U.S Economic Insights - July 2023

In July, the US economy displayed a strong performance with an uptick in GDP and a robust rally in the financial markets. Tech giants reported strong earnings, while crude oil, gold, and copper surged significantly. However, export activity and home prices hinted at potential challenges.

Here are the key highlights

The US economy grew by 2.4% in Q2 2023. This was quicker than the 2.0% growth we saw in Q1. This surge can be attributed mainly to rising consumer expenditure and corporate investment.

Stock Market: The Dow closed higher for 13 straight sessions in July, its longest series of positive closes since 1987; Russel 2000, Nasdaq 100, Dow Jones, and S&P 500 closed with month with 6.06%, 3.81%, 3.35%, 3.11% gains, respectively.

Sectoral Performance: All the Sectoral Indices ended the month with gains, with Energy, Communications Services, and Financials taking the top spot.

Inflation, as measured by the change in the Consumer Price Index (CPI), declined to 3% on a yearly basis in June from 4% in May, Core CPI inflation, which excludes volatile food and energy prices, dropped to 4.8% from 5.3%.

The US Federal Reserve hiked its benchmark interest rates to 5.25-5.5%, the highest since 2001, to counteract persistently high inflation. Fed Chair Jerome Powell hinted at further increases, supporting goals of maximum employment and 2% long-term inflation.

Conference Board's US consumer confidence index surged to 109.7, the highest level since the beginning of last year, driven by increased optimism about the labor market and economic growth, surpassing all economist estimates.

Home Prices: The median price of a home sold in the US stood at $416,100 in Q2, 2023, down over 13% from the all-time high of $479,500 in Q3, 2022.

Overall US economy displayed resilience and expansion, driven by positive consumer sentiment and record corporate earnings. Read the entire update.