Wednesday, September 2, 2015

US Economy: Homeward Bound (excerpt)


There are clearly enough recessionary indicators around the world to feed investors’ concerns about a global recession. While they were fretting about this scenario yesterday, they ignored solid numbers coming out of the US suggesting that real GDP, which rose 3.7% during Q2, could be revised higher and followed by another solid gain during Q3. Consider the following:

(1) The value of construction put in place rose 0.7% m/m during July, and 13.7% y/y, to the highest pace since May 2008. Leading the way over the past year has been nonresidential construction (up 18%), with particular strength in manufacturing (73), amusement & recreation (60), and lodging (41). Construction of factories has been soaring into new record-high territory since January of this year.

(2) Motor vehicle sales jumped to a new cyclical high of 17.8 million units (saar) during August. Leading the way have been light truck sales. The former is up 2.8% y/y, while the latter is up 9.0%.

Today's Morning Briefing: Breaking China. (1) Looking for support. (2) “Dudley Bounce” has petered out. (3) Good times for pessimists and bears. (4) The decoupling question. (5) No question that commodity producers can’t decouple from China. (6) China is weighing down global M-PMI. (7) Manufacturers in Canada, Brazil, Indonesia, and South Korea are in a world of pain. (8) China’s service economy isn’t serving as well as it should. (9) US and Eurozone M-PMIs remain solid, with just a few tiny cracks. (10) Let’s go home to the USA. (11) Construction spending on factories, lodging, amusement & recreation is booming. (12) Pickup trucks are on the fast track. (More for subscribers.)

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