Higher prices lead to weaker consumer spending; factory orders on the rise.
Amid a broader slowdown in the economy, weaker consumer spending hasn't fazed the nation's builders and manufacturers. Here's a look at this week's economic developments and how they may impact your business.
Rising prices put a damper on consumer spending, which rose by just 0.4% in June, the Commerce Department reported on Tuesday.
Including gas and food, consumer prices rose 0.2%, and have gained 3.5% over the past year, the report said.
Core consumer inflation, excluding gas and food prices, also rose by 0.2% in June and is up 2.4% in the past year -- the highest gain in 11 years, the department said.
At the same time, personal income is also rising, by 0.6% or $66.5 billion in June alone. Payrolls in the service sector increased by $28.1 billion, following a $5.2 billion decline in May, the report said.
The price grains are being closely watched by Federal Reserve policymakers, who have raised interest rates 17 times over the past two years.
Factory Orders Up
New orders for U.S. manufactured goods rose 1.2% in June to $406 billion, following gains of 1% in May, the U.S. Census Bureau reported in Thursday.
New orders have now risen four of the past five months, led by a growing demand for durable goods, the report said.
By contrast, orders for non-durable goods fell by 0.7%, or $1.3 billion, in June to $190.2 billion, the report said.
Also up were shipments of durable goods, which rose by 0.1% to $212.7 billion, and factory inventories, by 0.7% to $283 billion, the report said.
The manufacturing sector grew by 0.9% in July, while the service sector declined by 2.2%, the Institute of Supply Management reported on Tuesday.
Industries reporting the biggest growth included primary metals manufacturers, along with food, beverage, and tobacco producers, and electrical equipment makers, the report said.
In the service sector, the top performing industries in July included retail trade, educational services, and accommodation and food services, the report said.
Construction spending in June rose by 0.3% to $1.217 billion, the Department of Commerce reported on Tuesday.
The gains came despite a 1% drop in spending on private homes, and were driven by an upswing in nonresidential projects, the report said.
Jobless Claims Up
The amount of new claims for unemployment insurance grew by 14,000 to 315,000 last week, the Labor Department said on Thursday.
Altogether, some 2.48 million people filed for jobless claims in the week ending July 22, with the largest increases in new claims coming from Texas, Colorado, and Louisiana, the report said.