Monthly Archives: July 2012

Incomes Up, Spending Flat

Personal disposable incomes rose 0.4% in June, but spending remained almost unchanged (falling nearly 0.1%) as consumers continued to grow more cautious in their spending decisions. The data was not much changed after adjusting for inflation, with real disposable incomes rising 0.3% during the month and spending near the zero line. This is consistent with [...]

Economy Slows in Line with Expectations in 2Q

Real GDP slowed to a 1.5% pace in the second quarter after growing at a 2.2% pace in the first quarter. Historical revisions, which can throw quite a monkey wrench into our reading of real GDP, were much more benign this year than they have been in recent years. Growth in the 2009-2011 period was [...]

Durable Goods Orders Rise on Aircraft and Defense

Durable goods orders rose 1.6% in June, after being revised up quite significantly in May. All of those gains, however, were concentrated in aircraft, most notably in defense. The auto sector, which had been a bright spot earlier in the year, declined with some recent weakness in sales. Orders for electronics, computers and appliances also [...]

New Home Sales Disappoint

New home sales dropped to a 350,000-unit rate in June from an upwardly revised 382,000-unit rate in May. The drop was a disappointment and mirrored the weakness that we saw in existing sales during the month. The largest declines were in the Northeast and the South. The drop in the Northeast is particularly troubling,

Drop in Home Sales May Overstate Weakness

Existing home sales dropped to a 4.37 million unit rate in June, down from a 4.62 million rate in May. Sales were revised up slightly in May, which blunts the blow. A shortfall in the inventory of foreclosures and short sales on the market are the primary reasons that realtors blame for the drop, as [...]

Good News on Jobless Claims Fades Fast

Jobless claims surged by 34,000 back to 386,000, a range we have come to know too well. The unusual timing of auto factory closings was the anomaly that pushed claims so low the week prior, and quickly dissipated. We are now back in the murky waters of the second-quarter stall rate of growth and are [...]

Midwestern Drought: Pass-through Effects

I’ve been asked about this several times in recent weeks: We will see less of an inflationary effect in overall inflation than we did with the oil price shock. Restaurants are already having trouble with customer traffic, so they will have to eat higher costs in margins. The drought will hit prices of fresh vegetables, [...]

Housing Starts Rise

Housing starts continue to show signs of slowly healing and rose to 760,000 in June from 711,000 in May and are up more than 20% from June 2011. Moreover, gains were in both single and multifamily starts, which is important as much of the larger bang for the dollar in housing-related jobs is in single [...]

Best of Bernanke’s Semi-Annual Testimony on the Hill

I was tweeting (@DianeSwonk) this morning during Federal Reserve Chairman Ben Bernanke’s testimony and questions from the Senate Banking Committee.  Here are a few of my thoughts and reactions: Fed‬ downgrades growth, with concerns about ‪unemployment‬, which justifies further Fed action. One bright spot is housing (home builder sentiment jumped) but it is not enough to stem [...]

Industrial Production Rebounds in June

Industrial production rose 0.4% in June after declining 0.2% in May. Production in the vehicle sector surged 1.5%, while production of home electronics continued to slide. Business equipment also posted strong gains in June after moving essential sideways the previous month. Declines were posted in the defense sector, which could become substantially larger if the [...]