The U.S. economy slowed a bit more than initially thought in the second quarter as the strongest growth in consumer spending in 4-1/2 years was offset by declining exports and a smaller inventory build.
Gross domestic product increased at a 2.0% annualized rate, the Commerce Department said in its second reading of second-quarter GDP on Thursday, according to CNBC.
That was revised down from the 2.1% pace estimated last month. The economy grew at a 3.1% rate in the January-March quarter. It expanded 2.6% in the first half of the year. The downward revision was in line with economists’ expectations.
On the data front the main release of the afternoon saw the preliminary US GDP Q/Q for the second quarter come in at 2.0% in annualized terms, meeting consensus forecasts but showing a small 0.1% drop on the prior.
The preliminary is the 2nd of 3 readings for this data point and due to be sandwiched between the first and last often causes minimal market reaction.
The composition of the growth can provide further insight into the economy with personal consumption of 4.7% comfortably above the 4.3% expected, according to X-Trade Brokers.
The breakdown of investment showed the first contraction in business investment since 2016 (-0.6%), while home investment was revised down to -2.9% from -1.5% initially.
Recent price action is a good sign for bulls and with the S&P500 back above the 2900 handle, the market is within striking distance of prior resistance at 2944. Price is back above the 21 EMA on D1 after the recent gains, with the gradient of both the 21 and the 8 now pointing higher. The 8 remains below the 21 but a push and hold above 2944 would likely be accompanied by a bullish cross and could resolve the recent consolidation in a bullish manner.