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Category: Research - Topic: Economics


University of Michigan Consumer Confidence increased in October to 86.9
Posted: October 31, 2014 at 10:00 AM (Friday)

Consumer confidence posted its third consecutive monthly gain in October, rising to its highest level since July 2007. The October gain was due to improved personal finances as well as a more favorable outlook for the overall economy. Indeed, consumers reported the most favorable personal financial expectations as well as the most positive year-ahead outlook for the national economy in the past seven years. What the survey did not find was any negative impact on confidence from the global economic slowdown, military conflicts, or Ebola. None of these issues was mentioned by more than a few respondents; instead, respondents emphasized improved wage and employment prospects due to a stronger economy. Gains in holiday spending are expected to be the best in several years, benefitting from higher confidence as well as falling gas prices at the pump.

Economy Expected to Improve
Nearly six-in-ten consumers reported that the economy had recently improved, the most positive rating in more than ten years. When asked about the economic outlook for the year ahead, 45% expected good times financially, up from just 28% a year earlier, and the highest level since July 2007. Consumers anticipated that the continued strength in the economy would produce some additional declines in the national unemployment rate.

Higher Income Gains Expected
In the September and October surveys, more households expected income gains than anytime in the last six years—since September of 2008. Just as importantly, the median increase of 1.1% expected by all households was the highest since late 2008. While still meager, this improvement, along with a decline in the expected inflation rate, meant that more households expected their incomes to keep pace with or to exceed the inflation rate.

The Consumer Sentiment Index was 86.9 in the October 2014 survey, up from 84.6 in September and 73.2 last October. The entire October gain was concentrated in the Expectations Index, which rose to 79.6 from 75.4 one month ago and 62.5 one year ago. Although the Current Conditions Index slipped to 98.3 in October from 98.9 in September, it was well above last October’s 89.9.

Consumers have been gradually regaining their economic footing in the past several months, with confidence rising to the highest level since the start of the Great Recession. This is not the first time such a strong rebound has occurred, but this time it appears to have more forward traction. Consumers have not overreacted to the negative news of a global slowdown or Ebola nor to the positive news of lower gas prices. Instead, consumers have kept their focus on improved job and wage prospects. Finally, five years after the start of the recovery, consumers have begun to adopt the expectations and behaviors that have driven past expansions.


Chicago Purchasing Managers Index increased 5.7 points to 66.2 in October
Posted: October 31, 2014 at 09:45 AM (Friday)

The Chicago Business Barometer rose 5.7 points to a one year high of 66.2 in October, fuelled by a double digit gain in New Orders.

The bounceback in the Barometer marks a solid start to Q4 and suggests that against a backdrop of concerns about weakening growth in Europe and China, the US economy is still growing firmly.

New Orders was the strongest component of the Barometer and increased sharply to 73.6, the highest level since October 2013.

Production also strengthened further following a sharp decline in the previous month, and has been running at a firm pace for some time now.

The October survey also showed that higher demand and solid output encouraged companies to create jobs. Employment increased to the highest level since November 2013, a potential sign that the recovery is becoming more entrenched.

While the level of Inventories eased from the 41-year high seen in September, it remained firm and points to a continued stock build in line with strong sales forecasts and to cope with potential spikes in unplanned orders.

Order Backlogs also expanded faster, while Supplier Deliveries declined for the first time in six months, contributing negatively to the Barometer but giving some relief to business.

Lower crude oil prices saw inflationary pressures ease, with the Prices Paid measure falling below the average seen over the past year.

Commenting on the Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, “The strengthening in the Chicago Business Barometer suggests that the US economic recovery is more entrenched. The October survey also provided clearer evidence that companies are taking on more workers to keep up with higher demand.”

“Concerns about the global economy and the continued low level of inflationary pressures may persuade the Fed to keep rates lower for longer, but the domestic economy is growing healthily.”


Personal Income increased 0.2%, Spending decreased 0.2%
Posted: October 31, 2014 at 08:30 AM (Friday)

Personal income increased $22.7 billion, or 0.2 percent, and disposable personal income (DPI) increased $15.7 billion, or 0.1 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $19.0 billion, or 0.2 percent. In August, personal income increased $50.7 billion, or 0.3 percent, DPI increased $37.5 billion, or 0.3 percent, and PCE increased $58.7 billion, or 0.5 percent, based on revised estimates.

Real DPI increased less than 0.1 percent in September, compared with an increase of 0.3 percent in August. Real PCE decreased 0.2 percent, in contrast to an increase of 0.5 percent.


Employment Cost Index up 0.7% in 23Q2014
Posted: October 31, 2014 at 08:30 AM (Friday)

Compensation costs for civilian workers increased 0.7 percent, seasonally adjusted, for the 3-month period ending September 2014, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.8 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.6 percent.


DJ-BTMU U.S. Business Barometer dipped by 0.2%
Posted: October 30, 2014 at 10:00 AM (Thursday)

For the week ending October 18 2014, the DJ-BTMU U.S. Business Barometer dipped by 0.2 percent to 98.1 as most indexes extended their weakening trend. Chain store sales fell by 0.3 percent, after a loss of 0.8 percent in the prior week. In the same line, MBA’s purchase index dropped by a solid 4.8 percent, extending the negative trend for two consecutive weeks. As to the production side, electric output and steel production declined by 2.7 and 0.9 percent, respectively, although it was partially offset by minor gains in auto production.

On a year-over-year basis, the barometer showed a gain of 0.7 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.2. Its year-over-year growth rate was 0.9 percent.


Weekly Initial Unemployment Claims Increase 3,000 to 287,000
Posted: October 30, 2014 at 08:30 AM (Thursday)

In the week ending October 25, the advance figure for seasonally adjusted initial claims was 287,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 283,000 to 284,000. The 4-week moving average was 281,000, a decrease of 250 from the previous week's revised average. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending October 18, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 18 was 2,384,000, an increase of 29,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 2,351,000 to 2,355,000. The 4-week moving average was 2,377,500, a decrease of 4,500 from the previous week's revised average. This is the lowest level for this average since January 13, 2001 when it was 2,360,500. The previous week's average was revised up by 1,000 from 2,381,000 to 2,382,000.


3Q2014 GDP advance estimate increased 3.5%
Posted: October 30, 2014 at 08:30 AM (Thursday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the third quarter, compared with an increase of 2.0 percent in the second. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent, compared with an increase of 1.7 percent.


FOMC target funds rate maintained at 0 - 1/4%, QE Buying Ends
Posted: October 29, 2014 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Stanley Fischer; Richard W. Fisher; Loretta J. Mester; Charles I. Plosser; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: October 29, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 6.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 24, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 15 percent lower than the same week one year ago. The seasonally adjusted purchase index and conventional purchase index were the lowest since February 2014, while the government purchase index was the lowest since August 2007.

“Borrowers with jumbo loans tend to be most sensitive to changes in rates, and that sensitivity has been clearly apparent in the past few weeks with double and even triple digit percentage changes in refinance application volume for jumbo loans,” said Mike Fratantoni, MBA’s Chief Economist. “The average loan size for refinance applications decreased to $263,600 in the most recent week from a survey high of $306,400 the previous week. The decrease was driven by a 41 percent drop in refinance applications for loans greater than $729,000, which had surged almost 130 percent the week before.”

The refinance share of mortgage activity remained unchanged at 65 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.2 percent of total applications.

The FHA share of total applications increased from 8.3 percent last week to 8.9 percent this week. The VA share of total applications increased from 9.6 percent last week to 10.7 percent this week. The USDA share of total applications increased from 0.8 percent last week to 0.9 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.13 percent from 4.10 percent, with points remaining unchanged at 0.21 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.13 percent from 4.03 percent, with points decreasing to 0.13 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.84 percent from 3.81 percent, with points increasing to 0.16 from 0.07 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.28 percent, with points increasing to 0.24 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 2.94 percent, with points increasing to 0.43 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence rebounded in October to 94.5
Posted: October 28, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had decreased in September, rebounded in October. The Index now stands at 94.5 (1985=100), up from 89.0 in September. The Present Situation Index edged up from 93.0 to 93.7, while the Expectations Index increased sharply to 95.0 from 86.4 in September.

Consumer confidence, which had declined in September, rebounded in October. A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation. Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential. With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.

Consumers’ appraisal of current conditions was moderately more favorable in October than in September. Their view of business conditions was mixed; while the proportion saying conditions are “good” inched up from 24.2 percent to 24.5 percent, those claiming business conditions are “bad” also increased slightly, from 21.2 percent to 21.7 percent. Consumers’ assessment of the job market improved moderately, with the proportion stating jobs are “plentiful” increasing marginally from 16.3 percent to 16.5 percent, and those claiming jobs are “hard to get” declining slightly from 29.4 percent to 29.1 percent.

Consumers’ optimism, which had declined considerably in September, improved in October. The percentage of consumers expecting business conditions to improve over the next six months increased from 19.0 percent to 19.6 percent, while those expecting business conditions to worsen fell from 11.4 percent to 9.3 percent. Consumers’ outlook for the labor market also improved markedly. Those anticipating more jobs in the months ahead increased to 16.8 percent from 16.0 percent, while those anticipating fewer jobs fell from 16.9 percent to 13.9 percent. The proportion of consumers expecting growth in their incomes rose from 16.9 percent in September to 17.7 percent in October, while the proportion expecting a drop in income fell from 13.4 percent to 11.6 percent.


Richmond Fed's Current Activity Index climbed to a reading of 20
Posted: October 28, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity expanded in October, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders grew robustly this month, while manufacturing employment growth continued at a moderate pace. Average wages rose modestly and the average workweek shortened slightly compared to a month ago.

Manufacturers remained optimistic about future business conditions. Firms continued to look for faster growth in shipments and in the volume of new orders. Additionally, producers expected increased capacity utilization and anticipated rising backlogs in the six months ahead. Manufacturers looked for little change in vendor lead times.

Survey participants' outlook for the months ahead included faster growth in the number of employees and average wages, with steady growth in the average workweek.

Prices of raw materials and finished goods rose at a slightly faster pace in October. Manufacturers expected slower growth in prices paid and anticipated faster growth in prices received over the next six months

Overall, manufacturing conditions strengthened in October. The composite index climbed to a reading of 20 following last month's reading of 14. The index for shipments advanced 12 points, ending at 23. Additionally, the index for new orders moved up eight points to 22. Manufacturing employment grew at a steady pace this month. The October indicator slipped three points to a reading of 14.

Vendor lead time lengthened, moving the index up two points to 12. Capacity utilization grew on pace with a month ago; the index remained at 13. Backlogs rose at a faster pace this month; the October indicator gained three points, ending at 9. Finished goods inventories rose at a slower pace compared to a month ago. The index shed eight points to finish at 15. Additionally, raw materials inventories rose at a slightly slower rate compared to last month. That gauge moved down one point to settle at 19.


S&P/Case-Shiller Home Price Indices increase 0.2% in August
Posted: October 28, 2014 at 09:00 AM (Tuesday)

Data through August 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, continue to show a deceleration in home price gains. The 10-City Composite gained 5.5% year-over-year and the 20-City 5.6%, both down from the 6.7% reported for July. The National Index gained 5.1% annually in August compared to 5.6% in July.

On a monthly basis, the National Index and Composite Indices showed a slight increase of 0.2% for the month of August. Detroit led the cities with the gain of 0.8%, followed by Dallas, Denver and Las Vegas at 0.5%. Gains in those cities were offset by a decline of 0.4% in San Francisco followed by declines of 0.1% in Charlotte and San Diego.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.1% annual gain in August 2014. The 10- and 20-City Composites posted year-over-year increases of 5.5% and 5.6%.

The deceleration in home prices continues. The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities -- Los Angeles, San Francisco and San Diego. Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month.

The large extent of slower increases is seen in the annual figures with all 20 cities; the two composites and the national index all revealing lower numbers than last month. The 10- and 20-City Composites gained 5.5% and 5.6% annually with prices nationally rising at a slower pace of 5.1%. Las Vegas continues to see a sharp deceleration in their annual home prices with a 10.1% annual return, down just below three percent from last month. Miami is now leading the cities with a 10.5% year-over-year return. San Francisco, which has shown double-digit annual gains since November 2012, posted an annual return of 9.0% in August.

Despite softer price data, other housing data perked up. September figures for housing starts, permits and sales of existing homes were all up. New home sales and builders’ confidence were weaker. Continued labor market gains, low interest rates and slower increases in home prices should support further improvements in housing.

As of August 2014, average home prices across the United States are back to their levels posted in the spring of 2005. The National Index was up 0.2% in August 2014 and 5.1% above August 2013.

