Consumer Confidence Hits 18-Year High

​Last week, the Bureau of Economic Analysis updated its original estimate of second-quarter GDP growth, the U.S. Census Bureau announced the July trade deficit reversed its spring and summer trend to widen to a five-month high, and the Consumer Confidence Index for August spiked dramatically to an 18-year high. 

• The U.S. Census Bureau announced last Tuesday that the trade deficit in goods, measured as exports less imports, widened to a 5-month high mark. July exports in goods totaled $140.0 billion, $72.2 billion short of imports at $212.2 billion. Overall, it is a 6.3% increase from the June deficit of $67.9 billion and signals a potential slowdown in GDP growth for the third quarter. However, it is a strong consumer base that is driving imports, while a more valuable, or stronger, dollar and potential trade retaliation seem to be limiting export growth.

• The Consumer Confidence Index for August spiked dramatically to 133.4, despite expectations for a slowdown in the reading. After climbing only slightly from 127.1 to 127.4 in June and July, confidence jumped on heightened expectations for the near-term, suggesting more positive economic expectations for the remainder of 2018, but less optimism about the long-term outlook.

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• On Wednesday, the Bureau of Economic Analysis revised its second-quarter GDP figures. In the advanced estimate released in July, real gross domestic product grew 4.1% on a year-to-year basis, however that figure was revised upward to an annualized 4.2% in the new report. The revised reading still marks the strongest pace of growth in nearly four years and continues to demonstrate the benefit of the tax revision to economic output and consumer demand.