By: Dividend Sensei
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Weekly Economic Data Review
In terms of economic news things were mixed. On one hand the Q1 GDP growth estimate was upgraded from 0.7% to 1.2%, which is certainly good and inline with other hard data.
In addition the Philly Fed index continues improving, and corporate earnings are growing near 14%, though mainly due to higher oil prices and energy results.
More importantly for Main Street America is that the 4 week rolling average for new jobless claims continues to beat expectations, decline, and indicate the strongest labor market in over a decade.
On the negative side, new home sales fell 11% last month, while exisiting home sales declined by 2.3%. That’s likely to do with several factors, including home prices approaching inflation adjusted records, and much tighter lending standards for mortgages, including a 20% downpayment that many people are having a hard time saving up, especially with home prices growing at about three times the rate of inflation (5.7% YoY).
Durable goods orders also declined 0.7%, the first fall in five months, indicating that business capital investment may not be as strong as strong business confidence might make us hope for.
Meanwhile the projected growth of the US economy remains slightly positive:
New York Fed GDP NowCast: 2.2% projected Q2 GDP growth
Atlanta Fed GDPNow: 3.8% projected Q2 GDP growth
While both reports are merely based on models running on real time economic data, I think that it’s reasonable to assume that actual GDP growth will come in somewhere between these two estimates. If we truly can achieve 3% (midpoint estimate) growth that would be very good news indeed.