The U.S. stock market finished the week higher as trade war fears eased. Interest rates moved lower as the 10-year treasury yield dropped from 1.53% to 1.50%. The spread between the 10-year treasury yield and the 2-year treasury yield nears inversion again as it drops from 0.1% to 0.0%. The price of gold fell by a slight 0.28% to $1,531an ounce as demand for the haven metal drops. The price of crude oil increased by 3.7% to $55.04 a barrel as reports show a drop in stockpiles of the oversupplied commodity.
This Week's Economic Highlights
New orders of durable goods rose a much needed 2.1% in July, boosted by an increase in aircraft orders as Boeing rebounds. Excluding transportation orders, which includes aircraft, new orders in fact fell by -0.4%. Over the past year durable goods orders are up only 0.7%.
Initial unemployment claims rose by 4,000 to 215,000 for the week ending August 24th, meanwhile the more stable four-week average fell by 500 to 214,500. Continuing unemployment claims, which lag initial claims by a week, rose by 22,000 to 1.7 million.
Consumer spending, which accounts for nearly 70% of economic activity, jumped by 0.6%in July while personal incomes only rose by a more moderate 0.1%.
The Personal Consumption Expenditures (PCE) index, a measure of retail inflation, rose by 0.2% in July. Over the past year PCE is up 1.4%, which is well below the Fed’s 2.0%. Core PCE, which excludes the volatile food and energy prices, also rose by 0.2% but is up 1.6% over the past year.
“Personal finance is more about behavior than knowledge. Most financial problems are problems of self-control, not a math problem.”
– Steve Burns
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