Economy

U.S. Economic Dashboard

Here are summaries of some of the go-to data points I look to for an indication which way the U.S economy is heading. I will try to keep them regularly updated based on new data released.

GDP

U.S. GDP - 2Q2023

US real GDP in 2Q23 grew at an annualized q/q rate of +2.4% q/q, after inflation, higher than the 2.0% expected. This was up from +2.0% (revised upwards) in 1Q23. The composition of real GDP growth in 2Q23 was: +2.4% = +1.1 consumption, +1.0 business [...]
Industrial Production

U.S. Industrial Production (as of July 2023)

US industrial production fell -0.5% m/m in June, down -0.4% from a year ago. Production for Q2 as a whole rose +0.2% q/q, flat from a year ago. For the first half of 2023, production was up +0.4% from a year before. Total industrial capacity [...]
ISM/PMI

U.S. ISM/PMI Surveys (as of July 2023)

The following are diffusion indices, based on business surveys, which means that >50 indicates expansion and <50 indicates contraction, and 50 indicates no change. A larger or small number indicates breadth, not intensity, among survey respondents. ISM Manufacturing Index fell -0.9 points in June to [...]
Orders

U.S. Factory Orders (as of July 2023)

U.S. factory orders rose +0.3% m/m in May, down -1.1% from a year ago. These numbers are not adjusted for inflation, which was running at +4.1% y/y (CPI) in May. U.S. durable goods orders rose +1.8% m/m in May, up +5.5% from a year ago [...]
Trade

U.S. Trade Balance (as of June 2023)

The U.S. trade deficit in goods and services rose to $74.6 billion in April, but was still -13.3% smaller than a year ago. The trade deficit for Q1 was $201.0 billion, -27.2% smaller than a year ago. In 2022, the annual U.S. trade deficit hit [...]
Inflation

U.S. Inflation (as of July 2023)

US consumer prices (CPI) rose +0.2% m/m in June, up +3.1% from a year ago (down from +4.1% y/y in May). This is down noticeably from a peak of +9.0% y/y last June. Core CPI (excluding food and energy) also rose +0.2% m/m in June, [...]
Jobs

U.S. Jobs Data (as of July 2023)

The US economy added +209,000 jobs in June, below expectations. Previous months were also revised downwards by -77k in April and -33k in May, for a total of -110k. As a result, average job gains over first half of this year were +278k per month, [...]
Consumer

U.S. Consumer Data (as of July 2023)

The University of Michigan’s US Consumer Sentiment gauge jumped +12.7% in July to 72.6. This is up +41.0% from a year ago, but remains well below pre-Covid levels. The Conference Board’s US Consumer Confidence index rose +6.9 points in July to 117.0, its highest level [...]
Retail

U.S. Retail Sales (as of July 2023)

US retail sales rose +0.2% m/m in June, up +1.5% from a year ago. However, this is not adjusted for inflation. Given that consumer inflation (CPI) was running at +3.0% y/y in June, this indicates that sales continue to be down, in real terms, from [...]
Housing

U.S. Housing Data (as of June 2023)

U.S. new homes sales rose +4.1% m/m in April (last available), up +11.8% from a year ago. With the exception of a single month, this is the first time sales have turned positive y/y since May 2021. US existing home sales rose +0.2% m/m in [...]
Fiscal Budget

U.S. Fiscal Budget (as of May 2023)

The US federal budget deficit for the calendar year 2022 was $1.42 trillion, down significantly from $3.35 trillion in 2021. The US federal budget deficit as a percentage of GDP declined back to 5.4% in 2022, down from 11.9% in 2021 and 14.9% (which was [...]
Interest Rates

Interest Rates (as of July 2023)

At its July 2023 meeting, the Federal Reserve’s FOMC announced it was raising the Fed Funds Rate by 25 bps to a range between 5.25% and 5.50%, noting that unemployment remains low and inflation remains elevated. The rate hike in May was, at the time, [...]
Stock Market

Stock Market (as of May 2023)

The S&P 500 Index ended April at 4,169.48, up +1.5% that month, and up just +0.9% from a year ago. The Dow Jones Industrial Average (DJIA) ended April at 34,098.16, up +2.5% that month, and up +3.4% from a year ago. The Nasdaq Composite Index [...]
Commodities

Commodities (as of May 2023)

The Brent Oil Price (global) ended April at $81.32, up +2.7% that month, but down -25.0% from its price a year ago. The WTI Oil Price (domestic US) ended January at $76.78 per barrel, up +1.5% that month, but down -26.6% from a year ago. [...]

