Your Monthly Update in U.S. Economic Trends
Strong Jobs Report Eases Fears over Economy’s Health
The U.S. Department of Labor reported that employers added 110,000 new jobs in September. The report showed job losses in the housing and mortgage-related industries; however, higher job gains in health care and professional services compensated for the loss. The Labor Department revised its August job readings to a gain of 89,000 jobs, up from the 4,000 job losses the report originally showed. The report also showed that the unemployment rate reached 4.7% in September, up from 4.6% in August. Hourly wages increased 0.4% to reach an average of $17.57 an hour, and consumer borrowing rose at an annual rate of 5.9%, according to the labor report.
WashingtonPost.com – Oct. 6, 2007
Manufacturing Growth Slowed in September
The Institute for Supply Management reported its manufacturing index slowed to 52.0 in September, down from 52.9 in August. This is the lowest reading in seven months. Analysts were expecting the index to be 52.5. A reading of 50 or higher indicates expansion, while a reading below 50 shows contraction. Even with the slowdown in manufacturing sector, economists believe the sector is in good shape.
MSNBC.com – Oct. 1, 2007
Private Sector Adds 58,000 Jobs in September
According to Macroeconomic Advisors LLC, U.S. private employers added 58,000 new private sector jobs in September. The report showed a decline of 20,000 jobs in the construction sector, bringing the total number to 157,000 since August 2006 in construction. Employment in the financial sector fell by 7,000 jobs in September, the report showed. This is the second consecutive decline in jobs after six years of growth. The construction and financial sectors have taken the biggest hit from the housing market decline and subprime mortgage problems, according to the report.
Reuters.com – Oct. 3, 2007
Service Sector Growth Slows in September
The service sector increased at a slower-than-expected rate in September, according to the Institute for Supply Management. The report showed the index registered at 54.8 in September, down from 55.8 in August. Economists expected a reading of 54.5 for September. A reading above 50 shows economic expansion, while a reading below 50 indicates contraction. The service sector is made up of several industries such as banking and retail. The service sector makes up 80% of the U.S. economic activity.
CNN.com – Oct. 3, 2007
U.S. September Consumer Confidence Falls
The consumer confidence index fell to 99.8 in September from 105.6 in August, according to the Conference Board. This is its lowest level in nearly two years. Economists had forecasted the index to fall slightly to 104.5 in September. The reasons for the decline stem from a weaker job market and volatile business conditions, analysts said, and they believe it is not likely that the economy will improve anytime soon. The Conference Board report also showed the present situation index, which measures consumer’s sentiments toward the present economic situation, fell to 121.7 in September from 130.1 in August, and the expectation of future economic conditions index fell to 85.2 from 89.2 in August.
Forbes.com – Sept. 25, 2007
Factory Orders Decrease 3.3% in August
Factory orders fell by 3.3% in August, down from a 3.4% increase in July, according to the U.S. Census Bureau. The report showed shipments have decreased by 1.6%, down from a 2.3% increase in July, while unfilled orders have increased by 1.2%.
IndustryWeek.com – Oct. 4, 2007
Planned Layoffs Fell in September
Job cuts totaled 71,739 in September, but there were 28.5% fewer job cuts in September than there were this time in 2006, according to Challenger, Gray & Christmas Inc., a consulting firm. The report showed the housing sector taking the majority of job cuts, a total of 37%, or 26,465 jobs lost. Mortgage lenders, construction companies and real estate firms make up the housing sector. Total job cuts for the first three quarters of 2007 are at 587,594, 8.1% lower than the 639,229 in the first nine months of 2006, reported the consulting firm.
MSNBC.com – Oct. 3, 2007
Gasoline Prices Decline
The Lundberg survey reported that gas prices fell $0.04 to a national average of $2.75 per gallon. However, gas prices are still $0.47 higher than they were a year ago. According to the survey, gas prices are expected to increase due to recent increases in the price of crude oil and a tightening of gas supply as refineries begin to shut down some of their capacities to make seasonal changes. The report showed that the decrease in gas prices wasn’t consistent across the country. Gas prices on the East Coast saw no change, while gas prices on the West Coast went up.
CNN.com – Oct. 8, 2007
Fed Test: Will it Adjust in Time if Inflation Stirs?
The Federal Reserve cut interest rates by half a percentage point in September. Since then, commodities such as oil and gold have increased, the dollar has decreased, and hourly wages have increased 4.1% from a year earlier, causing concerns for inflation. According to the president of Euro Pacific Capital, a brokerage firm for foreign investments, inflation is going to get a lot worse. However, the federal government’s inflation gauge, the price index for personal consumption expenditures, which rose 1.8% in August, stayed in the 1% to 2% comfort zone for inflation. The two most common measures of the U.S. inflation expectations, one based on surveys of consumers on how they feel about the overall economy and the other on market movements, indicated that there is little concern for inflation.
TheWallStreetJournal.com – Oct. 8, 2007
U.S. Retail Sales Rise at Slowest Pace in Five Months
Consumers cut back spending in September as sales at U.S. retailers increased at the slowest pace in five months, according to The International Council of Shopping Centers. The report showed stores that have been open at least 12 months saw only a 2% increase in sales. This is the smallest increase since sales fell 1.9% in April 2006. High temperatures in the eastern part of the U.S. caused a decrease in sweaters and sweatshirt sales, which are typically surging this time of year, while the housing slump, increased gas prices and interest rates caused consumers to watch their spending, economists said.
Bloomberg.com – Oct. 9, 2007
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