Coming up from the US on Friday 28 July 2017, the advance (preliminary) GDP report for April - June

  • Due at 1230GMt on Friday 28 July 2017

Deutsche Bank:

Friday's advance reading on Q2 real GDP (+2.8% vs. +1.4%) will be an important anchor for forecasters' growth expectations over the back half of the year.

  • Note that BEA will also release its annual update to GDP, meaning that the output data going back to 2014 are subject to revision. These revisions can at times be meaningful and impact analysts' assessments of recent growth trends. Such was the case last year when we learned in July that Q1 2016 growth was revised down -30 bps to 0.8%, and Q4 2015 growth was revised down -50 bps to 0.9%. This likely contributed to the Fed's cautiousness at the time, and market participants' expectations for rate hikes fell meaningfully following the report.
  • However, in contrast to last year, the strength in survey data, including business and consumer sentiment, over the first half of the year could portend the opposite outcome.

Barclays:

We look for the BEA's advance estimate of Q2 GDP to show the economy grew by 2.5% q/q saar.

  • The rebound in growth has been more subdued than expected by the consensus, but was in line with our official published forecast (2.5%) for much of the quarter.
  • The main contribution to growth should come from private consumption, which we expect to rise by 3.0% q/q saar, and from modest growth in business fixed investment.
  • Equipment, structures, and intellectual property spending should contribute another 0.5pp to growth.
  • Offsetting this to some degree is residential investment, which is likely to be flat on the quarter, and net trade, which should subtract about 0.3pp from growth.
  • Final sales to domestic purchasers, which equals GDP less trade and inventories, should also rise 2.5% q/q saar.