Amherst Pierpont chief economist......>

US DATA REACT: Amherst Pierpont chief economist Stephen Stanley noted the July

retail sales report "shows broad-based strength in July on top of sizable upward

revisions to June." He said "the bulk of the upward adjustment to June figures

came from restaurant receipts and that the original June report showed a

puzzling 0.6% drop in restaurant receipts, but the revised figures show a

more-believable 0.3% gain." 

- He added that "as long as labor market strength is kicking off almost 200K new

jobs per month and wages are picking up, labor income should drive solid gains

in real spending and he expects to see on average 2.5% to 3% growth in real

consumer spending going forward." He expected "the upward revisions to May and

June are worth about three-tenths for Q2 GDP, taking my tracking estimate from

2.3% to 2.6%. For Q3, I raised real PCE to 2.5%, i.e. back into the underlying

range I noted above, and that takes real GDP growth up from 2.8% to 3.2%. He

expected the "GDP to track close to 3% in the second half of the year as the

solid gains in final demand seen in the first half continue, while inventories

swing from a drag to a plus."