Consumer confidence rose to the highest level in almost seven years. An upturn in hiring, combined with improved economic growth, boosted the Conference Board’s index to a reading of 90.9 – the best level since October 2007. Consumers aren’t as confident as they were before the recession (the index averaged 103.4 in the seven years prior to the recession), but optimism has rebounded from the February 2009 low of 25.3.
After contracting in the first quarter, the economy grew 4% in the second quarter, driven by consumer spending and business inventories. Consumer spending, which accounts for two-thirds of the economy’s activity, rose 2.5%, after slowing to a 1.2% pace in the first quarter. Inventories contributed 1.66% to second quarter growth, after cutting 1.16% in the first quarter.
On another positive note, manufacturing expanded at the fastest pace in over three years, as the ISM index of factory activity rose to a reading of 57.1 – the highest since April 2011 – driven by gains in new orders and employment.
The unemployment rate rose to 6.2% in July – but it rose for the right reason, as more people entered the labor market. The labor force participation rate rose to 62.9% (as the labor force grew to 156 million people). The economy added 209,000 jobs – the sixth month of job creation over 200,000.
Source: St. Louis Federal Reserve
Data out of the housing market was cloudy, as pending home sales, which lead sales by a month or two, fell 1.1% in June, following three straight months of gains.
Homes prices fell in May, with the S&P/Case Shiller index declining .3%.
Construction spending fell 1.8%, led by a 4% drop in public construction spending.