US ECONOMY & POLITICS

U.S. Jobless Claims Fell to 364,000 Last Week, a New Pandemic Low – Wall Street Journal, 7/1/2021

• Worker filings for jobless benefits fell to 364,000 last week, reaching a new pandemic low as layoffs continue to recede.
• The Labor Department said Thursday initial jobless claims in the week ended June 26 fell by a seasonally adjusted 51,000 from the prior week’s revised total of 415,000.
• The drop brought the four-week moving average, which smooths out volatility in the weekly figures, down by 6,000 from the previous week’s average to 392,750, also a new pandemic low.
• The total number of benefits distributed for all programs in the week ended June 12—which gives an approximation of the number of people receiving benefits—was 14.7 million on an unadjusted basis, with 3.2 million accounting for regular state programs and most of the rest from pandemic-related assistance.

U.S. manufacturing sector grows moderately; prices paid at record high-ISM – Reuters, 7/1/2021

• U.S. manufacturing activity grew at a moderate pace in June, but employment contracted for the first time in seven months, likely because of rampant shortages of raw materials and labor.
• The Institute for Supply Management (ISM) said on Thursday its index of national factory activity slipped to 60.6 last month, the lowest reading since January, from 61.2 in May.
• The ISM survey’s measure of prices paid by manufacturers jumped to a record 92.1 last month from a reading of 88.0 in May.
• Demand is also being fueled by the reopening of the economy, with more than 150 million Americans fully vaccinated.
• The survey’s forward-looking new orders sub-index edged down to a reading of 66.0 last month from 67.0 in May.

Construction spending unexpectedly falls in May – Reuters, 7/1/2021

• U.S. construction spending unexpectedly fell in May as gains in private homebuilding were offset by persistent weakness in outlays on nonresidential structures and public projects.
• The Commerce Department said on Thursday that construction spending dropped 0.3% after edging up 0.1% in April.
• Construction spending, which accounts for about 3.6% of gross domestic product, increased 7.5% on a year-on-year basis in May.
• Spending on private construction projects fell 0.3%, weighed down by a 1.1% drop in private nonresidential construction like gas and oil well drilling.
• Business investment on nonresidential structures has declined for sixth straight quarters.
• Private construction outlays increased 0.3% in April.
• Investment in residential projects rose 0.2%, lifted by a 0.8% increase in single-family homebuilding.
• Spending on public construction projects fell 0.2% in May after decreasing 0.6% in April.

This Summer, Jobs Come With a Hefty Signing Bonus – Wall Street Journal, 7/1/2021

• Signing bonuses are usually reserved for professional athletes and a privileged few white-collar professionals. Not this summer.
• Nearly 20% of all jobs posted on job search site ZipRecruiter in June offer a signing bonus, up from 2% of jobs advertised on the job search site in March.
• Hiring bonus offers start at $500 and quickly rise from there. Job postings across sectors show that a $1,000 hiring bonus is quickly becoming table stakes in recruiting hourly workers who make between $16.50 and $25 an hour.
• The $1,000 hiring bonus is advertised on jobs listed for apartment-complex groundskeepers in Texas, movers in Florida, cabinet makers in Georgia, housekeepers in Wisconsin, pool cleaners in New Mexico and welders in Ohio, among others.
• Ten states have started to offer bonus payments to get workers off unemployment, including Arizona, Colorado, Connecticut, Kentucky and Michigan, among others, according to the U.S. Chamber of Commerce.
• A recent poll conducted by the Chamber found more than half of workers ages 24-34 say hiring bonuses could attract them back to the job market.

Drought’s Toll on U.S. Agriculture Points to Even-Higher Food Prices – Wall Street Journal, 7/1/2021

• The Southwest is suffering through one of its worst droughts on record amid a critical reduction in the amount of water from snowpack runoff.
• Roughly 9.8% of the U.S. is currently in what climate experts refer to as exceptional drought, the most severe designation, which is characterized by widespread crop and pasture losses and shortages in reservoirs, streams and wells amounting to water emergencies. About 44% of the nation is experiencing some level of drought, with a further 13% currently affected by drier-than-normal conditions.
• The price of feed grains has risen in the past year to its highest levels since 2013, when another persistent and widespread drought tested the nation’s farm economy. It is another example of how economic strains are compounded by secondary effects of extended droughts.

EUROPE & WORLD

Xi Jinping Warns China Won’t Be Bullied as Communist Party Marks 100 Years – Wall Street Journal, 7/1/2021

• Chinese leader Xi Jinping marked his ruling Communist Party’s 100th anniversary with rousing appeals for national unity and defiance against foreign pressure, a rallying cry for one-party rule aimed at reinforcing his authority for years to come.
• Addressing a crowd of thousands gathered Thursday at Beijing’s Tiananmen Square, Mr. Xi struck strident tones in recounting the party’s successes in surmounting challenges at home and abroad—from eliminating rural poverty to resisting imperialist aggression.
• He insisted that China has irreversibly emerged from past humiliation by foreign powers into an era of pride and prosperity.
• The Chinese people “will never allow any foreign force to bully, oppress, or enslave us,” Mr. Xi said, dressed in a gray Mao suit atop the Gate of Heavenly Peace. “Anyone who tries to do so shall be battered and bloodied from colliding with a great wall of steel forged by more than 1.4 billion Chinese people using flesh and blood,” he said, drawing cheers and applause.

Euro zone factory growth, input costs rose at record pace in June -PMI – Reuters, 7/1/2021

• Euro zone manufacturing activity expanded at its fastest pace on record in June, according to a survey on Thursday which also showed factories faced the steepest rise in raw materials costs in well over two decades.
• IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) rose to 63.4 in June from May’s 63.1, above an initial 63.1 “flash” estimate and the highest reading since the survey began in June 1997.
• An index measuring output, which feeds into a composite PMI due on Monday and seen as a good guide to economic health, rose from May’s 62.2 to 62.6. Anything above 50 indicates growth.
• Due to a shortage of shipping containers and supply chains hugely affected by the global pandemic, the input prices index soared to 88.5 from 87.1 — by far the highest in the survey’s history.

Delta Variant’s Spread Hobbles Global Efforts to Lift Covid-19 Restrictions – Wall Street Journal, 7/1/2021

• The fast spread of the Delta variant of the coronavirus in much of the world is thwarting plans in many countries to lift lockdowns and reopen economies, a major setback to efforts to contain the global Covid-19 pandemic.
• Delta, which swept through India in May, is estimated to be at least twice as contagious as the original version of the virus.
• It is now present in 85 countries and is the most common variant in the U.S.
• In parts of Asia, Australia and Europe, governments are reintroducing travel restrictions and delaying the lifting of lockdowns as health authorities find that restrictive measures that kept earlier lineages of the virus in check aren’t curbing Delta.
• Israel has reimposed an indoor mask requirement, as the number of daily new Covid-19 cases has risen to an average of about 200 in the past week from about 10 a day in early June.

Factmonster – TODAY in HISTORY

• The Battle of Gettysburg, which marked the turning point in the Civil War, began. (1863)
• Canada became a self-governing dominion of Great Britain under the British North America Act. (1867)
• Theodore Roosevelt and his Rough Riders fought the battle of San Juan Hill in the Spanish-American War. (1898)
• Yasir Arafat returned to Palestinian land after 27 years in exile. (1994)
• After 156 years of British colonial rule, Hong Kong was returned to China. (1997)