General: The relentless stream of bad news in the past months has apparently led to a dramatic decrease in the August consumer confidence index. An initial reading puts it at 104.0, down from 112.6 in July. The good news is that the number is still above 100. If the country were to go into a recession, the number would be at least 30 points lower.
GDP: + 1.8% as of Q2 for the past twelve months, + 3.4% for the quarter alone compared to Q2 2006
Consumer Prices: + 2.4% in July; the personal consumption expenditure (PCE) index rose a mere 1.9% annually in July, soothing the collective nerves of the Federal Reserve board members. This Index excludes food and energy spending.
Industrial Production: + 1.4% in July. Durable goods orders increased an encouraging 5.9% in July over June. The closely watched non-defense capital goods orders rose 2.2%. The Purchasing Managers Index (PMI) fell to 53.8, down from 56.0 in June.
Unemployment: 4.5% in July
Trade Balance: - $823.4 billion as of June for the past twelve months
Housing: Sales of new homes increased 2.8% in July over June as the average home price fell 3.4% to $300,800 compared to a year earlier. Sales of existing homes fell slightly, by 0.2%, in July to an annual rate of 5.75 million units. This is the lowest level since November 2002. Inventories of homes for sale jumped 5.1% in July to 4.59 million. At the current sales pace, this represents a 9.6-month supply of homes. A 6-month supply is regarded as a balanced market. The median sales price dropped to $228,000, down 0.6% from July 2006. There seems to be a sinking feeling among the experts that the housing crisis will not be resolved any time soon and will probably last through 2008.
Steel Production: 8.4 million mt in July, 0.7% less than last year. In the first seven months of the year, 56.9 million mt were produced, or 3.8% less than last year.
Automotive Industry: 645,490 units were produced in July, or 15.6% ahead of last year. In the first seven months, 6,351,928 units were produced, still 4.9% behind last year.
Special Focus: According to a report by the US Census Bureau, the income inequality gap widened slightly in 2006 and the fraction of Americans living without health insurance continued to rise. Other noteworthy items were: - About 36.5 million Americans, or 12.3% of the population, lived in poverty last year. This number is statistically unchanged from 2002 despite several years of economic growth. - The best-off fifth of American households claimed 50.5% of pre-tax income in 2006, while the bottom three fifths accounted for 26.5% of pre-tax income. This trend has been present for quite some time. Twenty years earlier, the top fifth got 46.2% of the income and the bottom three fifths had 29.5%. - The median income of a full-time, year-round male worker fell for the third year in a row to $42,261 in 2006, a 1.1% drop from the year before. The median income for women fell to $32,515, a 1.2% drop. - 44.8 million Americans, or 15.8% of the population, were without health insurance in 2006.