Will US Q2 GDP Challenge the 3% Growth Mark?

Leadership is expected to come from a rebound in consumer spending, followed by residential investment. Investors should not be surprised at all when they see weak readings around the exports component of GDP this week as that pesky US dollar strength is making US exports less and less competitive on a global scale. In fact, major companies keep signaling how revenue and earnings are being eaten up foreign exchange.

Monday’s report of a stronger than expected Durable Goods orders might have given some cover for stronger than expected GDP. Unfortunately, the same amount that the June report beat expectations by was roughly the same worsening that the May reports were revised by. The new orders under Durable Goods rose 3.4% for the big ticket items, boosted by aircraft orders, computers, motor vehicles, and in machinery and fabricated metals.

Each report on Gross Domestic Product is meant to act as the current yardstick measurement for how the overall economy is growing. It effectively covers every sector of the US economy, but it has a massive exposure of roughly 70% around consumer spending.

ALSO READ: GE Looks Better Than 3M & United Tech After Earnings

GDP reports matter, but much of the data has been seen that influences those reports. The GDP’s first estimate is also given two revisions and the so-called Final GDP report is often very different from the initial view on GDP.