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The second-quarter GDP was revised up by 3 percentage points this week, thanks to a boost from the nonresidential fixed investment segment, which went from negative growth territory to a 1.0% Q/Q gain. Strong consumer spending also contributed to the increase. The revised GDP now stands at 1.4% Q/Q growth (compared with 1.1% after the first revision), while the GDP price index was unchanged and remains at 2.3%.
August was a quiet month for consumer income and spending with income rising only 0.2% and spending remaining the same. Service spending increased 0.3% but slower than previous months. A little more movement came from inflation readings. The PCE price index increased 0.1% and the core up 0.2%. Overall, the strength in prices was generally offset by the quiet income and spending changes.
New home sales decreased M/M in August by 7.6%, partly due to the fact that July’s rate was a cycle high at 659,000 annualized. In fact, the revised new home sales report was ultimately positive, thanks to an unexpected revision of a 5,000 gain, bringing the annualized rate to 609,000, which is above expectations. Supply increased very modestly but remains very low compared with the sales rate. Despite that, the median price of $284,000 came down 3.1% M/M and 5.4% Y/Y.
Upcoming Economic Reports:
Wed October 5 — International Trade Balance
Fri October 7 — Employment Situation
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