As of August 2014, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. The recovery from the March 2012 lows is 28.8% and 29.5% for the 10-City and 20-City Composites.

All cities except Cleveland saw their annual gains decelerate. Las Vegas showed the most weakness in its year-over-year return; it went from 12.8% in July to 10.1% in August. As a result, Las Vegas lost its leadership position as it moved to second place behind Miami with a 10.5% year-over-year gain. San Francisco posted 9.0% in August, down from its double-digit return of 10.5% in July.

All cities except Boston and Detroit posted lower monthly returns in August compared their returns reported for July. San Francisco showed its largest decline since February 2012; it was the only city that showed a negative monthly return two months in a row from -0.3% in July to -0.4% in August.


New Orders for Durable Goods Decreased 1.3%, Ex-Trans down 0.2%
Posted: October 28, 2014 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in September decreased $3.2 billion or 1.3 percent to $241.6 billion, the U.S. Census Bureau announced today. This decrease, down two consecutive months, followed an 18.3 percent August decrease. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders decreased 1.5 percent. Transportation equipment, also down two consecutive months, led the decrease, $2.8 billion or 3.7 percent to $73.4 billion.

Shipments of manufactured durable goods in September, up three of the last four months, increased $0.1 billion or 0.1 percent to $245.6 billion. This followed a 1.8 percent August decrease. Fabricated metal products, up eight of the last nine months, drove the increase, $0.2 billion or 0.6 percent to $30.5 billion.

Unfilled orders for manufactured durable goods in September, up seventeen of the last eighteen months, increased $3.8 billion or 0.3 percent to $1,168.7 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.6 percent August increase. Transportation equipment, up twelve of the last thirteen months, led the increase, $1.0 billion or 0.1 percent to $742.7 billion.

Inventories of manufactured durable goods in September, up seventeen of the last eighteen months, increased $1.8 billion or 0.4 percent to $404.8 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent August increase. Transportation equipment, also up seventeen of the last eighteen months, led the increase, $1.0 billion or 0.8 percent to $130.9 billion.

Nondefense new orders for capital goods in September decreased $4.6 billion or 5.4 percent to $82.0 billion. Shipments increased $0.4 billion or 0.5 percent to $80.2 billion. Unfilled orders increased $1.8 billion or 0.2 percent to $733.3 billion. Inventories increased $1.1 billion or 0.6 percent to $184.9 billion. Defense new orders for capital goods in September increased $0.6 billion or 7.4 percent to $9.4 billion. Shipments decreased $0.1 billion or 1.3 percent to $9.7 billion. Unfilled orders decreased $0.3 billion or 0.2 percent to $157.8 billion. Inventories decreased $0.3 billion or 1.2 percent to $23.6 billion.

Revised seasonally adjusted August figures for all manufacturing industries were: new orders, $502.2 billion (revised from $502.0 billion); shipments, $502.8 billion (revised from $503.1 billion); unfilled orders, $1,164.9 billion (revised from $1,164.5 billion); and total inventories, $653.9 billion (unchanged).


ICSC Chain Store Sales increased by 0.3% in Oct 25 Wk
Posted: October 28, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 2.8% for the week ending October 25 - relative to the prior year. On a week-over-week basis, sales increased 0.3%.

"Business over the past week was strong at department stores, wholesale clubs and electronics stores," said Michael Niemira, ICSC research consultant. "While the receding gasoline prices may not have a massive impact week-to-week, the cumulative effect should strongly benefit the upcoming holiday shopping season as consumers should have additional discretionary income," he added.


Texas Manufacturing Activity increased again in October
Posted: October 27, 2014 at 10:30 AM (Monday)

Texas factory activity increased again in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 17.6 to 13.7, indicating output grew but at a slightly slower pace than in September.

Other measures of current manufacturing activity also reflected continued growth in October. The new orders index rose notably from 7.5 to 14.2, reaching a six-month high. The capacity utilization index edged down to 18.1 and the shipments index slipped to 12.8, although still more than a quarter of firms noted increases in these measures over September levels.

Perceptions of broader business conditions remained optimistic this month and outlooks improved markedly. The general business activity index held steady at a solid reading of 10.5. The company outlook index surged more than 12 points to 18.2, reaching its highest level in six months.

Labor market indicators reflected continued employment growth and longer workweeks. The October employment index posted a fifth robust reading, holding steady at 10.2. Nineteen percent of firms reported net hiring, compared with 9 percent reporting net layoffs. The hours worked index also held fairly steady, coming in at 8.3 after rising to 9.5 last month.

Upward pressure on prices and wages continued at about the same pace in October. The raw materials prices index was 19.7, nearly unchanged from its September reading. The finished goods prices index also held steady, at a reading of 7.1, with more than 80 percent of manufacturers noting no change in selling prices this month. The wages and benefits index showed little movement as well, edging down from 26.2 to 24.5.

Expectations regarding future business conditions remained optimistic in October. The index of future general business activity inched up to 13.3. Indexes for future manufacturing activity showed mixed movements in October but remained in solidly positive territory. The index for future employment shot up 13 points to 31.7, suggesting an increase in headcounts six months from now.


Pending Home Sales Index inched up 0.3% in September
Posted: October 27, 2014 at 10:00 AM (Monday)

Pending home sales rose slightly in September and are now above year-over-year levels for the first time in 11 months, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched 0.3 percent to 105.0 in September from 104.7 in August, and is now 1.0 percent higher than September 2013 (104.0). The index is above 100 for the fifth consecutive month and is at the second-highest level since last September.

Moderating price growth and sustained inventory levels are keeping conditions favorable for buyers. Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year. Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.

Despite improved housing conditions and low interest rates, tight credit conditions continue to be a barrier for some buyers. Of the reasons for not closing a sale, about 15 percent of Realtors® in September reported having clients who could not obtain financing as the reason for not closing.

The final rule on Qualified Residential Mortgages should improve access to credit once it goes into effect next year. The rule provides clarity for lenders and is a win for creditworthy consumers by ensuring they continue to have access to safe and affordable loan products without overly burdensome downpayment requirements.

The PHSI in the Northeast increased 1.2 percent to 87.5 in September, and is now 2.9 percent above a year ago. In the Midwest the index decreased 1.2 percent to 101.2 in September, and is now 4.0 percent below September 2013.

Pending home sales in the South increased 1.4 percent to an index of 118.5 in September, and is 1.7 percent above last September. The index in the West inched back 0.8 percent in September to 101.3, but is still 3.6 percent above a year ago.


New Home Sales in September at annual rate of 467,000
Posted: October 24, 2014 at 10:00 AM (Friday)

Sales of new single-family houses in September 2014 were at a seasonally adjusted annual rate of 467,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.2 percent (±15.7%) above the revised August rate of 466,000 and is 17.0 percent (±20.6%)* above the September 2013 estimate of 399,000.

The median sales price of new houses sold in September 2014 was $259,000; the average sales price was $313,200. The seasonally adjusted estimate of new houses for sale at the end of September was 207,000. This represents a supply of 5.3 months at the current sales rate.


Kansas City Fed Manufacturing Activity grew at a modest pace in Oct
Posted: October 23, 2014 at 11:00 AM (Thursday)

Tenth District manufacturing activity grew at a modest pace in October, and producers’ optimism for future activity remained solid. Firms continued to note difficulties in attracting and retaining certain key workers, particularly machinists and welders. Most price indexes were down slightly from the previous month.

The month-over-month composite index was 4 in October, down from 6 in September but slightly higher than 3 in August. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Producers of metal products and computer and electronic equipment reported the strongest growth, while contacts at food and machinery plants reported further declines in activity. Most other month-over-month indexes were also lower than last month. The production index fell from 12 to 3, and the shipments, new orders, and employment indexes also moved lower. The new orders for exports index decreased from -1 to -9, and the order backlog index posted its lowest level in over a year. The raw materials inventory index increased from 0 to 4, while the finished goods inventory index fell into negative territory.

Most year-over-year factory indexes moved slightly higher. The composite year-over-year index rose from 15 to 17, and the production, shipments, and new orders indexes also increased. The employment index edged up from 12 to 16, and the capital expenditures index reached a two-year high. In contrast, the order backlog index decreased from 12 to 6, and the new orders for exports index fell into negative territory. Both inventory indexes moved lower but remained positive.

Future factory indexes were mostly stable at solid levels. The future composite index was unchanged at 17, while the future production, shipments, and order backlog indexes eased somewhat. The future new orders index was unchanged at 26, while the future employment index rose from 13 to 16. The future capital expenditures index moved slightly higher from 20 to 21, and the future new orders for exports index rebounded from last month’s decline. Both future inventories indexes increased after falling last month.

Most price indexes were down slightly from the previous month. The month-over-month raw materials price index edged down from 20 to 17, and the finished goods price index also moderated somewhat. The year-over-year raw materials price index inched lower from 45 to 44, while the finished goods price index was unchanged. The future raw materials price index eased from 39 to 38, and the future finished goods price index also decreased, indicating fewer firms plan to pass recent cost increases through to customers.


U.S. Leading Economic Index increased 0.8%
Posted: October 23, 2014 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.8 percent in September to 104.4 (2004 = 100), following no change in August, and a 1.1 percent increase in July.

“The LEI picked up in September, after no change in August, and the strengths among its components have been very widespread over the past six months,” said Ataman Ozyildirim, Economist at The Conference Board. “The outlook for improving employment and further income growth are expected to support the moderate expansion in the U.S economy for the remainder of the year.”

“The financial markets are reflecting turmoil and unease, but the data on the leading indicators continue to suggest moderate growth in the short-term,” said Ken Goldstein, Economist at The Conference Board. “Meanwhile, the weak advances in the housing market remain a bigger risk to the outlook than short-term financial gyrations.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.4 percent in September to 110.2 (2004 = 100), following a 0.1 percent increase in August, and a 0.3 percent increase in July.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in September to 125.1 (2004 = 100), following a 0.3 percent increase in August, and a 0.2 percent increase in July.


DJ-BTMU U.S. Business Barometer unch%
Posted: October 23, 2014 at 10:00 AM (Thursday)

For the week ending October 11 2014, the DJ-BTMU U.S. Business Barometer remained at the same level, 98.3, from the prior week as negative performances of consumption indexes were cancelled out by gains in productions indexes. Both chain store sales and MBA’s purchase index dipped by 0.7 percent, following a recovery in the previous week. As to the production side, electric output reported a solid gain of 5.7 percent, while auto production picked up by 2.8 percent, after declining 7.4 percent last week.

On a year-over-year basis, the barometer showed a gain of 1.3 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.3 for three weeks in a row. Its year-over-year growth rate was 1.1 percent.


Weekly Initial Unemployment Claims Increase 17,000 to 283,000
Posted: October 23, 2014 at 08:30 AM (Thursday)

In the week ending October 18, the advance figure for seasonally adjusted initial claims was 283,000, an increase of 17,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 264,000 to 266,000. The 4-week moving average was 281,000, a decrease of 3,000 from the previous week's revised average. This is the lowest level for this average since May 6, 2000 when it was 279,250. The previous week's average was revised up by 500 from 283,500 to 284,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending October 11, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 11 was 2,351,000, a decrease of 38,000 from the previous week's unrevised level of 2,389,000. This is the lowest level for insured unemployment since December 23, 2000 when it was 2,340,000. The 4-week moving average was 2,381,000, a decrease of 22,750 from the previous week's unrevised average of 2,403,750. This is the lowest level for this average since May 20, 2006 when it was 2,377,750.


Chicago Fed National Activity picked up in September
Posted: October 23, 2014 at 08:30 AM (Thursday)

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.47 in September from –0.25 in August. Three of the four broad categories of indicators that make up the index made positive contributions to the index in September, and three of the four categories increased from August.

The index’s three-month moving average, CFNAI-MA3, increased to +0.25 in September from +0.16 in August, marking its seventh consecutive reading above zero. September’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.24 in September from +0.18 in August. Fifty-eight of the 85 individual indicators made positive contributions to the CFNAI in September, while 27 made negative contributions. Fifty-six indicators improved from August to September, while 29 indicators deteriorated. Of the indicators that improved, 12 made negative contributions.

Production-related indicators made a contribution of +0.30 to the CFNAI in September, up from –0.20 in August. Industrial production rose 1.0 percent in September after decreasing 0.2 percent in August, and manufacturing capacity utilization increased to 77.3 percent in September from 77.1 percent in the previous month.

Employment-related indicators contributed +0.22 to the CFNAI in September, up from +0.04 in August. The unemployment rate declined to 5.9 percent in September from 6.1 percent in August; and nonfarm payrolls increased by 248,000 in September, up from a gain of 180,000 in August. The contribution of the sales, orders, and inventories category to the CFNAI rose to +0.08 in September from –0.01 in August.

