August 1, 2008
HP-1108
Treasury Economic Update 8.1.08
"Today's jobs data reflect the headwinds affecting the U.S. economy--the housing correction, credit market strains, and higher energy prices. Yesterday's GDP data reflect the positive impact and timeliness of the stimulus payments, which will continue to support spending as we work through these headwinds."
Assistant Secretary Phillip Swagel, August 1, 2008
Employment Fell in July:
Job Growth: Payroll employment fell by 51,000 in July, following a decrease of 51,000 in June. The United States has added about 7.8 million jobs since August 2003. Employment increased in 33 states and the District of Columbia over the year ending in June. (Last updated: August 1, 2008)
Unemployment: The unemployment rate was 5.7 percent in July, up from 5.5 percent in June. (Last updated: August 1, 2008)
Growth Was Moderate in Q2:
Real GDP: Real GDP growth in Q2 was 1.9 percent at an annual rate, up from 0.9 percent growth in Q1. Consumer spending added 1.1 percentage points to growth in the first quarter and net exports added 2.4 percentage points. These positives were partly offset by the continued drag from housing and a large inventory reduction. (Last updated: July 31, 2008)
Signs of Economic Strength Include Exports and Low Inflation:
Exports: Strong global growth is boosting U.S. exports, which grew 10.2 percent over the past 4 quarters. (Last updated: July 31, 2008)
Inflation: Core inflation remains contained. The consumer price index excluding food and energy rose 2.4 percent over the 12 months ending in June.
(Last updated: July 16, 2008)
The Economic Stimulus Package Will Provide a Temporary Boost to Our Economy:
The package will help our economy weather the housing correction and other challenges. The Economic Stimulus Act of 2008, signed into law by President Bush has two main elements--stimulus payments so that working Americans have more money to spend and temporary tax incentives for businesses to invest and grow. Together, the legislation will provide about $150 billion of stimulus for the economy in 2008, providing a meaningful boost to the U.S. economy in 2008.
(Last updated: February 29, 2008)
Pro-Growth Policies Will Enhance Long-Term U.S. Economic Strength:
We made significant progress on the deficit. The FY07 budget deficit was down to 1.2 percent of GDP, from 1.9 percent in FY06. Much of the improvement in the deficit reflects strong revenue growth, which in turn reflects strong economic growth. The economic stimulus package and the slowing economy contribute to the near-term budget deficit. The Mid-Session Review of the Budget projects that the deficit will be 2.7 percent of GDP in FY08 and 3.3 percent of GDP in FY09. Looking ahead, higher spending on entitlement programs dominates the future fiscal situation; we must squarely face up to the challenge of reforming these programs.