Despite last week’s employment report boasting an increase of 255,000 to non-farm payrolls, the Labor Market Conditions Index, which is broadly comprised of 19 different indicators, budged minimally in the month of July. At a 1.0 index level, July’s results are the first to make it into the positive column in 2016.
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Job openings increased by 2 percent in June, according the Labor Departments JOLTS report. Hiring also increased by 0.1 percent to 3.6 percent. The quit rate remained unchanged at 2 percent.
Consumer spending in July was mostly positive in the vehicle sector, as retail sales minus autos fell 0.3 percent and the overall retail sales month-to-month saw no change. July’s retail sales minus autos is the first decline in the index since March.
The positive of the report was the influx of motor vehicle sales, which was up 1.1 percent following a 0.5 percent gain in June. Increasing vehicle sales points to consumer confidence and strength, according to Bloomberg.
Regardless, moderating consumer spending could dim expectations for a Fed rate hike in September. In a statement reported by Reuters, RDQ Economics Chief Economist said, “The Fed has a consumer demand-centric view of economic activity and this report is one more hurdle to a rate hike in September.”
Last week in the economy:
- Purchase applications were up by 3 percent in the August 5 week, standing 13 percent higher than a year ago and following three weeks of declines. Refinance applications increased by a seasonally adjusted 10 percent from the previous week, according to MBA Mortgage Applications.
- Initial Jobless Claims fell by 1,000 in the August 6 week to 266,000. The 4-week average is up 3,500 to a level of 262,750.
- Bloomberg’s Consumer Comfort Index fell drastically in the August 7 week. The index dropped 1.2 points to 41.8, the lowest reading of the year.
What’s on economic calendar for the week of August 8, 2016:
- Monday – Housing Market Index
- Tuesday – Housing Starts, Consumer Price Index
- Wednesday – MBA Mortgage Applications, FOMC Minutes
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
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