The US Economy Suddenly Looks Like It's Unstoppable [Watch]
Jeff Cox, CNBC
- Friday's economic data provided evidence the U.S. economy is heading into the second half of 2018 with strong momentum.
- Nonfarm payrolls beat expectations while manufacturing and construction indexes both showed accelerated growth.
- Economists are slowly ratcheting up expectations for growth through the end of the year, with widely followed measures putting the second quarter at between 3.6 percent and 4.8 percent.
In the face of persistent fears that the world could be facing a trade war and a synchronized slowdown, the U.S. economy enters June with a good deal of momentum.
Friday's data provided convincing evidence that domestic growth remains intact even if other developed economies are slowing. A better-than-expected nonfarm payrolls report coupled with a convincing uptick in manufacturing and construction activity showed that the second half approaches with a tail wind blowing.
"The fundamentals all look very solid right now," said Gus Faucher, chief economist at PNC. "You've got job growth and wage gains that are supporting consumer spending, and tax cuts as well. There's a little bit of a drag from higher energy prices, but the positives far outweigh that. Business incentives are in good shape."
The day started off with the payrolls report showing a gain of 223,000in May, well above market expectations of 188,000, and the unemployment rate hitting an 18-year low of 3.8 percent.