The Bloomberg U.S. Economic Surprise Index, which measures whether incoming economic data beat or miss expectations of surveyed economists, fell below zero Thursday for the first time this year to the lowest point since just after last November's election. Economists, though, still project a pickup in second-quarter growth.
Since the election, businesses and consumers have evinced confidence that the new administration would bolster the economy with less regulation, lower taxes and spending on infrastructure. While there has been some reduction in rules, Congress has yet to act on major programs to cut taxes or spend on airports or highways.
"Economic surprise indexes give you some kind of clue whether the economy is gaining momentum or losing momentum," said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. "Folks were expecting too much too soon."
Among the reports released this month, data on employment, auto purchases, consumer prices and retail sales have all come in below economists' expectations.
The Federal Reserve on Wednesday raised interest rates by a quarter point, which "reflects the progress the economy has made and is expected to make," Chair Janet Yellen said at a press conference following the policy makers' meeting. "Economic growth appears to have rebounded, resulting in a moderate pace of growth so far this year."
Source: Bloomberg Pro Terminal
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