INSTANT VIEW - U.S. Q2 GDP rose 2.3 pct -ECI Up +1.1%
Sam,
One good, another a bit 'iffy'.
===================
Thursday July 29, 8:44 am Eastern Time
(Note: this article is ``in progress'; there will likely be an update soon.)
INSTANT VIEW - U.S. ECI rose 1.1 percent
GREG JONES, CHIEF ECONOMIST, BREIFING.COM: "This was worse than expected, but when you look at year-over-year we're at 3.2 percent, which is steady. These numbers (Gross Domestic Product and ECI) are a mixed bag. I think the Fed is going to tighten in August."
---------
INSTANT VIEW - U.S. ECI UP 1.1%
NEW YORK, July 29 (Reuters) - Following are comments from economists and market experts after the U.S. Labor Department reported that the second quarter Employment Cost Index (ECI) rose 1.1 percent after a first-quarter rise of 0.4 percent.
Economists surveyed by Reuters had predicted, on average, that the Employment Cost Index (ECI) would rise 0.8 percent.
JOSHUA FEINMAN, CHIEF ECONOMIST, DEUTSCHE ASSET MANAGEMENT AMERICA -- "The second-quarter ECI was higher than expected but last quarter's small 0.4 percent rise in the ECI was an aberration. You have to average through these things. You've got to smoothe through them. I would say that labor costs are still pretty tame.
``The one ECI reading that stands out as an aberration was the 0.4 percent increase in the first quarter.'
(Note: this article is ``in progress'; there will likely be an update soon.)
========
NEW YORK, July 29 (Reuters) - Following are comments from economists and market experts after the U.S. Commerce Department reported the second quarter advance estimate for gross domestic product rose 2.3 percent versus a rise of 4.3 percent for the first quarter.
The second quarter GDP price deflator rose 1.6 percent unchanged from the previous quarter. This was in line with market forecasts.
Economists surveyed by Reuters had predicted, on average, that second quarter Q2 GDP would rise 3.3 percent.
JOSHUA FEINMAN, CHIEF ECONOMIST, DEUTSCHE ASSET MANAGEMENT AMERICA: ``When looking at the GDP, don't focus on the headline number. Inventories were a surprise. Final sales are 3.2 percent which is solid. And we've had inventories be a drag on this economy for three straight quarters. We are setting ourselves up for the possibility of an inventory rebuild in the second half of the year.'
------------
The nation's gross domestic product -- the value of all goods produced within U.S. borders -- expanded at a 2.3 percent annual rate in the April-June second quarter, little more than half the first quarter's 4.3 percent pace. That was well below the 3.3 percent rate that Wall Street economists had forecast for second-quarter GDP growth and was the weakest since a 1.8 percent rate of growth in the second quarter of 1998.
``The slowdown in GDP growth was mainly accounted for by a slowdown in consumer spending and a downturn in government spending that more than offset an upturn in exports,' the department said.
Weaker GDP growth likely will be welcomed by Federal Reserve policymakers since it eases concern that expansion was so brisk it could fire up inflation. |
