On the other hand, separate report on consumer confidence showed incline to 101.5 thus beating forecasts on smaller increase to 92.9.Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the labor market. The uncertainty expressed last month about the short-term outlook has dissipated and consumers are once again feeling optimistic about the near future. Income expectations, however, were little improved.
Wednesday's session brought Durable Goods Orders figures. Orders for capital goods increased in July by the most in more than a year, showing corporate spending was finding its footing prior to the turmoil in financial markets. Bookings for non-military equipment excluding planes climbed 2.2%, the most since June 2014, after increasing 1.4 percent in June, data from the Commerce Department showed Wednesday in Washington. Orders for all durable goods rose 2%, beating forecasts on a decrease by 0.4%. Core Durable Goods rose by 0.6%, also above anticipated increase by 0.3%.
Thursday's US session was marked by GDP and Unemployment Claims figures. Gross domestic product, the value of all goods and services produced, rose at a 3.7 percent annualized rate. Analysts were forecasting 3.2% growth. American households, bolstered by gains in employment, rising home prices and cheaper fuel costs, will probably continue to spur the economy in the second half of the year. At the same time, a record surge in stockpiles represents another headwind for manufacturers already contending with a rising dollar and slumping emerging markets that have hurt exports.
Separate report showed that unemployment applications dropped by 6,000 to 271,000 in the week ended Aug. 22. The median forecast of economists called for 274,000 jobless claims. The four-week average of claims, a less-volatile measure than the weekly figure, rose to 272,500 from 271,500 in the prior week. Demand for skilled workers as the unemployment rate falls is convincing hiring managers to keep staffing levels consistent with sales. Pay raises, alongside strengthening job security, would help provide a bigger boost to consumer spending, which accounts for almost 70 percent of the economy.
On Friday Consumer Spending, Orders Trade Balance and Revised Consumer Sentiment figures were released. Consumer purchases climbed in July as incomes grew, showing the biggest part of the U.S. economy was off to a good start to the quarter. The 0.3% advance matched the prior month’s gain. The median forecast called for a 0.4% increase. Wages rose by the most this year. Separate report showed that the Nation's international advance trade deficit in goods decreased to $59.1 billion in July from $62.3 billion in June, as exports increased and imports decreased. (August 28, 2015).
The University of Michigan consumer sentiment final index for the month fell to 91.9 from 93.1 in July. The median projection in a of economists called for a reading 93.2, little changed from the preliminary reading of 92.9. A measure of prospects for the economy over the next 12 months was the weakest since November. Confidence withered in the second half of the month after U.S. stocks plunged on concerns about the Chinese economy. A resilient labor market and cheaper fuel may nonetheless keep sentiment from slumping, which will bolster consumer spending.
This week markets will be looking at:
Chicago PMI (Monday 3:45)
ISM Manufacturing PMI (Tuesday 16:00)
ADP Non-Farm Employment Change (Wednesday 14:15)
Trade Balance (Thursday 14:30)
Unemployment Claims (Thursday 14:30)
ISM Non-Manufacturing PMI (Thursday 16:00)
Non-Farm Employment Change/Unemployment Rate (Friday 14:30)
