Fleet Management

This Week Holds More Promise on Economic Fronts

August 06, 2010

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While last week brought some disappointing economic news, especially the payroll figures released Friday, this week is expected to bring some more positive news
, according to IHS Global Insight economists, Brian Bethune and Nigel Gault.

"After a relatively weak reading on payroll employment at the end of the preceding week, economic news during the upcoming week is expected to have a more positive spin overall," the IHS Global Insight economists said.

Last Week

Friday the U.S. Department of Labor said the nation lost 131,000 jobs in July, after slipping by 221,000 in June. The unemployment rate was unchanged from June at 9.5 percent.

The good news is, the private sector saw employment increase by 71,000 in July, the second straight increase, according to Bob Costello, chief economist of the American Trucking Associations. "To be sure, this rate of growth is not as fast as one would expect after such a severe recession, but it is evident that the private sector is adding to payrolls," Costello said in his Weekly Economic Recap. "The primary weakness as of late has been in government jobs."

Government jobs were down 202,000 in July, following a 252,000 decline in June. Of these lost in July, 143,000 were temporary Census 2010 jobs, Costello said.

The for-hire trucking sector gained 5,900 jobs in July, the third boost in the last four months. So far this year, trucking payrolls are up 8,900.

Early last week, the Institute for Supply Management said its index of manufacturing activity (PMI) for July was down to a reading of 55.5, compared to 56.2 in June and 59.7 in May. However, any reading above 50 indicates growth in the sector.

Another manufacturing report, released by the U.S. Department of Commerce, found that new orders for manufactured goods were down 1.2 percent in June, after falling 1.8 percent in May. Total orders were up 11.3 percent year-over-year.

This Week

Despite some slightly negative economic news, what lies ahead should be better. The economists at IHS Global Insight say retail sales are expected to grow by 0.5 percent in July, while consumer prices should only see a modest increase. In addition, consumer confidence is expected to see a boost in early August.

Because productivity slowed in the second quarter, this could mean higher employment growth in the future, IHS Global Insight says.

On Tuesday, the Federal Reserve's Federal Open Market Committee meets. The agency is expected to keep interest rates the same, but "the FOMC will have to tone down its assessment of the economy in view of recent weak indicators on real growth, real consumption spending and employment."

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