In the News
Last week started off with news that consumer confidence had rebounded in July. The Conference Board’s Consumer Confidence Index, which had dropped in June, increased to 59.5 for July (1985=100), up from June’s 57.6; however, consumer sentiments for the month were a mixed bag.
The Present Situation Index, how consumers feel about the economy’s current status, decreased to 35.7 from 36.6, while the Expectations Index, how they feel it will fare in the future, rose to 75.4 from 71.6 last month. An improving short-term outlook helped drive the overall confidence index, but consumers still have their doubts, said Lynn Franco, director of The Conference Board’s Consumer Research Center.
“Consumers’ appraisal of current business and employment conditions, however, was less favorable as concerns about the labor market continue to weigh on consumers’ attitudes,” she said. “Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated.”
Consumers stating business conditions are “good” decreased to 13.4 percent from 13.7 percent, while those claiming business conditions are “bad” increased to 39.0 percent from 38.4 percent. Consumers’ appraisal of the job market also fell, with those claiming jobs are “hard to get” increased to 44.1 percent from 43.2 percent, while those stating jobs are “plentiful” remained unchanged at 5.1 percent.
In terms of short-term outlook, the proportion of consumers expecting business conditions to improve over the next six months increased to 17.7 percent from 16.5 percent, but those anticipating business conditions will worsen also increased, to 15.2 percent from 14.9 percent.
New home sales took a slight dip in June, with sales of new single-family houses skirting downward to an annual rate of 312,000, according to estimates released last week by the Census Bureau and the Department of Housing and Urban Development. This marked a 1 percent drop from May’s revised rate of 315,000, but was 1.6 percent over June 2010′s estimate of 307,000.
In terms of pricing, the median sales price of new houses sold in June was $235,200; and the average sales price was $269,000. The estimate of new homes for sale at the end of June was 164,000, which represents a supply of 6.3 months at the current sales rate.
Looking at manufacturing, new orders for durable goods decreased $4.0 billion (2.1 percent) in June to $192.0 billion, according to an advanced report released by the Census Bureau last week. The decrease followed a 1.9 percent increase in May. Durable goods orders have been down two of the last three months, including June. Transportation, also down two of the last three months, took the largest hit, with transportation equipment dropping $4.2 billion (8.5 percent) to $45.4 billion. Excluding transportation, new orders actually increased 0.1 percent.
Shipments of manufactured durable goods for June increased $1.0 billion (0.5 percent) to $196.0 billion, with machinery shipments, up four of the last five months, posting the largest gain, $0.7 billion (2.6 percent) to $29.1 billion, the bureau reported. Unfilled orders for manufactured durable goods for June increased $2.1 billion or 0.2 percent to $862.7 billion, with machinery once again the strong performer; up $2.1 billion (2.0 percent) to $111.2 billion. Inventories of manufactured durable goods in June, increased $1.6 billion (0.4 percent) to $357.2 billion.
Encouragingly, initial claims for jobless benefits for the week ending July 23 dropped to 398,000, a decrease of 24,000 from the previous week’s revised figure of 422,000, the Employment and Training Administration reported. The four-week moving average dipped to 413,750, a drop of 8,500 from the previous week’s revised average of 422,250.
The total number of insured unemployment during the week ending July 16 dropped to 3,703,000, a decrease of 17,000 from the preceding week’s revised level of 3,720,000. The four-week moving average was 3,721,000, a decrease of 5,250 from the preceding week’s revised average of 3,726,250.
This week will see a busy calendar of economic headlines, starting today with June’s construction spending figures from the Census Bureau. Tomorrow follows with June’s personal income and expenditures from the Bureau of Economic Analysis, as well as car and truck sales for July from the auto manufacturers.
Wednesday, the Census Bureau will release June’s factory orders and on Thursday the Employment and Training Administration will release initial jobless claims data for last week.
On Friday non-farm payrolls, hourly earnings, average workweek and the unemployment rate for July is released from the Bureau of Labor statistics, as well as June’s consumer credit figures from the Federal Reserve.