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Weekly Economic Data Review
So once again the economic data was mixed.
On the plus side, nominal, real, and per capital household wealth came in at a record high. Of course that doesn’t mean that inequality is shrinking, and in fact the majority of the growth was among the top 10%, which explains why economic growth isn’t faster given the kinds of asset gains we’re seeing.
Rail traffic was up in may, pointing to continued economic growth. In addition, earnings annoucements continue to be the best since 2012, in terms of top and bottom lines beating expectations.
The ISM (services index) came in at 56.9, which was both much higher than expected, and a strong sign that the service side of the economy continues to generate strong growth.
Commerical Real Estate prices also continue to rise strongly, which helps many of the REITs we own, as well as help to minimze the risk of defaults in this important sector of the economy.
On the downside wholesale orders declined by 0.2%, the fifth month of consecutive declines. The levels are now consistent with those of a recession, though the overall economic picture continues to point to a less than 10% chance of that in the next 9 months.
That being said, both the New York and Atlanta Fed continue to decrease their projections for Q2 economic growth.