Weekly Economic Update: August 14, 2017

Investors may have been disturbed by the rising tensions between the United States and North Korea last week, resulting in a shift from stocks to long-term bonds. The Dow, which had surged to a new record high the prior week, sunk over 1.0% last week, while the large-cap S&P 500 fell almost 1.5% following some less than stellar second-quarter corporate earnings reports. Once again, the biggest drop was felt by the small-cap Russell 2000, which suffered the largest weekly decline of the major indexes and has lost most of its year-to-date gains. On the other hand, demand for 10-year Treasuries increased, sending yields to their lowest level since June.

• According to the Job Openings and Labor Turnover report for June, the number of job openings increased to 6.2 million.
• The monthly federal government budget deficit was $43 billion in July on the heels of a June deficit of $90 billion.
• There continues to be little upward movement in consumer prices. The Consumer Price Index rose slightly in July following no movement in June.
• Dwindling inflationary pressure has been the theme over much of 2017, and the latest figures from the Producer Price Index, showing a slight decline in July, continue that trend.
• In the week ended August 5, the advance figure for seasonally adjusted initial claims for unemployment insurance increased a bit from the previous week’s revised level.