PCE Inflation Surges, GDP Holds at 1.5%
U.S. GDP growth steadied at 1.5% in Q2 while PCE inflation rose to 3.7% year-over-year. Durable goods orders jumped 1.1% in July, exceeding forecasts.
Pre-market futures were mixed after a flood of economic data, including the first Q2 GDP update from the BEA.
Q2 GDP Stays at +1.5%
The second-print GDP rose 1.5% year-on-year, a modest increase that kept growth steady. Consumption climbed 3.4%, a 20-basis-point rise, while the price index climbed 6.4%, the highest reading in four years. Productivity edged forward, but prices continued to creep up.
| Metric | Q2 2023 | YoY % | Notes |
|---|---|---|---|
| GDP | +1.5% | 1.5% | Steady second print |
| Consumption | +3.4% | 3.4% | 20 bps rise |
| Price Index | +6.4% | 6.4% | Highest in four years |
The data can be cross-checked in the stats section.
July PCE Numbers Show Growth, Modest Inflation
July’s personal income and consumer spending both beat expectations, with month-over-month gains of 0.4% and 0.2% respectively. Real spending, adjusted for inflation, was flat at 0.0%, in line with forecasts and down from 0.4% a month earlier.
The PCE price index rose 0.2% versus the 0.1% expectation, following a 0.1% decline in June. Year-over-year, the index matched 3.7% reported a month ago, 10 basis points higher than anticipated. Core PCE matched expectations at 0.2% for the month and 3.3% for the year.
| Item | MoM % | YoY % | Expectations |
|---|---|---|---|
| Personal Income | +0.4% | - | 0.4% vs expectation |
| Consumer Spending | +0.2% | - | 0.2% vs expectation |
| Real Spending | 0.0% | - | 0.0% vs expectation |
| PCE Price Index | +0.2% | +3.7% | 0.2% vs expectation 0.1% |
| Core PCE | +0.2% | +3.3% | 0.2% vs expectation |
The latest figures are also available in the standings report.
Durable Goods Orders Jump in July
Durable goods orders rose 1.1% in July, more than doubling expectations of 0.5% after a 0.3% revision in June. This is the second-strongest month of the year so far, following April’s 8.5% jump. Ex-transportation orders fell to 0.4%, 20 basis points lower than projections. Non-defense, ex-aircraft orders slipped to 0.2% from a 0.7% forecast, while shipments climbed to 1.4% for July, with June revised to 2.4%.
| Item | MoM % | Forecast | Revised June |
|---|---|---|---|
| Durable Goods Orders | +1.1% | +0.5% | +0.3% |
| Ex-Transportation | +0.4% | - | 20 bps lower |
| Non-Defense, ex-aircraft | +0.2% | +0.7% | - |
| Shipments | +1.4% | - | June revised +2.4% |
Goods orders have been positive in seven of the past 12 months, reflecting resilience amid global volatility.
Market Outlook
Market focus will be on NVIDIA’s Q2 earnings, with analysts projecting 99% earnings growth and 96.5% revenue growth. NVIDIA’s CEO Jensen Huang may explain the company’s long-term strategy, especially after the firm’s $30 billion loan to OpenAI, which came with no chip-deployment milestones. OpenAI later developed its own Jalapeno chip with Broadcom, a direct competitor to NVIDIA’s Blackwell processors.
For a deeper dive, see the fixtures page.
Durable goods orders for July were revised to +1.1% from an unrevised +0.3% in June.
