The wholesale trade data for the month of May was way off expectations. Sadly, the number may not even be close to positively impacting the gross domestic product (GDP) in the second quarter of 2015.
May’s wholesale trade only rose at 0.3% following growth of 1.7% in April. The sale’s number compared to that of May 2014 dropped by 3.8%—the biggest drop since the financial crisis. (Source: U.S. Department of Commerce, July 10, 2015.)
Previous data suggested that the economy contracted in the first quarter due to unusual snowfall, port strikes, and the stronger dollar. While mainstream economists insist that the economy was strong in the second quarter, the latest data may prove something else.
Another report on Thursday, July 9th indicates that the number of people who applied for unemployment benefits in the week ending July 4 climbed to the highest level since February. Janet Yellen, the Chair of the Federal Reserve, also said that although unemployment dropped to 5.3% (its lowest in the last few years), alternative measures of employment remain weak.
Next week, investors receive a barrage of data on inflation and manufacturing production. These reports will give a clear picture as to the health of the U.S. economy.