Definition of 'Dismal Science'"/>

It’s Hot, But The Economy’s Not (?)

Studying, following and attempting to gauge economic and stock market trends is, truly, a “dismal science.”

Definition of ‘Dismal Science’

A term coined by Scottish writer, essayist and historian Thomas Carlyle to describe the discipline of economics. The term dismal science was inspired by T. R. Malthus’ gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship.

Source: Investopedia

On Tuesday, 7/16/2013, MarketWatch reported:

U.S. consumer prices rose a seasonally adjusted 0.5% in June to mark the biggest increase since February, as the cost of gasoline, housing, medical care, clothing and food all rose, the Labor Department said Tuesday. The energy price index shot up 3.4%, spurred by a 6.3% gain in gasoline. Food prices rose 0.2%. The core CPI, which excludes volatile food and energy costs, also advanced 0.2%. Economists surveyed by MarketWatch had forecast a 0.5% increase in the broad CPI and a 0.2 % gain in the core rate. Consumer prices have risen an unadjusted 1.8% over the past 12 months, up from 1.4% in May. Real or inflation-adjusted hourly wages, meanwhile, were flat in June. Real wages have risen just 0.4% over the past 12 months.

Source: MarketWatch

Later in the day it was reported that:

Industrial production rose 0.3% in June, led by a 2.2% gain in home electronics output and a 1.4% gain in automotive products, as well as a 0.8% gain in mining production, the Federal Reserve said Tuesday. The production was stronger than the 0.1% expected in a MarketWatch-compiled economist poll, and April’s output was revised to negative 0.3% from negative 0.4%. May’s flat reading was unrevised. The rate of capacity utilization edged up 0.1 percentage point to 77.8%, higher than the 77.6% expected and a rate that was 0.1 percentage point above May but 2.4 percentage points below its 1972 to 2012 average.

Source: MarketWatch

Today, 7/17/2013, MarketWatch Reported:

Construction on new U.S. homes fell 9.9% in June to a seasonally adjusted annual rate of 836,000, reaching the lowest level since August 2012, led down by a large drop for apartments, the U.S. Department of Commerce estimated Wednesday. Economists polled by MarketWatch had forecast housing starts in June to hit an annual rate of 950,000, compared with an originally estimated May starts rate of 914,000. On Wednesday the government revised May’s starts rate to 928,000. In June, starts for buildings with at least five units fell 26.7%, while starts for single-family homes declined 0.8%. Starts in June were up 10.4% from the same period in the prior year, pointing to ongoing recovery, though there’s concern about the impact of rising mortgage rates on the housing market’s rebound.Also Wednesday, the government reported that building permits, a sign of future demand, fell 7.5% in June to an annual rate of 911,000. Permits for buildings with at least five units fell 22.8%. Meanwhile, permits for single-family homes nudged up 0.6% to an annual rate of 624,000, the highest rate since May 2008.

Source: MarketWatch

See what I mean? In some areas of the economy there are glimmers of hope — in others, not so much. Did you notice how prices rose on all of the items most important to people (i.e. gasoline, housing, medical care, clothing and food), while wages were flat? That’s not good!

Sorry for all of the colors, but I didn’t want the page to look like one big blob of yellow, plus I tried to separate the various important aspects of the reports.

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