Financial and Economic Brief - July 11, 2017by © Liberty Publishing, Inc.
Job Market Better Than Expected
According to a government report on Friday, the U.S. job market created 222,000 new positions in June which was higher than expected and the unemployment rate held at 4.4%. Health care was the biggest provider, with 37,000 new positions. Wage growth, stayed the same, with average hourly earnings rising 2.5% on an annualized basis, unchanged from May. The report “is another illustration that the real economy is in good health,” said Paul Ashworth, chief U.S. economist at Capital Economics. “The only disappointment is that wage growth still shows few signs of accelerating.”
More Sears and Kmart Closings
On Friday Sears Holdings, the parent company of Sears and Kmart, announced that it will close eight Sears department stores and 35 Kmart locations, adding to the list of 236 stores Sears has closed in 2017, around 20% of its locations. Chief Executive Officer Eddie Lampert noted, “This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs.” Sears said it is focusing on boosting digital sales and is also testing out small, specialized “concept stores” that offer best-selling items.
Steel Demand Forecast Rises
European steel association Eurofer raised its 2017 EU steel demand forecast but said a U.S. plan to levy steel tariffs on national security grounds could be terrible for global trade flows. Eurofer said EU steel demand will rise 1.9% this year to 159 million tons. Despite the raised forecast, the association issued another warning about potential import distortions, saying mills could again fail to benefit from demand growth and instead lose market share to imports. “With no structural solutions for the underlying problem of global overcapacity in sight, the number of protectionist and even isolationist measures look set to increase,” Eurofer director general Axel Eggert said.