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:
Housing Starts and Building Permits
During July, housing starts jumped 2.1% to a 1.2 million-unit pace, while June housing starts remained relatively unchanged at a 1.19 million-unit pace. Building permits slipped 0.1% in July to a 1.15 million-unit pace. Economists were expecting housing starts to increase to a 1.18 million-unit pace and building permits to climb to a 1.16 million-unit pace. Given that housing starts are still increasing at a faster pace than building permits, only a slight rebound in home construction is expected.
Consumer Price Index (CPI)
The Labor Department reported that the Consumer Price Index (CPI) was flat in July, which followed two-consecutive months of 0.2% gains. In the past 12 months, CPI increased 0.8%. Excluding food and energy, core CPI rose 0.1% last month and is up 2.2% in the past 12 months. Inflation remains relatively tame, and that’s giving the Fed another reason to keep interest rates unchanged.
On Tuesday, the Federal Reserve reported that industrial production surged 0.7% in July, topping economists’ estimates for a 0.3% gain. June’s industrial production figure was revised lower to a 0.4% increase. Capacity utilization also rose last month, up 0.5 percentage point to 75.9%. Two-straight months of increases signal that the manufacturing sector may finally be stabilizing.
Initial Claims for Unemployment
For the week ending August 13, jobless claims slipped by 4,000 to 262,000. Economists were expecting 265,000 jobless claims. The four-week moving average climbed slightly to 265,250, up from 262,750 in the previous week. Jobless claims have been below the 300,000 level for 76-straight weeks, which indicates a strengthening jobs market.
Index of Leading Economic Indicators
The Conference Board reported this morning that its Leading Economic Index increased 0.4% in July. That’s up from the 0.3% jump in June and in line with economists’ expectations. The move higher came on the heels of rising stock prices, average workweek improvements and the yield curve. Overall, last month’s increase is a positive sign that the U.S. economy is now showing modest growth.
That’s all I have for you this week; I’ll be back online on Monday with your weekly ratings changes.
Have a great weekend,