Once again jobs news leads the headlines, with the revelation that last month no new jobs were added to the economy, the first time that's happened in nearly a year. We also learned that unemployment is stuck at 9.1 percent, and is not expected to dip below 9 percent until later in 2012. July's employment numbers were also revised down to 85,000 new jobs added, rather than the 117,000 that were originally projected.
July did see some good news for income, with personal income up by $42.4 billion, or 0.3 percent, and disposable personal income (DPI) increasing $32.5 billion, or 0.3 percent, the Bureau of Economic Analysis reported last week.
Personal consumption expenditures (PCE) also increased, up $88.4 billion, or 0.8 percent, the Bureau reported. Real disposable income (adjusted to remove price changes) decreased 0.1 percent in July, in contrast to an increase of 0.3 percent in June. Real PCE (adjusted to remove price changes) increased 0.5 percent, compared with a decrease of less than 0.1 percent in June.
Private wage and salary disbursements increased $24.3 billion in July, as well, compared with an increase of $8.9 billion in June, the Bureau reported. Goods-producing industries' payrolls increased $3.7 billion, in contrast to a decrease of $0.3 billion in June; and manufacturing payrolls increased $3.6 billion, in contrast to a decrease of $0.9 billion in June. Services-producing industries' payrolls increased $20.5 billion, compared with an increase of $9.2 billion in June. Government wage and salary disbursements decreased $0.1 billion in July, which was unchanged from June.
Those increases helped lead to increased consumer confidence in July, but sadly that confidence took a downturn in August, the Conference Board reported last week. The Conference Board's Consumer Confidence Index plummeted to 44.5 (1985=100), down from 59.2 in July. The Present Situation Index (how consumers feel about the current economy) decreased to 33.3 from 35.7, and the Expectations Index (how they feel the economy will go) decreased to 51.9 from 74.9 last month.
"Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook," said Says Lynn Franco, director of the Conference Board's Consumer Research Center.
Construction spending for July saw a slight dip, dropping 1.3 percent to an annual rate of $789.5 billion, from June's revised estimate of $799.8 billion. The July figure is 0.1 percent above the July 2010 estimate of $789 billion.
Spending on private construction was at an annual rate of $514.5 billion, 0.9 percent below June's revised estimate of $519.0 billion. Residential construction was at an annual rate of $248.1 billion in July, 1.4 percent below the revised June estimate of $251.7 billion.
First-time claims for jobless benefits saw a sizable drop for the week ending Aug. 27, decreasing 12,000 to 409,000 from the previous week's 421,000, the Employment and Training Administration reported last week. The four-week moving average was 410,250, an increase of 1,750 from the previous week's revised average of 408,500.
The total number of insured unemployment during the week ending August 20 was 3,735,000, a drop of 18,000 from the preceding week's revised level of 3,753,000. The four-week moving average was 3,726,000, a decrease of 3,250 from the preceding week's revised average of 3,729,250.
This week sees a light financial calendar, due to the long Labor Day weekend. On Thursday, the Employment and Training Administration will release initial jobless claims figures for last week, and the Census Bureau will release July's trade balance data.
On Friday, the Federal Reserve will release July's consumer credit figures, and the Census Bureau will release July's wholesale inventories.
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