Latest Jobs Report Sends Mixed Signals

1. Dana Calcagno-Wilkins Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE
“Europe was created
by history. America
was created by
philosophy.”
- Margaret Thatcher
WEEKLY TIP
Create a plan for the
distribution of your
retirement savings.
You will use up a
significant portion of
those assets; have a
withdrawal strategy
defined.
WEEKLY RIDDLE
I am usually only as
wide as a thumb, and
I typically travel
across the nation for
less than a dollar, all
while lying flat. What
am I?
Last week’s riddle:
What has two hands but
will never clap?
Last week’s answer:
A clock.
August 5, 2013
JOBS REPORT SENDS MIXED SIGNALS
Unemployment sank to a 4½-year low of 7.4% last month, even as the pace of hiring
declined a bit from spring. The Labor Department’s July report showed non-farm
payrolls expanding by 162,000 jobs, with retail, bar and restaurant hires accounting
for most of the gain. The ranks of the self-employed grew 2.6% last month. With jobs
data like this, some analysts are wondering if the Federal Reserve will reconsider its
plan to reduce asset purchases later this year.1
HOUSEHOLD SPENDING MEETS EXPECTATIONS
Consumer spending rose 0.5% in June, matching the consensus forecast of
economists polled by Reuters; consumer incomes grew 0.3%. The Commerce
Department also said the economy grew at a 1.7% annual pace in Q2, up from 1.1% in
Q1. July’s Conference Board consumer confidence index came in at 80.3 last week;
economists polled by MarketWatch had expected a reading of 81.1.2,3
ISM FINDS JUMP IN MANUFACTURING GROWTH
The Institute for Supply Management’s manufacturing index hit 55.4% in July, much
improved from 50.9% in June. Economists surveyed by MarketWatch had
anticipated a 52.0 reading.3
HOME SALE CONTRACTS DECREASE, BUT PRICES RISE
The National Association of Realtors said pending home sales dipped 0.4% for June
after rising 5.8% for May. May’s edition of the S&P/Case-Shiller Home Price Index
offered better news, however: a 12.2% overall annualized gain.3
MORE RECORDS SET ON WALL STREET
On Friday, the S&P 500 settled at 1,709.67 – its highest close ever – thanks to a
1.07% weekly advance. The Dow closed at 15,658.36 Friday, the NASDAQ at
3,689.59; they respectively gained 0.64% and 2.12% last week.4,5
THIS WEEK: ISM’s July non-manufacturing PMI arrives Monday, along with
earnings reports from HSBC, Tyson Foods, Jamba, Fidelity and Scripps. Q2 results
from Molson Coors, OfficeMax, Starwood Properties, CVS and Fossil appear
Tuesday. Wednesday, earnings reports arrive from Novatel, Time Warner, Rosetta
Stone, Prudential and Ralph Lauren. Thursday brings the latest initial claims
numbers and earnings from Priceline, Sports Chalet, Nvidia, T-Mobile and Orbitz.
On Friday, we get the Census Bureau’s June wholesale inventories report and the
latest inflation and industrial production data from China.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +19.49 +21.58 +7.65 +7.11
NASDAQ +22.19 +26.80 +11.93 +11.51
S&P 500 +19.88 +25.25 +7.13 +7.44
REAL YIELD 8/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.42% -0.69% 1.63% 2.40%
Sources: thestreet.com, bigcharts.com, treasury.gov - 8/2/135,6,7,8
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Citations.
1 - tinyurl.com/mjef2t3 [8/2/13]
2 - tinyurl.com/lh438e5 [8/2/13]
3 - marketwatch.com/Economy-Politics/Calendars/Economic [8/1/13]
4 - tinyurl.com/mqc7vx6 [8/2/13]
5 - usatoday.com/money/markets/overview/ [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/2/13]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/2/13]