The contribution of the consumption and housing category to the CFNAI decreased to –0.13 in September from –0.09 in August. Consumption indicators, on balance, deteriorated, pushing the category’s contribution lower. However, housing starts rose to 1,017,000 annualized units in September from 957,000 in August, and housing permits edged up to 1,018,000 annualized units in September from 1,003,000 in the previous month.

The CFNAI was constructed using data available as of October 21, 2014. At that time, September data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The August monthly index was revised to –0.25 from an initial estimate of –0.21, and the July monthly index was revised to +0.52 from last month’s estimate of +0.26. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the August and July monthly indexes were due primarily to the latter.


Consumer Price Index increased 0.1% in September, Ex Fd & Engy up 0.1%
Posted: October 22, 2014 at 08:30 AM (Wednesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.

Increases in shelter and food indexes outweighed declines in energy indexes to result in the seasonally adjusted all items increase. The food index rose 0.3 percent as five of the six major grocery store food group indexes increased. The energy index declined 0.7 percent as the indexes for gasoline, electricity, and fuel oil all fell.

The index for all items less food and energy increased 0.1 percent in September. Along with the shelter index, the index for medical care increased, and the indexes for alcoholic beverages and for personal care advanced slightly. Several indexes were unchanged, and the indexes for airline fares and for used cars and trucks declined in September.

The all items index increased 1.7 percent over the last 12 months, the same increase as for the 12 months ending August. The 12-month change in the index for all items less food and energy also remained at 1.7 percent. The 12-month change in the shelter index has been gradually increasing, and reached 3.0 percent for the first time since January 2008. The food index has also risen 3.0 percent over the span, while the energy index has declined 0.6 percent.


Real Average Hourly Earnings fell 0.2% in September
Posted: October 22, 2014 at 08:30 AM (Wednesday)

Real average hourly earnings for all employees fell 0.2 percent from August to September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from unchanged average hourly earnings combined with a 0.1 percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased by 0.2 percent over the month due to a 0.3 percent increase in the average workweek more than offsetting the decline in real average hourly earnings.

Real average hourly earnings increased by 0.3 percent, seasonally adjusted, from September 2013 to September 2014. This gain in real average hourly earnings, combined with a 0.3 percent increase in the average workweek, resulted in a 0.6 percent increase in real average weekly earnings over this period.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: October 22, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 11.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 17, 2014. This week’s results did not include an adjustment for the Columbus Day holiday.


The Market Composite Index, a measure of mortgage loan application volume, increased 11.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The Refinance Index increased 23 percent from the previous week to the highest level since November 2013. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 9 percent lower than the same week one year ago.

“Continuing concerns about weak economic growth in Europe and a few US economic indicators that came in below expectations caused a flight to quality into US Treasuries last week, leading to sharp drops in interest rates,” said Mike Fratantoni, MBA’s Chief Economist. “Mortgage rates have fallen close to 30 basis points over the last four weeks. Refinance application volume reached the highest level since November 2013 as a result, and the average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history.”

The refinance share of mortgage activity increased to 65 percent of total applications, the highest level since December 2013, from 59 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.4 percent of total applications, the highest level since June 2008.

The FHA share of total applications decreased from 9.5 percent last week to 8.3 percent this week. The VA share of total applications increased from 8.8 percent last week to 9.6 percent this week. The USDA share of total applications fell from 1.0 percent last week to 0.8 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.10 percent, the lowest level since May 2013, from 4.20 percent, with points increasing to 0.21 from 0.17 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.03 percent, the lowest level since May 2013, from 4.14 percent, with points increasing to 0.20 from 0.10 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81 percent, the lowest level since June 2013, from 3.90 percent, with points decreasing to 0.07 from 0.08 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.28 percent, the lowest level since May 2013, from 3.41 percent, with points decreasing to 0.22 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.94 percent, the lowest level since June 2013, from 3.05 percent, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Existing-Home Sales increased 2.4% in September
Posted: October 21, 2014 at 10:00 AM (Tuesday)

After a modest decline last month, existing-home sales bounced back in September to their highest annual pace of the year, according to the National Association of Realtors®. All major regions except for the Midwest experienced gains in September.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.4 percent to a seasonally adjusted annual rate of 5.17 million in September from 5.05 million in August. Sales are now at their highest pace of 2014, but still remain 1.7 percent below the 5.26 million-unit level from last September.

The improved demand for buying seen since the spring has carried into the fall. Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline. Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter.

The median existing-home price for all housing types in September was $209,700, which is 5.6 percent above September 2013. This marks the 31st consecutive month of year-over-year price gains.

Total housing inventory at the end of September fell 1.3 percent to 2.30 million existing homes available for sale, which represents a 5.3-month supply at the current sales pace. Despite fewer homes for sale in September, unsold inventory is still 6.0 percent higher than a year ago, when there were 2.17 million existing homes available for sale.

All-cash sales were 24 percent of transactions in September, up slightly from August (23 percent) but down from 33 percent in September of last year. Individual investors, who account for many cash sales, purchased 14 percent of homes in September, up from 12 percent last month but below September 2013 (19 percent). Sixty-three percent of investors paid cash in September.

According to Freddie Mac, after falling for four consecutive months, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.16 percent in September from 4.12 percent in August. Despite the slight increase, interest rates are 33 basis points less than a year ago (4.49 percent).

Economic instability overseas is leading to volatility in the stock market and is causing investors to seek safer bets, which will likely keep interest rates in upcoming weeks hovering near or below where they are now. This is welcoming news for consumers looking to buy, although they could temporarily become more cautious by less certain economic conditions.

The percent share of first-time buyers continues to underperform historically, remaining at 29 percent for the third consecutive month. First-time buyers have represented less than 30 percent of all buyers in 17 of the past 18 months.

Distressed homes – foreclosures and short sales – increased slightly in September to 10 percent from 8 percent in August, but are down from 14 percent a year ago. Seven percent of September sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 14 percent below market value in September (same as in August), while short sales were discounted 14 percent (10 percent in August).

Fewer distressed sales is good news for appraisers, who have faced undue pressure since the downturn. An appraisal is an important part of the home buying and selling process. With foreclosures and short sales falling closer to average levels, appraisers will have fewer distressed sales in their list of comparables when determining home valuations.

Properties typically stayed on the market in September longer (56 days) than last month (53 days) and a year ago (50 days). Short sales were on the market for a median of 116 days in September, while foreclosures sold in 59 days and non-distressed homes typically took 55 days. Thirty-five percent of homes sold in September were on the market for less than a month.

Single-family home sales rose 2.0 percent to a seasonally adjusted annual rate of 4.56 million in September from 4.47 million in August, but remain 1.9 percent below the 4.65 million pace a year ago. The median existing single-family home price was $210,300 in September, up 5.9 percent from September 2013.

Existing condominium and co-op sales increased 5.2 percent to a seasonally adjusted annual rate of 610,000 units in September from 580,000 in August, and are unchanged from the 610,000 unit pace a year ago. The median existing condo price was $205,200 in September, which is 3.2 percent higher than a year ago.

Regionally, September existing-home sales in the Northeast climbed 1.5 percent to an annual rate of 680,000, but remain 1.4 percent below a year ago. The median price in the Northeast was $249,800, which is 4.8 percent higher than a year ago.

In the Midwest, existing-home sales declined 5.6 percent to an annual level of 1.17 million in September, and remain 4.9 percent below September 2013. The median price in the Midwest was $165,100, up 4.9 percent from a year ago.

Existing-home sales in the South increased 5.0 percent to an annual rate of 2.12 million in September, and are now 1.4 percent above September 2013. The median price in the South was $180,900, up 5.1 percent from a year ago.

Existing-home sales in the West jumped 7.1 percent to an annual rate of 1.20 million in September, but remain 4.0 percent below a year ago. The median price in the West was $294,200, which is 4.0 percent above September 2013.


ICSC Chain Store Sales decreased by 0.3% in Oct 18 Wk
Posted: October 21, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 2.1% for the week ending October 18 - relative to the prior year. On a week-over-week basis, sales decreased by 0.3%.

"Business over the past week was strong for electronic stores, apparel stores, and discounters," said Michael Niemira, ICSC research consultant. "Gasoline prices remained low, down a hefty 7.1% from the same week of the prior year. Continuing to get a break at the pump should bode well for healthy discretionary spending as we inch closer to entering the traditional holiday shopping period," he added.


September Housing Starts up 6.3%, Permits up 1.5%
Posted: October 17, 2014 at 08:30 AM (Friday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,018,000. This is 1.5 percent (±1.1%) above the revised August rate of 1,003,000 and is 2.5 percent (±1.2%) above the September 2013 estimate of 993,000. Single-family authorizations in September were at a rate of 624,000; this is 0.5 percent (±1.1%) below the revised August figure of 627,000. Authorizations of units in buildings with five units or more were at a rate of 369,000 in September.

HOUSING STARTS
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,017,000. This is 6.3 percent (±9.3%) above the revised August estimate of 957,000 and is 17.8 percent (±14.4%) above the September 2013 rate of 863,000. Single-family housing starts in September were at a rate of 646,000; this is 1.1 percent (±8.3%) above the revised August figure of 639,000. The September rate for units in buildings with five units or more was 353,000.

HOUSING COMPLETIONS
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 999,000. This is 8.6 percent (±17.2%) above the revised August estimate of 920,000 and is 31.3 percent (±23.7%) above the September 2013 rate of 761,000. Single-family housing completions in September were at a rate of 624,000; this is 1.0 percent (±11.6%) above the revised August rate of 618,000. The September rate for units in buildings with five units or more was 368,000.


Philadelphia August Outlook Suggests Continued Growth
Posted: October 16, 2014 at 10:00 AM (Thursday)

Firms responding to the October Manufacturing Business Outlook Survey indicated continued growth in the region’s manufacturing sector this month. Most broad indicators of current growth, while positive, weakened from higher readings last month. The current activity, shipments, and employment indexes declined, while the index for new orders was at a higher level compared with September. A larger percentage of firms reported higher prices for their own manufactured goods this month. The survey’s indicators for future manufacturing conditions fell from higher readings but continued to reflect general optimism about growth in activity and employment over the next six months.

Indicators Reflect Continuing Growth
The diffusion index for current activity edged down from a reading of 22.5 to 20.7 this month. More than 34 percent of the firms reported an increase in activity; nearly 14 percent reported a decrease in activity. The current shipments and employment indexes also declined but remained positive, while the current new orders index increased 2 points. Firms reported an increase in inventories this month; the current inventory index increased 9 points to its highest reading in 10 months.

The survey’s indicators for labor market conditions suggest some moderation in employment growth this month. Although positive for the 16th consecutive month, the employment index decreased 9 points. The percentage of firms reporting increases in employment (20 percent) still exceeded the percentage reporting decreases (8 percent). For the first time in eight months, the workweek index was slightly negative.

Firms Report Higher Prices for Manufactured Goods
Input price pressures were reported to be nearly the same as last month: The prices paid index was nearly unchanged from September, at 27.6 (see Chart 2). More than 29 percent of the firms reported higher input prices; 2 percent reported lower input prices. With respect to prices received for manufactured goods, 21 percent of the firms reported higher prices, up from 13 percent last month. The prices received index increased 12 points, to 20.8, its highest reading since April 2011.

Future Indicators Weaken but Still Reflect Expected Growth
The diffusion index for current activity edged down 2 points, to 54.5. The future index for new orders held steady, but the future shipments index decreased 7 points. Firms pulled back their expectations about employment growth over the next six months. Nearly 33 percent of the firms are expecting growth in their employment levels over the next six months, compared with 44 percent last month. The future employment index decreased, from 39.6 to 28.0.

For this month’s special questions, manufacturers were asked about current capacity utilization rates compared with the same time last year, as well as their plans for different categories of capital spending next year. The average capacity utilization rate among the firms polled was slightly more than 78 percent, which was an increase from the rate indicated one year earlier (76.5 percent). The share of firms expecting to increase spending on all capital categories (except structures) was higher than the share of firms expecting decreases. For most capital spending categories, higher capacity utilization rates were associated with expected increases in spending. For example, the current utilization rate among firms expecting to increase spending on noncomputer equipment (84 percent) was notably higher than those expecting to decrease spending (69 percent).

Summary
The October Manufacturing Business Outlook Survey suggests continued expansion of the region’s manufacturing sector. Firms reported continued increases in new orders but slower growth in activity, shipments, and employment this month. The survey’s future activity indexes remained at high readings, suggesting continued optimism about manufacturing growth. Firms were less optimistic about employment increases over the next six months, but one-third of the firms still expect to hire additional workers.


