REBOUND IN CHINA, US ECONOMIC GROWTH
Recent reports from China and the United States confirm that economic growth has rebounded. China reported 3.2% GDP growth in Q2, up from -6.8% in Q1. The Q2 growth report exceeded the IMF’s forecast, released just last month, of 2.6% growth. Retail sales reports in the US showed a 7.5% improvement from last month, after a (revised) 18.2% rebound in May. Retail sales are up by 5% relative to June 2019. Unemployment claims in the United States fell in the latest weekly reports, to 1.4 million on a 4-week moving average basis. Although the trend is encouraging this is the fourth month in which claims exceed 1 million; prior to the pandemic claims were averaging about 0.2 million. These signals are an encouraging development for global economic recovery and increased trade. In contrast, some parts of the US economy will suffer as COVID-19-related restrictions are (re)imposed and political tensions with China are worsening. We will consolidate all this information in our upcoming market report to be released next month.