both over last quarter and last year. This had been expected, as ongoing geopolitical tensions took a bite out of trade-related data, and as business investment softened during the period.
The yawning domestic trade deficit widened to a five-month high in May while April’s gap was revised to be larger than previously reported, according to Commerce Department data released earlier in July. While the monthly reports have been lumpy due to new tariff policies, the data suggested net exports over the past several months were set to weigh on second-quarter economic expansion.
“The data clearly shows signs of a bifurcated economy. Weakness in manufacturing has weighed on components like inventories and fixed investment, but the healthy U.S. consumer has helped buoy the economy as seen in the stable reading on personal consumption expenditures,” Michael Reynolds, investment strategy officer at Glenmede, said in an email. “Altogether, robust domestic consumers are more than offsetting the headwinds of a weakening manufacturing economy.”
In the report, the BEA noted that the deceleration in real GDP in the second quarter “reflected downturns in inventory investment, exports, and nonresidential fixed investment.” However, these impacts were partially offset by an acceleration in personal consumption expenditures (PCE), as well as in federal government spending, it added.
https://www.yahoo.com/finance/news/what-to-expect-in-fridays-gdp-report-222140281.html
However, GDP still decelerated both over last quarter and last year. This had been expected, as ongoing geopolitical tensions took a bite out of trade-related data, and as business investment softened during the period.
The yawning domestic trade deficit widened to a five-month high in May while April’s gap was revised to be larger than previously reported, according to Commerce Department data released earlier in July. While the monthly reports have been lumpy due to new tariff policies, the data suggested net exports over the past several months were set to weigh on second-quarter economic expansion.
“The data clearly shows signs of a bifurcated economy. Weakness in manufacturing has weighed on components like inventories and fixed investment, but the healthy U.S. consumer has helped buoy the economy as seen in the stable reading on personal consumption expenditures,” Michael Reynolds, investment strategy officer at Glenmede, said in an email. “Altogether, robust domestic consumers are more than offsetting the headwinds of a weakening manufacturing economy.”
In the report, the BEA noted that the deceleration in real GDP in the second quarter “reflected downturns in inventory investment, exports, and nonresidential fixed investment.” However, these impacts were partially offset by an acceleration in personal consumption expenditures (PCE), as well as in federal government spending, it added.
https://www.yahoo.com/finance/news/what-to-expect-in-fridays-gdp-report-222140281.html