Last Week’s Economic News in Review (August 11th, 2021)
August 11th, 2021
Homebuilding drove gains in construction spending, while employment surged, and layoffs declined.
Construction Spending
Construction spending rose to an annual rate of $1.552 trillion in June, which was 0.1 percent above May’s revised rate of $1.551 trillion, according to last week’s report from the Census Bureau. Compared to the same period a year ago, June’s construction spending was 8.2 percent higher than June 2020’s pace of $1.435 trillion.
Spending on private construction rose 0.4 percent over May to hit an annual rate of $1,215.2 billion in June. Private construction comprised the lion’s share of construction spending for June. Of that, spending on housing construction in June grew to an annual rate of $763.4 billion, which was 1.1 percent higher than May’s revised pace of $755.4 billion.
Outlays on the construction of new, single-family homes in June expanded to an annual rate of $411.7 billion, which was 1.8 percent higher than May’s revised rate of $404.5 billion. Spending on the construction of new multi-family housing ticked down to an annual rate of $99.09 billion in June, which was 0.1 percent below May’s revised rate of $99.22 billion.
Employment Situation
The U.S. economy added 943,000 jobs in July, the Bureau of Labor Statistics reported last week. Job categories that contributed to last month’s employment gains included leisure and hospitality, local government education, and professional and business services.
The unemployment rate declined in July to 5.4 percent from 5.9 percent in June, and the unemployed population fell by 782,000 people to 8.7 million in July.
The population of long-term unemployed people – those who haven’t had jobs for 27 weeks or longer – declined by 560,000 people in July to 3.4 million Americans. This represented 39.3 percent of the total unemployed population.
“It’s an unambiguously positive report,” Barclays chief U.S. economist Michael Gapen told the New York Times. “Labor market conditions are strong. Unemployment benefits, infection risks and child care constraints are not preventing robust hiring.”
Initial Jobless Claims
First-time claims for unemployment benefits filed by recently unemployed Americans during the week ending July 31 declined to 385,000, which was 14,000 claims down from the preceding week’s revised total of 399,000, the Employment and Training Administration reported last week.
The decline in claims for the week was right in line with economists’ expectations for 385,000 claims,
The four-week moving average – regarded as a more reliable measure of jobless claims – notched down to 394,000 claims, which was 250 claims below the previous week’s revised average of 394,250.
This week, we can expect:
Wednesday – Consumer prices for July from the Bureau of Labor Statistics; Federal budget for July from the Treasury Department.
Thursday – Initial jobless claims for last week from the Employment and Training Administration; Producer prices for July from the Bureau of Labor Statistics.
Friday – Import prices for July from the Bureau of Labor Statistics; consumer sentiment for August from the University of Michigan Surveys of Consumers.
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Mission San Jose Mortgage
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