The Surprise Factor – The U.S. economy is on fire. It’s also disappointing.

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From the Wall Street Journal 7-3-18 edition

The Surprise Factor
The U.S. economy is on fire. It’s also disappointing.

The U.S economy is growing at one of its fastest clips in years, but that’s not enough to meet the inflated expectations of economists.

The Citigroup Economic Surprise Index for the U.S., which traders often watch for signs of shifting growth momentum, turned negative for the first time since September last week after a string of weaker-than-expected U.S. economic data.
The surprise index isn’t a measure of economic growth; instead it tracks how data are stacking up against analyst forecasts. A negative number indicates data are missing expectations, while a positive number indicates data are coming in unexpectedly strong.

The surprise index has been on the decline all year, reflecting in part the increasingly lofty growth expectations of many economists and analysts. But it also indicates conflicting readings on the sustainability of the decade-old expansion as rising U.S. interest rates and an intensifying trade spat with China threaten to crimp growth.

The descent into negative territory came after data last week showed the U.S. economy grew a touch slower than expected in the first quarter, while a closely-watched measures of business and consumer spending also slowed. Recent data on the U.S. manufacturing sector, consumer spending and the housing market have also been disappointing.

Still, other measures of U.S. economic growth remain strong, such as a report Friday that showed inflation rose at its fastest annual pace in six years in May. Second-quarter GDP is still expected to come in at nearly double the rate of the first quarter, at an annual growth rate of 3.8% according to data from the Atlanta Federal Reserve.

But analysts at Oxford Economics warn: “This may represent a peak as the sugar rush from the tax cuts fades, global growth slows, inflation rises and tariffs weigh on growth.

The unexpected strength in the U.S. economy has helped drive U.S. stocks and the dollar over the past several months. Unexpected weakness could have the opposite effect.

Are you worried about weakening economic growth as it pertains to your real estate investments? 

Call me at 959-574-3552 or email me today to have a conversation about the market and current economic indicators and how they pertain to upcoming home values and your real estate investments.

Article written by Chelsey Dulaney – Wall Street Journal

By | 2018-07-03T05:20:50+00:00 July 3rd, 2018|OC Insider|0 Comments

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