Your Monthly Update in U.S. Economic Trends
August Jobs Cut by 4,000
Monthly hiring declined for the first time in four years when U.S. employers cut 4,000 jobs in August, according to the U.S. Department of Labor. In addition to the recent job losses for August, the Labor Department revised earlier reports on job gains for June and July. June job gains were revised down from 126,000 to 69,000, and July job gains were revised down from 92,000 to 68,000. However, even with the revised estimates and loss of jobs for August, unemployment remained unchanged at 4.6%, according to the report. The loss of jobs in August were reported in the goods-producing sector, manufacturing sector and construction businesses.
WashingtonPost.com – Sept. 7, 2007
Manufacturing Sector Slowed in August
Construction spending fell 0.4% in July compared to June, and growth in the manufacturing sector decreased in August, according to the U.S. Department of Commerce. The Institute for Supply Management (ISM) reported the manufacturing sector registered at 52.9 in August, down from 53.8 in July. Economists expected a reading of 53. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. Analysts say that the slow growth in the manufacturing sector and the decrease in construction spending are affecting the overall economy.
MSNBC.com – Sept. 4, 2007
Consumer Confidence Weakened
The unstable financial markets and housing slump have weakened consumer confidence in the U.S., according to the Conference Board. The report showed the Consumer Confidence Index fell to 105.0 in August, down from 111.9 in July. Consumer confidence affects consumer spending which represents two-thirds of the U.S. economy. The Conference Board reported that the Present Situation Index decreased to 130.3 in August from 138.3 in July. The Present Situation Index measures how shoppers currently feel about economic conditions.
CBSNews.com – Aug. 28, 2007
Planned Layoffs Surge 85% from July to August
Layoffs increased by 85% to reach 79,459 in August, up from 42,897 layoffs in July, according to Challenger Gray & Christmas, a consulting firm. This is the highest amount of job cuts since February 2007 when they totaled 84,014, according to the report. In the Automatic Data Processing, Inc., a national employment report, private employers reported 38,000 jobs added in August, down from 48,000 jobs that were added in July. Nearly half of job losses in August came primarily from the financial sector where dozens of mortgage and subprime lenders closed, according to the report.
USAToday.com – Sept. 5, 2007
Oil Moves off Highs on Inventory Report
The Energy Information Administration reported crude oil for October delivery increased 47 cents to $76.20 a barrel on the New York Mercantile Exchange. Oil prices had hit a record trading high at $78.77 at the beginning of August 2007; however, due to a struggling subprime mortgage sector and rising concerns of a stalling economy, oil prices began to decline. With strong storms threatening the Gulf of Mexico, an oil-rich area, oil prices have begun to rise and are heading toward record high trading. Analysts predict that prices could reach a record-high soon.
CNNMoney.com – Sept. 6, 2007
Services Expand More Than Forecast
The non-manufacturing index remained unchanged at 55.8 in August, according to the ISM. Analysts had predicted a drop to 54.5 in the sector. The report showed growth among retailers, restaurants and healthcare companies. The non-manufacturing sector makes up 80% of the U.S. economy.
Bloomberg.com – Sept. 6, 2007
Productivity Grows at a Faster Pace
According to the U.S. Department of Labor, worker productivity rebounded growing by an annual rate of 2.6% in the second quarter of 2007. This is higher than the 1.8% that was originally reported. Productivity is measured by the amount of work output per hour. The report also showed that wage pressures, measured by unit labor costs, decreased to an annual growth rate of 1.4%. A decrease in rising wages and an increase in productivity helps fight against inflation and helping speculation by economists that the Federal Reserve will cut interest rates.
Forbes.com – Sept. 6, 2007
Record Drop in Pending Home Sales
In July, pending home sales saw their biggest drop since the terrorist attack of Sept. 11, 2001. The National Association of Realtors released their report showing the pending home sales index decreased by 12.2% to 89.9. This is the second-lowest reading beating the September 11 index of 89.8, according to the report. In June, analysts predicted a reading of 102.4. Economists now believe there were some discrepancies in the June reading that were factored in. On average, pending home sales have been on the decline since May, decreasing an average of 3.9% each month.
CNNMoney.com – Sept. 5, 2007
Bernanke Will Cut Interest Rates
The Federal Reserve Chairman, Ben Bernanke, will cut interest rates at least two more times this year, according to a Bloomberg News survey of economists. Economists believe the thriving labor market is helping the decaying housing market; however, with the decrease in the labor market in August they say, the Federal Reserve will be forced to look at the concerns for inflation. The Bloomberg News survey consists of 66 analysts, and according to the survey, analysts believe the Federal Reserve will lower interest rates to 5% by the end of September 2007 and will lower it again to 4.75% by the end of the fourth quarter of 2007.
Bloomberg.com – Sept. 10, 2007
Gasoline Prices Rise for First Time since July
The national average price for retail gas is up from last years $2.75 a gallon to $2.81, according to a nationwide Lundberg survey. This survey polls around 7,000 gas stations. The report shows that gas prices are up about 15 cents from a year ago at this time. The national average remains 37 cents lower than the all-time average high of $3.18 from May 2007. The recent rise in crude oil prices caused gasoline prices to increase across the U.S. in recent weeks. Despite oil prices, retail gas prices are likely to remain steady in September.
MSNBC.com – Sept. 10, 2007
Economic Trends is a publication of Express Services, Inc., Oklahoma City, Oklahoma. © 2007.