Friday Economic Snapshot: Back to work in June
Happy Friday! After celebrating our independence, let’s take a quick look at the economic week that was before getting back to the fun. The week’s economic news has been dominated by a positive employment report, red-hot auto sales and rising home prices.
While last week’s financial news was mixed — Q1 GDP revised down, contracting manufacturing and fewer unemployment claims — this week almost all of the news is positive. Apparently, even economics are reluctant to spoil the holiday fun.
The Bureau of Labor Statistics reported, “Total nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent…”
While it’s not enough to move the unemployment rate, those positive numbers was above the expected 161,000, and included positive revisions for April and May. Looking at the trend going back to pre-recession January 2008, June came out near the top tier of job-creating months.
As the lagging economic indicator, amid so much positive news in other categories, even modest improvements in payrolls are very welcome and an important step forward, even if June’s numbers weren’t spectacular.
American auto sales just keep getting better and, without over reliance on incentives or fleet sales, experts feel these levels are healthy and sustainable. The latest numbers show the industry at the fastest sales rate in more than five years — taking us back to 2007.
Analysts have credited consumers replacing older models, attractive financing and a healthy economy as bolstering sales, as well as an improved housing market driving demand for pickup trucks. As an aside, sales of the top-selling Ford F-series rose 24 percent to 68,009 in June. That’s quite a few loads of sheetrock.
Looking at the last three months, the CoreLogic House Price Index for May came out this week, and it showed a 12.2-percent year-over-year increase for May.
From the report, “Home prices nationwide, including distressed sales, increased 12.2 percent on a year-over-year basis in May 2013 compared to May 2012. This change represents the biggest year-over-year increase since February 2006 and the 15th consecutive monthly increase in home prices nationally.”
After remaining largely stagnant — and sour — since early 2009, the CoreLogic House Price index has shown a sharp turn up in the last year. If this trend continues, it will be good news for the overall economy, benefitting auto sales, consumer wealth, manufacturing and more.
From getting a good spot on the beach to avoiding sunburn, there’s a lot to worry about this holiday weekend, but the economy isn’t one of them. With strong car sales, rising home prices and increased payroll statistics, this is just the kind of news the business community would like to read every month. Sure, the trade deficit has increased and there are plenty of headwinds beyond our borders, but America’s economy is looking strong on this Independence weekend.
Get out there and enjoy it!