US data smashed expectations: data in review - Nomura

Analysts at Nomura explained the key Conference Board’s consumer confidence data that beat expectations propping up the dollar that was otherwise in decline.

"Consumer confidence improved in August, rising 5.5pp to 133.4, above expectations (Nomura: 127.0, Consensus: 126.6), and the highest reading since October 2000. Both the present situation and future expectation indices improved, highlighting solid consumer confidence in the current situation and outlook. The labor differential, the difference between those reporting jobs “plentiful” versus “hard to get,” increased to 30.0, another post-recession high, consistent with continued labor market strength. Consumers’ expectations about future purchases rebounded somewhat in August: the percent of respondents reporting plans to buy a major appliance within the next six months increased 5.3pp to 53.1% after a soft reading of 47.8% in July. Taken altogether, consistent with firm consumer fundamentals including a low unemployment rate, consumer confidence remains strong."

"GDP tracking update: Goods exports were somewhat weaker than expected, while goods imports were stronger than expected, implying more of a drag from net exports in Q3. Part of the softness in net exports was offset by stronger-than-expected wholesale and retail inventory data for July, indicating more inventory investment during Q3. Taken together, we lowered our Q3 real GDP tracking estimate 0.2pp to 3.1% q-o-q saar."