Second Quarter GDP Growth of 4.1% Highlights July Economic Activity

Sources: Commerce Department, Department of Labor, Federal Reserve, National Association of Home Builders, major automaker reports

​The U.S. economy continued to expand across a spectrum of measures in July. Headlining the news, the Department of Commerce reported in late July that U.S. GDP grew 4.1% in the second quarter. Employment numbers continued strong readings as well, with July unemployment ticking down to 3.9% from 4.0% in June, the economy adding 157,000 jobs, and wages growing 2.7% from one year prior.

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Conversely, consumers reportedly spent less on large purchases in June and July. Housing starts slumped 12.3% from May to June, and auto sales generally declined in June, although SUV and pickup sales were up for some automakers. Economists believe this is the result of rising interest rates. However, a report in July from the Commerce Department said retail sales climbed in June, up 6.6% from 12 months prior, despite rising prices. According to the Bureau of Labor Statistics’ Consumer Price Index, consumer prices rose 2.9% in June.
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Major stock indices also rose in July, with the Dow Jones closing up 4.7% and the S&P 500 up 3.6%. Strong corporate earnings and positive economic data led markets higher despite continued uncertainty regarding tariff policies.

The highlights from our weekly economic updates during July 2018 included (click the links for more details):

• Week 1: ISM showed strong manufacturing gains in June, automakers saw year-to-year gains in sales, and U.S. job additions beat analyst expectations in June
  
• Week 2: June CPI rose 2.9% and consumer credit accelerated in May
  
• Week 3: In June, retail sales grew and housing starts fell, while unemployment claims dropped for the week​
  
• Week 4: Creighton’s RMI showed neutral growth while farmers struggle to get credit; GDP rose 4.1% in the second quarter