ASA’s July Economic Report: Growth Expectations Surge, but Inflation and Supply Chain Risks Loom

From July’s ASA Monthly Economic Report: There has been a huge leap in growth expectations for the third quarter – according to the latest interpretation from the Atlanta Fed’s GDPNow readings. In the last part of Q2 the growth rate had fallen to around 1.5%. This is just the first iteration and there will be revisions. Now the numbers are suggesting real growth of 5.8%. Why? It is early days yet, but the thinking is that there will be some progress made on the oil crisis at the same time that there is attention focused on the retail season.

The monthly ASA Economic Report is produced by Armada Corporate Intelligence, ASA’s business intelligence partner, and is available as a free member benefit for ASA members through the MyASA portal at www.asa.net/myasa.

Armada also wrote that some big risks top watch out for is the supply chain and inflation – Just to be different we will talk about the impact of an ongoing oil crisis on prices and the supply chain. The oil shortage is about to become acute and that nearly shuts the supply chain down – prompting really high inflation (maybe approaching 4.5%).

What to Watch: Follow-On Impact – What is the next shoe to drop? Attention has been focused on the Middle East but there are major tensions emerging in Asia as Chinese threats against Taiwan escalate. Will the US intervene and if so – how?

The report also answers a reader’s question of the month: What is Going On With the Bond Market?

Again, ASA members can access the Monthly Economic Report through the MyASA portal at www.asa.net/myasa.