A WEEKLY ECONOMIC UPDATE FROM CONGRESSMAN GREGORY W. MEEKS

ECONOMIC ACTIVITY

Trade

• The July trade deficit fell $7.0 billion. Nominal exports increased in July ($2.8 billion or 1.8%) to their highest level since August 2008. The increase was led by a $2.3 billion increase in exports of capital goods. Year-to-date exports are up 18% when compared to the first half of 2009. (Commerce)

Employment

• In the week ending September 4, new claims for unemployment benefits fell by 27,000 to 451,000, the lowest weekly level of initial claims since the week ending July 10, 2010. (BLS)

• In July, the number of unemployed persons for every job opening was down to 4.80, from 5.10 in June. This ratio – often interpreted as a measure of labor market slack – is now about 20% below its November 2009 peak (a positive development). However, it remains more than double its pre-recession level. (BLS).

Production

• The two surveys of supply managers show continued growth in August, according to the Institute for Supply Management (ISM).

o The purchasing managers’ index (PMI) for manufacturing was 56.3 in August, up 0.8 point from July. The August level indicates expansion in the manufacturing sector, but at a slightly slower pace than it did during the March-to-May period when it averaged about 60. The PMI and its components are constructed so that an index below 50 indicates a contraction, while an index above 50 indicates growth. (Released September 1).

o Non-manufacturing supply managers continued to report growth in August, at a slower pace than had been reported for July. The overall non-manufacturing index registered 51.5, down 2.8 points from July. (Released September 3).

Consumer Spending

• Consumer confidence rose slightly in August, according to final data from the Reuters/University of Michigan Surveys of Consumers. The headline index edged up to 68.9 from July’s 67.8 final reading. Similarly, the Conference Board Consumer Confidence Index ticked up 2.5 points to 53.5 in August, partially retracing its declines in June and July.

Housing

• The mortgage applications purchase index increased 6.3% for the week ending September 3, according to the Mortgage Bankers Association. The index, a measure of the volume of mortgage applications for home purchases, is now 39% lower than it was a year ago. In addition, the refinance index fell 3.1% from the previous week, but is still more than double its level from one year ago.

• The pending home sales index rose by 5.2% in July compared with the previous month, according to the National Association of Realtors. The pending sales index leads the existing-home sales index by one or two months because the pending sales index measures signings of purchase contracts, rather than closings. Despite the increase, the July reading remains 19% below its year-ago level.