Growth in Demand for American Goods
Kurt Brouwer August 27th, 2008
Though it’s sputtering a bit, our economy is still showing signs of life as this Bloomberg piece [emphasis added] indicates:
U.S. Economy: Durable Goods Orders Unexpectedly Rise (Bloomberg, August 27, 2008, Timothy R. Homan)
Orders for U.S. durable goods unexpectedly increased in July, indicating that growing demand from abroad is still helping companies weather a slump in domestic spending.
The 1.3 percent gain in bookings of goods meant to last several years matched the previous month’s rise, the Commerce Department said today in Washington. The gains may have been aided by foreign demand for automobiles, aircraft and telecommunications gear as exports climbed to a record.
The boost from exports, which kept the U.S. expanding last quarter, may wane because the European and Japanese economies are now contracting, while the dollar is rallying. Federal Reserve officials anticipate trade gains will fade, minutes of their Aug. 5 meeting showed yesterday.
…Economists projected orders would be unchanged after a previously reported 0.8 percent increase in June, according to the median of 76 forecasts in a Bloomberg News survey.
Excluding transportation equipment, orders rose 0.7 percent after a 2.4 percent increase. Those bookings were projected to fall 0.7 percent, after an originally reported 2 percent gain in June.
Today’s report indicates stronger growth in the third quarter than economists previously anticipated. Morgan Stanley analysts now project a 0.8 percent annualized gain in gross domestic product in the period, up from 0.4 percent previously.
Tomorrow, the Commerce Department is also forecast to raise its estimate of second-quarter GDP growth to 2.7 percent, from 1.9 percent before, due to stronger exports…
I can’t wait to see the Commerce Department report on Q2 economic growth.
Update: More good news came through today as the Associated Press reported that consumer confidence had the biggest monthly increase in a couple of years [emphasis added]:
Americans felt better about the economy in August, as a barometer of sentiment posted the biggest boost in two years amid falling gas prices. Two reports suggested that a bottom could be nearing for the housing market, but economists caution it’s too early to proclaim that the worst is over.
The Conference Board, a private research group, said Tuesday that its consumer confidence index rose to 56.9, up from a revised 51.9 in July. That’s the largest gain since August 2006 and is ahead of the 53 expected by economists surveyed by Thomson/IFR…
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