The US economy rebounded in the second quarter at a faster pace than previously estimated, with GDP revised to 4.2% from 4.0%, as both business spending and exports were revised higher.
Also on a positive note, consumer confidence rose to the highest level since October 2007, as views on the current state of the economy improved, marking the fourth consecutive monthly increase. According to the Conference Board, “Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers’ spirits”.
In a great headline, durable goods orders rose in July by the largest amount on record, surging 22.6%. However, that gain came from demand for commercial aircraft, which jumped 318%, and excluding transportation, orders for long-lasting goods fell .8%.
Pending home sales rose 3.3% in July as more buyers signed contracts to purchase existing homes following a decline in June.
In contrast to other positive recent housing data, new home sales fell for a second straight month in July, declining 2.4% to an annual pace of 412,000 units, the lowest level since March. The inventory of new homes on the market increased to 205,000 units – the highest since August 2010.
The negative equity rate in the US fell to 17% of all homeowners with a mortgage in the second quarter, according to Zillow. That comes in 14.4% below the 2012 peak of 31.4% – as home values have risen, negative equity has declined for nine consecutive quarters. Even with that, however, more than 8.7 million homes are still underwater.
Credit card delinquencies fell in the second quarter to the lowest level in seven years, as payments at least 90 days overdue declined to 1.16%. According to the latest TransUnion Industry Insights Report: “Consumers continue to have a good handle on their credit cards, with delinquencies at all-time lows across the spectrum”. The report also noted that “Credit cards continue to perform well even with a higher percentage of non-prime consumers entering the market. We also noted an increase in credit card limits, which points to lenders feeling they can take on more risk while giving consumers a bigger credit cushion.”