General: Federal Reserve Chairman Ben Bernanke's latest efforts have concentrated on calming fears that inflation will run out of control. The latest data indicate just that. But the recent fall of crude oil prices could be very helpful in his endeavor. There is no doubt that the economy has taken center stage in the upcoming election campaign. A variety of solutions and plans will be offered in the next few weeks and lifting a partial ban on off-shore oil exploration was already being heatedly discussed in the US Congress before it went on its five-week summer break. If the up to now restricted fields could be opened up, the US could cover its present crude oil needs for almost three years. Blend in some imports and these reserves could be stretched even further. At the very minimum, an increased US production would alleviate the global crude oil supply and likely bring down energy prices.
GDP: +1.9% in Q2
Consumer Prices: +5.6% for the twelve months up to the end of July, +0.8% in July over June
Consumer Confidence: 51.9 in July, steady from 51.0 in June. However slight, it is the first increase since December of last year
Industrial Production: +0.2% in July
Producer Prices: +9.8% in July, +1.2% over June
Unemployment: 5.7% in July -- a four-year high
Trade Deficit: $56.8 billion in June and $836.2 billion for the latest twelve months
Housing: Housing starts in July fell to a seasonally adjusted annual rate of 965,000 units. This is 11.0% below June and 29.6% below last year. Housing permits in July fell 17.7% to a seasonally adjusted annual rate of 937,000 units. This is 32.4% below July 2007. Existing home sales fell 2.6% in June to a seasonally adjusted annual rate of 4.86 million units. This is 15.5% lower than June 2007. At the current sales rate the inventory of unsold homes translates into 11.1 months, up from a 10.8 month supply in May. The median home price in June was $215,100, down 6.1% from a year ago.
Automotive Industry: 577,794 units were produced in July, or 9.4% less than last year. In the first seven months of the year 5,464,859 units were produced or 13.9% less than last year. Automotive sales dropped again in July (-1.2%) even though the fall was not as steep as in June.
Steel Production: 8.5 million metric tons in July or 2.7% more than last year. In the first seven months of 2008, 59.4 million mt were produced or 4.8% ahead of last year.
Purchasing Managers' Index: According to the Institute for Supply Management, the PMI fell to 50.0 in July from 50.2 in June. Any number over 50 signifies growth and under 50 signals a contraction. The July index nicely sums up the state of the US economy right now: stalled.
Other data in that report were as follows:
New Orders: 45.0 (49.6 in June) - trend is "contracting"
Production: 52.9 (51.5) - "growing"
Inventories: 45.0 (51.2) - "contracting"
Customers' Inventories: 47.0 (55.0) - "too low"
Backlog Orders: 43.0 (47.5) - "contracting"
Overall Economy: "growing" (81st consecutive month!)
Currency: US$1 = Euro 0.68 as of August 20 (0.74 a year ago)