Tony Kelly, Senior Economist at NAB, notes that after a sluggish start to the year, US GDP growth rebounded in the June quarter and the labour market continues to tighten.
“The large fall in the non-manufacturing ISM indicator in July is probably exaggerated and, together with the rebound in GDP growth, points to a re-alignment of the ‘hard’ activity data with the ‘soft’ business survey measures.”
“Growth is expected to remain modestly above the economy’s longer term trend; in the near-term it will be supported by the easing in financial conditions that has occurred despite Fed rate hikes.”
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