US economic growth disappoints; European shares rise on strong company results – live

4 weeks ago 4

European stocks hit record highs Lloyds swings to profit and resumes dividend payments AstraZeneca Covid vaccine sales triple but are a fraction of Pfizer’s $7.8bn Pharma firm Advanz fined over thyroid drug pricing Introduction

2.13pm BST

Paul Ashworth, chief US economist at Capital Economics, has looked at the GDP figures in detail.

The relatively disappointing 6.5% annualised gain in second-quarter GDP, which was well below the consensus at 8.5%, included an unexpected decline in government spending linked to the end of the PPP program and a more severe drop back in residential investment than we had anticipated.

The good news is that the economy has now surpassed its pre-pandemic level. But with the impact from the fiscal stimulus waning, surging prices weakening purchasing power, the delta variant running amok in the south and the saving rate lower than we thought, we expect GDP growth to slow to 3.5% annualised in the second half of this year.

1.55pm BST

A separate report from the US Labor Department showed initial claims for state jobless benefits fell by 24,000 to 400,000 for the week to 24 July (these are seasonally adjusted figures).

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