US Trade, Durable Goods Orders Data Suggest Upside for Q2 GDP
- The US trade deficit fell more than expected in June, narrowing to $64 billion from $66 billion.
- Durable goods orders surged by 6.5% after an upwardly-revised fall of 0.1% in May.
- The numbers suggest that tomorrow’s second-quarter GDP growth figure could be higher than the annualized 2.5% previously forecast.
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The US trade deficit in goods fell to $63.9 billion in June, below both the $65.5 billion expected and the prior month’s $66.3 billion. Moreover, durable goods orders surged by 6.5% last month, well above the 3.9% rise predicted and May’s upwardly revised fall of 0.1%.
Taken together, the numbers suggest that the first estimate of US second-quarter economic growth tomorrow could be higher than the 2.5% annualized predicted by economists before the latest data and well above the 1.4% growth rate recorded in the first quarter.
At the margin, the numbers also make another tightening of US monetary policy this year a little more likely but the Dollar was little affected. Earlier it had crept higher after its sharp fall in the wake of Wednesday’s FOMC statement, which was generally interpreted as being dovish.
Chart: EURUSD Five-Minute Timeframe (July 26-27)
--- Written by Martin Essex, Analyst and Editor
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