By: Dividend Sensei
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Weekly Economic Data Review
As with the last few weeks, last week saw a mix of good and bad soft and hard data.
For example, while the Chicago PMI (midwest manufacturing) hit a 3 year high, consumer confidence remained at near multi-year highs, Q1 GDP growth estimates were increased to 1.4%, and consumer income and spending came in better than expected (+0.4% month over month), jobless claims increased, durable goods orders fell 1.1%, and unexpectidly fell 0.8% (1.7% YoY).
This points to continued steady, though disappointgly slow growth, which can be seen in the New York and Atlanta Fed’s real time GDP growth estimates.
New York Fed GDP NowCast: 1.9% for Q2 1.6% for Q3 (Q2 unchanged Q3 up 0.1%)
Atlanta Fed GDPNow: 3.0% for Q2 (up 0.3% from last week)
Fortunately the current economic growth forecasts are up slightly, which is certainly better than the recent quarterly trend of steadily declining forward growth expectations as the quarter progresses.
The most important factor, continues to be the forward super index, a metaanalysis of 9 other leading economic indecies, indicates that the probability of a recession within the next 3-4 months is just 2.36%, up an insignificant 0.05% since last week.
In other words, while economic growth may be disappointing, the odds of another recession in the next 9 months remains well under 10%.