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Despite Distractions, Economic Data Boomed Last Week

Despite all the distractions, the U.S. economy's resilience remains intact. Here are key fundamentals easily lost amid recent headlines dominating the news cycle.

Newly released June retail sales data shows consumers are spending big.

Excluding gasoline—its volatile price distorts the data—retail sales grew 5.3% in the twelve months ended June 30. That compares to a 3.2% rate of growth achieved in the last twelve months of the previous economic expansion. In other words, retail sales are growing more than 60% faster than at the peak of the prior expansion.

Consumers account for 70% of U.S. economic growth; therefore retail sales are an indication of buyer strength.

Sales at non-store retailers, including Amazon, soared 10.2% in the twelve month period ended on June 30, while sales at traditional retail department stores were flat.

Food and drink enterprises—establishments for a necessity of everyday life and a retail category—where one does not see sudden accelerations in sales, are surging with growth.

The forward-looking index of ten U.S. leading indicators of economic growth resumed its surge, after flattening in May. It is in record territory.

A dynamic model of how fast the U.S. economy is growing, is published by the Federal Reserve Bank of Atlanta publishes a dynamic model of how fast the U.S. economy is growing. Its estimate of GDP growth becomes more accurate as the publication date of the data nears every quarter. With the GDP growth number for 2Q2018, just ten days away, the Atlanta Fed model is signaling an astonishing 4.5% growth rate. Even if the real figure comes in at 4%, it towers over the 2.2% quarterly growth average, since the end of The Great Recession. Notwithstanding all of the distractions, setbacks, and hurdles, critical fundamentals of the economy remain incredibly strong.

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While we believe these sources to be reliable, the information is not intended to be used as financial advice without consulting a professional about your situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

This article was written by a professional financial journalist for Private Group Wealth Management and is not intended as legal or investment advice.

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