July 17, 2017

Chart of the Week: Fathom’s US Economic Sentiment Indicator (USESI) points to robust economic growth in Q2

by Fathom Consulting


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After incorporating survey data for June, the final 2017 Q2 USESI reading was 5.1%, suggesting that economic activity grew at a very strong pace last quarter. By contrast, official US GDP growth – scheduled for release on 28 July – looks likely to be closer to 2.5%, based on the hard economic data for Q2 released so far; we will publish a more detailed forecast later this week. In a note last quarter, we highlighted possible explanations for the very large divergence between survey (or soft) measures of economic activity and real (or hard) measures of economic activity in Q1. A large divergence appears to have continued into Q2; the most plausible explanation for this is that while US businesses and consumers are optimistic about the economic outlook, they are waiting for more clarity on tax reform before loosening the purse strings.


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