We got our first look at US economic growth for the 2nd quarter this week and it showed the US economy grew at a 1.5% rate, a little slower than expected. After growing at an annual rate of 2.1% in the 1st quarter, expectations were for an annualized rate of 1.8% last quarter. However, the underlying numbers still looked pretty good, with consumer spending up 3.2% from a 1st quarter rate of 0.5%. Final sales were also up 3.9% versus 1.7% in the 1st quarter, but lower government spending and a widening trade gap ultimately dragged overall growth lower.
Economic growth, or GDP, is reported 3 times each quarter. This week’s report was the 1st estimate for the 2nd quarter. Once the Bureau of Economic Analysis has a chance to process more data, the 2nd estimate is scheduled to come out August 26th and the final number will be released sometime at the end of September.
The Fed left interest rates unchanged this week after a 9-3 vote. Three members voted to raise rates by 0.25% now to combat inflation earlier than later, and the odds are now 65% for a rate hike in their next meeting in September.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
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