This Week's Economic Roundup
While the economy continues to cool, consumers are putting on a brave face amid high energy costs and a softening housing market. Here's a look at this week's economic developments and how they may impact your business.
Consumer Mood Strengthens
Defying growing signs of an economic slowdown, the mood of consumers unexpectedly brightened in July, the Conference Board reported on Tuesday.
Based on a survey of 5,000 U.S. households over the first half of the month, the private research group's index of consumer confidence edged up to 106.5, from 105.4 in June, with both the present situation and expectations indexes making gains, the report said.
Of those polled, a full 27.6% described current conditions as good, up from 26.6% the previous month, and 28.6% said jobs were plentiful, up from 28%, according to the report.
While those who felt conditions could get worse declined in July, from 11.9% to 11.1%, fewer also expected the economy to improve, the report said.
"Present day conditions remain favorable, though not as strong as earlier this year," Lynn Franco, the group's director of research, said in a statement. "Expectations for the months ahead remain cautious and also below levels earlier this year."
While all twelve Federal Reserve Districts reported growth between June and mid-July, individual reports pointed to "evidence that the pace of growth has slowed," the Federal Reserve Board said on Wednesday.
Among other troubling signs, the report cited high energy costs, coupled with the cooling housing market and tighter labor markets, even as wages and prices remained steady, the report said.
Philadelphia, Cleveland, Richmond, Chicago, Dallas and San Francisco all reported declines in the overall pace of economic growth, the report said.
Home Sales Down
The housing market continued its downward slide in June, with new home sales falling 3% to an annual rate of 1.13 million, the Commerce Department said on Thursday.
The sales pace in May was also revised downward to 1.17 million from 1.23 million, the department said.
There were 566,000 unsold new homes on the market in June with a median sales price of $231,300, enough to last 6.1 months at the current sales pace, the report said.
At the same time, sales of existing homes fell 1.3% to an annual rate of 6.62 million, the National Association of Realtors reported on Tuesday.
The number of existing homes on the market hit a record high of 3.725 million in June, even as the average price rose just 0.9% to $231,000 -- the lowest monthly gain in a decade, the report said.
Jobless Claims Fall
The number of new claims for unemployment insurance dropped by 7,000 to 298,000 last week, the Labor Department reported on Thursday.
The biggest declines in new claims were in Michigan, Wisconsin, New York, Pennsylvania and Ohio, the report said.
Still, the four-week moving average for all jobless claims rose by 18,500 to 2,460,250, the report said.