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Weekly Economic Data Review
Overall the economic news continues to be good, with industrial production beating expectations and up 2.2% YoY. In addition, home equity levels are rising, leading indicators continue to trend up, and home builder confidence was up as well.
Meanwhile corporate earnings season, which is now complete, was a huge win. S&P 500 revenue and EPS grew 7.2%, and 14.7% YoY. Even excluding energy, which benefited from rising oil prices, those figures were 5.3%, and 10.4%, respectively. Better yet? we’re seeing upward revisions across all sectors of S&P 500, in terms of Q2 sales growth.
This tells me that, despite the fact that tax reform has essentially no chance of passing this year, we still have plenty of built in growth in the economy. In fact, thanks to the above, plus the continued strong labor market, the Atlanta Fed raised its Q2 GDP growth target from 3.6% to 4.1% this week. Meanwhile the New York Fed GDP Nowcast also increased, from 1.9% to 2.3%.
While the spread between those estimates is vast, the overall trend is highly positive and should help keep the economy humming even if tax reform never occurs.