Bill Losey’s Weekly Economic Update for Aug. 8, 2011

PRIVATE SECTOR ADDS 150,000+ NEW JOBS
America’s jobless rate ticked down to 9.1% in July as private sector payrolls expanded by a better-than-anticipated 154,000 positions, 81,000 of which were in the health care, retail and manufacturing industries. On the downside, Labor Department data showed that 156,000 people stopped looking for work last month; 6.2 million people have been out of work for six months or longer.

A SILVER LINING IN JUNE’S CONSUMER SPENDING
Basic Commerce Department data shows that personal spending fell 0.2% in June as personal incomes rose just 0.1%. Factor in inflation, and the story differs. Real disposable income increased 0.3% in June for the best advance since May 2010, and inflation-adjusted consumer spending was merely flat for the month.

ISM BAROMETERS INDICATE MODEST GROWTH
The Institute for Supply Management’s latest manufacturing and service sector PMIs didn’t exactly thrill Wall Street. ISM’s manufacturing index declined 4.4% to 50.9 for July, showing a sector that was barely growing for the month. Its service sector PMI descended to a 52.7 reading from June’s 53.3 mark.

WALL STREET BRACES ITSELF
After Thursday’s 513-point plunge, the Dow swung more than 400 points in Friday’s session and settled with a 61-point gain. While the July jobs report and the European Central Bank’s plan to buy Italian bonds provided a bit of encouragement for Wall Street, Standard & Poor’s discouraged investors worldwide by downgrading the U.S. long-term credit rating from AAA to AA+ Friday evening. The major index performance in the first week of August: S&P 500, -7.19% to 1,199.38; DJIA, -5.75% to 11,444.61; NASDAQ, -8.13% to 2,532.41. As U.S. stocks endured a correction, gold rose $20.50 in five days to $1,648.50 per ounce – its fifth straight weekly gain.