Builder Confidence fell 5 points in September to 54
Posted: October 16, 2014 at 10:00 AM (Thursday)

After four consecutive monthly gains, builder confidence in the market for newly built single-family homes fell five points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

“We are seeing a return to the mid-50s index level trend established earlier in the summer, which is in line with the gradual pace of the housing recovery,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.

“While there was a dip this month, builders are still positive about the housing market.” “After the HMI posted a nine-year high in September, it’s not surprising to see the number drop in October,” said NAHB Chief Economist David Crowe. “However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components declined in October. The index gauging current sales conditions decreased six points to 57, while the index measuring expectations for future sales slipped three points to 64 and the index gauging traffic of prospective buyers dropped six points to 41.

Looking at the three-month moving averages for regional HMI scores, the Northeast and Midwest remained flat at 41 and 59, respectively. The South rose two points to 58 and the West registered a one-point loss to 57.


DJ-BTMU U.S. Business Barometer picked up by 0.1%
Posted: October 16, 2014 at 10:00 AM (Thursday)

For the week ending October 4 2014, the DJ-BTMU U.S. Business Barometer picked up by 0.1 percent to 98.3, after declining for three weeks in a row. The recovery in this week’s barometer is driven by both consumption and production indexes. MBA’s purchase index surged 2.4 percent, in line with minor gains in chain store sales and freight car loadings. As to the production side, all indexes except auto production reported gains, specially coal production and electric output, which climbed by 10.7 and 3.6 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 0.9 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.3. Its year-over-year growth rate was 1.1 percent.


Industrial Production increased 1.0%
Capacity Utilization moved up 0.6% to 79.3%

Posted: October 16, 2014 at 09:15 AM (Thursday)

Industrial production increased 1.0 percent in September and advanced at an annual rate of 3.2 percent in the third quarter of 2014, roughly its average quarterly increase since the end of 2010. In September, manufacturing output moved up 0.5 percent, while the indexes for mining and for utilities climbed 1.8 percent and 3.9 percent, respectively. For the third quarter as a whole, manufacturing production rose at an annual rate of 3.5 percent and mining output increased at an annual rate of 8.7 percent. The output of utilities fell at an annual rate of 8.5 percent for a second consecutive quarterly decline. At 105.1 percent of its 2007 average, total industrial production in September was 4.3 percent above its level of a year earlier. The capacity utilization rate for total industry moved up 0.6 percentage point in September to 79.3 percent, a rate that is 1.0 percentage point above its level of 12 months earlier but 0.8 percentage point below its long-run (1972–2013) average.


Weekly Initial Unemployment Claims Decrease 23,000 to 264,000
Posted: October 16, 2014 at 08:30 AM (Thursday)

In the week ending October 11, the advance figure for seasonally adjusted initial claims was 264,000, a decrease of 23,000 from the previous week's unrevised level of 287,000. This is the lowest level for initial claims since April 15, 2000 when it was 259,000. The 4-week moving average was 283,500, a decrease of 4,250 from the previous week's unrevised average of 287,750. This is the lowest level for this average since June 10, 2000 when it was 283,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending October 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 4 was 2,389,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,381,000 to 2,382,000. The 4-week moving average was 2,403,750, a decrease of 10,750 from the previous week's revised average. This is the lowest level for this average since June 17, 2006 when it was 2,399,000. The previous week's average was revised up by 250 from 2,414,250 to 2,414,500.


Beige Book: Economic Activity Continues at Steady Pace
Posted: October 15, 2014 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts generally described modest to moderate economic growth at a pace similar to that noted in the previous Beige Book. Moderate growth was reported by the Cleveland, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco Districts, while modest growth was reported by the New York, Philadelphia, Richmond, Atlanta, and Kansas City Districts. In the Boston District, reports from business contacts painted a mixed picture of economic conditions. In addition, several Districts noted that contacts were generally optimistic about future activity.

Most Districts reported overall growth in consumer spending that ranged from slight to moderate, at a pace that was often similar to that reported in the previous Beige Book. However, general merchandise retailers in New York noted that sales were weaker on balance since the previous report. Several District reports indicated that retailers were relatively optimistic about the remainder of the year. Meanwhile, tourism activity remained upbeat in several areas, with some reports of higher occupancy rates and solid advance bookings for travel and lodging.

Several Districts reported that nonfinancial services grew at a moderate pace since the previous Beige Book. Districts reporting on transportation services generally noted growth in this sector, with a few pointing to capacity constraints in railroads, trucking, or both. Manufacturing activity increased in most Districts since the previous Beige Book; contacts in the Boston, Philadelphia, Atlanta, and Kansas City Districts reported positive near-term outlooks.

Residential construction and real estate activity were mixed since the previous report. Commercial construction and real estate activity grew in most Districts. Banking conditions continued to improve relative to the previous Beige Book. Commercial loan volumes increased in nearly all reporting Districts. However, consumer loan demand was mixed, and some Districts pointed to low or reduced levels of demand for refinancing. Credit standards generally remained unchanged, and there were no reports of deterioration in credit quality.

Agricultural conditions were mixed since the previous Beige Book. Prices for some crops declined, driven in part by very strong realized or anticipated production. These lower prices for some agricultural commodities were seen as weighing on producers' incomes, but as benefiting those using the commodities as inputs. In the energy sector, coal production was mixed and oil and natural gas production generally increased from already-high levels.

Employment continued to expand at about the same pace as that reported in the previous Beige Book. Most Districts reported that some employers had difficulty finding qualified workers for certain positions. A number of Districts characterized overall wage growth as modest, but reported upward wage pressures for particular industries and occupations, such as skilled labor in construction and manufacturing.

Consistent with the previous Beige Book, price pressures remained subdued, with Districts reporting little to no change in price levels or modest increases. Firms generally reported that input prices were unchanged or up slightly.


Business Inventories up 0.2% in August
Posted: October 15, 2014 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for August, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,353.4 billion, down 0.4 percent (±0.1%) from July 2014, but were up 4.5 percent (±0.6%) from August 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,752.3 billion, up 0.2 percent (±0.1%) from July 2014 and up 5.7 percent (±0.4%) from August 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of August was 1.29. The August 2013 ratio was 1.28.


Producer Price Index decreased 0.1% in September, ex Fd & Engy up 0.2%
Posted: October 15, 2014 at 08:30 AM (Wednesday)

The Producer Price Index for final demand decreased 0.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in August and advanced 0.1 percent in July. On an unadjusted basis, the index for final demand increased 1.6 percent for the 12 months ended in September.

In September, the 0.1-percent decrease in final demand prices can be traced to the indexes for both goods and services, which moved down 0.2 percent and 0.1 percent, respectively.

Within intermediate demand, prices for processed goods inched up 0.1 percent, the index for unprocessed goods rose 0.6 percent, and prices for services were unchanged.


U.S. Retail Sales for September decrease 0.3%, Ex-Auto down 0.2%
Posted: October 15, 2014 at 08:30 AM (Wednesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.7 billion, a decrease of 0.3 percent (±0.5%) from the previous month, but 4.3 percent (±0.9%) above September 2013. Total sales for the July through September 2014 period were up 4.5 percent (±0.7%) from the same period a year ago. The July to August 2014 percent change was unrevised from 0.6% (±0.2%).

Retail trade sales were down 0.4 percent (±0.5%) from August 2014, but 4.0 percent (±0.7%) above last year. Auto and other motor vehicle dealers were up 10.4 percent (±3.2%) from September 2013 and food services and drinking places were up 7.1 percent (±3.3%) from last year.


Empire State Manufacturing Survey Conditions show growth slowed significantly
Posted: October 15, 2014 at 08:30 AM (Wednesday)

The October 2014 Empire State Manufacturing Survey indicates that business activity grew modestly for New York manufacturers. The headline general business conditions index fell twenty-one points to 6.2, signaling that the pace of growth slowed significantly from last month. The new orders index dropped nineteen points to -1.7, indicating a slight decline in orders, and the shipments index fell twenty-six points to 1.1, indicating that shipments were flat. The employment index rose seven points to 10.2, pointing to an increase in employment levels, while the average workweek index fell to a level just below zero, suggesting that hours worked held steady. Both price indexes fell this month—a sign that the pace of growth had moderated for input prices and selling prices. Indexes for the six-month outlook were somewhat lower than last month, but continued to convey a high degree of optimism about future business conditions.

Growth in Business Activity Slows
After reaching a multiyear high last month, the general business conditions index plummeted twenty-one points to 6.2, pointing to a substantial slowing in the pace of growth in business activity for New York manufacturers. The decline in the index was driven by a drop in the share of respondents reporting that conditions had improved relative to the preceding month’s; this share fell from 46 percent to 25 percent in October, while the share of respondents reporting worsening conditions was little changed at 19 percent. The new orders index fell eighteen points to -1.7—evidence of a slight decrease in orders. Like the drop in the general business conditions index, this decline reflected a large drop in those reporting an increase. The shipments index tumbled twenty-six points to 1.1, indicating that orders were flat on the heels of a sharp increase last month. The unfilled orders index rose slightly but remained negative at -4.5. The delivery time index was little changed at -5.7, and the inventories index, up ten points to 2.3, showed that inventory had increased slightly after declining the prior three months.

Price Increases Less Widespread
Both price indexes declined, indicating a slower pace of growth in input and selling prices alike. The prices paid index fell thirteen points to 11.4, its lowest level in more than two years, and the prices received index fell eleven points to 6.8. Employment indexes pointed to a modest increase in employment levels and little change in hours worked. The index for number of employees climbed seven points to 10.2, and the average workweek index dropped four points to -1.1.

Growth Expected to Continue in the Months Ahead
Most of the indexes assessing the future outlook were down from last month. Nevertheless, they remained fairly high by historical standards, and conveyed an expectation that activity would continue to grow in the months ahead. The index for future general business conditions fell five points to 41.7. The future new orders index fell three points to 42.3, and the future shipments index declined five points to 42.5. The index for expected number of employees dropped to 12.5, and the future average workweek index fell below zero. The capital expenditures index climbed nine points to 21.6, its highest level in several months, and the technology spending index rose to 15.9.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: October 15, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 5.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 10, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index increased 11 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 4 percent lower than the same week one year ago.

“Growing concerns about weak economic growth in Europe caused a flight to quality into US assets last week, leading to sharp drops in interest rates. Mortgage rates for most loan products fell to their lowest level since June 2013,” said Mike Fratantoni, MBA’s Chief Economist. “Refinance application volume reached the highest level since June 2014 as a result, with conventional refinance volume at its highest since February 2014.”

The refinance share of mortgage activity increased to 59 percent of total applications, the highest level since February 2014, from 56 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.0 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.20 percent, the lowest since June 2013, from 4.30 percent, with points decreasing to 0.17 from 0.19 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.14 percent, the lowest since May 2013, from 4.21 percent, with points decreasing to 0.10 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.90 percent, the lowest since June 2013, from 4.00 percent, with points decreasing to 0.08 from 0.15 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.41 percent, the lowest since July 2014, from 3.48 percent, with points decreasing to 0.28 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.05 percent, the lowest since June 2013, from 3.20 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


ICSC Chain Store Sales decreased by 0.7% in Oct 11 Wk
Posted: October 14, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.8% for the week ending October 11 - relative to the prior year. On a week-over-week basis, sales decreased by 0.7%.

"Business over the past week was strong across most segments - particularly at apparel stores and wholesale clubs," said Michael Niemira, ICSC research consultant. "With gasoline prices at their lowest point nationally since mid-November of last year, discretionary spending should remain healthy. Therefore retail sales should increase 3.5-4.5% for the month of October," he added.


NFIB Small Business Optimism Index fell 0.8 points to 95.3
Posted: October 14, 2014 at 07:30 AM (Tuesday)

September’s Optimism Index gave up 0.8 points, falling to 95.3. At 95.3, the Index is now 5 points below the pre-recession average (from 1973 to 2007). Four Index components improved, six declined. Two declined by 10 points total, accounting for the entire decline in the Index score. Unfortunately, the two that fell drastically were job openings and planned capital outlays, which are directly relevant to GDP growth and hiring.

