Consumer Spending Boosts U.S. GDP Despite Slipping Industrial Production

Buoyed by strong consumer spending, U.S. real GDP grew 2.1 percent over the past three months, reports ITR Economics’ July 2016 ITR Advisor report. Consumer spending’s uptick is driven by 2.1 percent growth in U.S. total retail sales and a 4.5-percent increase in retail sales excluding gas stations.

An economic research and consulting firm providing economic information, insight, analysis and proactive strategies, ITR works with PPAI to produce quarterly market outlook reports on the promotional products industry. ITR’s monthly Advisor publications provide a snapshot of macroeconomic trends and selected industries and indicators. The PPAI/ITR industry outlook reports are available here.

The bump in GDP comes as annual industrial production slipped 1.1 percent in June from the previous year. The industrial sector’s performance was hampered by declines in electric and gas utilities production (down 2.2 percent) and mining production (down 8.8 percent). However, ITR expects the mining industry to improve in 2016’s last half and notes that manufacturing production, up 0.5 percent, is outpacing other components of the industrial sector.

While annual wholesale trade stood at $5.274 trillion in May, it is down 3.4 percent from the previous year. Unpacking the sector, wholesale trade of durable goods is down one percent and wholesale trade of nondurable goods is down 5.6 percent. Wholesale trade of lumbar and other construction material was a notable standout, up 5.4 percent.

ITR expects interest rates to remain low longer than expected following the UK’s “Brexit” vote. U.S. Government Long-Term Bond Yields (10 year) fell to a 63-year low in May of 1.49 percent.

 

filed under industry-news | july-2016
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