Updating the rba index of commodity prices
The Fed noted that: “The labour market has continued to strengthen and…
economic activity has been rising moderately so far this year.
In other US economic news, newly released Q2 GDP data indicated a healthy rebound from weak growth in the first quarter.
Real GDP rose by 2.6% on a seasonally adjusted, annualised basis, up from 1.2% in Q1.
Europe The European Central Bank (ECB) met on 20 July and made no changes to policy.
After the Bank moved to a more neutral view of growth risks and removed its asymmetric forward guidance on policy rates in June, there was some expectation that it may commit to a timetable for tapering its asset purchase program.
Strength in the housing market remains, despite signs of a slowdown in investment lending following tighter macro-prudential measures put in place in March.
The improvement was underpinned by a 2.8% lift in consumer spending and a 5.2% increase in non-residential fixed investment.
Despite the better growth results, the ISM Manufacturing Index retreated, falling from 57.8 in June to 56.3 in July.
Nonetheless, the unemployment rate rose to 4.4%, driven by a rise in the participation rate to 62.8%.
Average Hourly Earnings also rose to 2.5% per annum, from a revised 2.4% per annum the month before.