Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
While last week saw a light calendar of economic headlines, it still witnessed some significant news, with better-than-expected consumer credit and initial jobless claims. Also, wholesale sales and inventories saw gains, which was cause for optimism.
Consumer Credit
Consumer credit saw an encouraging gain in May, according to last week’s report from the Federal Reserve. Total consumer borrowing for the month hit $3.19 trillion, a 7.4 percent, or $19.6 billion, gain over the previous month when the market was expecting only a $15 billion increase.
Non-revolving debt, such as car or student loans, continued to be a key driver for consumer borrowing, growing 9.3 percent in May to $2.32 trillion. Revolving debt, such as credit card transactions, grew by 2.5 percent during the month to $872.2 billion.
May’s credit gains coincided with solid gains in several retail sales categories (reported by the Census Bureau in June). The willingness of consumers to assume more debt pointed to increased belief in the economy, according to Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd.
“This says a lot about the confidence of consumers and bodes well in terms of future spending,” Rupkey told the Bloomberg news services. “Their ability to take on more debt, because of the firmer job market means this economy has some staying power.”
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed fell further than anticipated, according to last week’s numbers from the Employment and Training Administration. The market had expected last week’s numbers to match the previous week’s total of 315,000 claims, but that wasn’t the case.
Instead, claims filed in week ending July 5 dropped to 304,000, a solid decline of 11,000 from the previous week's 315,000-claim mark. The numbers seemed to be confirmed by the four-week moving average, which dropped to 311,500, marking a 3,500-claim reduction from the previous week’s average of 315,000. (The four-week moving average is considered a more reliable figure to measure near-term employment activity.)
“Overall, unemployment claims have been exceptionally stable at low levels as of late and suggests that labor market conditions continue to improve,” BNP Paribas economist Yelena Shulyatyeva told MarketWatch.
Wholesale Sales and Inventories
Turning to the merchant side of the economy, sales for merchant wholesalers, except manufacturers’ sales branches and offices, grew 0.7 percent in May to hit $453.2 billion, the Census Bureau reported last week.
Looking at supply, total inventories for merchant wholesalers saw a similar gain of 0.5 percent to hit $532.7 billion in May. This put the inventory-to-sales ratio for merchant wholesalers in May at 1.18. The May 2013 ratio was 1.16.
That increase in inventories came as encouraging news, as it points to expectations of increased sales activity for wholesalers in coming months.
This week we can expect:
- Tuesday — Retail sales totals for June, export and import prices for June, and May business inventories from the Census Bureau.
- Wednesday — June producer price index from the Bureau of Labor Statistics; Industrial production and capacity utilization for June from the Federal Reserve.
- Thursday — Initial jobless claims from the Employment and Training Administration; housing starts and building permits for June from the Census Bureau.
- Friday — June leading economic indicators from The Conference Board.
Economic News in Review Greenville SC
Have a Big day,
Randy
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