by Calculated Risk on 8/04/2012 01:25:00 PM

Earlier:
• Summary for Week Ending Aug 3rd

The key report this week is the June Trade Balance report.

The July Fed Senior Loan Officer Survey will be released on Monday, and Fed Chairman Ben Bernanke holds a town hall meeting on Tuesday and is expected to take questions from the audience.

----- Monday, Aug 6th -----
9:00 AM ET: Speech by Fed Chairman Ben Bernanke, "Economic Measurement", At the 32nd General Conference of the International Association for Research in Income and Wealth, via prerecorded video.

2:00 PM: The July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices from the Federal Reserve.

----- Tuesday, Aug 7th -----
10:00 AM: Job Openings and Labor Turnover Survey for June from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings increased in May to 3.642 million, up from 3.447 million in April. The number of job openings (yellow) has generally been trending up, and openings were up about 18% year-over-year compared to May 2011.

2:30 PM: Conversation with the Fed Chairman: A Teacher Town Hall Meeting Event will be broadcast live and the Twitter discussion is at hashtag: #FedTownHall

3:00 PM: Consumer Credit for July. The consensus is for credit to increase $10.5 billion.

----- Wednesday, Aug 8th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

----- Thursday, Aug 9th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase slightly to 367 thousand from 365 thousand.

8:30 AM: Trade Balance report for June from the Census Bureau.

Exports increased in May and imports decreased. Exports are 10% above the pre-recession peak and up 4% compared to May 2011; imports are at the pre-recession peak, and up about 4% compared to May 2011.

The consensus is for the U.S. trade deficit to decrease to $47.5 billion in June, down from from $48.7 billion in May. Export activity to Europe will be closely watched due to economic weakness. Also oil prices started to decline in April, and that will probably reduce the value of oil imports in June.

10:00 AM: Monthly Wholesale Trade: Sales and Inventories for June. The consensus is for a 0.3% increase in inventories.

----- Friday, Aug 10th -----
8:30 AM: Import and Export Prices for June. The consensus is a for a 0.2% increase in import prices.

by Calculated Risk on 8/04/2012 08:05:00 AM

The week started with expectations of central bank action. The Fed went first, and although the FOMC statement acknowledged that “economic activity decelerated”, the FOMC took no action. Then it was the European Central Bank’s turn; the eurozone economy has taken a turn for the worse, and the ECB took no action.

However, after further reflection, some analysts felt the ECB has laid the groundwork for sovereign bond buying, and that the Fed will announce QE3 in September. We will see.

In the meantime, the data was mixed. The employment report showed more payroll jobs added in July than in June, but the unemployment rate also increased to the highest level this year (the same rate as in January and February).

A key story early in the week was that the Case-Shiller house price indexes increased in May and are close to being up year-over-year. Also residential construction spending was up again in June.

However manufacturing was weak; the ISM index was below 50 (contraction) for the 2nd consecutive month. As a reminder, housing is usually a better leading indicator for the US economy than manufacturing. Manufacturing is more coincident. The ISM index suggests some weakness now, whereas housing suggests an ongoing sluggish recovery - and that appears to be what is happening.

Here is a summary of last week in graphs:

• July Employment Report: 163,000 Jobs, 8.3% Unemployment Rate

Click on graph for larger image.

There were 163,000 payroll jobs added in July, with 172,000 private sector jobs added, and 9,000 government jobs lost. The economy has added 1.06 million jobs over the first seven months of the year (1.12 million private sector jobs). At this pace, the economy would add around 1.9 million private sector jobs in 2012; less than the 2.1 million added in 2011. Also, at this pace of payroll job growth, the unemployment rate will probably still be above 8% at the end of the year.

This was above expectations of 100,000 payroll jobs added.

The second graph shows the employment population ratio, the participation rate, and the unemployment rate. The unemployment rate increased to 8.3% (red line).

The Labor Force Participation Rate declined slightly to 63.7% in July (blue line). This is the percentage of the working age population in the labor force.

The Employment-Population ratio declined to 58.4% in July (black line).

