As anxiety around the world about a slowing global economy rises, with worries about China’s decreasing rate of output at the heart of the concerns, investors received two encouraging reports about the health of the U.S. economy at 10:00 A.M. (EDT).
It was a nice one-two combination, as the data highlighted strengthening consumer and housing sectors, which are big kingpins in the country’s economic output.
A half-hour into the trading day, the investment community received another encouraging report on the U.S. housing market
when the National Association of Realtors, the nation’s largest trade association, reported an increase in existing home sales for the month of July
. The upbeat sales data came on the heels of Tuesday’s solid news on housing starts and building permits for the same month.
Privately-owned housing starts
totaled a seasonally adjusted annualized rate of 1,206,000 properties in July. Expectations had been for starts to have totaled 1,190,000 homes last month. The actual annualized total also was incrementally better than the upwardly revised June tally of 1,204,000 homes started. Initially, the June estimate had been given as 1,174,000 homes. The May figure also was revised higher, albeit nominally. In all, this was the strongest construction level of the year thus far.
U.S. industrial production
has risen at its strongest pace in eight months, according to data issued at 9:15 AM (EDT) this morning by the U.S. Federal Reserve. In all, such output increased by 0.6% last month, two-tenths of a percentage point better than had been generally forecast and well ahead of the downwardly revised 0.1% gain tallied in June. This latter rise originally had been estimated at 0.3%.
After days of anticipation, which clearly has had some effect on Wall Street trading so far this week, the U.S. Labor Department has come out with employment and unemployment figures for July that have come in pretty close to consensus forecasts.
The market exhaled; the futures off grudgingly before the release, weakened further for a time, but have since strengthened modestly. There would seem to be little, if any, chance that the Federal Reserve will now be more disposed to raise interest rates next month than it had been earlier. In fact, this issuance could cause the central bank to wait a while longer before hiking borrowing costs.
Just two days after the Institute for Supply Management reported a less-than-compelling report on manufacturing activity, with that trade group indicating that this sector had slowed its advance last month, that same group has now reported that the companion survey on non-manufacturing has reached a 10-year high
, coming in at 60.3 for July.
The manufacturing sector
slowed its rate of growth in July, with its closely watched survey securing a score of 52.7. Now, while that result was clearly in expansionary territory, as the survey exceeded the dividing line between a contracting and a growing industrial sector of 50.0, the outcome was disappointing, as it fell shy of the 53.5 reading tallied in June and expectations for July of 53.5.
The Federal Reserve concluded its latest
Federal Open Market Committee (FOMC) meeting earlier this afternoon
, and investors found few surprises either in what the lead bank did, or rather did not do, or in what it said following its latest get together.
Just when it looked as though most of the stars were aligned for the economic bulls, comes word that consumer confidence
, one of the major indicators of economic health, came in well below expectations in July. That finding was according to a release made earlier this morning by The Conference Board, a private research group.
New home sales fell to a seven-month low in June
, in a surprise setback in a market that has been roaring ahead on most fronts. In all, such sales declined by 6.8%, to a seasonally adjusted annualized rate of 482,000 homes sold last month. Worse, May's sales pace was revised down from an estimated 546,000 homes sold annually, to just 517,000 properties