Economic Figures Show Uncertainty, Economist Says Everything On Track
If there is anything that can be said for these uncertain economic times, it is that economic figures are uncertain, too
If there is anything that can be said for these uncertain economic times, it is that economic figures are uncertain, too.
On Tuesday more numbers were released, leaving many trying to figure out where trucking and the rest of the American economy are headed.
The U.S. Commerce Department reported that consumer spending rose more than expected in June, increasing 0.4%, following a 0.3% percent increase in May. That’s good news for trucking because so many consumer goods are moved by truck, and that consumer spending accounts for two-thirds of U.S. economic activity.
What makes this news surprising is that unemployment increased to 4.5 percent in June due to more than 100,000 jobs being eliminated during the month. Even more confusing, during the same period Americans’ incomes increased, moving up 0.3% in June following a 0.2% increase in May. Many economists are predicting July’s unemployment numbers will show a slightly bigger increase when released on Friday.
“I believe things are still on track for an improved economy," said Newport Communications Economist Jim Haughey. “The spending increase is important. If you look closely at the details, spending on durable goods increased 1.6%, which is a big jump, and that has been increasing much less the past few months. That’s a very good sign because those kind of purchases are very sensitive to economic conditions,” he said.
In the meantime, how consumers are spending their money and how they feel about the future are entirely different.
The Conference Board reported its Consumer Confidence Index fell from 116.5 in July from a revised 118.9 in June. The monthly survey of 5,000 households also found this same group is cautiously optimistic about the economy later in the year. Many analysts are shrugging off this report, saying consumers will start to feel better as government tax rebate tax checks for as much as $600 arrive in the mail.
According to Haughey, “A little bit of drop is disappointing but not serious. The low point was April and we’ve been above that clearly for three months and we can conclude confidence is on the uptrend.
“If you look behind those numbers, the index is really composed of two parts—consumer assessment of current conditions and consumer assessment of six months in the future. The current conditions assessment has continued to deteriorate each month as it has for many months, but the assessment of conditions six months ahead has been stable or rising, meaning that consumers are saying things are tough now, but they feel things are going to get better.”
Finally, yesterday, two regional economic indicators fell. The National Association of Purchasing Management released its New York Business Conditions Index. The drop came despite a pickup in the manufacturing sector for the first time in six months, while The Chicagoland Business Barometer fell far more than forecast by economists and well below its June reading.
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