The third graph shows the job losses from the start of the employment recession, in percentage terms. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

• Case Shiller: House Prices increased 2.2% in May

This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 32.6% from the peak, and up 0.9% in May (SA). The Composite 10 is up from the post bubble low set in March, Not Seasonally Adjusted (NSA).

The Composite 20 index is off 32.3% from the peak, and up 0.9% (SA) in May. The Composite 20 is also up from the post-bubble low set in March (NSA).

The second graph shows the Year over year change in both indices.

The Composite 10 SA is down 1.0% compared to May 2011.

The Composite 20 SA is down 0.7% compared to May 2011. This was a smaller year-over-year decline for both indexes than in April, and the smallest year-over-year decline since 2010 (when the tax credit boosted prices temporarily).

The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Prices increased (SA) in 18 of the 20 Case-Shiller cities in April seasonally adjusted (all 20 cities increased NSA). Prices in Las Vegas are off 60.4% from the peak, and prices in Dallas only off 5.8% from the peak. Note that the red column (cumulative decline through May 2012) is above previous declines for most cities.

This was better than the consensus forecast and it is now possible that prices will turn positive year-over-year in June.

All Current House Price Graphs
• Real House Prices, Price-to-Rent Ratio

This graph shows the quarterly Case-Shiller National Index SA (through Q1 2012), and the monthly Case-Shiller Composite 20 SA and CoreLogic House Price Indexes (through May) in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.

In real terms, the National index is back to Q4 1998 levels, the Composite 20 index is back to March 2001, and the CoreLogic index back to May 2000.

As we've discussed before, in real terms, all of the appreciation early in the last decade is gone.

Here is a graph using a ratio of the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes to Owners' Equivalent Rent (a price-to-rent ratio)..

This graph shows the price to rent ratio (January 1998 = 1.0).

On a price-to-rent basis, the Case-Shiller National index is back to Q4 1998 levels, the Composite 20 index is back to May 2000 levels, and the CoreLogic index is back to June 2000.

In real terms - and as a price-to-rent ratio - prices are mostly back to late 1990s or early 2000 levels.
All Current House Price Graphs
• ISM Manufacturing index increases slightly in July to 49.8

This is the second consecutive month of contraction (below 50) in the ISM index since the recession ended in 2009. PMI was at 49.8% in July, up slightly from 49.7% in June. The employment index was at 52.0%, down from 56.6%, and new orders index was at 48.0%, up slightly from 47.8%.

Here is a long term graph of the ISM manufacturing index.

This was below expectations of 50.1%.

• U.S. Light Vehicle Sales at 14.1 million annual rate in July

Based on an estimate from Autodata Corp, light vehicle sales were at a 14.09 million SAAR in July. That is up 14% from July 2011, and down 1.7% from the sales rate last month (14.33 million SAAR in June 2012).

This graph shows light vehicle sales since the BEA started keeping data in 1967.

This was slightly above the consensus forecast of 14.0 million SAAR (seasonally adjusted annual rate).

Sales have averaged a 14.12 million annual sales rate through the first seven months of 2012, up sharply from the same period of 2011.

• ISM Non-Manufacturing Index increases slightly, Employment index declines in July

The July ISM Non-manufacturing index was at 52.6%, up from 52.1% in June. The employment index decreased in July to 49.3%, down from 52.3% in June. Note: Above 50 indicates expansion, below 50 contraction.


This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was above the consensus forecast of 52.0% and indicates slightly faster expansion in July than in June. The internals were mixed with the employment index weaker, and new orders stronger.

• Construction Spending in June: Private spending increases, Public Spending flat

The Census Bureau reported that overall construction spending increased in June: "The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2012 was estimated at a seasonally adjusted annual rate of $842.1 billion, 0.4 percent above the revised May estimate of $838.3 billion. The June figure is 7.0 percent above the June 2011 estimate of $786.8 billion."

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 61% below the peak in early 2006, and up 19.4% from the recent low. Non-residential spending is 27% below the peak in January 2008, and up about 33% from the recent low.

