08222017Tue
Last updateMon, 21 Aug 2017 7pm

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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

Empire State Manufacturing Survey Dropped in June

Business activity grew modestly in New York State, according to firms responding to the July 2017 Empire State Manufacturing Survey. Manufacturing firms in New York State reported that business activity continued to expand in July. After reaching its highest level in more than two years last month, the general business conditions index retreated ten points to 9.8, indicating that activity grew at a slower rate than in June. Overall 30% of respondents reported that conditions had improved over the month, while 20% reported that conditions had worsened. 

U.S. Industrial Output Rose for Fifth Straight Month in June

Industrial production rose 0.4% in June for its fifth consecutive monthly increase. Manufacturing output moved up 0.2%; although factory output has gone up and down in recent months, its level in June was little different from February. The index for mining posted a gain of 1.6% in June, just slightly below its pace in May. The index for utilities, however, remained unchanged. For the second quarter as a whole, industrial production advanced at an annual rate of 4.7%, primarily as a result of strong increases for mining and utilities. Manufacturing output rose at an annual rate of 1.4%, a slightly slower increase than in the first quarter. At 105.2% of its 2012 average, total industrial production in June was 2.0% above its year-earlier level. Capacity utilization for the industrial sector increased 0.2% in June to 76.6%, a rate that is 3.3% below its long-run (1972–2016) average. 

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