Latest Economy Post

U.S. GDP – 2Q2023

July 27, 2023

US real GDP in 2Q23 grew at an annualized q/q rate of +2.4% q/q, after inflation, higher than the 2.0% expected. This was up from +2.0% (revised upwards) in 1Q23.

The composition of real GDP growth in 2Q23 was: +2.4% = +1.1 consumption, +1.0 business investment, +0.1 inventories, -0.2 housing, +0.5 government spending, -0.1 net exports.

In contrast, the (revised) composition of GDP growth in 1Q23 was: +2.0% = +2.8 consumption, +0.1 business investment, -2.1 inventories, -0.2 housing, +0.9 government spending, +0.6 net exports.

Consumption grew at an annualized rate of +1.6% in 2Q23, down from +4.2% in 1Q23, and contributed +1.1 points to GDP growth (down from +2.8 points in Q1).

Business investment saw a boost to +7.7% in Q2, up from a tepid 0.7% in Q1, and contributed a full +1.0 point to GDP growth, up from just +0.1 points.

Businesses also added slightly to inventories in Q2, adding +0.1 points to GDP growth, after drawing down on inventories in Q1.

Residential investment continued to decline for the 9th straight quarter, falling at a rate of-4.2% in Q2, down from -4.0% in Q1. However, the rate of decline has slowed noticeably from -27.1% in 3Q22 and -25.1% in 4Q22.

Government spending grew at a rate of +2.6% in Q2, down from +5.0% in Q1, and added half a point to GDP growth. Federal defense spending rose by +2.5% (same as last quarter), but federal non-defense spending declined -1.1% after two quarters of double-digit growth. State and local spending rose at a rate of +3.6% in Q2, down from +4.4% in Q1.

The US trade deficit expanded slightly in Q2, after four straight quarters of shrinking. As a result, GDP growth was adjusted downwards by -0.1 points. Both exports and imports fell in Q2. Exports fell -10.8%, after growing +7.8% in Q1. Imports fell by -7.8%, after growing +2.0% in Q1.

The PCE price index rose at an annualized pace of +2.6% q/q in Q2, down from +4.1% in Q1, indicating that inflation is slowing. Note that these are q/q figures giving a snapshot of current price momentum, NOT y/y rates.

Core PCE (excluding food and energy) rose at a pace of +3.8% q/q in Q2, down from +4.9% in Q1. While inflationary pressure is declining, core inflation is proving somewhat more persistent.

As usual, the headline GDP figure conceals a lot going on under the hood. Consumption slowed, but business investment (which had been very cautious) picked up. The downturn in the housing market has eased, but has not yet seen a rebound. Foreign trade (both exports and imports) weakened, which is a concern. Inflationary pressure, however, still seems to be on a downward path.

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Videos

Some of my recent appearances talking about the economy and markets.

Speaking with CNBC’s Martin Soong about the challenges of investing and doing business in China in the Xi Jinping Era. (June 2022)

Talking to CNBC’s Dan Murphy about why slower growth in early 2022 wouldn’t (and didn’t) derail the Fed’s continued rate hikes. (April 2022)

More with CNBC’s Dan Murphy, explaining the interesting historical background behind Elon Musk’s jibe about reintroducing cocaine into Coca-Cola.

Talking with CNN’s Richard Quest about the Chinese government’s crackdown on technology firms. (July 2021)

Selected Articles

Some of my previously published articles, blog posts, and other material focused on the economy and markets.

Short Q&A on the Debt Ceiling

GMF: Towards a New Architecture for the International Economic Order

Congressional Testimony on China's Overseas Investments

FP: It's Time to Kick Germany Out of the Eurozone

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The materials on this website may contain the personal opinions of the author, as of the date set forth herein, about the securities, investments and/or economic subjects discussed. No part of the author's professional compensation was related to any specific views contained in these materials.