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Real Time Economics |
Good morning. Jeff Sparshott here with the latest on the economy. You can send questions, comments and suggestions by replying to this email. |
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Applications for unemployment benefits fell to a new pandemic low, showing a healing labor market. Jobless claims declined to 360,000 in the week ended July 10 from a seasonally adjusted 386,000 a week earlier. Last week’s applications count marked the lowest level for claims since March 2020, the month the Covid-19 pandemic hit the U.S. economy, Sarah Chaney Cambon reports. |
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The number of people receiving jobless aid has also trended lower as many states end enhanced pandemic programs. Nearly half of states have announced that they will end the expanded benefits of $300 a week before they are slated to end nationwide in early September. From mid-May through the week ended July 3, continuing claims were down 19.2% in states with June and July expiration dates for the $300 enhanced payment. Over the same period, they were down 6.7% in the remaining states that are set to end benefits in September, according to Jefferies LLC. |
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U.S. retail sales for June are expected to fall 0.4% from a month earlier. (8:30 a.m. ET) New York Fed President John Williams gives opening remarks at a webinar on culture in a post-pandemic workplace at 9 a.m. ET. U.S. business inventories for May are expected to increase 0.5% from a month earlier. (10 a.m. ET) The University of Michigan consumer sentiment index is expected to rise to 86.3 in the opening weeks of July from 85.5 at the end of June. (10 a.m. ET) The Baker Hughes rig count is out at 1 p.m. ET. 📰 Enjoying this newsletter? Get more from WSJ and support our work with a special subscription offer. |
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U.S. shoppers likely boosted spending at many retailers in June, but weak auto sales linked to supply disruptions could have dampened gains as the economy more broadly reopened. Economists estimate the Commerce Department will report that retail sales—a measure of purchases at stores, at restaurants and online—fell by 0.4% last month compared with May. Excluding autos—a sometimes volatile category—sales are estimated to have risen by 0.4% in the same period. Auto sales have shown signs of slowing amid supply-chain disruptions and semiconductor shortages that have limited the number of vehicles for sale, Amara Omeokwe reports. The Commerce Department's retail sales report is out at 8:30 a.m. ET. Follow our coverage here. |
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U.S. factory production is having a hard time shifting into higher gear. This isn’t because manufacturers don’t want to turn their wheels any faster, but because for now they can’t. The Federal Reserve on Thursday reported that industrial production—the combined output of U.S. factories, utilities and mines—rose 0.4% last month from May. That increase was largely due to a 2.7% increase in utility output, as the country cranked up the air conditioners in a month of record-breaking heat. Manufacturing production actually slipped 0.1%. A big part of the problem is the auto industry, which has been especially hampered by the global semiconductor shortage, Justin Lahart writes. |
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Taiwan Semiconductor Manufacturing Co.—the world’s largest custom chip maker—expects the semiconductor shortage that has plagued car makers this year to ease. The company says the automotive semiconductor shortage will be greatly reduced starting this quarter as it increases output of microcontrollers for cars. TSMC, however, believes its capacity will remain tight as long-term increases in chip demand remain intact: 5G and other computing applications require more powerful and energy-efficient processors, Jacky Wong reports. |
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Tens of millions of U.S. households can expect to see their bank balances grow this week, thanks to the first monthly payments of the expanded child tax credit. The Internal Revenue Service issued families payments of up to $300 per child under a program aimed at combating child poverty and turning lump-sum annual tax refunds into predictable household income, Richard Rubin reports. How is the economy doing overall? Quarterly earnings from JPMorgan Chase, Goldman Sachs and other big U.S. banks show consumer spending is returning to pre-pandemic levels, and borrowing appears poised to rise. But the recovery remains vulnerable. Covid-19 variants are driving up case counts, raising the specter of new lockdowns, and government-aid programs that kept many Americans afloat are about to expire, David Benoit and Ben Eisen report. |
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The U.S. real-estate market is starting to calm down. More houses are coming on the market, real-estate experts said. For high-end properties in particular, inventory is increasing as owners who delayed selling during the worst of the pandemic list their homes. Owners who weren’t planning to sell have changed their minds after watching prices climb ever higher. Meanwhile, some deals made at the height of the frenzy have fallen through, while overpriced homes sit rather than getting snapped up immediately. The market is still hot, with strong demand buoyed by low interest rates, agents said, but buyers now have more options as a sense of normalcy returns, Candace Taylor reports. |
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Covid-19 cases and deaths have climbed rapidly in Indonesia in recent weeks, as the Delta variant has helped fuel a devastating surge that echoes the one that tore through India in the spring. Uneven global vaccination levels have driven a divergence. The virus is reaching new peaks in much of the developing world, which is struggling to import enough vaccine doses, Jon Emont and Ismira Lutfia Tisnadibrata report. Los Angeles County will again require the use of masks indoors. The new restrictions follow what officials called alarming growth in Covid-19 cases and hospitalizations in recent weeks, as residents of the nation’s most populous county cast off their masks in coffee shops and movie theaters and life returned to something resembling a pre-pandemic normal. Several local governments in China are planning to bar residents who haven’t been vaccinated against Covid-19 from accessing public venues, stirring controversy as the country makes a push for herd immunity. In recent days, a dozen counties and cities in the eastern provinces of Zhejiang, Fujian and Jiangxi set late-August deadlines for people 18 years or older to complete a two-shot vaccine regimen, Chao Deng reports. |
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