Pundits report that the Federal Reserve is planning to raise interest rates, probably around mid-2015. But, the message some observers get is a bit different. Federal Reserve officials have made it very clear that any decision to raise rates, or allow the market to work, is “data dependent”. The premise that rates will rise in 2015 is spun off of the economic forecasts of the Fed governors and regional presidents. Their forecasts have been persistently optimistic. If their forecasts are correct, rates can go up, but if their forecasts turn out to be too optimistic, will rates still be allowed to rise? Recent speeches by Federal Reserve officials have emphasized the “slack” in labor markets and the consequent need for “accommodation”, the code word for buying bonds to keep interest rates low. This in spite of the evidence that indicates the low rates are not stimulating the hoped-for spending and hiring but causing many other distortions. An official end to QE3 does not preclude the Federal Reserve from buying bonds through normal Open Market Operations in the conduct of monetary policy. The Federal Reserve has not been able to attain its goal of 2 percent inflation or its unspecified goals for employment (the unemployment rate was quickly disposed of as a target measure). This obviously creates much uncertainty, not just in financial markets but on Main Street as well. Seeing the Federal Reserve trying to create the very thing they were designed to minimize is a bit disconcerting.

With historically low interest rates, why has the percent of small business
owners indicating no interest in borrowing reached record high levels? The answer is obvious except to policymakers in Washington, D.C. Borrowed money must be repaid with interest and few business owners see opportunities to make profitable investments in facilities, equipment or employees. There is too much uncertainty, expectations for improved sales are weak, the economy is not expected to improve substantially and there is little hope that the top concerns of business owners will be addressed in Washington, D.C. While Gross Domestic Product (GPD) growth has been positive, Gross Domestic Expenditures have only recently shown some strength. The difference between GDP and Gross Domestic Expenditures, is exports, the life blood of the performance from large companies. As domestic spending picks up, the small business sector will contribute more to growth and employment. Less clear is what will trigger the improvement in domestic spending. More bond buying will not, it will probably take very positive news from Washington dealing with taxes and regulations to improve the mood of consumers and small business owners. Only 1 in 10 consumers thinks government policy is “good”. This will have to improve before the private sector picks up speed.


U.S. Import Price Index declined 0.5% in September
Posted: October 10, 2014 at 08:30 AM (Friday)

Prices for U.S. imports fell 0.5 percent in September, after declining 0.6 percent in August and 0.3 percent in July, the U.S. Bureau of Labor Statistics reported today. Each of the 3 monthly decreases was led by falling fuel prices. The price index for U.S. exports also declined in September, decreasing 0.2 percent following a 0.5-percent drop in August.


Wholesale Inventories up 0.7% in August
Posted: October 9, 2014 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that August 2014 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $453.9 billion, down 0.7 percent (+/-0.4) from the revised July level, but were up 5.8 percent (+/-1.8%) from the August 2013 level. The July preliminary estimate was revised downward $1.6 billion or 0.3 percent. August sales of durable goods were up 0.1 percent (+/-0.5%)* from last month and were up 7.0 percent (+/-1.2%) from a year ago. Sales of metals and minerals, except petroleum were up 1.6 percent from last month. Sales of nondurable goods were down 1.3 percent (+/-0.5%) from July, but were up 4.7 percent (+/-3.0%) from last August. Sales of petroleum and petroleum products were down 4.2 percent from last month and sales of farm product raw materials were down 3.8 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $538.0 billion at the end of August, up 0.7 percent (+/-0.4%) from the revised July level and were up 7.9 percent (+/-0.7%) from the August 2013 level. The July preliminary estimate was revised upward $0.7 billion or 0.1 percent. August inventories of durable goods were up 0.8 percent (+/-0.4%) from last month and were up 8.5 percent (+/-1.2%) from a year ago. Inventories of computer and computer peripheral equipment and software were up 4.5 percent from last month and inventories of lumber and other construction materials were up 1.5 percent. Inventories of nondurable goods were were up 0.5% (+/-0.4%) from July and were up 6.9 percent (+/-1.2%) from last August. Inventories of drugs and druggists' sundries were up 1.6 percent from last month.

The August inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.19. The August 2013 ratio was 1.16.


DJ-BTMU U.S. Business Barometer declined by 0.1%
Posted: October 9, 2014 at 10:00 AM (Thursday)

For the week ending September 27 2014, the DJ-BTMU U.S. Business Barometer fell again by 0.1 percent to 98.2 as most indexes reported negative performances. Chain store sales declined by 0.2 percent mainly owing to underperformances in traditional grocery stores, online-only stores and office supply stores. As to the production side, almost all indexes declined, especially electric output, which dipped for three weeks in a row. Coal production and truck production also slumped, down by 6.4 and 1.2 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 1.0 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, declined by 0.1 percent to 98.3. Its year-over-year growth rate was 1.0 percent.


Weekly Initial Unemployment Claims Decrease 1,000 to 287,000
Posted: October 9, 2014 at 08:30 AM (Thursday)

In the week ending October 4, the advance figure for seasonally adjusted initial claims was 287,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 287,000 to 288,000. The 4-week moving average was 287,750, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since February 4, 2006 when it was 286,500. The previous week's average was revised up by 250 from 294,750 to 295,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 27, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 27 was 2,381,000, a decrease of 21,000 from the previous week's revised level. This is the lowest level for insured unemployment since May 27, 2006 when it was 2,381,000. The previous week's level was revised up 4,000 from 2,398,000 to 2,402,000. The 4-week moving average was 2,414,250, a decrease of 27,750 from the previous week's revised average. This is the lowest level for this average since July 1, 2006 when it was 2,406,250. The previous week's average was revised up by 750 from 2,441,250 to 2,442,000.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: October 8, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 3, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to the highest level since early July. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 8 percent lower than the same week one year ago.

The refinance share of mortgage activity remained unchanged at 56 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.30 percent from 4.33 percent, with points decreasing to 0.19 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.21 percent from 4.28 percent, with points increasing to 0.29 from 0.15 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.00 percent from 4.07 percent, with points increasing to 0.15 from 0.04 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.48 percent from 3.55 percent, with points increasing to 0.32 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.20 percent from 3.31 percent, with points decreasing to 0.37 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings were 4.8 million in August
Posted: October 7, 2014 at 10:00 AM (Tuesday)

There were 4.8 million job openings on the last business day of August, up from 4.6 million in July, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) was down and the separations rate (3.2 percent) was essentially unchanged in August. Within separations, the quits rate (1.8 percent) was unchanged and the layoffs and discharges rate (1.1 percent) was little changed. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 4.8 million job openings on the last business day of August and the rate was 3.4 percent. This was the highest level of job openings since January 2001. The number of job openings increased for total private and was little changed for government in August. (See table 1.) Job openings levels went up in nondurable goods manufacturing, health care and social assistance, and in accommodation and food services. Job openings fell in state and local government and were little changed in all four regions.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in August 2014 for total nonfarm, total private, and government. The job openings level increased in many of the industries and in all four regions.


ICSC Chain Store Sales increased by 0.1% in Oct 4 Wk
Posted: October 7, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.9% for the week ending October 4 - relative to the prior year. On a week-over-week basis, sales increased by 0.1%.

"Weather was favorable for seasonal apparel demand, as temperatures cooled some nationally," said Michael Niemira, ICSC research consultant. "According to the ICSC-GS consumer tracking survey business was strong for wholesale clubs, dollar stores, electronic stores, apparel stores and discounters. Overall September sales should increase by a very strong 5-6%," he added.


Employment Trends Index increased in September to 121.68
Posted: October 6, 2014 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in September. The index now stands at 121.68, up from 121.32 (an upward revision) in August. This represents a 6.1 percent gain in the ETI compared to a year ago.

The Employment Trends Index increased for the ninth consecutive month, signaling solid job growth through year end. A combination of positive and negative forces has been driving the rapid decline in the unemployment rate in recent years. Hiring is strong, but productivity growth is weak, and the participation rate continues to decline. None show signs of reversing.

September’s increase in the ETI was driven by positive contributions from six of its eight components. In order from the largest positive contributor to the smallest, these were: Industrial Production, Real Manufacturing and Trade Sales, Initial Claims for Unemployment Insurance, Ratio of Involuntarily Part-time to All Part-time Workers, Number of Temporary Employees, and Job Openings.


ISM Non-Manufacturing Index grew slower at 58.6%
Posted: October 3, 2014 at 10:00 AM (Friday)

Economic activity in the non-manufacturing sector grew in September for the 56th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 58.6 percent in September, 1 percentage point lower than the August reading of 59.6 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 62.9 percent, which is 2.1 percentage points lower than the August reading of 65 percent, reflecting growth for the 62nd consecutive month at a slower rate. The New Orders Index registered 61 percent, 2.8 percentage points lower than the reading of 63.8 percent registered in August. The Employment Index increased 1.4 percentage points to 58.5 percent from the August reading of 57.1 percent and indicates growth for the seventh consecutive month. The Prices Index decreased 2.5 percentage points from the August reading of 57.7 percent to 55.2 percent, indicating prices increased at a slower rate in September when compared to August. According to the NMI®, 12 non-manufacturing industries reported growth in September. Respondents’ comments indicate that business seems to be leveling off and there is a slight slowing in the momentum of the past few months of strong growth. They continue to remain optimistic about business conditions and the overall direction of the economy.

INDUSTRY PERFORMANCE
The 12 non-manufacturing industries reporting growth in September — listed in order — are: Construction; Retail Trade; Utilities; Information; Health Care & Social Assistance; Transportation & Warehousing; Management of Companies & Support Services; Wholesale Trade; Professional, Scientific & Technical Services; Accommodation & Food Services; Real Estate, Rental & Leasing; and Finance & Insurance. The five industries reporting contraction in September are: Arts, Entertainment & Recreation; Mining; Educational Services; Public Administration; and Other Services.


September Employment increased by 248,000
Unemployment Rate dropped to 5.9%

Posted: October 3, 2014 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services and in health care.

In August, both the unemployment rate (6.1 percent) and the number of unemployed persons (9.6 million) changed little. Over the year, the unemployment rate and the number of unemployed persons were down by 1.1 percentage points and 1.7 million, respectively.

Among the major worker groups, the unemployment rates in August showed little or no change for adult men (5.7 percent), adult women (5.7 percent), teenagers (19.6 percent), whites (5.3 percent), blacks (11.4 percent), and Hispanics (7.5 percent). The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 192,000 to 3.0 million in August. These individuals accounted for 31.2 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.3 million.

The civilian labor force participation rate, at 62.8 percent, changed little in August and has been essentially unchanged since April. In August, the employment-population ratio was 59.0 percent for the third consecutive month but is up by 0.4 percentage point from a year earlier.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in August at 7.3 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In August, 2.1 million persons were marginally attached to the labor force, down by 201,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 775,000 discouraged workers in August, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment increased by 142,000 in August, compared with an average monthly gain of 212,000 over the prior 12 months. In August, job growth occurred in professional and business services and in health care.

In August, the average workweek for all employees on private nonfarm payrolls was 34.5 hours for the sixth consecutive month. The manufacturing workweek edged up by 0.1 hour to 41.0 hours, and overtime was unchanged at 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the sixth consecutive month.

Average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents in August to $24.53. Over the year, average hourly earnings have risen by 2.1 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $20.68.

The change in total nonfarm payroll employment for June was revised from +298,000 to +267,000, and the change for July was revised from +209,000 to +212,000. With these revisions, employment gains in June and July combined were 28,000 less than previously reported.


Goods and Services Deficit Decreased in August 2014
Posted: October 3, 2014 at 08:30 AM (Friday)

The Nation’s international trade deficit in goods and services decreased to $40.1 billion in August from $40.3 billion in July (revised), as exports and imports increased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total August exports of $198.5 billion and imports of $238.6 billion resulted in a goods and services deficit of $40.1 billion, down from $40.3 billion in July, revised. August exports were $0.4 billion more than July exports of $198.0 billion. August imports were $0.2 billion more than July imports of $238.3 billion.

In August, the goods deficit increased $0.1 billion from July to $59.9 billion, and the services surplus increased $0.3 billion from July to $19.8 billion. Exports of goods increased $0.1 billion to $138.8 billion, and imports of goods increased $0.1 billion to $198.7 billion. Exports of services increased $0.4 billion to $59.6 billion, and imports of services increased $0.1 billion to $39.9 billion.

The goods and services deficit increased $0.6 billion from August 2013 to August 2014. Exports were up $7.9 billion, or 4.1 percent, and imports were up $8.4 billion, or 3.7 percent.


New orders for manufactured goods decreased 10.1%
Posted: October 2, 2014 at 10:00 AM (Thursday)

New orders for manufactured goods in August, down following two consecutive monthly increases, decreased $56.1 billion or 10.1 percent to $502.0 billion, the U.S. Census Bureau reported today. This followed a 10.5 percent July increase. Excluding transportation, new orders decreased 0.1 percent.

