Happy post-Fourth of July and happy bikini day! With two full days left on this three-day weekend to celebrate America’s birthday and with the hot weather, no doubt there will be a lot of bikinis poolside today and tomorrow.
The week started off on a sour note when Chicago’s Purchasing Managers Index (PMI), much like the Plain State’s PMI from last week, came in at 62.6, below May’s 65.5 and expectations of 63. A number of factors affected PMI, but deflation and new orders dragged the measurement down the most. At the bottom of the country, Texas Manufacturing Outlook Survey for June came in at 15.5, up from 11 in May. Texas’ new orders for June came in at 6.5, up from 3.8 in May, contrary to Chicago. Monday’s economic news was complete when the National Association of Realtors reported that pending home sales for May increased 6.1 percent, an eight-month high. Housing is still trying to find it legs.
The economic data for the first day in July and the first day of the second half of the year were slightly positive. June auto sales rose 1.2 percent, hitting a level not seen since the financial crisis of our own making. While it’s good news for the auto industry, we’re not yet convinced it’s good news for average Americans. The rich have not struggled to buy new cars. Our concern is that the middle class is being forced to buy new cars because their cars have become old and unreliable. This is different than buying a car out of want.
The Institute of Supply Management (ISM), also, reported on Tuesday that its index of national factory activity for June came in at 55.3, down a fraction from May’s 55.4. Anything over 50 suggests expansion and we’re still above 50. The ISM’s new orders index, which is a more forward looking index, hit a six-month high and suggests future expansion. Also, on Tuesday, Markit reported that its U.S. Manufacturing Purchasing Managers Index (PMI) for June came in at 57.3, up from 56.4 in May. Broadly speaking, manufacturing has been the industry in which to be for the last few quarters. Finally for Tuesday, the Commerce Department reported that May’s construction spending was up 0.1 percent.
On Wednesday, the Mortgage Bankers Association reported that new mortgage applications and refinance applications for the week ended June 27th were down 0.2 and 0.1 percent respectively, while the 30-year fixed rate mortgage average dropped to 4.28 from 4.33 percent. Then the Commerce Department reported that U.S factory orders for May dropped 0.5 percent. As with the last report, much of this dropped is because of decreased military spending. Excluding military spending, factory orders increased 0.2 percent.
Wednesday proved positive for the job market, as ADP’s June employment report showed that private sector, nonfarm jobs increased by 281,000 from May. Then, Gallup’s June Job Creation Index remained at May’s level of 27. While it’s not up, it’s not down.
Heading into the Fourth of July, Thursday was the last day of the workweek for the market. The Labor Department reported that U.S. unemployment benefit claims for the week ended June 27th only rose 2,000 to 315,000, which kept the four-week moving average unchanged at, well, 315,000. A separate report showed that the wholly incomplete U3 U.S. unemployment rate dropped to 6.1 percent in June. The more comprehensive U6 unemployment rate for June dropped slightly to 12.1 percent from May’s 12.2 percent. That’s a 2.2 percent drop year-over-year. The U.S. Challenger Job Cuts for June 2014, which measures mass layoffs, was down 20.2 percent from June 2013, suggesting an even stronger job market. The ISM Service Sector Index for June dropped to 56, down from May’s 56.3. Again, anything over 50 suggests expansion, so this report suggests a slower pace of expansion. To close out the week, month, quarter and first half of the year, Bloomberg reported its Consumer Comfort Index for the week ended June 29th. It fell to 36.4 from 37.1 the week prior blamed party on increased gas prices.
While this weekend is about celebrating America’s freedoms, we should understand that achieving the American dreams has become more difficult. There are ways to declare your financial independence and, ultimately, that’s what most of us want. You can start with these five matters to put on your mid-year checklist.
With America’s brain on vacation and vacationing, expenses can get expensive. This is not necessarily necessary. Consider not-so-expensive (NSE) vacation ideas. If you’re the kind of person that goes big or goes home, here are strategic ways to reduce the cost of your summer vacation. Of course, as it’s July, last minute travel can be expensive, but it doesn’t have to be if you’re familiar with how to take advantage of last minute travel deals.
That’s this week’s economic and personal finance news that we think is worth your read. Come back every Saturday for the Debt Free Guys’ take on economic and personal finance news that worth it.