Out of the black: For much of the past year, the world’s biggest energy companies suffered through an oil-price rout with one silver lining: Their little-loved refineries were churning out big profits again. Now, The Wall Street Journal reports that bright spot could be fading, even as oil prices sink. Analysts and executives are flagging the prospect of lower refining profits in the second half of the year as summer gasoline consumption eases, lowering demand. Analysts don’t expect refining profits to crash in the same way oil prices have, at least in the near term. Major oil companies’ downstream businesses will likely continue to perform better than they have done for several years as weak oil prices and rising consumption help bolster their performance. But headwinds are building, especially in Europe. Read the full story.
Help wanted: Construction of homes and commercial buildings is up significantly across the nation this year—but the industry would be sizzling if not for a critical shortage of workers, industry officials say. USA Today reports the labor crunch is delaying projects, raising home prices and forcing companies to turn down work, which in turn curtails building activity and economic growth. Spot labor shortages began in 2012 as new construction slowly came to life following the 2000’s real estate crash. But they’ve spread across most of the country and have been accentuated this year by a strong recovery in both residential and commercial building. “I would go so far as to call it an epidemic,” says Jerry Howard, CEO of the National Association of Home Builders. Read the full story.
Spend, spend: U.S. consumers increased their spending moderately in July, as wages and salaries made their biggest jump in eight months. Spending rose 0.3% in July, helped by purchases of big-ticket items such as cars, the Commerce Department announced this morning. June’s result was revised up to a matching 0.3% gain. Incomes increased 0.4% in July. The key category of wages and salaries rose 0.5%, the biggest advance since last November. The Associated Press reports the report suggests that consumer spending—which accounts for 70% of economic activity—got off to a good start in the third quarter as strong momentum from the second quarter rolled into July. Read the full story.
