• U.S. economy likely to grow significantly above trend growth in Q3

    Source: FxWire Pro - Commentary / 20 Aug 2018 15:51:37   America/New_York

    U.S. inflation and labor market data for the July month so far indicate to a solid start to the third quarter. The retail sales grew more rapidly than expected and hint at healthy consumer spending. Nine of the main 13 categories in the report rose, as households seem to be adjusting consumption to reflect higher after-tax incomes.

    Clothing and department store sales were some of the best performers, implying that after struggling for much of the past year and offering significant discounts, apparel retailers are making a comeback, noted Barclays in a research report.

    Manufacturing output was another bright spot, which rose 0.3 percent sequentially. The July report affirms the accelerating trend in manufacturing activity that began this year, which is in line with the timing of fiscal stimulus.

    On a percentage 6m/6m saar basis, manufacturing output rose 4.6 percent in July, as compared with a 1.2 percent rise in the preceding six-month period.

    “Based on the strong data so far our GDP tracking model suggests the US economy will grow by 3.0 percent q/q saar in Q3, another quarter of significantly above trend growth”, added Barclays.

    At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -137.75. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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