Shipments, down following two consecutive monthly increases, decreased $5.0 billion or 1.0 percent to $503.1 billion. This followed a 1.4 percent July increase.

Unfilled orders, up sixteen of the last seventeen months, increased $7.0 billion or 0.6 percent to $1,164.5 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 5.3 percent July increase. The unfilled orders-to shipments ratio was 6.71, up from 6.62 in July.

Inventories, up twenty-one of the last twenty-two months, increased $0.8 billion or 0.1 percent to $653.9 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a slight July increase. The inventories-to-shipments ratio was 1.30, up from 1.29 in July.


DJ-BTMU U.S. Business Barometer declined by 0.1%
Posted: October 2, 2014 at 10:00 AM (Thursday)

For the week ending September 20 2014, the DJ-BTMU U.S. Business Barometer declined slightly by 0.1 percent to 98.3, extending the weakening trend to two weeks. The decrease in this week’s barometer stemmed from weak performances in production indexes, despite moderate gains in auto and truck production. Electric output dipped again by 4.5 percent, while coal and steel production dropped by 1.4 and 0.7 percent, respectively. As to the consumption side, chain store sales picked up by 0.1 percent following a sharp drop in the last week.

On a year-over-year basis, the barometer showed a gain of 0.9 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, fell again by 0.1 percent to 98.5. Its year-over-year growth rate was 1.1 percent.


Weekly Initial Unemployment Claims Decrease 86,000 to 287,000
Posted: October 2, 2014 at 08:30 AM (Thursday)

In the week ending September 27, the advance figure for seasonally adjusted initial claims was 287,000, a decrease of 8,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 293,000 to 295,000. The 4-week moving average was 294,750, a decrease of 4,250 from the previous week's revised average. The previous week's average was revised up by 500 from 298,500 to 299,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 20, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 20 was 2,398,000, a decrease of 45,000 from the previous week's revised level. This is the lowest level for insured unemployment since June 17, 2006 when it was 2,395,000. The previous week's level was revised up 4,000 from 2,439,000 to 2,443,000. The 4-week moving average was 2,441,250, a decrease of 20,000 from the previous week's revised average. This is the lowest level for this average since November 11, 2006 when it was 2,439,500. The previous week's average was revised up by 1,000 from 2,460,250 to 2,461,250.


New York Purchasing Managers Business Activity rose to 63.7 in September
Posted: October 2, 2014 at 08:30 AM (Thursday)

New York City business activity expanded at an above-average pace, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions rose to 63.7 in September, above the long-run average (55-56).

Future optimism improved to a seven-month high. The Six-Month Outlook increased to 71.4 in September.

Job growth cooled off last month’s record. Employment came in at 57.0 in September.

Purchase volume advanced again, to a 19-month high. Quantity of Purchases rose to 60.5 in September.

Price measures were benign. Prices Paid fell to a 13-month low of 52.5 in September, and Prices Received also moderated to 52.5 in September.

The top line was solid and forward guidance built on recent improvement. Current Revenues were 67.5 in September, and Expected Revenues were 76.3 in September.


Challenger Layoffs plunged 24% in September
Posted: October 2, 2014 at 07:30 AM (Thursday)

Monthly job cuts fell to their lowest level in 14 years in September, as U.S.-based employers announced workforce reductions totaling 30,477 during the month. As the fourth quarter begins, 2014 is on pace to be the lowest job-cut year since 1997.

The September total plunged 24 percent from the 40,010 job cuts announced in August, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc. It was also 24 percent lower than the September total from a year ago, when employers announced plans to cut payrolls by 40,289.

Last month saw the fewest job cuts since June, 2000, when just 17,241 announced layoffs were recorded. The decline brings the 2014 monthly average down to 40,379. If this pace holds, the year could end with fewer than 500,000 job cuts for the first time since 1997 (434,350).

To date, employers have announced 363,408 planned layoffs, 6.2 percent fewer than the 387,384 cuts announced through September, 2013. 

In the third quarter, job cuts totaled 117,374, which was down 5.9 percent from the previous quarter. The third quarter total was 8.6 percent lower than the same quarter a year ago, when 128,452 cuts were recorded.

“There have been a couple of bumps in the road for the economy lately, which caused consumer confidence to drop in its latest reading. However, as this report shows, the recent hiccups have not resulted in widespread layoffs. Job security is being helped by the fact that corporate profits remain near record highs. So, we may see some ebb and flow in the rate of hiring, but employers, at this point, are reluctant to make any over-correction in workforce levels,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

September job cuts were led by the entertainment industry, where the closure of casino resorts in Atlantic City resulted in more than 7,000 job cuts. Overall, employers in the entertainment and leisure industry announced 8,119 job cuts during the month, the most since December, 2005, when announced layoffs totaled 12,202.

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The computer sector continues to lead all industries in terms of year-to-date job cuts, despite the fact that just 74 announced layoffs were reported by these firms in September. Employers in the computer industry have announced 49,002 job cuts, so far this year. That is nearly double the 27,892 computer-sector job cuts tallied in the first nine months of 2013.

“The Atlantic City cuts are not as much an indication of the overall economy as they are an indication of trends re-shaping the casino industry. As states allow more cities to open gambling establishments, destinations like Atlantic City, start to lose their draw. Atlantic City has not been able to mimic Las Vegas, where a diversity of entertainment options beyond gambling attract tourists,” Challenger noted.

“Unfortunately, the decline in tourism, the casino closures and loss of jobs are going to reverberate through the entire local economy there. Non-casino hotels, restaurants, theaters, etc., are going to feel the pinch and job cuts are likely to spread,” he added.

“While we are seeing some large cuts in certain industries, which are mostly resulting from shifting trends specific to those industries, the pace of job cutting continues to decline. There is the potential for a fourth-quarter surge in downsizing activity, if corporations are not hitting their earnings goals. However, over the last few years, since the end of the recession, the fourth quarter has been among the lowest job-cut quarters,” said Challenger.

Indeed, in four of the previous five years, the fourth quarter saw the fewest or second fewest job cuts of the year, according to Challenger data. In fact, from 2009 through 2013, the fourth quarter averaged 131,174 job cuts, making it the smallest job-cut quarter during that period. The fourth-quarter average was 18 percent lower than the next highest quarterly average during the five-year period: the second quarter, which averaged 160,721.

“The first quarter is the most active period for job cutting. So, looking ahead to 2015, we are likely to see a first-quarter surge. However, unless there is a major shock to the economy between now and the end of the year, the first three months of the new year should remain relatively low by historical standards,” said Challenger.


Construction Spending decreased 0.8% in August
Posted: October 1, 2014 at 10:00 AM (Wednesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during August 2014 was estimated at a seasonally adjusted annual rate of $961.0 billion, 0.8 percent (±1.8%) below the revised July estimate of $968.8 billion. The August figure is 5.0 percent (±2.3%) above the August 2013 estimate of $915.3 billion. During the first 8 months of this year, construction spending amounted to $623.1 billion, 6.8 percent (±1.5%) above the $583.2 billion for the same period in 2013.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $685.0 billion, 0.8 percent (±1.0%) below the revised July estimate of $690.3 billion. Residential construction was at a seasonally adjusted annual rate of $351.7 billion in August, 0.1 percent (±1.3%) below the revised July estimate of $352.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $333.3 billion in August, 1.4 percent (±1.0%) below the revised July estimate of $338.1 billion.

PUBLIC CONSTRUCTION
In August, the estimated seasonally adjusted annual rate of public construction spending was $275.9 billion, 0.9 percent (±2.8%) below the revised July estimate of $278.5 billion. Educational construction was at a seasonally adjusted annual rate of $62.3 billion, 2.9 percent (±4.4%) below the revised July estimate of $64.1 billion. Highway construction was at a seasonally adjusted annual rate of $83.3 billion, 0.6 percent (±6.3%) below the revised July estimate of $83.8 billion.


Help Wanted OnLine Labor Demand declined 137,200 in September
Posted: October 1, 2014 at 10:00 AM (Wednesday)

Online advertised vacancies declined 137,200 to 5,072,000 in September, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series released today. The August Supply/Demand rate stands at 1.84 unemployed for each advertised vacancy with a total of 4.4 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 9.6 million in August.

“The September loss offsets most of August’s gain, resulting in only modest overall growth for 2014,” said Gad Levanon, Director of Macroeconomics and Labor Markets at The Conference Board. “Following a strong second quarter, the third quarter has ended basically flat.”

In September, the STEM-related occupations showed strength in Computer and Math (9,600), Architecture and Engineering (3,400), and Healthcare Practitioners (12,200), while other categories showed losses, including Office and Administrative (-40,600), Sales (-32,500), and Transportation (-22,900).


September Manufacturing ISM expanded at 56.6
Posted: October 1, 2014 at 10:00 AM (Wednesday)

Economic activity in the manufacturing sector expanded in September for the 16th consecutive month, and the overall economy grew for the 64th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The September PMI® registered 56.6 percent, a decrease of 2.4 percentage points from August’s reading of 59 percent, indicating continued expansion in manufacturing. The New Orders Index registered 60 percent, a decrease of 6.7 percentage points from the 66.7 percent reading in August, indicating growth in new orders for the 16th consecutive month. The Production Index registered 64.6 percent, 0.1 percentage point above the August reading of 64.5 percent. The Employment Index grew for the 15th consecutive month, registering 54.6 percent, a decrease of 3.5 percentage points below the August reading of 58.1 percent. Inventories of raw materials registered 51.5 percent, a decrease of 0.5 percentage point from the August reading of 52 percent, indicating growth in inventories for the second consecutive month. Comments from the panel reflect a generally positive business outlook, while noting some labor shortages and continuing concern over geopolitical unrest.

Of the 18 manufacturing industries, 15 are reporting growth in September in the following order: Wood Products; Primary Metals; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Chemical Products; Transportation Equipment; Petroleum & Coal Products; and Textile Mills. The three industries reporting contraction in September are: Machinery; Plastics & Rubber Products; and Electrical Equipment, Appliances & Components.


ADP National Employment Report increased by 213,000 in September
Posted: October 1, 2014 at 08:15 AM (Wednesday)

Private sector employment increased by 213,000 jobs from August to September according to the September ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Goods-producing employment rose by 58,000 jobs in September, up from 42,000 jobs gained in August. The construction industry added 20,000 jobs over the month, below last month’s gain of 23,000. Meanwhile, manufacturing added 35,000 jobs in September, the highest total in that sector since May 2010.

Service-providing employment rose by 155,000 jobs in September, down from 160,000 in August. The ADP National Employment Report indicates that professional/business services contributed 29,000 jobs in August, down from 37,000 in August. Expansion in trade/transportation/utilities grew by 38,000, up from August’s 30,000. The 5,000 new jobs added in financial activities was down slightly from last month’s number.

September’s jobs added number marks the sixth straight month of employment gains above 200,000. It’s a positive sign for the economy to see the 200,000-plus trend continue.

Job gains remain strong and steady. The pace of job growth has been remarkably similar for the past several years. Especially encouraging most recently is the increasingly broad base nature of those gains. Nearly all industries and companies of all sizes are adding consistently to payrolls.

Payrolls for businesses with 49 or fewer employees increased by 88,000 jobs in September. That’s up from 82,000 in August. Job growth was down significantly over the month for medium-sized firms. Employment among medium-sized companies with 50-499 employees rose by 48,000, down from 72,000 in August. Employment at large companies – those with 500 or more employees – increased by 77,000, up substantially from 48,000 the previous month. Companies with 500-999 employees added 5,000, up slightly from August’s 4,000.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: October 1, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 26, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.4 percent compared with the previous week. The Refinance Index decreased 0.3 percent from the previous week. The seasonally adjusted Purchase Index remained unchanged from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 11 percent lower than the same week one year ago. The seasonally adjusted conventional purchase index increased 1.3 percent to the highest level since July 2014.

The refinance share of mortgage activity remained unchanged at 56 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.6 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.33 percent from 4.39 percent, with points decreasing to 0.31 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.28 percent from 4.30 percent, with points decreasing to 0.15 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.07 percent from 4.08 percent, with points decreasing to 0.04 from 0.09 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.55 percent from 3.56 percent, with points remaining unchanged from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.31 percent from 3.20 percent, with points increasing to 0.51 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence declined in September to 86.0
Posted: September 30, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in August, declined in September. The Index now stands at 86.0 (1985=100), down from 93.4 in August. The Present Situation Index decreased to 89.4 from 93.9, while the Expectations Index dropped to 83.7 from 93.1 in August.

Consumer confidence retreated in September after four consecutive months of improvement. A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers’ assessment of present-day conditions. Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential. All told, consumers expect economic growth to ease in the months ahead.