Public construction spending is now 16% below the peak in March 2009 and near the post-bubble low.

This graph shows the year-over-year change in construction spending.

On a year-over-year basis, both private residential and non-residential construction spending are positive, but public spending is down on a year-over-year basis. The year-over-year improvements in private non-residential is mostly related to energy spending (power and electric).

The solid year-over-year increase in private residential investment is a positive for the economy (the increase in 2010 was related to the tax credit). However the recent improvement in residential construction is being somewhat offset by declines in public construction spending.
All Housing Investment and Construction Graphs
• Weekly Initial Unemployment Claims increase to 365,000

The DOL reports:

In the week ending July 28 the advance figure for seasonally adjusted initial claims was 365,000, an increase of 8,000 from the previous week's revised figure of 357,000. The 4-week moving average was 365,500, a decrease of 2,750 from the previous week's revised average of 368,250.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined to 365,500.

The sharp swings over the last few weeks are apparently related to difficulty adjusting for auto plant shutdowns.

This was below the consensus forecast of 370,000 and is the lowest level for the four week average since March - and is near the post bubble low of 363,000.

All current Employment Graphs
• NMHC Apartment Survey: Market Conditions Tighten in Q2 2012

From the National Multi Housing Council (NMHC): Apartment Market Hot Streak Continues "For the sixth quarter in a row, the apartment industry improved across all indexes in the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. The survey’s indexes measuring Market Tightness (76), Sales Volume (54), Equity Financing (58) and Debt Financing (77) all measured at 50 or higher, indicating growth from the previous quarter."

This graph shows the quarterly Apartment Tightness Index. Any reading above 50 indicates tightening from the previous quarter. The index has indicated tighter market conditions for the last ten quarters and suggests falling vacancy rates and or rising rents.

• Other Economic Stories ...
• Dallas Fed: "Slower Growth" in July Regional Manufacturing Activity
• Personal Income increased 0.5% in June, Spending decreased slightly
• Misc: Chicago PMI increases slightly, Consumer Confidence up, CoreLogic 60,000 Foreclosures in June
• Fannie Mae and Freddie Mac Serious Delinquency rates declined in June
• ADP: Private Employment increased 163,000 in July
• AAR: Rail Traffic "mixed" in July, Intermodal at Record Level
• FOMC Statement: "Economic activity decelerated", Takes no action

by Calculated Risk on 8/03/2012 07:06:00 PM

From the FDIC: First Midwest Bank, Itasca, Illinois, Assumes All of the Deposits of Waukegan Savings Bank, Waukegan, Illinois

As of March 31, 2012, Waukegan Savings Bank had approximately $88.9 million in total assets and $77.5 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $19.8 million. ... Waukegan Savings Bank is the 40th FDIC-insured institution to fail in the nation this year, and the sixth in Illinois.

It is officially Friday!

Earlier on employment:
• July Employment Report: 163,000 Jobs, 8.3% Unemployment Rate
• Employment: Another Fairly Weak Report (more graphs)
• All Employment Graphs

by Calculated Risk on 8/03/2012 04:07:00 PM

Once again rail traffic was "mixed". Building related commodities were up such as lumber and crushed stone, gravel, sand. Lumber was up 9% from July 2011.

From the Association of American Railroads (AAR): AAR Reports Mixed Weekly and July Monthly Rail Traffic

The Association of American Railroads (AAR) today reported U.S. rail carloads originated in July 2012 totaled 1,103,733, down 7,787 carloads or 0.7 percent, compared with July 2011. Intermodal volume in July 2012 was 946,071 trailers and containers, up 50,431 units or up 5.6 percent, compared with July 2011. The July 2012 weekly intermodal average of 236,518 trailers and containers is the highest July average in history.
...
“Carloads of some of the more economically sensitive commodities, such as lumber and wood, steel, and autos, gave us a mixed message in July. While lumber related to home construction remained very positive, other manufactured goods either grew more slowly than they have been or actually fell in July,” said AAR Senior Vice President John T. Gray. “It remains to be seen if this is just a blip or something more serious. More positively, intermodal volume remains on track to see a record year in 2012.”

