The main focus this week will be updated estimates of second quarter US and UK GDP.
US Q2 GDP set for an upgrade…
The second estimate of US economic growth in the three months to June is out Thursday. The first estimate showed that real GDP rose 2.3% in seasonally adjusted annualized terms, up sharply from 0.6% in the first quarter, which was dragged down by strikes at West Coast ports. Strong gains in monthly non-farm payrolls, consumer spending and construction data suggests second quarter real GDP will be revised up.
…while the UK’s stands pat
The UK’s second estimate of real GDP growth in the second quarter, which provides the first look at the breakdown by expenditure component, is due Friday. UK economic growth picked up to 0.7% in quarter-ago terms, according to the initial estimate, from 0.4% previously. By sector, the largest contribution was from services, while manufacturing fell for the first time in more than two years. This suggests the second estimate will show private consumption remained the main growth driver while exports underperformed. Fixed investment will be closely watched amid mixed signals. Recent manufacturing surveys suggest investment is weakening, yet the Bank of England earlier this month revised up its business investment forecasts.
We’ll be blogging both the US and UK GDPs.
In other news, Germany’s Ifo business climate index for August is out Tuesday. The index will probably rise as Greece’s new three-year €86 billion bailout deal has reduced the prospect of the nation leaving the euro zone, and the snap general election on September 20 is unlikely to throw a spanner in the works.