US: Economy is doing fine – Danske Bank

On Friday, the key event was the US GDP report for Q2 and the GDP came in at annual rate of 4.1% q/q, driven mainly by a strong contribution from private consumption, which was up by a rate of 4.0% q/q, points out the research team at Danske Bank.

Key Quotes

“Inventories contributed negatively by one percentage point, whereas fixed investments were decent with a one percentage point contribution. Given the focus on the US trade deficit, note that net exports were a positive 1.1 percentage point.”

“All in all, the US economy is doing fine despite GDP growth coming in one-tenth below consensus. PCE core index also came in lower than expected but should not change much for the Fed, which still seems on track to deliver two more hikes this year.”