GDP Growth

According to the "third" estimate by the U.S. Bureau of Economic Analysis (BEA), the real GDP grew at an annual rate of 1.4% in the first quarter of 2024, down from 3.4% in the fourth quarter of 2023 but higher than the previous estimate of 1.3%. This adjustment reflects reduced imports, increased non-residential fixed investment, and higher government spending, partially offsetting the decrease in consumer spending. Non-residential investment and government spending were the main contributors, highlighting a shift in economic drivers.

The slowdown in GDP growth indicates potential external economic pressures and fluctuations in consumer spending in the coming quarters. The overall economic outlook is cautious, as the slowdown and reduced consumer spending reveal underlying economic resistance.

Unemployment Claims

For the week ending June 22, seasonally adjusted initial unemployment claims dropped to 233,000, lower than the market expectation of 236,000 and the previous week's revised figure of 239,000. However, the four-week moving average rose to 236,000, an increase of 3,000 from the previous week's revised average, indicating a gradual increase in unemployment claims. The insured unemployment rate remained at 1.2%, but the number of insured unemployed increased by 18,000 to 1.839 million, the highest since November 2021, suggesting potential weaknesses in the labor market.

Given the rise in the four-week moving average and the increase in the number of insured unemployed, the labor market outlook appears more pessimistic, indicating potential challenges to employment stability.

Durable Goods Orders

In May 2024, new orders for manufactured durable goods increased by 0.1% (or $3 billion) to $283.1 billion, marking the fourth consecutive month of growth. However, orders excluding transportation decreased by 0.1%, and orders excluding defense decreased by 0.2%. The transportation equipment sector grew in three of the past four months, driving overall orders up by 0.6% to $95.4 billion.

The performance of the transportation equipment sector offset declines in other areas, underscoring its critical role in driving durable goods growth. The better-than-expected report indicates continued demand in key industries, reflecting the economic resilience of the manufacturing sector. The sustained growth in durable goods orders, particularly in the transportation equipment sector, indicates ongoing demand in manufacturing and the potential for economic growth.