Friday, July 15, 2011

THE UNITED STATES "CURRENT" ECONOMIC REPORT

The U.S. Census Bureau announced July 14, 2011 that advance estimates of U.S. retail and food services sales for June, were $387.8 billion, an increase of 0.1 percent (±0.5%)* from the previous month, and 8.1 percent (±0.7%) above June 2010. Total sales for the April through June 2011 period were up 7.7 percent (±0.5%) from the same period a year ago. The April to May 2011 percent change was revised from -0.2 percent (±0.5%)* to -0.1 percent (±0.2%)*.

On unemployment, the Fed stated Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down.

For jobless claims, initial claims fell 22,000 to an as-expected level of 405,000 but the period is a shortened one that includes the July 4 holiday (prior week revised upward to 427,000). Another factor is uncertainty over the week-to-week timing of shutdowns, including auto retooling, in the manufacturing sector, a seasonal factor that lowers claims after adjustment and always makes for uncertain readings at this time of year. One factor that is clearly inflating claims is the government shutdown in Minnesota which added 11,500, before adjustment, to the week's total. A look at the four-week average, especially important for uncertain periods, is favorable, down 3,750 to 423,250.

Compensation costs for civilian workers increased 0.6 percent, seasonally adjusted, for the 3-month period ending March 2011, the reported U.S. Bureau of Labor Statistics. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.4 percent, and benefits (which make up the remaining 30 percent of compensation) increased 1.1 percent.

New orders for manufactured goods in May, are up two of the last three months, increased $3.5 billion or 0.8 percent to $445.3 billion, the U.S. Census Bureau reported July 5, 2011. This followed a 0.9 percent April decrease. Excluding transportation, new orders increased 0.2 percent. Shipments, up eight of the last nine months, increased $0.4 billion or 0.1 percent to $443.9 billion. This followed a 0.4 percent April decrease.

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 612,000. This is 8.7 percent (±1.5%) above the revised April rate of 563,000 and is 5.2 percent (±2.4%) above the May 2010 estimate of 582,000. Privately-owned housing starts in May were at a seasonally adjusted annual rate of 560,000. This is 3.5 percent (±12.4%)* above the revised April estimate of 541,000, but is 3.4 percent (±8.7%)* below the May 2010 rate of 580,000.

Consumer confidence in the U.S. rose last week as households became more upbeat about the state of their finances and optimism climbed among wealthier Americans. The Bloomberg Consumer Comfort Index increased to minus 43.9 for the period ended July 10 from minus 45.5 the prior week.

The Misery Index, which takes into account both inflation and the unemployment rate, is currently, slightly below the level seen in December 2009, which is when the economy was still in the midst of the credit crisis. To put this in perspective, we haven't seen the Misery Index this is high since 1983. And what is a bit concerning is that the index has climbed higher each month during 2011. With inflation rising higher still and unemployment not ticking down, the upward trend may well continue in the near future. 

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