There's no simpler way to say this, the U.S. economy is accelerating.
Yesterday's final revision to third quarter GDP showed a 20 basis point bump to +3.5% (on a quarter-over-quarter basis) that translated into +1.7% year-over-year growth (up 40 bps versus the prior quarter). That means, after five consecutive quarters of slowing U.S. growth (from the peak of 3.3% in March 2015 to 1.3% in June 2016) the trend finally flipped. (See the Chart of the Day below.)
Meanwhile, Durable Goods data, reported yesterday, decelerated to -1.9% year-over-year. No surprise there. The ramp in private aircraft orders (choppy & volatile) juiced the October headline number.
As you can see in the chart below, Durables Ex-Defense & Aircraft (a better proxy for household demand) was up +0.6% month-over-month and improved to +1.2% year-over-year.
Where do we go from here?
Here's Hedgeye CEO Keith McCullough in today's Early Look:
"Post yesterday’s economic data, our GIP Model (predictive tracking algorithm) has GDP accelerating again in Q4 to +1.94% year-over-year = Quad2 (i.e. U.S. growth accelerating, inflation accelerating) = Bullish for U.S. Dollar, Rates, and Stocks."
Simple as that.