Your Monthly Update in U.S. Economic Trends
Unemployment Rate Rises to 4.6%
The unemployment rate rose to 4.6% in July, up from 4.5% in June, according to the U.S. Department of Labor. There were 92,000 jobs added to the U.S. economy, which is less than the 135,000 jobs that economists had predicted. The increased unemployment rate is a result of a decline in construction, manufacturing and retail jobs. According to the report, construction jobs fell by 12,000 in July, retail jobs dropped by 1,000 and manufacturing jobs fell by 2,000.
Forbes.com – Aug. 3, 2007
U.S. Consumer Confidence Climbs to Highest in Six Years
According to the New York-based Conference Board, the consumer confidence index increased to 112.6 in July, up from a revised 105.3 in June. This is the highest the index has been hit in six years. The increase in consumer confidence is a result of higher income and job growth, as well as lower gasoline prices, according to the report. Consumer spending accounts for more than two-thirds of the economy.
Bloomberg.com – July 31, 2007
Economy Rebounds in Second Quarter
The gross domestic product (GDP), which measures the value of all goods and services produced in the United States, grew at a rate of 3.4% in the second quarter of 2007, up from a rate of 0.6% in the first quarter of 2007, according to the Commerce Department. The increase in the GDP was driven by an increase in business and government spending. Business spending increased at a 22.1% rate, the biggest increase in 13 years. In the same period, government spending increased at a 4.2% pace, up from 0.5% in the first quarter of 2007.
MSNBC.com – July 27, 2007
Minimum Wage $9.50? Democrats Say Maybe
Democrats are discussing increasing the minimum wage to $9.50 an hour by 2012, according to a spokesperson for the Massachusetts senator. If the proposal passes, it will take effect in 2009 after the current minimum wage law ends. The Fair Minimum Wage Act of 2007 increased the federal minimum wage from $5.15 to $5.85 on July 24, 2007 and will increase it to $6.55 in 2008 and to $7.25 in 2009. According to Edward Kennedy, a Democratic senator for Massachusetts, the federal minimum wage is expected to be a major issue for presidential candidates for the 2008 election.
CNNMoney.com – July 27, 2007
Manufacturing Sector Expands in July
The U.S. manufacturing sector continues to expand for the sixth month in a row, according to the Institute for Supply Management. The manufacturing index for July was 53.8, down from 56.0 in June. The index reflects the opinions of purchasing managers at factories, plants and utilities. A reading above 50 shows growth, while a reading below 50 indicates contraction. The leading growth indicators for the manufacturing sector were new orders and production; however, these indicators were slightly less in July than in June. Industries that performed well included: products, furniture, food, beverage and tobacco products, among other industries.
WashingtonPost.com – Aug. 1, 2007
Service Sector Growth Moderates in July
According to the Institute for Supply Management, the non-manufacturing sector had a reading of 55.8 in July, down from 60.7 in June. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. Economists expected the economic growth to slow in the third and fourth quarters, and the decline in the services sector is on par with economists’ predictions. The service sector accounts for 80% of U.S. economic activity.
ABCNews.com – Aug. 3, 2007
Oil Hits New One-Month Low
Crude-oil futures reached a new one-month low, as oil prices for the September delivery of crude oil fell to $71.71 a barrel on the New York Mercantile Exchange. The unemployment rate suggests that the economy is slowing down which could decrease the demand for oil and gasoline, according to economists. Oil prices peak in the summer and decline in the fall. According to the report, oil prices declined $20 in 2006 between August and October.
WallStreetJournal.com – Aug. 7, 2007
American Worker Productivity Rebounds
Worker efficiency rose at an annual rate of 1.8% in the second quarter of 2007, more than doubling the first quarter annual rate of 0.7%, according to the U.S. Department of Labor. However, the increase in productivity was below the expected 2% analysts reported. In addition, unit labor costs increased at a 2.1 rate. The Federal Reserve pays close attention to productivity and labor costs for signs of inflation. Increasing wages are good for workers; however, if they rise too quickly inflation can occur.
MSNBC.com – Aug. 7, 2007
Home Sales May Pick Up
Home sales could see an increase over the next few months, according to the National Association of Realtors (NAR). Economists had predicted a 0.6% decrease in June 2007, but the NAR reported that the home sales index increased 5% to 102.4 in June. This is the biggest increase in three years, analysts reported. However, the housing market still shows signs of weakness as June’s 2007 increase is still 8.6% below the June 2006 level.
CNNMoney.com – Aug. 1, 2007
Fed Keeps Rates Steady
Short-term interest rates remained unchanged at 5.25%, according to the Federal Reserve. Policymakers for the Federal Reserve reported that they expect the economy to continue to grow at a moderate pace supported by solid employment growth and a robust economy. Consumers with home equity lines of credit, car loans and other consumer loans will most likely not see a change in rates. The 5.25% short-term interest rate has held steady since June 2006. The Federal Reserve is hoping to weaken the threat of inflation and slow economic growth by keeping the interest rate unchanged.
USAToday.com – Aug. 7, 2007
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