America in focus: Consumers still gloomy about economy; US hiring falls in June

The economy, inflation, and how those forces could impact the lives of Americans were front and centre over the past week. Trips to the grocery store or gas station are more painful than they were last year, and rising costs are impacting the decisions of both households and businesses.

Here’s a snapshot of prominent economic data and news that occurred over the past week, and what it potentially means for you.

Consumers are still gloomy about the economy

Americans’ attitudes toward the economy improved slightly this month as gas prices declined, but their outlook is still mostly negative by historical standards.

The Conference Board said Tuesday that its consumer confidence index rose 0.6 points to 91.2 in June, a figure that is still below its year-ago reading of 95.2. Consumer attitudes worsened after the Iran war caused oil and gas prices to spike, accelerating inflation and causing Americans’ inflation-adjusted incomes to decline. Before the pandemic, the index regularly topped 120.

The report suggests that consumer confidence is recovering only slowly from the hit caused by the Iran war.

US hiring drops in June

US employers pulled back on hiring last month and added only 57,000 jobs, less than half the previous month’s total and a sign that companies still have a cautious economic outlook.

The Labour Department said Thursday that the unemployment rate declined to a low 4.2 per cent from 4.3 per cent in May, though the decline mostly occurred because many people out of work gave up looking and were no longer counted as unemployed.

The figures suggest companies remain wary of the economy’s health, with inflation at a three-year high and consumer confidence near post-pandemic lows. The solid job gains that were initially reported in April and May were also revised lower.

US filings for jobless aid decline

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US applications for jobless aid inched down last week as layoffs remain at historically            The number of Americans filing for unemployment benefits in the week ending June 27 fell by 1,000 to 215,000, the Labour Department reported Thursday. That’s fewer than the 225,000 new applications forecast by analysts surveyed by the data firm FactSet.

Weekly filings for unemployment benefits are considered representative of US layoffs and are close to a real-time indicator of the health of the job market.

The four-week moving average of jobless claims, which quiets some of the week-to-week noise, fell by 2,500 to 222,000.

Mortgage rate falls to the lowest level in seven weeks

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The average long-term US mortgage rate fell this week to its lowest level since mid-May, easing borrowing costs for prospective homebuyers.

The benchmark 30-year fixed-rate mortgage fell to 6.43 per cent from 6.49 per cent last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.67 per cent.

The average rate has been mostly hovering around 6.5 per cent in the months since the war between the US and Iran began in late February, disrupting the flow of crude oil from the Persian Gulf to customers worldwide. That’s sent oil prices sharply higher, helping drive up inflation, bond yields and mortgage rates.

The American labour market remains resilient in May

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US job openings stayed at a surprisingly strong 7.6 million in May as the American labour market remains resilient in the face of the economic shock from the Iran war.

Forecasters had expected employers to post just 7 million openings in May.

The job market is sturdy but not exactly booming. Layoffs rose in May, and the number of people quitting their jobs - a sign of confidence in their prospects - ticked up only slightly. That’s according to data from the Bureau of Labour Statistics released Tuesday.

Employers are advertising openings, but they aren’t actually doing much hiring. Gross hiring - before counting people who lost or quit their jobs - dipped to 5.17 million in May from 5.26 million in April. When the job market was booming from mid-2021 to mid-2023 after COVID-19 lockdowns, gross monthly hiring regularly topped 6 million.