By Thomas Cooley and Peter Rupert
The Bureau of Economic Analysis announced that real GDP grew at a 6.5% annual rate in Q2. Q1 was revised down to 6.3% from 6.4% and Q4 was revised up to 4.5% from 4.3%. Moreover, real GDP has now surpassed the highest pre-pandemic level, $19.2 trillion, and is now $19.36 trillion. Personal Consumption Expenditures rose 11.8%. The big downside is with investment that declined for the second straight quarter. The report was pretty much in line with expectations, a bit lower, but we are still in unchartered waters so pretty hard for people to be making predictions.
Initial Claims
Initial claims fell 24,000 to a still worrisome 400,000 and averaged 395,000 in the month of July after averaging 394,000 in June. Continuing claims rose 7,000 and remain elevated.
Personal income rose 0.1% between May and June with personal consumption expenditures rising 1.0%.
Overall, the economy is growing but with the new Delta variant there are some risks over the next few months. In addition, inflation has become the talk-of-the-town and it will be of interest to see how the Fed responds.
