07272017Thu
Last updateWed, 26 Jul 2017 7pm

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U.S. Consumer Confidence Rebounds in July

The Conference Board Consumer Confidence Index, which had declined marginally in June (a downward revision), improved in July. The Index now stands at 121.1, up from 117.3 in June. The Present Situation Index increased from 143.9 to 147.8, while the Expectations Index rose from 99.6 last month to 103.3.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.” 


IHS Market PMI Index Reached Four-Month High in July

July data revealed a further acceleration in business activity growth across the U.S. private sector. At 54.2, up from 53.9 in June, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index signaled the strongest rate of expansion since January.

The pickup in business activity growth was driven by a steeper increase in manufacturing production in July (‘flash’ output index at 54.3, up from 52.6 in June). Meanwhile, service providers indicated that activity growth was unchanged from June’s five-month peak (‘flash’ business activity index at 54.2 in July). 

IMF Lowers 2017 Growth Forecast for U.S.

The growth forecast in the United States has been revised down from 2.3% to 2.1% in 2017 and from 2.5% to 2.1% in 2018, according to the IMF’s World Economic Outlook. While the markdown in the 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes. Market expectations of fiscal stimulus have also receded. 

Leading Economic Indicators Increased in June

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.6% in June to 127.8 (2010 = 100), following a 0.2% increase in May, and a 0.2% increase in April.

“The U.S. LEI rose sharply in June, pointing to continued growth in the U.S. economy and perhaps even a moderate improvement in GDP growth in the second half of the year,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “The broad-based gain in the U.S. LEI was led by a large contribution from housing permits, which improved after several months of weakness.” 

U.S. Jobless Claims Fall to Near Five-Month Low

In the week ending July 15, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 247,000 to 248,000. The 4-week moving average was 243,750, a decrease of 2,250 from the previous week's revised average.

“The number of Americans filing for unemployment benefits fell more than expected last week, touching its lowest level in nearly five months, suggesting strong job gains that should continue to underpin economic growth,” Reuters reports

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