Consumers assessed current conditions less favorably in September compared to a month ago. Their view of business conditions was virtually unchanged: those saying conditions are “good” fell minutely, from 23.5 to 23.4 percent, while those claiming business conditions are “bad” held constant at 21.3 percent. Consumers’ appraisal of the job market declined more appreciably, with the proportion stating jobs are “plentiful” falling from 17.6 percent to 15.1 percent. Those claiming jobs are “hard to get” was barely changed, at 30.1 percent versus 30.0 percent in August.

Consumers’ optimism about the short-term outlook declined considerably in September. The percentage of consumers expecting business conditions to improve over the next six months fell from 20.8 percent to 18.6 percent, while those expecting business conditions to worsen rose from 9.9 percent to 12.0 percent. Consumers’ outlook for the labor market likewise took a downturn. Those anticipating more jobs in the months ahead fell from 17.8 percent to 15.2 percent, while those anticipating fewer jobs rose from 15.2 percent to 17.8 percent. The proportion of consumers expecting growth in their incomes rose in September to 16.8 percent, compared to 15.5 percent in August. However, the proportion expecting a drop in income also rose—to 13.4 percent versus 11.6 percent a month ago.


Chicago Purchasing Managers Index decreased 3.8 points to 60.5 in September
Posted: September 30, 2014 at 09:45 AM (Tuesday)

The Chicago Business Barometer decreased 3.8 points to a still robust 60.5 in September, as Production and New Orders slowed while firms reported a record rise in stocks and a sharp increase in input prices.

With the latest fall, the Barometer ended Q3 at an average of 59.1, down from the weather boosted 63.7 rate seen in Q2, but still showing the US economy is growing at a healthy clip.

There was a surprisingly sharp increase in stocks with firms adding inventories of finished goods at the fastest pace since February 1973. Feedback suggested firms were preparing for robust sales forecasts and potential spikes in unplanned orders.

Despite September‘s fall, the Barometer stands above Q1‘s level and the 10-year average of 55.8, with respondents deeming activity levels as ”strong“ and “surging“, aided by ongoing demand, successful sales promotions and organic growth, all of which called for inventory builds.

The three ordering components fell back after strong readings in August. Production and New Orders, however, remained firm around 60, while Order Backlogs stood above 50 for the second consecutive month. A number of respondents reported that September’s slight slowing was expected to be temporary as businesses reported strong bookings through the end of October.

In contrast, Employment and Supplier Deliveries contributed positively to the Barometer, with the latter lengthening to the longest since April 2011.

There were tentative signs that demand pressures are starting to put some upward pressure on prices. In spite of the recent fall in oil prices, Prices Paid increased to the highest level since November 2012.

Commenting on the Chicago Report, Chief Economist of MNI Indicators said, ”Activity levels remained buoyant in September and point to continued firm economic growth. Moreoever, the record pace of stockbulilding suggests firms are increasingly confident that things will keep improving.“


S&P/Case-Shiller Home Price Indices gained 0.6% in July
Posted: September 30, 2014 at 09:00 AM (Tuesday)

Data through July 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show a significant slowdown in price increases. Nineteen of the 20 cities saw lower annual returns in July. Las Vegas, Miami and San Francisco were the only cities to report double-digit annual gains. Cleveland’s rate remained unchanged at +0.9% for the 12 months ending July 2014.

In July, the 10-City and 20-City Composites increased 0.6% and the National Index 0.5%. Although all cities but one gained on a monthly basis, 17 saw smaller increases in July as compared to last month. Although New York saw a lower gain this month, it was the only city where prices rose over one percent. San Francisco posted its largest decline of 0.4% since February 2012.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.6% annual gain in July 2014. The 10- and 20-City Composites posted year-over-year increases of 6.7%.

The broad-based deceleration in home prices continued in the most recent data. However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales -- which are not covered by the S&P/Case-Shiller indices – is a welcome exception to recent trends.

The 10- and 20-City Composites gained 6.7% annually with prices nationally rising at a slower pace of 5.6%. Las Vegas, one of the most depressed housing markets in the recession, is still leading the cities with 12.8% year-over-year. Phoenix, the first city to see double-digit gains back in 2012, posted its lowest annual return of 5.7% since February 2012.

While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years. The National Index rose 0.5%, its seventh consecutive increase. At the bottom was San Francisco with its first decline this year and the only city in the red. New York tended to underperform over the past few years but it was on top for the last two months.

As of July 2014, average home prices across the United States are back to their levels posted in the spring of 2005. The National Index was up 0.5% over June 2014 and 5.6% above July 2013.

As of July 2014, average home prices across the United States are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. The recovery from the March 2012 lows is 28.6% and 29.3% for the 10-City and 20-City Composites.

While all cities continue to continue to post year-over-year gains, not one managed to show improvement. San Francisco decelerated the most from an annual return of +13.2% last month to +10.3% in July. Cleveland remained steady at +0.9% year-over-year and continued to underperform the other MSAs by a wide margin.

San Francisco declined 0.4%, but the rest of the cities saw gains ranging from 0.1% to 1.1%. Miami was the only city to show improvement from +0.6% in June to +0.8% in July. Charlotte and Cleveland remained at 0.4% and 0.5%, respectively. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value.


Paychex-IHS Small Business Jobs Index decreased to 100.85 in September
Posted: September 30, 2014 at 08:30 AM (Tuesday)

While the Paychex | IHS Small Business Jobs Index grew 0.13 percent in the past 12 months through September, the national index decreased to 100.85 with the pace of small business employment growth continuing to slow slightly. Coming off its April peak of 101.26, the index is still trending higher than any quarter prior to 2014, indicating consistent employment growth conditions persist. An increase in small business job growth drove the East South Central region into the lead among regions. Wisconsin continues to lead the state index, and Seattle claimed the top spot among metro areas.

Though still performing stronger than in 2013, the small business job market has cooled a bit in the second half of 2014. At 100.85, the Paychex | IHS Small Business Jobs Index contracted again in September, remaining below the 101 level it exceeded from January through July. Year-over-year gains continue to trend positively, 0.13 percent, as the index is higher than at any time in the second half of 2013.

For the second consecutive month, the Paychex | IHS Small Business Jobs Index is showing a mixed story for small businesses employment growth. While the growth rate has slowed in four of the past five months, the index continues to show positive year-over-year gains.

Year-over-year index growth remains positive, but declined 0.22 percent for the quarter; East South Central region takes over top index spot; Wisconsin maintains lead as the top ranked state; Seattle rises to the top among metro areas


ICSC Chain Store Sales decreased by 0.2% in Sept 27 Wk
Posted: September 30, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.6% for the week ending September 27 - relative to the prior year. On a week-over-week basis, sales declined slightly by 0.2%.

"Weather generally was not favorable for seasonal demand, but business was brisk for a number of retail segments," said Michael Niemira, ICSC research consultant. "According to the ICSC-GS consumer tracking survey business was very strong for wholesale clubs, dollar stores, electronic stores, apparel stores and discounters - but weak at online only stores, grocery stores and office supply stores. Overall September sales should increase by a healthy 4-5%," he added.


Texas Manufacturing Activity increased again in September
Posted: September 29, 2014 at 10:30 AM (Monday)

Texas factory activity increased again in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose markedly from 6.8 to 17.6, indicating output grew at a faster pace than in August.

Other measures of current manufacturing activity also reflected significantly stronger growth in September. The new orders index climbed 5 points to 7.5. The capacity utilization index surged to 20.2 after dipping to 3.6 in August, with nearly a third of manufacturers noting an increase. The shipments index rebounded to 15.9 after falling to 6.4 last month.

Perceptions of broader business conditions were more optimistic this month. The general business activity index moved up to a reading of 10.8, nearly four points above its nonrecession average of 7. The company outlook index rose from 1.5 to 5.8, due to a larger share of firms noting an improved outlook in September than in August.

Labor market indicators reflected continued employment growth and longer workweeks. The September employment index posted a fourth robust reading, holding fairly steady at 10.6. Twenty-four percent of firms reported net hiring compared with 14 percent reporting net layoffs. The hours worked index rose to a five-month high of 9.5, indicating a stronger rise in hours worked than in recent months.

Upward pressure on prices eased slightly in September, while wage pressure increased. The raw materials price index fell seven points to a reading of 19.5. The finished goods price index also fell but to a lesser degree, edging down from 9.1 to 7. The wages and benefits index, however, ticked up for the second month in a row and came in at 26.2, its highest reading since before the Texas recession began in mid-2008.

Expectations regarding future business conditions remained optimistic in September. The index of future general business activity fell from 18.7 to 12.1, while the index of future company outlook rose from 30.1 to 32.3. Indexes for future manufacturing activity generally moved down in September but remained in solidly positive territory.


Pending Home Sales Index declined 1.0% in August
Posted: September 29, 2014 at 10:00 AM (Monday)

Pending home sales slowed modestly in August but contract signings remain at their second-highest level over the past year, according to the National Association of Realtors®. All major regions experienced declines except for the West, which rose for the fourth consecutive month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 1.0 percent to 104.7 in August from 105.8 in July, and is now 2.2 percent below August 2013 (107.1). Despite the slight decline, the index is above 100 – considered an average level of contract activity – for the fourth consecutive month and is at the second-highest level since last August.

Contract signings are holding steady and fewer distressed sales and less investor activity is likely behind August’s modest decline. Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” he said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.

According to NAR’s Profile of Home Buyers and Sellers, 81 percent of first-time buyers in 2013 who financed their purchase obtained a conventional or FHA loan. Overall, first-time homebuyers have been less prevalent from the housing recovery, representing less than a third of all buyers each month for the past two years.

First-time buyer participation should gradually improve despite tight credit conditions and the inevitable rise in rates. The employment outlook for young adults is brightening and their incomes finally appear to be rising. Jobs and income gains will help repay student debt and better position first-time buyers, setting the stage for improved sales growth in upcoming years.

The PHSI in the Northeast slipped 3.0 percent to 86.5 in August, but is still 1.6 percent above a year ago. In the Midwest the index fell 2.1 percent to 102.4 in August, and is 7.6 percent below August 2013.

Pending home sales in the South decreased 1.4 percent to an index of 117.0 in August, unchanged from a year ago. The index in the West rose for the fourth consecutive month (2.6 percent) in August to 102.1, but still remains 2.6 percent below August 2013.

Existing-home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates and slower price growth. Overall, Yun forecasts existing-homes sales to be down 3.0 percent this year to 4.94 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.


Personal Income increased 0.3%, Spending increased 0.5%
Posted: September 29, 2014 at 08:30 AM (Monday)

Personal income increased $47.3 billion, or 0.3 percent, and disposable personal income (DPI) increased $35.2 billion, or 0.3 percent, in August, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $57.5 billion, or 0.5 percent. In July, personal income increased $35.9 billion, or 0.2 percent, DPI increased $24.6 billion, or 0.2 percent, and PCE increased $0.5 billion, or less than 0.1 percent, based on revised estimates.

Real DPI increased 0.3 percent in August, compared with an increase of 0.1 percent in July. Real PCE increased 0.5 percent, in contrast to a decrease of 0.1 percent.


University of Michigan Consumer Confidence increased in September to 82.5
Posted: September 26, 2014 at 10:00 AM (Friday)

Consumer confidence posted a healthy September gain due to more favorable prospects for the domestic economy as well as more favorable personal income expectations. The September reading, the second highest in the last seven years, points toward renewed strength in consumer spending. While the September rebound brought confidence back to its highest levels since the Great Recession, confidence has repeatedly failed to move above this level. The improved income expectations recorded in September have the potential to reinvigorate personal financial optimism that is the key driving force of behind large discretionary expenditures, especially those involving debt. Needless to say, it will take repeated and cumulative gains to reverse the impact of stagnant incomes on spending.

Economy Expected to Improve
The recent survey recorded widespread reports that the economy had improved and the economy was expect to continue to post gains in the year ahead. The creation of jobs is the most important aspect of a strengthening economy for consumers. On this count, consumers expected modest growth in jobs in the year ahead. The unemployment rate, however, was expected the remain largely unchanged rather than to post substantial improvement.

Higher Income Gains Expected
More households expected income gains in the year ahead in the recent survey than anytime in the last six years—since September of 2008. Just as importantly, the median increase of 1.1% expected by all households was the highest since late 2008. While still meager, this improvement, along with a decline in the expected inflation rate, meant that more households expected their income gains to keep pace or exceed the rate of inflation.

