US: GDP looking solid - ANZ

The second estimate of US GDP data suggest momentum through Q2 was much firmer than expected, driven almost entirely by domestic demand, with both consumption and investment revised up, explains the analysis team at ANZ.

Key Quotes

“Even the net export picture remained positive, despite downward revisions – exports were up 3.7% (initial: 4.1%) with imports up 1.6% (initial: 2.1%). Government consumption fell 0.3% (initial: +0.7%) over the quarter. The Fed will like this data. With confidence indicators near all-time highs, business confidence rebounding, and employment gains continuing, expect growth momentum to continue through Q3 (floods aside). Estimates have put the Q3 drag from Cyclone Harvey at around 0.2ppt. Eventual repair efforts will of course be a positive for GDP but this highlights nothing so much as the inherent shortcomings of the GDP concept as a measure of economic wellbeing. It isn’t designed for that.”