Mixed Signals

So is the economy slowing or speeding up? Yes, it is doing both according to today's batch of economic indicators. No wonder that neither stocks nor bonds did much today. The calm in the stock market was notable given that President Donald Trump was Tariff Man again on Friday, blasting China for not abiding by the temporary and partial tariff truce with the US and doubling the tariff on steel and aluminum from 25% to 50%. The gold market went up on that news as well as on reports that Ukraine destroyed a third of Russia's strategic bomber fleet with drones. The Ukrainians are coming!

In any event, there was no slowdown in today's Atlanta Fed GDPNow tracking model, which now shows Q2 real GDP up a whopping 4.6% (saar), up from the previous estimate of 3.8%. Consumer spending was revised up from 3.8% to 4.6%, while capital equipment spending was revised up from 5.1% to 8.8%. The most widely anticipated recession of all times remains a no-show, as it has for the past three and a half years. (Some of Q2's strength is reversing Q1's weakness (-0.2% real GDP), which was attributable to unusually cold weather and front-running Trump's tariffs.)