Despite Distractions, Economic Data Boomed Last Week
Despite all the distractions, the U.S. economy's resilience remains intact. Here are key fundamentals easily lost amid recent headlines dominating the news cycle.
Newly released June retail sales data shows consumers are spending bigly.
Excluding gasoline, because its volatile price distorts the data, retail sales grew 5.3% in the 12 months ended June 30. That compares to a 3.2% rate of growth achieved in the last 12 months of the last economic expansion. To be clear, retail sales are growing more than 60% faster than in the peak of the last expansion.
Retail sales are an indication of consumer strength since consumers account for 70% of U.S. economic growth.
Sales at non-store retailers, including Amazon, soared 10.2% in the 12 months ended June 30, while sales at traditional retail department stores were flat.
Food and drink places, establishments for a necessity of everyday life and a retail category where you just do not see sudden accelerations in sales, are surging with growth.
The forward looking index of 10 U.S. leading indicators of economic growth resumed its surge after flattening in May. It's in record territory.
A dynamic model of how fast the U.S. economy is growing is published by the Federal Reserve Bank of Atlanta. Its estimate of GDP growth grows more accurate as the publication date of the data nears every quarter. With the GDP growth number for 2Q2018 just 10 days away, the Atlanta Fed model is signaling an astonishing 4.5% growth rate. Even if the actual figure comes in at 4%, it towers over the 2.2% quarterly growth average since the end of The Great Recession. Despite all of the distractions, setbacks and hurdles, key fundamentals of the economy remain incredibly strong.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.
This article was written by a professional financial journalist for McCarthy Asset Management, Inc and is not intended as legal or investment advice.