The July 2016 unemployment report shows a pretty good month of statistics. The unemployment rate remained the same at 4.9%. Yet this month, unlike others, the low unemployment rate is not due to more people dropping off of the statistical radar. Instead the labor participation rate ticked up a tenth of a percentage point as more people entered the labor force.
The Manufacturers' Shipments, Inventories, and Orders report shows factory new orders declined by -1.5% for June. That's after May new orders decreased by -1.2%. Durable goods new orders by themselves plunged by -3.9% for June after an May -2.9% decrease. That ain't good folks. Transportation new orders plunged by -10.5% as nondefense aircraft and parts dropped by -58.8%.
ADP's proprietary private payrolls jobs report gives a monthly gain of 179,000 private sector jobs for July 2016. This is less than the 12 month ADP private sector average and about the same as June. All of the job gains were in the service sectors whereas the goods producing jobs were lost. The largest gains were in professional and business services with construction jobs contracting.
The June personal income and outlays report shows a 0.4% increase in consumer spending. When adjusted for inflation, consumer spending rose 0.3%. Personal income increased 0.2% while real disposable income increased 0.1% for the month. This is decent growth in PCE. From a year ago, real consumer spending has increased 2.8% while real disposable income has increased 2.2%.
Recently I wrote an article regarding Darcy Richardson’s candidacy for the Reform Party nomination. Well a funny thing happened at the Reform Party Convention last weekend. Instead of picking a nominee, they postpone the decision until 8 Aug.
The first Q2 GDP estimate shows a surprising sputtering 1.2% of economic growth. That is a much weaker second quarter than most expected as investment declined -9.7% from the first quarter and the price index was much higher. Worse, GDP was revised for 2016 Q1 back to 0.8%. GDP for years 2015, 2014 and 2013, were all revised higher. Yet since Q2 2015, quarterly GDP was revised lower, showing quite the sluggish slowdown going on for at least a year.
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