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The
economy still
is moving ahead
at a solid pace
…
Article
Date - June.08.2005
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|
 Earlier
fears of a stall
out in growth
of the U.S.
economy have
been erased
by revisions
to key data
for the first
quarter, as
well as by reassuring
data for April
and May. As
expected, growth
of real Gross
Domestic Product
(GDP) was revised
up for the first
quarter, from
3.1% to 3.5%.
The revision
reflected stronger
patterns for
personal consumption
expenditures,
residential
fixed investment
and foreign
trade while
business inventory
investment was
revised downward
(that’s
a good thing).
The performance
of GDP growth
squares with
the solid performance
of the labor
market in the
first quarter.
Forward economic
momentum extended
into the second
quarter of the
year. Growth
of personal
consumption
expenditures
remained quite
healthy in April,
supported by
strong growth
in disposable
personal income
(particularly
labor income).
Expenditures
on housing also
continued to
climb in April
as home sales
surged and residential
construction
put-in-place
recorded another
solid advance,
and surveys
of builders
and mortgage
lenders were
quite positive
in May. New
orders for durable
goods were revised
up for March
and perked up
in April, and
the Institute
for Supply Management’s
factory index
remained above
50 in May -
suggesting that
the manufacturing
sector still
is in a forward
gear. Everything
considered,
GDP growth appears
to be headed
to about 3.5%
in the second
quarter, and
we expect growth
to hang around
that pace in
the second half
of the year. |
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