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08/16/2017
Market Update

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Job openings surged by 8.1% in June, according to the Department of Labor’s Job Openings and Labor Turnover Survey; yet hiring fell by 1.9%, as employers struggled to find qualified staff. The report suggests that higher wages, a driver of inflation, might be necessary to fill openings that require skilled employees.
This Week
  • Job openings surged by 8.1% in June, according to the Department of Labor’s Job Openings and Labor Turnover Survey; yet hiring fell by 1.9%, as employers struggled to find qualified staff. The report suggests that higher wages, a driver of inflation, might be necessary to fill openings that require skilled employees.
  • Consumer prices inched up by 0.1% in July and by 1.7% in the year over year. Weakness in new-vehicle prices, communications and lodging contributed to the muted monthly report. Inflation continued to linger below the Federal Reserve’s (Fed) 2% target, which could cause the central bank to further delay future interestrate increases. Producer prices also eased by 0.1% in July, the biggest monthly drop in almost a year, due to lower energy and services costs.
  • Initial jobless claims rose by 3,000 to 244,000 in the week ending August 5. The four-week moving average (considered a more reliable gauge of unemployment) dropped by 1,000 to 241,000. Continuing claims fell by 16,000 for the week ending July 29, while the four-week moving average of continuing claims was unchanged at 1.965 million. Sustained tightness in the labor market could push the Fed to communicate its plans for balancesheet reduction at its next policy meeting in September.
  • Mortgage-purchase applications rose by 1% in the week ending August 4, as borrowers took advantage of decreased mortgage rates. Refinancing activity, which is highly rate-sensitive, gained 5% in the same period.
  • Non-farm productivity grew by 0.9% in the second quarter, modestly exceeding expectations. Output climbed by 3.4%, while labor costs inched 0.6% higher. The soft productivity figures continued to provide a headwind for economic growth.
  • Outstanding consumer credit (which measures non-mortgage debt) increased by 3.9% in June after expanding by 5.8% in May. Revolving credit reached a new high, a possible signal that households are taking on increasing amounts of credit-card debt to cover necessities.
  • Investor confidence within the eurozone remained steady in August, according to the Sentix eurozone investor sentiment index, as a strong reading for current conditions mitigated growing concerns about the U.S. economy.
  • The trade deficit in the U.K. widened to £12.7 billion in June from £11.3 billion in May. Imports rose by 1.6%, while exports dropped by 2.8%, despite a weakened pound that has made British goods cheaper abroad.
  • Consumer prices in China increased by 1.4% from a year ago in July, falling short of estimates. Producer prices held steady at 5.5% in the year over year.
  • Producer prices in Japan were higher in July, by 0.3% for the month and 2.6% year over year. This was the highest annual reading since late 2014—primarily on strength in petroleum and coal, but also within electric power, gas and water.


 

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