Your Monthly Update in U.S. Economic Trends
Employment Stays the Course
The unemployment rate remained at 4.5% for the third straight month as the U.S. saw an increase of 132,000 jobs in June, according to a report released by the U.S. Labor Department. The report showed education, health services, leisure and hospitality and government had the highest job growth, while factories, retailers and some professional and business services saw significant job cuts. Average hourly wages saw a 0.3% increase from May, according to economists. Wage growth is important to the U.S. economy because it supports consumer spending.
The WashingtonPost.com – July 7, 2007
More Employers Plan to Hire than Fire
According to a recent online survey from USA Today and CareerBuilder.com, 52% of hiring managers expect payrolls to remain unchanged in the third quarter. That is up from the 49% of hiring managers that planned to keep their payrolls the same in the second quarter. The survey suggests that hiring has slowed down; however, the job market remains strong. Nearly 2,500 hiring managers and human resource professionals were surveyed, and more than a third of them said they plan to expand their workforce this quarter, while only 5% said they plan to cut workers.
USAToday.com – July 9, 2007
U.S. Manufacturing Sector Set to Expand
According to the Institute for Supply Management, the manufacturing index increased to 56 in June, up from 55 in May. A reading above 50 indicates growth, while a reading below 50 indicates contraction. Top performing industries in June included: petroleum and coal products, chemical products, plastics and rubber products, paper products, fabricated metal products and machinery. Economists believe that consumer spending has boosted manufacturers’ confidence.
ABCNews.com – July 5, 2007
Consumer Confidence Hits 10-Month Low
The consumer confidence index fell to 85.3 in June from 88.3 in May, according to a consumer survey by Reuters and the University of Michigan. This is the lowest reading since August 2006, when the index registered at 82. Consumer confidence is an indicator of future consumer spending, which accounts for two-thirds of the U.S. economy.
CNNMoney.com – June 29, 2007
U.S. Services Index Reached 14-Month High in June
The Institute for Supply Management’s latest report showed the index of non-manufacturing businesses rose to 60.7 in June, from 59.7 in May. Some non-manufacturing businesses include banks, builders and retailers. A reading above 50 indicates growth for the sector. The services industries make up nearly 90% of the economy.
Bloomberg.com – July 5, 2007
Oil Prices Surge $1 a Barrel
Retail gas prices fell in June from May’s peak of $3.23 a gallon; however, according to AAA and the Oil Price Information Service, the national average for gas inched back up 0.3% to $2.95 a gallon the first week in July. August deliveries of light, sweet crude oil, commonly used for processing into gasoline, rose a $1 a barrel to settle at $72.81. Continuing concerns over kidnappings and violence in Nigeria, along with struggling U.S. refineries are causing oil and gasoline futures to rise, according to economists.
MSNBC.com – July 6, 2007
Pending Sales of Homes Decline
Pending home sales, which track contracts signed but not closed, fell 3.5% in May to 97.7 from 101.2 in April, according to a report from the National Association of Realtors. Economists speculate that the falling index is attributed to tighter lending standards, climbing foreclosures in the subprime mortgage sector and decreasing buyer confidence. The report indicates that the housing sector remains a hindrance to economic growth.
USAToday.com – July 5, 2007
Economy Shows Sharp Gain
As consumer spending slows down, the U.S. economy is expected to continue to grow due to an increase in business inventories and a lower trade deficit, according to an economic forecast by Blue Chip Economic Indicators. Their forecast predicts a gross domestic product growth of 2.1% for 2007 and 2.9% for 2008.
CNNMoney.com – July 10, 2007
Wholesalers’ Inventories Increase
The Commerce Department reported that U.S. wholesalers’ inventories increased by 0.5% to $396.66 billion in May after a 0.3% increase in April. According to the report, sales for U.S. wholesalers rose by 1.3% in May to $357.17 billion after increasing 1.5% in April. Wholesalers’ inventories of durable goods, which are meant to last three or more years, rose by 0.6% in May. Auto inventories were down 5% from May 2006 and metals inventories increased by 2.5% in May.
TheWallStreetJournal.com – July 10, 2007
Consumer Borrowing Posts Big Increase in May
Consumer credit debt increased by 6.4% in May, the biggest jump in six months, according to the Federal Reserve. The April increase was 1.1%. The credit card category in consumer credit saw a substantial increase at 9.8% in May, compared with a 0.2% rise in April. This is the largest increase since a 14.5% increase in November 2006. Auto loans showed an increase of 4.4% in May after a 1.7% gain in April. Experts say the reason consumer credit debt is on the rise is that it is harder to get home equity loans with banks and because home values are staying stagnate.
MSNBC.com – July 9, 2007
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