The latest nonfarm payrolls report released on Aug.2 revealed an addition of 162,000 jobs created, compared to a downwardly revised 188,000 in June. Economists expected the latest report to show 175,000 jobs created. The average workweek dropped 34.4 hours from 34.5 and average hourly earnings declined 0.1%. Aggregate wages fell 0.3%, “which will put substantial downside pressure on retail sales growth,” according to Briefing.com.
Yet despite the negative economic news, the U.S. retail economic trend according to the New Economy Index (NEI) remains up. The NEI is a stock price composite of the leading retail, business transportation and employment agency stocks. It’s currently just below a 6-year high, having long since surpassed its previous all-time high from 2007. While it’s certainly possible we’re witnessing the beginnings of an economic topping process, it’s still too early to assume the worst.
Until the uptrend in the NEI is broken, we can assume the economic outlook is still positive despite the bumps beginning to appear on the road.