July Jobs Report: Better Times Ahead?

Aug 2, 2013 7:50am

Morning Money Memo…

It’s jobs Friday. Today’s release of the monthly employment report by the Labor Department is the most closely watched economic survey of the week. This year the average number of new jobs created each month has been almost 200,000. That’s an improvement on last year, but economist Joel Naroff says “unfortunately the labor market’s not strong yet. We need to get the unemployment rate down so that businesses start bidding for workers and wages begin to pick up.” While the strong stock market and rising home prices are a plus for more affluent Americans, middle class living standards have not improved. “I do expect better times ahead but for folks who are unemployed these are difficult times,” says Mark Zandi, senior economist at Moody’s Analytics. The total US workforce is still smaller than it was before the recession began. This spring the share of the population looking for work or with a job hit the lowest level in nearly 35 years.

Fresh highs for the stock market. For the first time the benchmark S&P 500 closed above 1700, as August got off to a strong start. The small-stock Russell 2000 and the Dow Jones index are in record territory. Asian stocks rose overnight. Investors were impressed by the purchasing managers’ report on US manufacturing which came in stronger than expected.

Americans love their booze, especially premium brands of bourbon whiskey. Diageo, which owns Smirnoff Vodka, Johnnie Walker whiskey and other well-known products, said in its latest report that North American sales account for 40 percent of the company’s profit, although they’re only one-third of total revenues. Recent price increases of high-end brands have not put a dent in demand. Diageo’s CEO says the growing cocktail culture in North America is fueling demand for premium spirits.

Chevron, the giant oil company, is about be hit by a lawsuit from the San Francisco bay area city of Richmond. Nearly a year ago, a corroded pipe at Chevron’s big oil refinery ruptured, leading to an explosion and fire. Smoke blanketed the skies and 15,000 people went to local hospitals because of the pollutants in the air. Many had breathing problems and filed individual claims against Chevron. The mayor of Richmond has scheduled a news conference. In a statement Chevron says the lawsuit is a waste of city resources.

Bank of America may be facing civil charges over mortgage-backed securities and other mortgage-related matters, according to a regulatory filing by the firm. The SEC and the New York Attorney General’s Office also are considering filing charges against Merrill Lynch in related investigations. Bank of America says it’s fully co-operating with the investigations.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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