Sentiment among small business owners held steady during the early days of summer. Here are the five things we learned from U.S. economic data released during the week ending July 11.
Small business owner sentiment barely budged in June. The Small Business Optimism Index slipped by 2/10ths of a point to 98.6 (1986=100), leaving the National Federation of Independent Business measure up 7.1 points from a year earlier. Four of ten index components improved during the month: earnings trends, current job openings, plans to increase employment, and whether it is a good time to expand. Five other indices fell, including sizable declines for current inventories, expectations for the economy, and expected real sales. The press release noted concerns about taxes, labor quality, and high labor costs.
Wholesalers’ sales fell as their inventories narrowed in May. Merchant wholesalers’ sales declined 0.3 percent to a seasonally adjusted $697.2 billion. The Census Bureau measure was up 4.8 percent from a year earlier. Wholesale durable goods sales inched up 0.2 percent (boosted by a 3.6 percent bump for the automotive sector), while nondurables sales fell 0.8 percent. Wholesalers reported that their inventories shrank 0.3 percent to $905.5 billion. Even with the contraction, inventories remained 1.4 percent larger than a year ago. The inventory-to-sales (I/S) ratio held steady for the month at 1.30 (down four basis points from a year earlier). Durable goods I/S ratio declined by two basis points to 1.67 (May 2024: 1.80), while the nondurables ratio grew by two basis points to 0.95 (May 2024: 0.93).
Initial jobless claims remained modest in early July. The Department of Labor reports that there were a seasonally adjusted 227,000 first-time claims made for unemployment insurance during the week ending July 5. Claims were up 5,000 for the same week a year ago. The four-week moving average of 235,500 initial jobless claims was up 1.3 percent from a year earlier. During the week ending June 21, 1.929 million people were receiving some form of unemployment insurance benefits, 5.7 percent above their year-ago pace.
Consumer debt grew slowly in May. The Federal Reserve estimates American consumers held a seasonally adjusted $5.048 trillion in outstanding debt (net of mortgages and other real estate-backed debt). This was a gain of $5.1 billion from April and a mere 0.4 percent from a year earlier. Revolving credit balances (e.g., credit cards) contracted by $3.5 billion to $1.299 trillion. Revolving credit balances have fallen 2.5 percent over the past year. Nonrevolving credit balances, which include auto and college loans, swelled $8.6 billion to $3.749 trillion (+1.4 percent versus May 2024).
Even with a surplus in June, the U.S. government continued to run a large budget deficit for the fiscal year. The Bureau of Fiscal Service reports that the U.S. government collected $526.4 billion in receipts and had $499.4 billion outlays during the month. The resulting surplus of $27.0 billion was the first such monthly surplus since last September. The Federal government collected $26.6 billion in customs duties in June and $108.0 billion thus far in the FY2025. Over the same nine months of FY2024, the government had collected $55.6 billion in duties. Thus far in FY2025, the U.S. government has collected $4.008 trillion in receipts while spending $5.346 trillion in outlays. The resulting budget deficit of -$1.337 trillion was 5.0 percent ahead of its year-ago pace.
Other U.S. economic data released over the past week:
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.
What We Learned About the U.S. Economy Last Week 