Economy Gets Better Even as it Slows

 

July 7, 2004 -- Reports of the economy's well-being may occasionally seem somewhat premature. But then, so do reports of its ill-health.

In the past week, economic benchmark data from various sources have offered differing views. On Tuesday, the Institute for Supply Management released its latest business activity index for non-manufacturing business, indicating a slight slowdown in activity: The index stood at 59.9 percent for June, down from May's 65.2 percent and below the 63 percent anticipated by many economists.

But in the same report, the group noted that new orders rose to 62.4 percent in June from 61.3 in May and employment levels reached 57.4 percent, up from 56.3 the previous month.

Elsewhere, the Bureau of Labor Statistics offered a dimmer view Friday, with data showing new jobs totalled just 112,000 in June, far short of the 250,000 new jobs expected after a poll by Barron's.

Meanwhile, conflicting data present a mixed picture on consumer activity. Last week, Wal-Mart, General Motors and Target reported a drop of sales in June. However, the Conference Board, which measures business activity, said that its index of consumer confidence hit a two-year high.

Many economists remain bullish on the economy, however, according to a report yesterday by the Associated Press, which noted the group expected growth of up to 4.8 percent overall. Despite the ups and downs in the data, such growth would put the year on track to be the strongest since 1984, when the economy grew at 7.2 percent.