Weekly Economic Review: 255,000 Jobs Added to Economy in July, Consumerism Picks Up Rapidly

Posted by Laine Smith on 8/5/16 1:16 PM

Topics: Economy

Friday’s Employment Situation showed increasing strength in the job market and consumerism as non-farm payrolls soared to a much stronger-than-expected 255,000 for the month of July. The consensus range was calling for 150,000 to 215,000.

 Economic_Update_8-5.pngImage courtesy of Master isolated images at FreeDigitalPhotos.net

The report held several positives, including the participation rate, which was up one-tenth of a percent to 62.8. Average hourly earnings also saw a boost of 0.3 percent with a year-over-year rise of 2.6 percent. Another positive was the workweek length, which moved higher for the first time since January.

The highlights of the employment report confirm suggestions that the Federal Reserve is still on track to raise interest rates again in 2016, possibly at the next meeting in September. 

Consumer spending picked up rapidly in July, according to the Gallup U.S. Consumer Spending Measure. With a $12 increase from June, Americans reported average daily spending at $100. The index has not been this high since July 2008, according to Bloomberg.

Last week in the economy:

  • Purchase applications were down 2 percent for a third weekly decline, according to MBA Mortgage Applications. The refinance sector also dropped 4 percent following the previous week’s 15 percent decline. Year-over-year, the purchase index is up only 6 percent.
  • Initial Jobless Claims increased for a second week in a row, up 3,000 in the July 30 week to 269,000. This lifted the 4-week average by 4,000 to 260,050 but levels are still near record lows.
  • Bloomberg’s Consumer Comfort Index is still steady, coming in at 43.0 for the July 31 week.

What’s on economic calendar for the week of August 8, 2016:

  • Monday – Labor Market Conditions Index
  • Wednesday – MBA Mortgage Applications, JOLTS
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
  • Friday – Retail Sales, Consumer Sentiment

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