US FACTORY OUTPUT BARELY RISES
US factory output rose just 0.1 percent in May, according to the Associated Press. This comes after two months of declines and indicates that manufacturing is not the source of economic growth at this time. The Federal Reserve said that output fell 0.4 percent in April and 0.3 percent in March. Manufacturing has increased just 1.7 percent in the past 12 months. Factories did produce more autos, computers and wood products last month, offsetting declines in primary metals and furniture.
PRODUCER PRICES INCREASE IN MAY
US producer prices rose more than expected in May, due to an increase in gasoline prices. CNBC is reporting that the Labor Department report shows that producer prices increased 0.5 percent last month. Food prices also increased. This comes after wholesale prices had declined 0.7 percent in April. Wholesale prices, excluding the volatile food and energy segments, increased only 0.1 percent. Overall, the core PPI (that does not include food and energy) has increased only 1.7 percent in the past year, making it difficult for producers to raise prices on consumers. This increase could argue against the scaling back of the quantitative easing program currently being used by the Fed to stimulate the economy.
RETAIL SALES INCREASE
Retail sales increased 0.6 percent in May, putting them 4.3 percent higher over the past year, according to a Commerce Department report. The Wall Street Journal reports that experts predict that the increase in spending suggests the economy could strengthen in the second half of 2013. Consumer spending accounts for more than two-thirds of total demand in the US and is critical to economic growth. Consumers have cut back on saving and are buying what they need but consumers are still not shelling out cash for extras.
REFINANCINGS FALL DUE TO INCREASE IN INTEREST RATES
A spike in mortgage rates threatens to slow down a refinancing boom that has delivered strong profits in the last two years, according to the Wall Street Journal. The average rate on a 30 year mortgage rose to 4.15 percent last week, a 14 month high and up from 3.59 percent in May. Refinancing applications were down 36 percent from the first week of May. The climbing mortgage rates are one of the tricky issues the Fed must balance as it considers when to pull back on its bond-buying program.
THE INCREASING COST OF A TRIP TO THE MOVIES
A trip to the movies is getting more expensive, according to the National Association of Theatre Owners. The average ticket price in 2011 was $7.93(the latest figures available) and in 2010 it was $7.89. But CNBC reports that the Regal Entertainment Group has indicated it would increase prices 3-4 percent this year. Theaters are also adding “premium viewing experiences”. Upgrades to a 3D screen could cost as much as $5. Higher costs are blamed on fewer consumers making it to the movies. Overall box office trips are down 6.3 percent compared to a year ago.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.