The Numbers: Unemployment Rate Drops Slightly

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(Photo: © iStockphoto.com/CTRd)

Jean Teller |

Consumers see economic improvement despite few indicators going down in May, June

CHICAGO — JUNE’S UNEMPLOYMENT RATE was down to 6.1%, according to the U.S. Bureau of Labor Statistics. Gains were seen in a variety of industries, with a total of 288,000 jobs added to non-farm payrolls. The rate was down 0.2 percentage points from May’s. Over the course of this year, the rate has dropped by 1.4 percentage points, and the number has decreased by 2.3 million.

“It is the fifth consecutive month with job growth of at least 200,000,” says U.S. Secretary of Labor Thomas E. Perez, “and this is the most total jobs added in the first half of a year since 1999. Businesses created 262,000 more jobs in June, bringing us to a total of 9.7 million new private-sector jobs over the last 52 months (the longest such streak on record).”

THE HOUSING MARKET also reported recent growth. The National Association of Realtors reported a sharp increase in pending home sales for May, as well as lower mortgage rates and an increased inventory. The Association’s Pending Home Sales Index increased 6.1% in May, which, while up from April 2014, is still below the May 2013 figure by 5.2%. The May increase was the largest gain since April 2010.

“Sales should exceed an annual pace of 5 million homes in some of the upcoming months behind favorable mortgage rates, more inventory and improved job creation,” says NAR Chief Economist Lawrence Yun. He also says that second-half sales are likely to not be enough to help the lower first-quarter numbers, and that the year’s total will probably be lower than 2013.

The Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey showed a slight decrease in mortgage applications for the last full week of June. The number of applications was down 0.2% from the previous week. Refinance applications accounted for 53% of the total, an increase of 1% from the previous week.

New foreclosures were down 5% in May when compared with the same period one year ago, for a total of 109,824 new proceedings, according to RealtyTrac. And the number of homes underwater was also down when compared to a year ago, down 17% from March 2013 to a total of 9,065,741 homes.

U.S. INTERNATIONAL TRADE FIGURES were up in May, to $195.5 billion from $193.5 billion in April. “Today’s strong export numbers are yet another sign that more American businesses are seizing the opportunity to sell their world-class products and services to the 95% of consumers who live outside the United States,” says U.S. Secretary of Commerce Penny Pritzker.

THE NON-MANUFACTURING SECTOR of the U.S. economy reported growth for the 53rd consecutive month in June, according to the Non-Manufacturing Report on Business from the Institute for Supply Management.

A SMALL GAIN in consumer confidence was reported for June by the Surveys of Consumers from Thomson Reuters and the University of Michigan, although the figure was offset by a largely unchanged Sentiment Index. Weather conditions were given as reasons by most consumers for a first-quarter decline in economic growth, but they also see that the economy is experiencing positive growth overall, according to the report.

“Consumers did not expect such a negative GDP report, but it will not cause them to revise their expectations of future economic growth,” says Richard Curtin, Surveys of Consumers chief economist. “Given that they ignored the dismal first-quarter results, they are also likely to ignore the announcement of more favorable second-quarter GDP results in the months ahead.

“Unlike the usual seasonal adjustments that require established patterns, consumers had no trouble adjusting their expectations for a unique, one-time event. This adjusted base must be considered when assessing the implications of consumers’ expectations that the economy will remain largely unchanged in the year ahead.”

About the author

Jean Teller

Contributing Editor, American Trade Magazines

Jean Teller is contributing editor at American Trade Magazines. She can be contacted at jteller@americantrademagazines.com.

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