U.S. Economic Growth Holds Steady In Second Quarter
- U.S. real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021. The increase was the same as the “second” estimate that the government released in May. Federal government assistance payments, including direct economic impact payments and Paycheck Protection Program loans, contributed to the high level of growth. Read the U.S. Department of Commerce’s full report here. Meanwhile, the Federal Reserve Bank of Chicago’s National Activity Index, a key gauge of future growth, was +0.29 in May, up from -0.09 in April.
- The National Association of Manufacturers’ Outlook Survey for the second quarter of 2021 indicated manufacturers are optimistic about the rest of 2021. Manufacturers’ optimism reading reached 90.1 percent, its highest level since 2018. Firms expect full-time employment to jump 3.7 percent, wages to rise 3.3 percent, sales to increase 6.1 percent, and production to expand 5.9 percent over the next 12 months. Each of these indicators was at its highest recorded level in the survey’s history. Read the full report here.
- The Federal Reserve Bank of Kansas City announced its manufacturing survey for June rose to +27 in June from +26 in May. The bank said growth continued to be driven by durable goods plants, in particular primary and fabricated metals, machinery, computer and electronic products, furniture, and transportation equipment manufacturing. Additionally, the future composite index increased from 33 to 37 in June, a new survey record high, due to higher readings for new orders and supplier delivery times. Read the full report here. The Federal Reserve Bank of Richmond, meanwhile, said its manufacturing reading for the Central Atlantic region rose from +18 in May to +22 in June due to increases in new orders, shipments, and employment. Manufacturers did continue to report shrinking inventories, growing order backlogs, and lengthening vendor lead times. Read the full report here.
- Income to U.S. households fell by two percent in May while consumer spending as measured by personal consumption expenditures stayed flat. Read the full report here.
- According to the U.S. Department of Labor, 411,000 individuals filed for federal unemployment benefits for the week that ended June 19, a decrease of 7,000 from the previous week’s level. The four-week moving average was 397,750, an increase of 1,500 from the previous week’s average. Read the full report here.
- In other economic news: Canadian retail sales fell 5.7 percent to $54.8 billion in April, the largest decline since April 2020; new home sales in the United States fell 5.9 percent from April 2021 to May 2021, but were up 9.2 percent from May 2020 to May 2021; existing home sales in the United States fell 0.9 percent from April to May, but were up 44.6 percent year-over-year; and the University of Michigan consumer sentiment index rose to 85.5 in June, up from the 82.9 reading registered in May.