With August underway, the July economic reports will begin pouring in this week. But before analyzing the month just passed, it might be helpful to take a moment to first reflect on what happened in June. In general, the results weren't pretty. The economy, which appeared to hiccup in May, took a more emphatic step backwards in June.
In order to simplify things, here's a chart containing 12 major economic indicators from June. To eliminate any confusion, the terms "worsened" and "improved" were used to provide a qualitative explanation of the indicator's verdict on the economy, rather than create confusion by saying whether a statistic increased or declined. So the chart shows the change compared to the prior period (May for all metrics except for GDP, which is quarterly), the rate of change (i.e. improving/worsening more quickly or more slowly), and the length of the trend. Then, the final column provides a verdict -- the spectrum of which includes great, good, troubling, and awful -- based on the direction and rate of change.
The color coding might make it more visually revealing. You can see that there's quite a lot of red and not a lot of green.
In fact, the only two indicators which produced "great" results in June I qualified with footnotes. New home sales improved significantly, but they were still historically near their record low. Better exports were also only mildly satisfying, since imports grew much more quickly. As for the "good" indicators, housing starts still worsened, but not by as much -- and new permits rose, which might be a positive leading indicator for construction jobs. Foreclosures also appear to be steadily declining, but there's some question of how much banks are affecting this number by controlling their inventories.
Everything else ranged from troubling to awful. That several of these negative indicators are leading is particularly worrying. Those include consumer sentiment, durable goods orders and inventories, and service sector growth.
Looking to July, we can hope for some better results, because June turned out to be a pretty rotten month. See below for posts on all of these indicators from June, including two more not included above for producer price index and personal savings, which don't have an immediately clear affect on the economy one way or the other.
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