Fellow Shortrunners,

      Data Analysis Only This Week... and there is plenty of it.    

Economic Releases
The data section provides charts and data for the most important economic indicators.

Consumer Confidence: 76.6%
Release Date: 7/29

• Bucking a quarter of recovery, the Conference Board's index of consumer confidence fell to sharply from 83.5% during June to a reading of 76.6% for July.  Economists for the conference board attributed falling confidence in the economy to a lack of labor market improvement, as unemployment has often been shown to have a psychologically strong impact on individuals.

Jobless Claims: 388,000
Release Date: 7/31

• Initial jobless claims fell by 3,000 to 388,000 this Thursday.  The small movement in initial claims leaves us with yet another release hovering around the 400,000 mark.  Generally, economists use the 400,000 mark as a rule of thumb for determining when jobless claims are high enough to signal labor market deterioration.  Continuing claims rose during the same period.

Employment Cost Index: 0.9%
Release Date: 7/31

• The Department of Labor's employment cost index rose 0.9% during the last quarter.  With fears of deflation not yet erased from the minds of America's firms, a little price pressure may be just the right thing for the economy.

Gross Domestic Product:  2.4%
Release Date: 7/31

• Preliminary estimates for the second quarter show stronger economic growth in the US.  Real gross domestic product during the period expanded at an annualized rate of 2.4%.  Most analysts heralded the release as evidence that the economy is recovering.  Indeed, there was an increase in consumer spending (PCE) of 3.3%, a good sign that the American consumer is ever present.  The fastest growing component was of course national defense spending which increased at an annualized rate of 44.1% (while governmental non-defense spending fell 4.1%).  Rising imports continued to constitute a drag on overall growth.

Personal Income/Spending: 0.3%/0.3%
Release Date: 8/1

• During June, personal income and spending both rose 0.3%.  Overall balance sheets for consumers don't seem to have been improving despite a historical trend towards improvement when the economy slows down (generally consumers slow their spending and thus tend to ward of things like bankruptcy and attempt to pay down debt where possible).

Construction Spending: 0.0%
Release Date: 8/1

• During June, construction spending was largely unchanged.  Market expectations had been for a modest increase and the release was consequently rather a disappointment.  Two underlying currents were readily apparent.  The first was a slowdown in private construction, i.e. a slowdown in home building.  The second was a rise in new business construction, i.e. a rise in office building.

ISM Manufacturing Index: 51.8%
Release Date: 8/1

• The ISM Manufacturing Index broke 50% in July, signaling expanding manufacturing activity in the US.  The index had previously been below 50% for the past 4 months.  Manufacturing activity has generally struggled to gain ground in the US with the economy structurally shifting more towards services and manufacturing jobs moving overseas to lower cost suppliers.  The ISM manufacturing index is a survey based index and attempts to cover a range of factors that assess the entire manufacturing outlook including expectations, new orders, employment and costs.

Unemployment: 6.2%
Release Date: 8/1

• The headline rate of unemployment in the US decreased to 6.2% in spite of a reduction in employment.  The number of individuals seeking employment dropped during the month and thus the unemployment figure fell as well.  There is little evidence in this release to suggest any significant improvement in the labor market picture.

ECRI Future Inflation Gauge: 115.4
Release Date: 8/1

• The ECRI FIG increased to 115.4 changing directions from its recent slide.  The ECRI FIG provides yet another piece of evidence that inflationary pressure is still present in the economy and that fears of deflation are overstated.

ECRI Weekly Leading Index: 127.2
Release Date: 8/1

• Economists for the Economic Cycles Research Institute emphasized that economic recovery, though less than perfect, was still picking up in the US.  The ECRI WLI fell 0.1 to 127.2 this week.  In spite of this, the index's growth rate, a 4-week moving average of the WLI, rose above 10%.

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Issue #158

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