Current Events and Updates

last updated 08/2006
Note: Reports link to appropriate government sites.

Economic Growth
Economic growth slows in the second quarter of 2006. Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the second quarter of 2006, according to advance estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 5.6 percent. [Outside Econweb] Full report

Unemployment in July creeps up to 4.8 percent from 4.7 percent a month earlier. The number of unemployed persons edged up to 7.2 million in July, and the unemployment rate rose to 4.8 percent. A year earlier, the number of unemployed persons was 7.5 million and the jobless rate was 5.0 percent. [Outside Econweb] Full report

Inflation and Prices
Inflation advances 0.2 percent in June, following a 0.4 percent rise in May. Over the past year, inflation has increased by 4.3 percent. Excluding food and energy prices, the "core" CPI rose 0.3 percent in June, and 2.6 percent over the last twelve months. [Outside Econweb] Full report

Exchange Rates and International Trade
The May trade deficit is essentially unchanged. The U.S. international deficit in goods and services increased to $63.8 billion in May from a revised $63.3 billion in April. Exports increased to $118.7 billion in May from $115.9 billion in April while imports increased to $182.5 billion in May from $179.3 billion the previous month. The trade deficit through the first five months of 2006 is $317.9 billion, about $36 billion higher than the deficit at the same period in 2005.[Outside Econweb] Full report

The dollar strengthens somewhat in July. The weighted average exchange value of the U.S. dollar against major currencies rose slightly from 81.67 in June to 82.09 in July. However, over the past year the dollar has depreciated by 4.2 percent. [Outside Econweb] Full report

Monetary Policy and Interest Rates
The Fed boosts rates again in June. At its meeting of June 29, the Federal Open Market Committee (FOMC) raised the federal funds rate by 25 basis points to 5.25 percent. The Committee's actions at it next meeting are uncertain. The Committee stated "Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information." The next meeting is scheduled for August 8, 2006. [Outside Econweb] Full report

Fiscal Policy and the Budget Deficit
CBO projects a deficit of $260 billion for fiscal year 2006. This projection is lower than CBOs previous estimate by $111 billion. The primary reason for the lower-than-anticipated deficit is higher tax revenues, up 12.8 percent over 2005 revenues.[Outside Econweb] Full report

Labor productivity rises 3.7 percent in nonfarm business sector during the first quarter of 2006.  Output increased by 6.5 percent while hours increased by 2.7 percent. [Outside Econweb] Full report  

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