Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. economy shows resilience with fewer negative surprises

Published 09/01/2017, 04:33 PM
Updated 09/01/2017, 04:33 PM
© Reuters. The logo of Citibank is seen on a board at the SPIEF 2017 in St. Petersburg

© Reuters. The logo of Citibank is seen on a board at the SPIEF 2017 in St. Petersburg

NEW YORK (Reuters) - The U.S. economy may be gaining some traction after a dismal first quarter, according to Citi Research's gauge on economic data surprises that showed fewer reports lagging economists' forecasts.

Citi Research's gauge on Friday turned the least negative since early May as unexpectedly strong data on domestic manufacturing offset weaker-than-forecast readings on non-farm payrolls and consumer sentiment.

The Citi barometer <.CESIUSD>, a measure of economic data that can come in weaker or stronger than forecast, is monitored by traders for the U.S. growth trajectory. It came in at -18.2 on Friday, matching a level last seen on May 5. It stood at -23.1 on Thursday.

Fewer downbeat reports do not guarantee actual economic strength, but they help foster optimism or at least reduce pessimism among traders and investors.

The index fell to its lowest level since July 2011 on June 26 when it hit -78.5.

The index's upturn stemmed from further improvement in the labor market and a bounce in manufacturing from a weaker dollar and stronger global demand.

It is unclear, analysts say, how damage to production and shipping in the Gulf of Mexico region from Hurricane Harvey, the most powerful storm to hit Texas in over 50 years, will end up hurting business activity nationwide in the third quarter. They said the same about whether rebuilding efforts in its aftermath may boost growth in the fourth quarter and beyond.

"On net we think the GDP impact from Hurricane Harvey to be positive over time as the activity during the reconstruction phase are likely to offset the lost activity. However, this does not necessarily mean that the economic effect is positive," Bank of America Merrill Lynch (NYSE:BAC) economists wrote in a research note on Friday.

Gross domestic product in the second quarter was revised to 3.0 percent, its fastest pace in over two years, on solid consumer spending and business investment, the government said on Wednesday.

First-quarter GDP grew at a 1.2 percent clip.

© Reuters. The logo of Citibank is seen on a board at the SPIEF 2017 in St. Petersburg

(For a graphic, click

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.