The economy only expanded in the first quarter after increases in business services and government spending, especially on the NHS, and a surge in consumer spending boosted expansion. Real household spending was up 0.7% on the quarter and added 0.5 percentage points to the growth rate.
The disappointing manufacturing and construction figures were blamed by economists on the uncertainty over the referendum’s outcome, weak overseas growth and financial market volatility. Most worryingly, business investment was estimated to have fallen by 0.5% in the first quarter as companies shelved plans to buy new equipment and build new offices and factory space as another sign of the uncertainty surrounding the Brexit debate affecting business confidence and investment.
The Commerce Department said on Thursday orders for durable goods, items ranging from toasters to aircraft meant to last three years or more jumped 3.4 percent last month and non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8 percent.
The other key data release showed the number of Americans filing for unemployment benefits fell more than expected last week, moving back to near cycle lows as the labour markets remain healthy and the economy regains momentum after stumbling in the first quarter.
18:15 – USD – Fed Chair Yellen is speaking