NAM: Real GDP Surpasses Pre-Pandemic Levels In Q2
cent in June versus May, while shipments rose 1.0 percent in June versus May. Durable goods orders have risen a remarkable 13 of the last 14 months, and in June, they sur- passed their pre-pandemic high reached in March 2019. Capital goods orders excluding defense and aircraft grew 0.5 percent in June versus May to also reach a new all- time high. Preliminary international trade figures for June showed that exports grew only 0.3 percent versus May, while im- ports rose 1.5 percent. The monthly trade deficit grew to more than $91 billion in June. Both imports and exports rose significantly versus this time last year. At its two-day meeting last week, the Federal Reserve’s Federal Open Market Committee left the benchmark fed- eral funds rate unchanged at a target range of 0 percent to 0.25 percent. The FOMC also maintained the current pace of asset purchases at $120 billion per month. The FOMC noted progress on reaching its inflation and em-
This past week, economic data have confirmed the ongo- ing trends within the U.S. manufacturing sector and over- all economy. According to Chad Moutray Ph.D. and Chief Economist at the National Association of Manufacturers (NAM), demand remains strong, but supply chain and la- bor-related factors continue to constrain growth. In the second quarter of 2021, real gross domestic product grew 6.5 percent at an annualized rate, or 12.2 percent against the second quarter of 2020, according to the initial estimate of the Bureau of Economic Analysis. This marked the first quarter when real GDP surpassed the pre-pandemic level achieved in Q4 2019. Durable goods orders and shipments remained strong in the month of June. Durable goods orders rose 0.8 per-
ployment goals but indicated it would need to see further progress in the coming months before tapering its rate of bond purchases. New single-family home sales for June came in at a seasonally adjusted annual rate of 676,000 units. June sales were at their lowest rate in 14 months and 19 percent low- er than in June 2020. Pandemic-related fis- cal and monetary stimuli helped boost recent demand for housing. However, the supply side has lagged, resulting in a shortage of homes for sale and rising prices. According to a survey by the Federal Re- serve Bank of Dallas, manufacturing activity held up at strong levels in July, despite on- going supply constraints. The production index from the Texas Manufacturing Outlook Survey was up from 29.4 points in the previ- ous month to 31.0 points in July. This result was above the year-to-date average of 26.1 points and surpassed historical averages by wide margins. The Richmond Federal Reserve District regional manufacturing index remained firm in July, rising by one point from a strong read- ing of 26 to 27. Both shipments and employ- ment showed stronger growth than the June survey, while orders grew at a slower rate, according to survey respondents. Invento- ries of raw materials and finished goods both hit record lows in this survey. The Conference Board Consumer Confi- dence Index increased for the sixth consec- utive month in July. Consumer confidence is at its highest level since February 2020, suggesting U.S. consumers remain optimis- tic about the economic recovery, despite in- flationary pressures and growing concerns about the spread of COVID-19 variants.
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August 16, 2021
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