Today’s encouraging update on US personal income and spending for August raised the Atlanta Fed’s third-quarter GDP nowcast to 1.8% from 1.4% (seasonally adjusted annual rate). The revised GDP projection for the current quarter is still a sluggish pace and well below Q2’s strong 3.9% increase. But at least the revisions are moving in a positive direction. In fact, today’s update of the widely followed GDPNow model offers the highest growth rate since the Fed bank began publishing Q3 estimates in early August. That’s not saying much since the initial estimate was a tepid 0.9%. Nonetheless, in the current environment of bearish expectations, the sight of even minor upgrades for macro expectations is noteworthy.
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Daily Archives: September 28, 2015
Solid Gains For US Personal Spending & Income In August
Consumer spending and disposable personal income—money available to spend or save after taxes—posted healthy increases in August, according to this morning’s update from the US Bureau of Economic Analysis. Personal consumption expenditures rose 0.4% last month, matching July’s gain. Disposable personal income’s (DPI) advance ticked down to 0.4% in August from 0.5% in the previous month, but that’s still an encouraging rate of growth. Meanwhile, the year-over-year gains for income and spending remained steady in the 4% range, suggesting that the consumer sector—the foundation for US economic activity–remains on track to deliver moderate if unspectacular increases in the near-term future.
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Emerging Market Stocks: Last Week’s Red-Ink Leader
Value investors on the lookout for bargains have recently been eyeing up the battered corner of emerging market equities. At some point the selling will lay the foundation for a solid rebound. Judging by last week’s trading, however, there was no sign that a bullish inflection point is near. Stocks in emerging countries led the way lower last week through Sep. 25, based on the Vanguard Emerging Markets ETF (VWO). The fund was by far the worst performer among a set of proxies for monitoring the major asset classes.
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Initial Guidance | 28 September 2015
● US Q2 GDP growth revised up to 3.9% from 3.7% | BEA
● US Services PMI growth ticks lower in Sep: 55.6 vs. 56.1 in Aug | Markit
● US consumer sentiment slips in September | Reuters
● Solid gain for business & consumer confidence in Italy in Sep | RTT
● US dollar firms on expectations of Fed rate hike | Reuters
● IMF head says global growth outlook will likely be revised down | Reuters