The summer of 2011 was sizzling hot in many areas of the US and that was not necessarily good news. Texas is still in the midst of the longest drought since the early 1950s, having a very negative impact on the agricultural business. Unfortunately, the state of the economy was-and still is-the exact opposite: ice cold and uncomfortably close to stalling once again. The Federal Reserve Bank has launched yet another rescue package, this time with a "twist" as they called it; the Fed will concentrate on buying long term bonds keeping the yield low which will help to keep the mortgage rates low. The aim is to help the housing market by maintaining a low interest rate for mortgages, but the Federal Reserve is just about out of ammunition and one hopes that this latest program will do the trick. In addition, there is the president's new job program that will make $50 billion almost immediately available for infrastructure programs. It still has to pass the US Senate and the House of Representatives, and as the latter is controlled by Republicans, passage is by no means assured.
GDP: Up 1.0 percent Q2 from Q1. Compared with Q2 2010 the increase was 1.5 percent
Consumer Prices: Up 3.8 percent in August (up 1.1 percent a year ago)
Consumer Confidence: 45.4 in August, down from 59.2 in July
Industrial Production: Up 0.2 percent August, up 3.4 percent growth compared with August 2010
Producer Prices: No change from July to August, up 6.5 percent compared to August 2010
Unemployment: 9.1 percent August
Trade Deficit: $44.8billion in July compared to $51.6 billion in March. For the past 12 months the deficit was $706.7 billion as of July
Currency: 0.73 euro to 1 US dollar as of September 21 (0.75 a year ago)
Housing: Housing starts in August fell to a seasonally adjusted annual rate of 571,000 units. This is 5.0 percent lower than the adjusted July rate and 5.8 percent below last year. In contrast, housing permits rose 4.0 percent to a seasonally adjusted annual rate of 620,000 units. This is 7.8 percent above the adjusted July figure and 5.4 percent below last year. Existing home sales in August increased 7.7 percent from July to a seasonally adjusted annual rate of 5.03 million units. This is 18.6 percent above last year. The national median existing home price for all types was $168,400, down 5.4 percent from a year ago. Total housing inventory at the end of August fell to 3.58 million units, representing a 9.5 month supply at the current sales rate.
Automotive Industry: 821,000 units of light vehicles were produced in August or 16.2 percent more than last year. In the first eight months of the year 5,592,254 units were produced or 9.5 percent more than last year.
Steel Production: 7.5 million metric tons in August or 13.8 percent above last year. In the first eight months of the year 57.6 million metric tons were produced or 6.1 percent more than last year.
Purchasing Managers' Index: according to the Institute for Supply Management, the PMI fell to 50.6 in August from 50.9 in July. But it is still the 26th consecutive month of growth albeit at a much slower pace.
Other data in that report were as follows:
New Orders: 49.6 (49.2 in July) - "contracting" for the second consecutive month
Production: 48.6 (52.3) - "contracting"
Inventories: 52.3 (49.3) - "contracting"
Customers' Inventories: 46.5 (44.0) - "too low"
Manufacturing Sector: "growing" for 25 consecutive months but at a slower pace
Overall Economy: "growing" for 27 consecutive months but at a slower pace