Click on graph for larger image.

This graph shows U.S. average weekly rail carloads (NSA).

U.S. railroads originated 1,103,733 total carloads in July 2012, down 0.7% (7,787 carloads) from July 2011. It was the sixth straight year-over-year monthly decline, but at 0.7% it was the lowest percentage decline in those six months.

Eight of the 20 commodity categories tracked by the AAR saw carload gains in July 2012 year over year, the lowest such number since May 2011. By contrast, 13 of the 20 categories are up year-to-date in 2012 compared with 2011.

Grains is off 10% year-over-year due to fewer exports.

The second graph is for intermodal traffic (using intermodal or shipping containers):

Graphs reprinted with permission.

Intermodal traffic is now at peak levels.

U.S. intermodal traffic was up 5.6% (50,431 containers and trailers) in July 2012 over July 2011 to 946,071 units, its 32nd consecutive year-over-year monthly increase. Average weekly intermodal volume in July 2012 was 236,518 units, the highest of any July in history

The top months for intermodal are usually in the fall, and it looks like intermodal traffic will be at record levels this year.

This is more evidence of sluggish growth - and of residential investment making a positive contribution.
Earlier on employment:
• July Employment Report: 163,000 Jobs, 8.3% Unemployment Rate
• Employment: Another Fairly Weak Report (more graphs)
• All Employment Graphs

by Calculated Risk on 8/03/2012 12:51:00 PM

Earlier ... the July ISM Non-manufacturing index was at 52.6%, up from 52.1% in June. The employment index decreased in July to 49.3%, down from 52.3% in June. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: July 2012 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in July for the 31st consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI registered 52.6 percent in July, 0.5 percentage point higher than the 52.1 percent registered in June. This indicates continued growth this month at a slighter faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 57.2 percent, which is 5.5 percentage points higher than the 51.7 percent reported in June, reflecting growth for the 36th consecutive month. The New Orders Index increased by 1 percentage point to 54.3 percent. The Employment Index decreased by 3 percentage points to 49.3 percent, indicating contraction in employment for the first time since December 2011. The Prices Index increased 6 percentage points to 54.9 percent, indicating higher month-over-month prices when compared to June. According to the NMI, 11 non-manufacturing industries reported growth in July. Respondents' comments are mixed and vary by industry and company."

Click on graph for larger image.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was above the consensus forecast of 52.0% and indicates slightly faster expansion in July than in June. The internals were mixed with the employment index weaker, and new orders stronger.

by Calculated Risk on 8/03/2012 10:21:00 AM

The economy has added 1.06 million jobs over the first seven months of the year (1.12 million private sector jobs). At this pace, the economy would add around 1.9 million private sector jobs in 2012; less than the 2.1 million added in 2011. Also, at this pace of payroll job growth, the unemployment rate will probably still be above 8% at the end of the year.

Some numbers: There were 163,000 payroll jobs added in July, with 172,000 private sector jobs added, and 9,000 government jobs lost. The unemployment rate increased slightly to 8.3% (from the household survey), and the participation rate declined to 63.7%. Both are moving in the wrong direction.

U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, increased so 15.0%.

The change in May payroll employment was revised up from +77,000 to +87,000, but June was revised down from +80,000 to +64,000.

The average workweek was unchanged at 34.5 hours, and average hourly earnings increased slightly. "The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. ... In July, average hourly earnings for all employees on private nonfarm payrolls edged up by 2 cents to $23.52. Over the year, average hourly earnings rose by 1.7 percent." This is sluggish earnings growth.

There are a total of 12.8 million Americans unemployed and 5.2 million have been unemployed for more than 6 months.

Even though the number of payroll jobs added was more than expected, the bottom line is this was another fairly weak employment report. Here are a few more graph ...

Employment-Population Ratio, 25 to 54 years old

Click on graph for larger image.

Since the participation rate has declined recently due to cyclical (recession) and demographic (aging population) reasons, an important graph is the employment-population ratio for the key working age group: 25 to 54 years old.

