Global Business Confidence

Global business confidence held steady at the end of June, consistent with a global economy that is expanding at the high end of its potential. Sentiment has weakened from its peak early in the year largely because of weaker responses to the broadest questions regarding current business conditions and expectations regarding the economy at year's end. Responses to more specific questions regarding the strength of sales, equipment investment, and hiring remain firmer. The weaker readings since the beginning of the year are also largely due to a smaller percentage of positive responses to the survey questions and not an increase in negative responses. Japanese and U.S. businesses remain the most nervous, while South American and German businesses the most upbeat.

 

Conference Board Consumer Confidence: 58.5
The Conference Board index of consumer confidence fell by 3.3 points in June on top of the 4.3-point decline in May. High energy prices, weakness in stock prices, and recent labor market weakness likely weighed on consumers. Confidence fell to 58.5 from 61.7 (revised from 60.8). This takes the index to its lowest level since November. The expectations component again led the decline falling to 72.4, from 76.7 (previously 75.2). The present situation component dipped to 37.6 from 39.3 (unrevised). The weakness was broad-based across questions that make up the index.

Bloomberg Consumer Comfort Index: +1
Consumer sentiment improved modestly in the latest week. According to the Bloomberg consumer confidence index, sentiment rose by 1 point, to -43.9 for the week ended June 26.

 

GDP: 1.91%
There was a small upward revision to real GDP growth in the first quarter of 2011, to 1.9% (SAAR), from the previously reported 1.8%. The consensus was for a larger upward revision, to 2%. There was a downward revision to imports and an upward revision to inventory investment. These were largely offset by downward revisions to exports, business investment, and state and local government. The economy is in the middle of a slow patch, but growth should pick back up again in the second half of 2011 and hiring will strengthen.

 

Personal Income: 0.3%
Consumer spending did not increase in May despite continued modest income growth. Nominal spending was nearly unchanged after growing 0.3%, in April. Real spending fell 0.1% for the second consecutive month. Personal income growth was 0.3% for the second month, although wage and salary income growth slowed from 0.4% to 0.2% for May as job growth moderated. The saving rate inched up to 5% from 4.9% in both March and April. Overall inflation slowed to 0.2%, although core inflation accelerated to 0.3%.

 

Durable Goods (Advance): 1.9%
New orders for durable manufactured goods rose 1.9% in May, partially rebounding from last month's 2.7% decline. Excluding transportation, new orders rose 0.6%. Total shipments rose 0.3%, while inventories were up 1.2%. The details of the report were good; core capital orders rose 1.6%, while shipments added 1.4%.

ECRI Weekly Leading Index: 127.0
The ECRI weekly leading index decreased to 127 for the week ending June 17 from a revised 127.7 (previously 127.8). The smoothed, annualized growth rate fell to 2.9% from a revised 3.6% (previously 3.7%). Consistent with the slowdown seen in recent economic data, the ECRI WLI is suggestive that the recovery has lost some momentum over the past few months. However, the index is not yet foreshadowing renewed recession.

 

Jobless Claims: +1,000
Initial claims decreased by 1,000 to 428,000 for the week ending June 25; the prior week's data were unrevised. This modest decline does little to alleviate concerns that the recovery has lost momentum in recent months. Continuing claims decreased by 12,000 to 3.697 million for the week ending June 18; this excludes the millions more on extended and emergency benefits.

S&P/Case-Shiller® Home Price Indexes: -4.0
Existing-home prices soured slightly in the three months ending in April relative to the same period in March. This month's decline pushed the 20-city composite index to a new cyclical low. In contrast, the 10-city composite remains nearly unchanged from last month. On a year-ago basis, the 10-city composite index is down 3.1%, while the 20-city index is down 3.9%.

Chain Store Sales Snapshot: 2.9%
The ICSC chain store sales index jumped 2.9% in the latest week, the largest weekly gain since March 2010. While sales also rose sharply in the comparable week last year, year-over-year growth rose to 3%, its strongest showing in five weeks. Hot weather and lower gasoline prices reportedly stimulated shopping at malls and particularly apparel stores.

Natural Gas Storage Report: +78 bcf
Working gas in underground storage rose by 78 billion cubic feet during the week ending June 24, slightly below the consensus estimate of an 80 bcf rise. This report is pushing natural gas prices higher. 
  

Source: Economy.com