US: June’s growth rate was close to 3% - SocGen

Kit Juckes, Research Analyst at Societe Generale, notes that a really simple regression of the US ISM data suggests that June’s growth rate was close to 3%, and Q2 overall was at around 2.3%.

Key Quotes

“This is just another piece of evidence placed in front of a sceptical market but even so, it paints a picture of an economy that is trundling along at the familiar pace of recent years. Factory orders are soft, we’ve had a couple of months of bad employment releases, but my best guess is that growth is still running close to 2%, unable to accelerate, but not yet doomed to slow too sharply.

The next big news point in this regard is tomorrow’s labour market report, of course. We get jobless claims today and the ADP employment survey which is expected to show a 140,000 gain in private sector jobs. Yesterday’s FOMC minutes made clear both the Fed’s uncertainty about the state of the economy at present and their bias, which is that doling nothing is safer than risking dong the wrong thing (raising rates too soon in this instance).”