Your Monthly Update in U.S. Economic Trends
May Job Growth Unexpectedly Strong
According to the U.S. Department of Labor, 157,000 new jobs were added in May. Economists had forecasted employers would add only 130,000 news jobs, and they believe the increase in the job growth shows the economy is gaining strength. The report showed an increase in hiring in the service industry and a decline in the factory sector, while 19,000 jobs were lost in both the goods-producing sector and the manufacturing sector. The unemployment rate remained unchanged in May at 4.5%, according to the report.
Reuters.com – June 1, 2007
Congress Approves Minimum-Wage Increase
Congress recently approved the first increase in the federal minimum wage in nearly a decade. Workers who currently receive $5.15 per hour will receive an increase of 70 cents per hour before the end of summer and another 70 cents-per-hour increase by the summer of 2008, and by the end of the summer of 2009, all minimum wage workers will be paid $7.25 per hour. According to the Economic Policy Institute, a research group in Washington, D.C., 5.6 million U.S. workers earn less than $7.25. The last time there was an increase in the minimum wage was in September 1997, when the rate increased from $4.75 to $5.15.
ABCNews.com – May 24, 2007
Consumer Confidence Unexpectedly Rebounds
Despite high gas prices, the Consumer Confidence Index rose to 108.0 in May, up from 106.3 in April, according to the New York-based Conference Board. This is the highest reading since March, when the index rose to 108.2. The Consumer Confidence Index is closely monitored by economists because nearly two-thirds of the U.S. economy is made up of consumer spending. A reading above 100 shows optimists outweigh pessimists. The Present Situation Index, which monitors consumers’ feelings about economic conditions, rose to 136.1 in May, up from 133.5 in April.
MSNBCNews.com – May 29, 2007
May ISM Manufacturing Index 55.0, Highest in Year
The Institute for Supply Management reported that the manufacturing index rose to 55.0 in May, up from 54.7 in April. This is the highest increase in 12 months. A reading above 50 indicates growth for the sector. New orders rose 1.1 percentage points to 59.6 in May. Production also increased one percentage point to 58.3.
Forbes.com – June 1, 2007
Oil Prices Decline by $2 a Barrel
Crude oil delivery prices for July dropped $2.11 to $64.82 a barrel on the New York Mercantile Exchange. Predictions that Cyclone Gonu would hit several oil refineries in the Gulf of Oman caused an increase in gas prices; however, the cyclone weakened and did not damage the equipment. As a result, crude oil dropped more than $2 a barrel, and gasoline futures fell nearly 7 cents to $2.12 a gallon. Gasoline inventories increased by 3.5 million barrels in the week ending June 1, 2007, beating the estimated 1.5 million barrels analysts predicted, according to the Energy Information Administration.
MSNBC.com – June 8, 2007
Productivity Growth Slows
The federal government reported that worker productivity in the U.S. was lower than forecasted in the first quarter. Productivity increased by 1.0% in the first quarter, less than the 1.7% that was originally forecasted by economists. The gross domestic product (GDP), which measures the nation’s economic activity, grew only by 0.6%.
CNNMoney.com – June 6, 2007
White House Trims '07 Economic Forecast
The White House lowered its expectations for the GDP for 2007. The new forecast for U.S. economic growth is 2.3% from fourth quarter in 2006 to fourth quarter in 2007, down from the earlier forecast of 2.9%. During the first quarter of 2007, the economy increased at an annual rate of just 0.6%, the worst increase in four years. Therefore, the GDP was lowered. However, according to some economists, the economy will rebound despite the lowered expectations for the GDP. The economy grew 3.1% in 2006, and the White House expects the same growth in 2008 and 2009.
USAToday.com – June 5, 2007
Factory Orders Post Weak Rise
The Commerce Department reported that new orders at U.S. factories increased at a lower-than-expected rate of 0.3% in April. According to analysts, factory orders were expected to rise 0.7%. Factory orders in March were revised to 4.1%, up from a previously-reported 3.1%.
CNNMoney.com – June 4, 2007
Housing Prices Fell in 1st Quarter
Home prices fell for the third quarter in a row, the National Association of Realtors (NAR) reported. However, the housing market seems to be leveling out, and according to the NAR report, it is likely to recover during the second half of 2007. The median price for an existing home was $212,300 in the first quarter, down 1.8% from the first quarter of 2006. Home sales from February to March declined 8.4%, the biggest month-to-month decline in 18 years, according to the NAR.
USAToday.com – May 16, 2007
May ISM Services Index Rises to Highest in a Year
The index for non-manufacturing businesses, including banks, builders and retailers, rose to 59.7 in May, up from 56 in April, according to the Institute for Supply Management. A reading above 50 indicates growth in the sector. Economists report that service businesses are providing the momentum the U.S. needs to push past the housing slump. The services industry makes up 90% of the economy.
Bloomberg.com – June 5, 2007
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