In the earlier period the employment-population ratio for this group was trending up as women joined the labor force. The ratio has been mostly moving sideways since the early '90s, with ups and downs related to the business cycle.

This ratio should probably move back to or above 80% as the economy recovers. So far the ratio has only increased slightly from a low of 74.7% to 75.5% in July (this was down slightly in July.)

Percent Job Losses During Recessions


This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.

In the earlier post, the graph showed the job losses aligned at the start of the employment recession.

Part Time for Economic Reasons

From the BLS report:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million in July. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

The number of part time workers increased slightly in July to 8.25 millon.

These workers are included in the alternate measure of labor underutilization (U-6) that increased in July to 15.0%, up from 14.9% in June.

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 5.19 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.37 million in June. This is generally trending down, but very slowly. Long term unemployment remains one of the key labor problems in the US.

State and Local Government

So far in 2012 - through July - state and local government have lost 42,000 jobs (7,000 jobs were added in July). In the first seven months of 2011, state and local governments lost 205,000 payroll jobs - and 230,000 for the year. So the layoffs have slowed.

This graph shows total state and government payroll employment since January 2007. State and local governments lost 129,000 jobs in 2009, 262,000 in 2010, and 230,000 in 2011.

Note: Some of the stimulus spending from the American Recovery and Reinvestment Act probably kept state and local employment from declining faster in 2009.

Of course the Federal government is still losing workers (38,000 over the last 12 months and another 2,000 in July), but it looks like state and local government employment losses might be slowing - but the job losses haven't stopped yet.

Overall this was another fairly weak report.
All Employment Graphs

by Calculated Risk on 8/03/2012 08:30:00 AM

From the BLS:

Total nonfarm payroll employment rose by 163,000 in July, and the unemployment rate was essentially unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and manufacturing.
...
Both the civilian labor force participation rate, at 63.7 percent, and the employment- population ratio, at 58.4 percent, changed little in July.
...
The change in total nonfarm payroll employment for May was revised from +77,000 to +87,000, and the change for June was revised from +80,000 to +64,000.

Click on graph for larger image.

This was a somewhat better month, and the revisions for the previous two months were mostly offsetting.

This was above expectations of 100,000 payroll jobs added.

The second graph shows the employment population ratio, the participation rate, and the unemployment rate. The unemployment rate increased to 8.3% (red line).

The Labor Force Participation Rate declined slightly to 63.7% in July (blue line). This is the percentage of the working age population in the labor force.

The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although most of the recent decline is due to demographics.

The Employment-Population ratio declined to 58.4% in July (black line).

The third graph shows the job losses from the start of the employment recession, in percentage terms. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

This was more payroll growth than expected, but still fairly weak. (expected was 100,000). I'll have much more later ...

by Calculated Risk on 8/02/2012 09:29:00 PM

From the Financial Times: Draghi kills hope of instant action

Financial markets recoiled on Thursday after Mario Draghi demanded eurozone governments turn to existing rescue funds before any intervention by the European Central Bank in bond markets to shore up Europe’s monetary union.
Excerpt with Permission

Some analysis from the Joseph Cotterill at Alphaville: Was Draghi really a disaster? and from Tim Duy at EconomistsView: Second Policy Failure of the Week

On Friday:
• At 8:30 AM ET, the Employment Report for July will be released. The consensus is for an increase of 100,000 non-farm payroll jobs in July, up from the 80,000 jobs added in June. The consensus is for the unemployment rate to remain unchanged at 8.2%.

Some thoughts: Employment Situation Preview and from Binyman Appelbaum at Economix: Beware the Jobs Report of July

As ... Floyd Norris explained last month, one possible distortion that has arisen in recent years, thanks to the weakness of the economy, is that “seasonal adjustments make things look better than they are in the winter, when fewer workers are being let go than the government expects, and worse in the spring and summer, when the workers who were not let go cannot be rehired.”

• 10:00 AM, the ISM non-Manufacturing Index for July will be released. The consensus is for a decrease to 52.0 from 52.1 in June.

