Economic News Week : August 9, 2010
By Tony Stevenson, SWBC Mortgage
The big news last week was the jobs report. Put in perspective, instead of losing 500k jobs per month, as was the case when the recession was in high gear, we are adding private sector jobs-71k last month and an additional 30k the previous month. We did lose those ‘census jobs’ but, who ever thought they would be permanent in the first place? Instead of total unemployment rising as some negative economists were predicting, it actually stayed the same at 9.5% for the month. Of the 18 industries surveyed by ISM, 13 reported growth in July as well. Auto sales improved in July for most automakers-at least giving some a sigh of relief as consumers did increase spending on some big ticket items. GM CEO Ed Whitacre Jr. is eager to shed the tag, ” Government Motors.” Retail Sales did increase 2.8% for July compared to the same time last year- maybe not by the numbers economists would like to see but, it was an increase none the less. It was reported too, that households are borrowing less and saving more, lowering consumer spending. However, the $1.3 billion June drop in borrowing was much smaller than the $5 billion decline that economists had expected. Finally, both sides of the aisle will be arguing over whether to keep the Bush tax cuts in place or other options. Former Fed Chairman-Mr. Greenspan believes the tax cuts should be repealed. We will be watching how this plays out.
Locally, Texas is listed as one of five states that added manufacturing jobs in each of the first six months of 2010. Nationally, the manufacturing sector has grown now for 12 straight months. I know I sound like a broken record but, our economy is jobs dependent and consumer dependent. Most economists are saying that our current economic situation is in one if its down times but, in no way is to be considered headed to a ‘double-dip’ recession.
On another positive note, “Texas home sales up 14% in 2Q”, was a recent headline. The report stated that a new Texas Association of Realtors report released last Monday showed the number of home sales was up statewide in the second quarter, but prices were unchanged.
“Texas chalks up another best for biz prize” was a headline for local Economist, M Ray Perryman’s column in the San Antonio Business Journal this past week. In the study by CNBC, Texas received the most points out of 2500 and 31 points above last years winner-Virginia. America’s Top States for Business 2010 survey included points for workforce, quality of life, economy, transportation and infrastructure, technology and innovation, educations, business friendliness, and access to capital. By amassing more points than any other state for 2010, as well as the highest score in the history of the study, Texas’ strengths were appropriately recognized according to Mr Perryman. Way to go Texas!
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