Chart of the Week: Trade Disputes Dent US Sentiment

Our US Economic Sentiment Indicator (ESI) dropped from 6.1% in May to 4.9% in June. Some of this softening can be explained by trade disputes — both between the US and China (as demonstrated by our CEI and explained in last week’s video) and between the US and other trading partners.

Refresh the chart in your browser | Edit chart in Datastream

Trade tensions aside, the decline in our ESI is not surprising, as businesses feel the effects of rising input costs, including higher oil prices, and a tightening labor market. The bigger picture though, is that at current levels our ESI suggests that the US economy continues to expand at a healthy clip. Recent hard data suggest that GDP growth firmed in Q2, and we still expect GDP growth to exceed 3% this year.

______________________________________________________________________

Thomson Reuters Datastream

Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.

Thomson Reuters offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.