The Market Ticker
Commentary on The Capital Markets- Category [Macro Factors]

I wonder who's paying attention to the internals....

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent in the second quarter, compared with an increase of 1.4 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent, compared with an increase of 1.3 percent.

Real personal consumption expenditures increased 2.5 percent in the second quarter, compared with an increase of 1.2 percent in the first. Durable goods increased 14.0 percent, compared with an increase of 3.2 percent. Nondurable goods increased 2.5 percent; it was unchanged in the first quarter. Services increased 0.7 percent in the second quarter, compared with an increase of 1.3 percent in the first.

In other words the increase was largely durable goods -- if you believe it.  I'm not at all sure I do.

In addition:

Real nonresidential fixed investment increased 5.5 percent in the second quarter, compared with an increase of 1.6 percent in the first. Investment in nonresidential structures increased 5.3 percent, compared with an increase of 2.9 percent. Investment in equipment increased 7.0 percent, in contrast to a decrease of 1.0 percent. Investment in intellectual property products increased 3.5 percent, compared with an increase of 4.6 percent. Real residential fixed investment increased 7.5 percent, in contrast to a decrease of 5.3 percent.

I don't buy this one either; the durables report certainly doesn't bear that sort of increase out.

The change in real private inventories added 1.66 percentage points to the second-quarter change in real GDP after subtracting 1.16 percentage points from the first-quarter change.

That's a very large inventory increase -- and it's only good if you sell it through.  We'll have to see what the following quarter brings in that regard.

The markets loved the number, but the revisions that will come to Fed expectations from it should not be ignored.

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