Across The United States:
As with the second quarter GDP, productivity (output per person hour) also rebounded. Second quarter productivity growth was up 2.5%. This is better than expectations and a considerable improvement from the 4.5% decline in the first quarter. Unit labor costs, which account for the majority of business costs, edged up 0.6% after surging 11.8% (annualized rate-poor weather induced) in the first quarter. This indicates less cost pressure than expected.
The manufacturing sector surged higher in June following a weak May with new orders up a much higher than expected 1.1%. This followed a downwardly revised 0.6% decline in May.
The Institute for Supply Management’s index for the non-manufacturing sector grew in July for the 54th consecutive month. The index stood in 58.7. This is up from 56.0 in June. Any reading of 50 or above indicates expansion.
Consumer credit rose at a 6.5% annual rate in June. It was driven once again by the non-revolving component (mainly autos and student loans) which grew at an 8.4% annual rate. Revolving credit (mainly credit cards) grew at a 1.3% annual rate indicating that outside of replacing autos and going to college, consumers remain reluctant to take on debt.
After rising to its highest level in six years in April, the Arizona Consumer Confidence Index subsided modestly from 75.1 to 71.6 (see chart below). Confidence declined in both Greater Phoenix and Greater Tucson but rose in rural counties.