Last week, reports from the Commerce Department and the National Association of Home Builders indicated the housing market is beginning to cool off. Also, the Department of Commerce released their U.S. retail sales report for the month of June, showing a slight increase in retail activity. Finally, on Thursday, the Department of Labor announced that weekly jobless claims reached their lowest level since 1969.
Last Monday, the Institute for Supply Management released their monthly manufacturing report, showing strong gains, despite industry disruption. On Tuesday, U.S. automakers released their monthly auto sales reports, all showing gains from the year before. Finally, on Friday, the U.S. Department of Labor released the monthly jobs report, which beat analyst expectations on job growth, while unemployment rose slightly.
The civilian unemployment rate fell to 3.8% in May, its lowest since April 2000, and the rate has not been lower since 1969, according to the Department of Labor. Employers created 223,000 jobs, continuing a 92-month streak of expansion, and wages rose 2.7% since last May. The U.S. economy is also seeing its strongest wage growth for non-supervisory workers since 2009, at roughly 2.8%. Broad strength across the economy is driving increased demand for workers, and with it their wages and salaries. This release, coupled with Thursdays consumer confidence report of 128.0 and the recent tax cut, show that workers have more disposable income and are willing to spend it.
This past week, mortgage applications and refinancing activity continued to decrease, with refinances falling to 18-year lows. Jobless claims also rose to a seven-week high for the week ended May 19th, with the four-week average reversing course to an increase.
The number of Americans applying for unemployment benefits increased 11,000 to 222,000 for the week ended May 12th, according to the Department of Labor. Economists polled by Reuters estimated the weekly claims number to come in at 215,000.
Highlights of last week’s economic news include jobless claims that remained at 48-year lows, slowing consumer credit growth, and a withdrawal from the Iran nuclear deal, which may result in higher oil prices in the near term.
Of all economic news last week, perhaps the most intriguing are the jobless claims and GDP reports. Jobless claims fell to the lowest level since 1961, and GDP for the first quarter of 2018 slipped on consumer spending weakness.
Last week, several key indicators indicated cooling in the US economy. Primarily led by consumer-focused indicators, other softening indicators included small business optimism, which hinted at decreasing confidence of an improving economy. Inflation also ticked up, but the increase was largely driven by plunging wireless services prices in the year-ago period.
This past week, the Bureau of Labor Statistics released its jobs report. Major news involved the biggest year-over-year increase in wages since the recession, a 10-year Treasury-note yields jump, roughly 200,000 jobs being added in January alone, and the Dow Jones Industrial Average dropping over 600 points.
Last week’s economic news was slightly disappointing, as a number of indicators missed estimates, though jobless claims fell to a 45-year low. Still, given the higher than usual number of states estimating claims, the jobless claims number is a rough estimate.
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