For the economic contest in August:

by Calculated Risk on 8/02/2012 07:47:00 PM

For amusement ... from the LA Times: What's in your vault? Uncle Sam audits its stash of gold at the New York Fed

For decades, the U.S. government has stashed gold five stories beneath Manhattan in a vault under the Federal Reserve's fortress near Wall Street.

Or has it?

Some conspiracy theorists suspect that the billions of dollars' worth of bullion might have been looted in a dramatic heist, a la the movie "Die Hard: With a Vengeance." Others claim that the gold has been used in a shadowy government transaction, or swapped with gold-painted bars. It's even caught the attention of politicians like Rep. Ron Paul and members of Germany's Parliament.

Now all of us may finally get some answers.

The federal government has quietly been completing an audit of U.S. gold stored at the New York Fed. The effort included drilling small holes in the bars to test their purity.

The Treasury Department has refused to disclose what the audit has revealed so far, saying the results will be announced by year's end.

This will probably launch more conspiracy theories ...

by Calculated Risk on 8/02/2012 02:00:00 PM

The last three employment reports were very weak: 68,000 payroll jobs added in April, 77,000 in May, and 80,000 in June. Some of this recent weakness might have been "payback" for the mild weather earlier in the year. Also there is the possibility that the seasonal factors are a little distorted by the deep recession and financial crisis - this is the third year in a row we've some late spring weakness.

Bloomberg is showing the consensus is for an increase of 100,000 payroll jobs in July, and for the unemployment rate to remain unchanged at 8.2%.

Here is a summary of recent data:

• The ADP employment report showed an increase of 163,000 private sector payroll jobs in July. This would seem to suggest that the consensus for the increase in total payroll employment is too low, although the ADP report hasn't been very useful in predicting the BLS report for any one month.

• The ISM manufacturing employment index decreased in July to 52.0%, down from 56.6% in June. A historical correlation between the ISM index and the BLS employment report for manufacturing, suggests that private sector BLS reported payroll jobs for manufacturing decreased about 8,000 in July.

The ISM service index will be released tomorrow after the BLS report.

• Initial weekly unemployment claims averaged about 365,000 in July, down from the 382,000 average for April, May and June. This was about the same level as in March when the BLS reported 143,000 payroll jobs added (Note: weekly claims have apparently been impacted by the timing of auto plant shutdowns).

For the BLS reference week (includes the 12th of the month), initial claims were at 388,000; near the high for the year.

• The final July Reuters / University of Michigan consumer sentiment index declined to 72.3, down from the June reading of 73.2. This is frequently coincident with changes in the labor market, but also strongly related to gasoline prices and other factors. This level - and the slight monthly decline - suggest a weak labor market.

• The small business index from Intuit showed 35,000 payroll jobs added, down from 40,000 in June.

• And on the unemployment rate from Gallup: U.S. Unadjusted Unemployment Rate Increases in July

U.S. unemployment, as measured by Gallup without seasonal adjustment, was 8.2% in July, up slightly from 8.0% in June, but better than the 8.8% from a year ago. Gallup's seasonally adjusted number for July is 8.0%, an increase from 7.8% in June.

Note: Gallup only recently has been providing a seasonally adjusted estimate for the unemployment rate, so use with caution (Gallup provides some caveats). Note: So far the Gallup numbers haven't been useful in predicting the BLS unemployment rate.

• Conclusion: The overall feeling is that the economy weakened further in July, and that would seem to suggest another weak employment report. However, if the weather "payback" is over (as several analysts have argued), the number of payroll jobs could be better than the last few months. And it is possible that there have been some seasonal factor distortions.

The ISM manufacturing report suggest a loss of manufacturing jobs, however the ADP report (private only), suggests the consensus is too low. Initial weekly unemployment claims were mixed too: the monthly average was near the low for the year, but the reference week was near the high.

Other negatives include the weak small business numbers from Intuit, and the decline in consumer sentiment.

Overall it seems like the July report will be weaker than expected.

For the economic contest in August: