Initial unemployment weekly claims fell by 6,000 for the week ending Aug 6. The four-week average fell too.
The labor market continues to be tight in many parts of the country. The states on both the coast report lowest unemployment rates while mild rise in unemployment is witnessed in the mid-west. The July retails stregth is driven by these tight labor markets across the country.
Advanced July sales were reported at1.8% better than June retail sales driven largely by auto discounts.
Consumer is still in the mood to spend. The healthly consumer spending was reflected in June and July retail sales. The June retail sales (exlcuding auto) was revised to 0.9%. The retail sales strength will drive the 3Q GDP estimates higher.
U.S. crude import reached second highest weekly average, while refineries oerate at 95%.
The oil hungry U.S. economy hit the second-best record oil import in the last week. The gasoline and distillate production inched higher even though refineries processed 64,000 barrels less in the week. The Crude inventories rose but the inventories for distillate and gasoline fell.
Fed Raises its target for fed funds rate by 25 basis points to 3.5%. Stock market has reacted so far with the positive approval.
The tenth rate hike since June 2004 has taken the Fed fund rates to 3.5%. Fed also said in its release that it wants to extend its campaign of measured rate increases. The recent economic data released has suggested that the core inflation index, Fed's favorite index of personal consumption expenditure has been at 2.4% for the last 12 months well above the Fed target of 2%.
The non-farm productivity grew at a slower pace then in the 1Q rate of 3.2%. The future rise in productivity for the year is expected to slow down.
The productivity growth has slowed down considerably in the second quarter from the first quarter and is likely to slow further in the coming months. The rising wages contributed to slow down in the productivity. The manufacturing productivity rose at a fasater rate then service sector rate.
June wholesale inventories rose more than expected driven by rise in auto production and
Wholesale inventories in June were $353.1 billion, up 0.7% from May and up 10.2% from one year ago. Sales were $297.3 billion, up 0.6% from last month and up 7.8% from June 2004.
