The U.S. economy expanded more than previously estimated in the second quarter, reflecting an improvement in the trade deficit and a pickup in household spending on utilities.
Gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, revised Commerce Department figures showed today in Washington. The figure followed a 2 percent first-quarter pace and matched the median estimate in a Bloomberg survey.
The index of pending home resales climbed 2.4 percent, exceeding the 1 percent gain median forecast of 39 economists surveyed by Bloomberg News, figures from the National Association of Realtors showed. The gauge rose to 101.7, the highest since April 2010.
“Recent housing-market reports, including data on sales of existing and new homes, have been consistent with stabilization and gradual recovery,” Kathy Lien, managing director of foreign exchange at BK Asset Management, an investment advisory firm in New York, wrote today in a note to clients. “The rally in equities and low level of interest rates have given investors confidence to dip their toes back into the market.”
Bernanke will give a speech in two days at a meeting of central bankers in Jackson Hole, Wyoming, that may shed light on the outlook for U.S. monetary policy as signs of an improving economic outlook dull the case for more stimulus.
“More and more people are getting of the mindset that Bernanke isn’t going to say anything new,” Brian Kim, a currency strategist in Stamford, Connecticut, at Royal Bank of Scotland Group Plc, said in a telephone interview. “You may see euro-dollar come a little lower again on dollar strength because some people might have been pricing in dollar weakness while thinking about QE.”
Europe’s shared currency has climbed 2.6 percent against the dollar since Aug. 1, the day before ECB President Mario Draghi said the central bank may buy Spanish and Italian bonds to cap borrowing costs. He will give a press conference on Sept. 6 in Frankfurt after the next meeting of policy makers.
Italy doesn’t need to tap the rescue fund at the moment because measures by the government are starting to offset market concerns, Italian Prime Minister Mario Monti said in an interview with Il Sole 24 Ore published today.