Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Markets & Finance

Vital Signs: A Second-Quarter Hangover


The government reported that the economy grew at an upwardly revised annual pace of 5.3% during the first three months this year. Now, economists are focusing on where the economy is headed for the rest of the year.

The mainstream view is that the economy is going through a second-quarter hangover after the stellar first period and will then cruise along at the long-term pace of growth of around 3% to 3.5%. Any indications that the economy is deviating from the consensus could have significant implications for both inflation and monetary policy.

After the mixed results of the April labor report, the markets will be looking for some clarity. A solid May employment report could spark extra concerns about higher wages, potential inflation pressures, and raise expectations that the Federal Reserve will hike rates yet again at the next monetary policy meeting on June 28-29. A soft report could cause some concerns about growth prospects, the impact of higher energy prices on businesses and consumers, and lead more analysts to assume a pause is in the pipeline. Another mixed report would only intensify the financial markets' anxiety.

Analysts will scan the Institute for Supply Management's factory activity index, along with factory orders, construction spending, vehicle sales, and consumer confidence numbers for confirmation that demand among consumers and businesses is holding up in the face of elevated gasoline, oil, and commodity prices.

The minutes from the Fed's May 10 monetary policy meeting should also garner a bit of attention. The post-meeting press release was written in a way to provide the central bank maximum flexibility in its monetary policymaking from here on out. The minutes will be scrutinized for any indications of bias for or against another rate hike.

Memorial Day will make for a short week. The financial markets and government offices will be closed on Monday, May 29. Here's the lineup.

Economic Calendar


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus