U.S. Review
Q2 Appears to Be Ending on a Stronger Note
• Retail sales rose a modest 0.2 percent in June, however, the details of the report were encouraging for consumer spending in the second quarter.
• June producer prices came in higher than expected, rising 0.4 percent. Import prices, however, showed some signs of easing up for the month.
• The most disappointing news of the week was June housing starts which fell 9.3 percent, marking the second month of sizable declines. The downshift in building activity was observed in both single and multifamily starts.
Global Review
Growth in China Appears to Be Stabilizing
• The year-over-year rate of real GDP growth in China edged up to 7.5 percent in Q2 from 7.4 percent in Q1. Modest relaxation in credit restrictions in recent months led to some stabilization in investment spending growth.
• We look for the rate of real GDP growth in China to edge lower in coming quarters. Although Chinese authorities may relax policy at the margin to allow some fine-tuning of the economy, they are not about to embark on a wholesale easing of policy that would delay the necessary rebalancing of the economy away from its heavy reliance on investment.
Read the full report: Economic Research