US GDP tracking update unchanged post US data - Nomura

Analysts at Nomura offered their US GDP tracking update after the New home sales data.

Key Quotes:

New home sales grew modestly in Q2, albeit at a slower pace than in Q1. June new home sales rose 0.8% m-o-m to an annual pace of 610k, mostly in line with expectations (Consensus: +0.8%, Nomura: +1.6%). However, sales in May and April were revised downwards. The average sales pace in Q2 was 597k, 3.2% lower than the pace in Q1. Much of the slowdown can be attributed to continued price and supply pressure. The months supply indicator rose slightly to 5.4 months in June from 5.3 months, suggesting a modest improvement. However, factors that suppress strong increases in supply such as a lack of developable lots and shortage of skilled construction labor still persist.

GDP tracking update: 

"June new home sales were broadly in line with our expectations. However, downward revisions to May and April suggest a deeper decline in brokers’ commissions in Q2 from Q1."

"Real residential investment in Q2 has been weaker than in Q1. Softness in brokers’ commissions suggests more drag from residential investment on topline real GDP growth. After rounding, however, our tracking estimate of Q2 real GDP growth is unchanged at 2.5% q-o-q saar."