US Economy Shows Resilience Amid Disappointing Corporate Reports

The US economy showed signs of resilience as better-than-expected GDP growth and solid jobs data offset disappointing reports from major corporations. The US Labor Department reported 267,000 jobless claims, a 12,000 increase, while the GDP grew at a 2.3 percent annualized rate in the second quarter. The labor market continues to improve, with low unemployment claims emphasizing the economy's growth momentum.

Key Takeaways:

• The US economy grew at a 2.3 percent annualized rate in the second quarter, up from 0.6 percent in the first quarter.
• Jobless claims rose by 12,000 to 267,000 in the period ended July 25, indicating a strong labor market.
• 64 percent of S&P 500 companies have reported second-quarter results, with overall earnings expected to edge up 1 percent and revenue to decline 3.6 percent.
• Shares of Microsoft and United Technologies gained 1.6 percent and 1.5 percent respectively, while shares of Procter & Gamble, Boeing, and UnitedHealth declined 3.9 percent, 0.9 percent, and 0.8 percent respectively.
• Royal Dutch Shell rallied 4.9 percent after announcing plans to slash 6,500 jobs and sell a stake in a Japanese refiner.
• Nokia Oyj soared 7.5 percent on better-than-expected earnings.

Statistics:

• 267,000 jobless claims, a 12,000 increase.
• 2.3 percent annualized GDP growth in the second quarter.
• 0.6 percent annualized GDP growth in the first quarter.
• 1 percent expected overall earnings growth.
• 3.6 percent expected overall revenue decline.
• 64 percent of S&P 500 companies have reported second-quarter results.
• 110,000 (2,000/18.85) employees at Risk of losing their jobs at Whole Foods Market.

Sources:

• "While you were sleeping: Solid US GDP, jobs July 31" by BusinessDesk.
• BMO Capital Markets economist Jennifer Lee's comments to Bloomberg.
• TD Securities Deputy Chief Economist Millan Mulraine's comments to Reuters.
• Atlantic Equities analyst James Cordwell's comments to Reuters.
• Thomson Reuters data.