Weekly Economic Update: July 29-August 2, 2013

Aug 05 2013

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Pending home sales fell 0.4% in June to a level of 110.9. The Case-Shiller home price index was up 1.0% in June and up 12.2% from a year ago. The FOMC held constant its target for the federal funds rate in the range of 0.0%-0.25%. GDP grew at a real annual rate of 1.7% in the 2nd quarter of 2013, according to the advanced estimate. Auto sales declined 1.8% in July to a still strong annual rate of 15.80 million units. Construction spending fell 0.6% in June. The ISM index jumped 4.5 points to 55.4 in July. The economy added 162,000 payroll jobs in July as the unemployment rate eased to 7.4%. Personal income increased 0.3% in June while personal spending increased 0.5%. Factory orders increased 1.5% in June. Initial jobless claims fell 19,000 to 326,000, a recovery low, for the week ended 7/27.

• Pending home sales fell 0.4% in June to a level of 110.9.

• The Case-Shiller home price index was up 1.0% in June and up 12.2% from a year ago. The Washington DC area component for the index was up 2.0% in May and up 6.5% from a year ago.

• The FOMC held constant its target for the federal funds rate in the range of 0.0%-0.25%. The Fed did not issue a reduction in quantitative easing, but it remains a possibility in the coming months.

• GDP grew at a real annual rate of 1.7% in the 2nd quarter of 2013, according to the advanced estimate. Second quarter growth topped expectations partially due to 1st quarter GDP being revised down to 1.1% from 1.8% with annual revisions.

As part of annual revisions, annual average growth for 2012 was revised up to 2.8% from 2.2%; 2011 remained unrevised at 1.8%; and 2010 was revised up to 2.5% from 2.4%. Finally, as part of a larger comprehensive revision, GDP was revised to reflect an improved measurement and accuracy of entertainment originals, expenditures on R&D, ownership transfer costs of residential fixed assets, accrual accounting of defined benefit pensions, and harmonization of treatment of wages and salaries on an accrual basis. The revision added roughly 3.6% to real GDP. Data was revised back to 1929.

• Auto sales declined 1.8% in July to a still strong annual rate of 15.80 million units. Sales were up 11.2% from a year ago.

• Construction spending fell 0.6% in June.

• The ISM index jumped 4.5 points to 55.4 in July. This was the strongest reading in more than 2 years.

• The economy added 162,000 payroll jobs in July as the unemployment rate eased to 7.4%. The private sector added 161,000 jobs while government employment increased by 1,000. The net revisions for May and June were down 26,000. The labor force fell by 37,000 as the participation rate edged down to 63.4%.

• Personal income increased 0.3% in June while personal spending increased 0.5%.

• Factory orders increased 1.5% in June.

• Initial jobless claims fell 19,000 to a level of 326,000, a recovery low, for the week ended July 27th. The figures are tied to seasonal distortions from temporary summer layoffs in the auto industry.

 

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