Equity markets opened lower as no new deal with Canada has been reached with Friday’s deadline fast approaching. The markets are also focused on tariff disputes with China as the deadline for the end of public comment ends on Wednesday, September 5^th.    

Personal Income and Spending

Personal income increased by 0.3%, $54.8 billion in July according to the Bureau of Economic Analysis.  The increase was driven by increases in wages and salaries, dividend income and rental income.  Personal spending increased 0.4%, $49.3 billion for the month of July.  Personal saving came in at $1,048.1 billion and the personal saving rate as a percentage of disposable income was 6.7%.        

The PCE price index rose 0.1%, excluding food and energy, the PCE price index rose 0.2%.  Prescription drugs were the leading contributor to the increase spending on goods.  The largest contributor to the increase in services was for food services and accommodations.  There were no surprise in the report that would change the thinking of Chairman Powell and the Federal Reserve.     

Unemployment Insurance Weekly Claims

Weekly claims rose last week, but the trend continue to point to a robust labor market. For the week ended August 25, Initial claims came in at 213,000 (consensus 214,000), an increase of 3,000 from the prior week.  The 4-week moving average was 212,250, falling 1,500 from last week, the lowest since December 1969 when it was 210,750.

Continuous claims for unemployment benefits for the week ended August 18 was 1,708,000, a decrease of 20,000 from the previous week’s revised number (upwardly revised 1,000). A better gauge, the 4-week moving average, was 1,731,250, a decrease of 4,500 from the prior week’s revised average (upwardly revised by 250).

Among retailers, the dollar stores, Dollar General (DG) and Dollar Tree (DLTR) are both trading lower pre-market after reporting earnings.  Upscale jeweler Signet (SIG) beat on the top and bottom lines, same store sales rose by 1.7%.  The stock is trading higher by 15%

We are holding off on any new ideas.