This Week's Economic Roundup
While taking a more cautious approach to hiring and spending plans for the months ahead, small-business owners are maintaining a positive outlook on the economy. Here's a look at this week's economic developments and how they may affect your business.
Owner Optimism Steady
The economic outlook of the nation's small-business owners held steady in May, even as many were cutting back on hiring and spending plans, the National Federation of Independent Business reported Tuesday.
Based on a survey of its 600,000 members, the Washington-based lobby's monthly small-business optimism index rose 0.4 points from April to 97.2, just below its 1986 baseline rate of 100. Typically, about a quarter of the group's members respond to the surveys.
While slightly more owners were expecting sales to increase in the months ahead, the number planning to raise employment and capital spending remained unchanged from April. Meanwhile, 29 percent reported higher prices and compensation costs, both up from April.
"Labor compensation will be pressuring profit margins all year," William Dunkelberg, the group's chief economist, said in a statement.
Retail Sales Up
Total sales at the nation's retailers rose by 1.4 percent in May to $377.9 billion, a 5 percent gain from the same period last year, the Commerce Department reported Wednesday.
Excluding motor vehicle and parts dealerships, retail sales rose 1.3 percent.
The gains, which were led by a 3.8 percent increase in gasoline sales, included stronger sales at clothing and accessories stores, building-equipment and gardening centers, and sporting goods and hobby outlets.
In the past year, non-store retail sales have grown by 7.7 percent -- the fastest pace in the retail sector after clothing stores -- while sales at traditional department stores have declined by 0.7 percent, the report said.
Producer Prices Rising
Prices paid by the nation's manufacturers rose by 0.9 percent in May, a slightly faster pace than a month earlier, the Labor Department reported Thursday.
Prices for finished goods, excluding food and energy, rose by 0.2 percent, while prices were up by 1.1 percent for intermediate goods and 2 percent for crude goods, the report said.
Higher energy costs boosted prices across the board, including a 10.2 percent gain in gas prices.
The value of unsold inventories at factories, wholesalers, and retailers rose by 0.4 percent in April, the sharpest gain in seven months, the Commerce Department reported on Wednesday.
Gas Prices Falling
After rising to record highs in recent months, average gas prices fell for the third straight week, dropping by 8.1 cents to $3.076 per gallon as of June 11, the Energy Information Administration reported on Wednesday.
Despite the declines, prices were still 17 cents above the same period last year.
The largest regional decrease this week was in the Midwest, where prices dropped by 15.2 cents to $3.073 per gallon, the report said. The West Coast continues to have the nation's highest gas prices, including a regional high of $3.32 per gallon in California.
Jobless Claims Unchanged
The number of new claims for unemployment benefits held steady last week at 311,000, the Labor Department reported Thursday.
The advance seasonally adjusted insured unemployment rate the previous week was also unchanged at 1.9 percent, with 2,487 million people filing jobless claims.
The largest increases in new claims last week were in Georgia, Minnesota, and Illinois, which were offset by decreases in California, Texas, and New Jersey.