Monthly GDP was flat in May following a 0.2% increase in April (revised down from 0.3% previously). The flat reading in May reflected increases in domestic final sales and nonfarm inventory investment that were essentially offset by a decline in net exports. The level of GDP in May was 2.1% above the first-quarter average at an annual rate. Our latest estimate of 2.5% GDP growth in the second quarter assumes a 0.3% (not annualized) increase in June. Click here for more information on MA’s Monthly GDP measure.
MA’s Ken Matheny was quoted in the article, “Fog of Brexit clouds outlook for central banks seeking clarity” by Howard Schneider and Ann Saphir at Reuters (excerpts shown below). For much of this year, the dollar, oil prices, and economic conditions largely behaved as the U.S. Federal Reserve had expected, allowing policymakers to plot further interest rate increases. Not anymore. Since Britain’s June 23 vote to leave the European Union, every piece of economic, such as Friday’s jobs report, data comes with a question mark – how much does it reflect domestic economic developments and how much the short and long-term implications of an economic reordering that may take years to play out. Ken Matheny, senior economist at Macroeconomic Advisers, said he expected Brexit to nick U.S. growth, but that was all investors and policymakers will be able to say for a while. “I am not sure that in six months … Continue Reading