Economic Data Suggest Stronger Growth in Q2
- The ISM manufacturing index kicked o ff the fireworks a day early on Monday with its highest reading since August 2014. The ISM non-manufacturing index also topped expectations.
- The FOMC minutes from the June meeting showed that the Fed appeared split on when to initiate the beginning of its balance sheet reduction program. Wells Fargo anticipates the reductions will begin at the start of Q4, with the next rate hike occurring in December.
- Nonfarm payrolls capped the strong week with a 222,000 increase in employment. Despite the job gains, wage growth remained stuck in neutral.
Solid Growth in Many Foreign Economies in Q2
- The Tankan survey of Japanese business sentiment corroborated other recent data that suggest the Japanese economy continues to grind along. Real GDP growth in the second quarter appears to have been solid as well in the Eurozone and in Canada.
- In contrast, economic growth in the United Kingdom appears to be lackluster at present. Although there are a number of reasons behind the recent slowdown in the U.K. econo my, uncertainties related to the Brexit process undoubtedly are playing a role.