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Minnesota Mortgage Blog

August 9th, 2011 1:25 PM

A key financial headline for last week was the news that the U.S. economy gained 117,000 jobs in July bringing the unemployment rate slightly down to 9.1 percent, the Bureau of Labor Statistics reported last week. Key sectors for job gains were health care, retail trade, manufacturing, and mining, while government employment continued to trend down.

The total number of unemployed workers was 13.9 million and the total U.S. labor force was 153.2 million for the month, meaning that the job market has remained somewhat unchanged since April.

That said, the increase in jobs, which was reported Friday of last week, helped Wall Street make gains after experiencing a nasty drop on Thursday. Negative economic reports from Europe, as well as the lackluster budget agreement signed into law, put the Dow Jones Industry Average into 512.76 point free fall marking, the largest one-day drop since 2008. Friday saw the markets roller-coaster hundreds of points through the day, with the good employment news ultimately leaving the Dow 60.93 points up by the final bell.

Continuing in employment news, the Employment And Training Administration’s job report for the tail end of July was also positive: First-time claims for unemployment coverage during the week ending July 30 decreased slightly to 400,000, a drop of 1,000 from the previous week. That said, the total number of unemployed workers covered by jobless benefits for the week ending July 23 rose to 3,730,000, a jump of 10,000 from the preceding week's revised level of 3,720,000.

Going back a month, personal income for June increased slightly while spending decreased with, according to the Bureau of Economic Analysis. June personal income increasing by $18.7 billion, or 0.1 percent, and disposable personal income (DPI) increasing $16.3 billion, or 0.1 percent,

Personal consumption expenditures (PCE) decreased $21.9 billion, or 0.2 percent in June, and personal outlays (PCE, personal interest payments, and personal current transfer payments) decreased $22.6 billion. Meanwhile, personal saving (DPI less personal outlays) was $620.6 billion in June , compared with $581.7 billion in May.

While savings was up, so too was borrowing, according to the Federal Reserve’s data for June. Consumer credit in June increased at an annual rate of 7.75 percent, with revolving credit (such as credit cards) increasing at a rate of 8 percent and nonrevolving credit (such as car or student loans) increasing at a rate of 7.25 percent. Overall debt was pegged at $2.44 trillion for the month, with revolving debt at $798 billion and nonrevoling amounting to $1.64 trillion.

Turning to construction, June construction spending increased to an annual rate of $772.3 billion, a 0.2 percent over May's revised estimate of $770.5 billion, the Census Bureau reported. That said, June’s spending was 4.7 percent below the June 2010 estimate of $810.4 billion. Private construction spending jumped to an annual rate of $493.4 billion, 0.8 percent over May's revised estimate of $489.6 billion, but residential construction dropped to an annual rate of $235.8 billion in June, 0.3 percent below May's revised estimate of $236.5 billion.

This week, we can expect:

Tuesday — Second quarter non-farm worker productivity from the Bureau of Labor Statistics
Wednesday — June wholesale inventories from the Census Bureau; the July Treasury Department budget
Thursday — The June trade balance from the Census Bureau; Initial jobless claims for the week ending July 30 from the Employment and Training Administration
Friday — June business inventories and July retail sales totals from the Census Bureau

Posted by Jamie Larkin, Mortgage Advisor on August 9th, 2011 1:25 PMPost a Comment (0)

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