It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
Factory Goods Orders
During the month of May, orders for factory goods slipped 1%, which was in line with economists’ estimates. The decline comes after two-straight months of increases and was attributed to weak demand for defense and transportation goods. In fact, orders for transportation dropped 5.7% and a defensive orders plunged 28.1%.
Balance of Trade
The Commerce Department reported on Wednesday that the U.S. trade deficit expanded 10.1% in May to $41.1 billion. Economists were expecting the deficit to widen to $40 billion. Exports slipped 0.2% in May and imports increased 1.6%. Clearly, the strengthening U.S. dollar is further widening the U.S.’s trade deficit. The U.S. trade deficit is expected to continue to rise in the upcoming months, which will be a drag on overall GDP growth.
Initial Claims for Unemployment
For the week ending July 1, initial claims for unemployment dropped by 16,000 to 254,000. Economists were expecting jobless claims to rise to 270,000 last week. The four-week moving average slipped to 264,750. Jobless claims are now just shy of a 34-year low of 248,000 and have remained below the 300,000 level for 70-consecutive weeks.
Unemployment Rate Report
This morning, the Labor Department announced that 287,000 new payroll jobs were created in June, topping estimates for 170,000. April’s payroll figure was revised to 144,000, up from 123,000, while May’s figure was revised lower to 11,000, down from 38,000. The unemployment rate rose to 4.9% in June, up from at 4.7% in May. Average hourly wages increased by $0.02 to $25.61 per hour. While the June payroll report was encouraging, the monthly volatility in the payroll numbers is disturbing. And given that the Fed wants to see real wage growth, and a $0.02 increase is not enough, the Fed is not expected to raise interest rates any time soon.
That’s all I have for you this week; I’ll be back online on Monday with your weekly ratings changes.