#MoneyConscious Mash Up: National Bagelfest Day Edition

ECON

Bake yourself bagels for breakfast today in honor of National Bagelfest Day and take in some extra calories. No, that’s not a sensible thing to do in the middle of swimsuit season, but neither is scheduling a carb-loaded national holiday in the same season.

As for economic news, it was nearly as concerning as the possibility that Cher may have never recorded one of our biggest hits. To start, the Chicago Fed released its National Activity Index for June, which came in at 0.12, down from May’s 0.16. The three-month average slowed to 0.18 in June from 0.33 in May. A reading of zero equals trend growth. June’s drop was driven mostly by a drop in production and cancelled out the gains from job growth.

Tuesday was a robust news day and started with the ICSC-Goldman Store Sales report that showed same-store sales for the week ended July 19th dropped to – 0.4 percent from the previous week and a 2.8 percent increase from the previous year. This breaks a sharp increase in recent months and is the slowest reading since May. The Johnson Redbook was the next retail report to be released and, also, showed a slowdown, but remained positive. Sales were up 3.7 percent for the week ended July 19th, after a 4.1 percent increase the prior week.

The Department of Labor’s June Consumer Price Index (CPI) report was up 0.3 percent over May’s 0.4 percent increase. The rise in consumer prices was driven in large part by a 3.3 percent increase in gas prices after a 0.7 percent increase in May. Electricity and food prices were, also, up slightly. The core-CPI, which removes food and energy prices, showed a 0.1 percent rise, down from May’s 0.3 percent increase. This suggests that families should continue to closely monitor prices, spending and their budget so as to avoid the need to tap into credit.

If your natural inclination is to turn to chocolate and 50 Shades of Grey during such scary times, budget for increased chocolate costs, as well. The price of cocoa, the main ingredient in chocolate, increased nearly 50 percent this week and doesn’t look to decrease anytime soon.

The Federal Housing Finance Agency (FHFA) released its House Price Index (HPI), which covers sale prices of single-family homes and was up 0.4 percent in May and up 5.5 percent over last year. The year-over-year pace closed by 0.6 percent from April and suggests the spring thaw was as productive as Megan Fox’s search for Big Foot. Then, like a disco ball to a ferret, housing got excited when the National Association of Realtors released its June U.S. home sales report. The report showed that existing home sales increased 2.6 percent, the fastest in eight months, and a sign that housing may have climbed out of its slump. Broadly speaking it’s not a buyers or a seller’s market so, regardless of which side you’re on, don’t take your first option.


Read last week’s #MoneyConscious Mash Up: National Daiquiri Day Edition


The Richmond Fed wrapped up Tuesday with its own manufacturing index, which rose 3 points to 7 in July and marked the fourth straight month of an increase. New orders remained steady and employment in the region edged up 9 points to 13, with wages up 16 points from 12 points. This mirrors last week’s Empire State Manufacturing Survey and the Philly Fed Index. Go east, young non-denominational, race and gender neutral it person. East coast manufacturing is where the jobs are.

Wednesday was tied for the lightest day of the week with one report, the Mortgage Bankers Association Purchase Applications. Both purchase and refinance applications increased for the week ended July 18th, up 0.3 percent and 4.1 percent respectively. This caused the MBA Mortgage Index to rise 2.4 percent.

Global economic news on Thursday overall proved hard to swallow. First the Labor Department reported that initial jobless claims for the week ended July 19th dropped 19,000 from the previous week to 284,000. This was its lowest report since February 2006. Though it feels like Weird Al’s 31 year quest for a number one album, taken with the increase in new jobs, we finally have a trend that the employment picture is improving. Of course, most jobs are part-time positions that make it hard for workers to juggle multiple jobs when they can’t find a full-time job.

Markit, then, released its preliminary U.S. Manufacturing Purchasing Managers Index that came in at 56.3 in July, down from June’s 57.3. While anything above 50 suggests expansion, this suggests a slowdown in that expansion. At the same time, the Commerce Department’s sale of new homes report was like Darth Vader to a presidential race on Thursday when it reported a significant drop in sales of 8.1 percent to 406,000 from May’s downward revised figure of 442,000.

Lastly, the International Monetary Fund, better known as IMF and run by a “cheese eating surrender monkey”, on Thursday cut its 2014 global forecast to 3.4 percent from 3.6 percent due to signs of weakness in China and the U.S.’s economies. 

Reading Friday’s single report made us as giddy as reading historical slang terms for sex. The Commerce Department reported that U.S. durable goods orders jumped 0.7 percent in June after May’s decline. The increase was driven largely by purchases for commercial aircraft and machinery, which suggests business are ready to invest . . . and they should be. In addition to investing in capital, business should start investing in the American people (i.e., hiring and increasing wages) because . . . .

About 77 percent of companies within the S&P 500 have so far reported beaten second quarter earnings expectations, higher than the 63 percent long-term average, while 65 percent have beaten their own sales projections. We think it’s now time to grow potential customers.

In our opinion, the economy is slowly improving and is on a positive, yet unstable trajectory. Domestically, our biggest concerns are jobs, wages and the economic steroid known as Quantitative Easing. A more secure, reasonably paid middle class is the oil the U.S. engine needs. Until business sees value in investing in American citizens and government stop covering for business’s greed, we’ll continue this slow drudgery. Internationally, the economy and especially the stock market have proven they care about the rest of the world about as much as the stereotypical average American. 

PF

This week in personal finance seems to be a wake-up call to workers. It’s has become more apparent that though the job market has improved for whatever reason, call it Obamacare or something else, employers are hiring largely for part-time shifts. Part-time employment could be the causation or correlation for the seemingly growing complacency among our political and business leaders that stand in the way of necessary policy changes. Of course, there’s a theory that due to technological advancements, no matter what our fearless leaders do we will continue to have increased abundance with a continued decrease in human jobs. This has echoed calls for a shrinking work week from the likes of Mexican magnate Carlos Slim and Google’s Larry Page

This doesn’t mean that the era of jobs is over. It likely means a need for more skilled workforce, one that’s technically savvy and thinks strategically and critically. Times such as these often cause great stress, but it’s time such as these we must remember that though America feels, it’s not out.

That’s all the economic and personal finance news, interjected with a little humor, that we think is work your time this week. Use this information to help you manage your personal finances. Though the topic may bore you, it still affects you. 

Please tell us what you think of our #MoneyConscious Mash up. Do you find it useful and entertaining? Do you apply it to your personal finance?


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