The Consumer Sentiment Index was 84.6 in the September 2014 survey, up from 82.5 in August and 77.5 in last September’s survey. The entire September gain was concentrated in the Expectations Index, which rose to 75.4 from 71.3 one month ago and 67.8 one year ago. Although the Current Conditions Index slipped to 98.9 in September from 99.8 in August, the August reading was the highest since July of 2007.

The defining aspect of the current recovery has been that optimism about future prospects has not improved in advance of actual economic gains. Typically, optimism generates increased spending which helps to improve current economic conditions. Surprisingly, an improved economy has not sparked renewed optimism, at least until recently. The renewal of income growth is particularly important for sparking increased consumer spending in the year ahead. Moreover, given the anticipated changes in monetary policy, strong income gains will be needed to bolster spending given the diminished positive role of household wealth.


2Q2014 GDP final estimate increased 4.6%
Posted: September 26, 2014 at 08:30 AM (Friday)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.6 percent in the second quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 4.2 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in exports were larger than previously estimated).

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Real GDP increased 4.6 percent in the second quarter, after decreasing 2.1 percent in the first. This upturn in the percent change in real GDP primarily reflected upturns in exports and in private inventory investment, accelerations in nonresidential fixed investment and in PCE, and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration in imports.


Kansas City Fed Manufacturing Activity edged higher in Sept
Posted: September 25, 2014 at 11:00 AM (Thursday)

Growth in Tenth District manufacturing activity edged higher in September, and producers’ expectations for future activity maintained the solid level of the previous survey. Price indexes showed a mild decline from the previous month, and expectations for future price growth were mixed. Several firms continued to comment about difficulties finding qualified labor, resulting in some wage pressures.

The month-over-month composite index was 6 in September, slightly higher than 3 in August but lower than 9 in July. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in manufacturing activity continued to occur primarily at durable goods-producing plants. Nondurable goods-producers experienced only a modest rise, with activity at some food processing plants continuing to decline in the face of higher beef prices. The production index increased from 4 to 12, and the shipment index also grew from a reading of 2 in August to 14. The employment index increased significantly from -4 in the last survey period to 7 in September. Most other month-over-month indexes eased compared to August’s readings. The new orders and backlog of orders indexes both declined modestly. The inventory indexes also both experienced moderate declines, with materials now at -6 and finished goods at -1.

Year-over-year factory indexes were mostly higher this survey period. The composite year-over-year index rose to 15, as compared to the previous survey reading of 13. The production index was moderately higher at 14, while capital expenditures and backlog of orders were also moderately higher. The volume of shipments index increased from 10 to 16 and the materials inventory increased from 15 to 18. The volume of new orders and number of employees were also slightly higher. Conversely, supplier delivery time and finished goods inventories indexes were lower at 12 and 8, respectively.

Most of the future factory indexes were mildly lower compared to August, although the future composite index maintained its level of 17 due to strong expectations for production. The future production and future volume of shipments indexes were both at their highest levels in 5 months. The future volume of new orders and future backlog of orders also increased slightly. In contrast, the future new orders for export index fell to 0 from a previous level of 9. Both future inventories indexes declined with future materials inventory declining the most, from 7 to 2.

The majority of price indexes experienced a decline this month. The month-over-month raw materials price index was steady at 20, while the finished goods price index decreased from 6 to 2. The year-over-year finished goods price index eased slightly once again, but the raw materials price index dropped from 55 to 45. The future raw materials price index also declined, yet the future finished goods price index saw its first increase in four months.


DJ-BTMU U.S. Business Barometer slumped by 0.9%
Posted: September 25, 2014 at 10:06 AM (Thursday)

For the week ending September 13 2014, the DJ-BTMU U.S. Business Barometer slumped by 0.9 percent to 98.4, wiping out the gain of 0.7 percent from last week. The biggest factor that contributed to the performance of this week’s barometer was chain store sales, which plummeted by a sharp 2.5 percent, after three consecutive weeks of positive growth. As to the production side, almost all indexes declined, especially auto production and electric output, which fell by 7.5 and 4.3 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 0.9 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, dipped slightly by 0.1 percent to 98.7. Its year-over-year growth rate was 1.2 percent.


Weekly Initial Unemployment Claims Increase 12,000 to 293,000
Posted: September 25, 2014 at 08:37 AM (Thursday)

In the week ending September 20, the advance figure for seasonally adjusted initial claims was 293,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 280,000 to 281,000. The 4-week moving average was 298,500, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 299,500 to 299,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 13, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 13 was 2,439,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,429,000 to 2,432,000. The 4-week moving average was 2,460,250, a decrease of 22,250 from the previous week's revised average. This is the lowest level for this average since June 9, 2007 when it was 2,458,250. The previous week's average was revised up by 750 from 2,481,750 to 2,482,500.


New Orders for Durable Goods Decreased 18.2%, Ex-Trans Up 0.7%
Posted: September 25, 2014 at 08:32 AM (Thursday)

New orders for manufactured durable goods in August decreased $54.5 billion or 18.2 percent to $245.4 billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly increases, followed a 22.5 percent July increase. Excluding transportation, new orders increased 0.7 percent. Excluding defense, new orders decreased 19.0 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $55.6 billion or 42.0 percent to $76.8 billion.

Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $3.7 billion or 1.5 percent to $246.1 billion. This followed a 3.7 percent July increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.9 billion or 5.1 percent to $72.5 billion.

Unfilled orders for manufactured durable goods in August, up sixteen of the last seventeen months, increased $7.4 billion or 0.6 percent to $1,165.0 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 5.3 percent July increase. Transportation equipment, up eleven of the last twelve months, led the increase, $4.3 billion or 0.6 percent to $742.1 billion.

Inventories of manufactured durable goods in August, up sixteen of the last seventeen months, increased $1.7 billion or 0.4 percent to $403.0 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent July increase. Transportation equipment, also up sixteen of the last seventeen months, led the increase, $0.6 billion or 0.4 percent to $129.9 billion.

Nondefense new orders for capital goods in August decreased $49.5 billion or 36.3 percent to $86.8 billion. Shipments increased $0.1 billion or 0.2 percent to $79.7 billion. Unfilled orders increased $7.1 billion or 1.0 percent to $731.8 billion. Inventories increased $0.6 billion or 0.3 percent to $184.1 billion. Defense new orders for capital goods in August increased $0.4 billion or 5.4 percent to $8.8 billion. Shipments increased $0.1 billion or 0.9 percent to $9.7 billion. Unfilled orders decreased $0.9 billion or 0.6 percent to $158.3 billion. Inventories increased $0.1 billion or 0.5 percent to $23.9 billion.

Revised seasonally adjusted July figures for all manufacturing industries were: new orders, $558.5 billion (revised from $558.3 billion); shipments, $508.4 billion (revised from $507.4 billion); unfilled orders, $1,157.6 billion (revised from $1,158.2 billion); and total inventories, $653.5 billion (revised from $653.8 billion).


New Home Sales in August at annual rate of 504,000
Posted: September 24, 2014 at 10:00 AM (Wednesday)

Sales of new single-family houses in August 2014 were at a seasonally adjusted annual rate of 504,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 18.0 percent (±16.3%) above the revised July rate of 427,000 and is 33.0 percent (±21.7%) above the August 2013 estimate of 379,000.

The median sales price of new houses sold in August 2014 was $275,600; the average sales price was $347,900. The seasonally adjusted estimate of new houses for sale at the end of August was 203,000. This represents a supply of 4.8 months at the current sales rate.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: September 24, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 19, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.3 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 16 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 56 percent of total applications from 57 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.0 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.39 percent, the highest rate since May 2014, from 4.36 percent, with points increasing to 0.35 from 0.20 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.30 percent from 4.24 percent, with points increasing to 0.22 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.08 percent, the highest rate since May 2014, from 4.03 percent, with points increasing to 0.09 from 0.05 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.56 percent, with points increasing to 0.26 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.20 percent from 3.19 percent, with points increasing to 0.40 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Richmond Fed's Current Activity Index up to a reading of 14
Posted: September 23, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity continued to grow at a moderate pace in September, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders picked up this month. Manufacturing employment also strengthened this month, while average wages rose at a slower pace and the average workweek lengthened.

Manufacturers remained optimistic about future business conditions. Survey participants expected faster growth in shipments and in the volume of new orders in the six months ahead. Producers looked for increased capacity utilization and anticipated rising backlogs. Expectations were for longer vendor lead times.

Survey participants anticipated steady growth in the number of employees and the average workweek during the next six months. Additionally, they expected faster growth in wages.

Prices of raw materials and finished goods rose at faster pace in September compared to last month. For the six months ahead, manufacturers expected slower growth in prices paid, and anticipated faster growth in prices received.

Overall, manufacturing conditions strengthened in September. The composite index for manufacturing moved to a reading of 14 following last month's reading of 12. The index for shipments edged up one point, ending at 11, while the index for new orders also gained one point, finishing at a reading of 14. Manufacturing employment strengthened this month. At an index of 17, the September indicator gained six points from last month’s reading of 11.

Backlogs rose at a slower pace this month; the index settled at a reading of 6. Additionally, capacity utilization grew at a slower pace, moving the index down four points ending at 13. Vendor lead time shortened, moving the index to 10 from a reading of 16 last month. Finished goods inventories rose at a faster pace compared to a month ago. The index gained seven points, ending at 23. Raw materials inventories increased at a faster rate compared to last month. That gauge moved to 20 from 17.


ICSC Chain Store Sales increased by 0.1% in Sept 20 Wk
Posted: September 23, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 4.1% for the week ending September 20 - relative to the prior year. On a week-over-week basis, sales increased 0.1%.

"According to the ICSC-GS consumer tracking survey business over the past week was strong for apparel stores, dollar stores, wholesale clubs and discounters. Business was also strong at electronic stores - possibly buoyed by the release of Apple's iPhone 6," said Michael Niemira, ICSC research consultant. "September is a high-volume month and I expect sales to continue to show a healthy trend - increasing by 4-5%," he added.


Existing-Home Sales decreased 1.8% in August
Posted: September 22, 2014 at 10:00 AM (Monday)

After four consecutive months of gains, existing-home sales slipped in August as investors paying in cash retreated from the market, according to the National Association of Realtors®. Sales increases in the Northeast and Midwest were outweighed by declines in the South and West.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August from a slight downwardly-revised 5.14 million in July. Sales are at the second-highest pace of 2014, but remain 5.3 percent below the 5.33 million-unit level from last August, which was also the second-highest sales level of 2013.

Sales activity remains stronger than earlier in the year, but fell last month as investors stepped away. There was a marked decline in all-cash sales from investors,” he said. "On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.

As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying.

The median existing-home price for all housing types in August was $219,800, which is 4.8 percent above August 2013. This marks the 30th consecutive month of year-over-year price gains.

Total housing inventory at the end of August declined 1.7 percent to 2.31 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace. However, unsold inventory is 4.5 percent higher than a year ago, when there were 2.21 million existing homes available for sale.

All-cash sales were 23 percent of transactions in August, dropping for the second consecutive month (29 percent in July) and representing the lowest overall share since December 2009 (22 percent). Individual investors, who account for many cash sales, purchased 12 percent of homes in August, down from 16 percent last month and 17 percent in August 2013. Sixty-four percent of investors paid cash in August.

A gradual decline in investor activity, many who pay in cash, is good for the market and creates more opportunity for buyers who rely on financing to purchase a home.

On the subject of mortgage financing Realtors® applaud the recent policy change to eliminate post-payment interest charges on FHA-insured single-family mortgages. The prepayment penalty placed an unfair and unreasonable burden on consumers who already face high housing and closing costs.

The percent share of first-time buyers remained unchanged in August from July at 29 percent. First-time buyers have represented less than 30 percent of all buyers in 16 of the past 17 months.

Distressed homes – foreclosures and short sales – represented 8 percent of August sales, remaining in the single-digits for the second straight month and down from 12 percent a year ago. Six percent of August sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 14 percent below market value in August (20 percent in July), while short sales were discounted 10 percent (14 percent in July).

Properties typically stayed on the market in August longer (53 days) than last month (48 days) and a year ago (43 days). Short sales were on the market for a median of 135 days in August, while foreclosures sold in 53 days and non-distressed homes typically took 52 days. Forty percent of homes sold in August were on the market for less than a month.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell for the fourth consecutive month to 4.12 percent in August from 4.13 percent in July, and remains at the lowest rate since June 2013 (4.07 percent).

Single-family home sales slipped 1.8 percent to a seasonally adjusted annual rate of 4.46 million in August from 4.54 million in July, and are now 4.9 percent below the 4.69 million pace a year ago. The median existing single-family home price was $220,600 in August, up 5.2 percent from August 2013.

Existing condominium and co-op sales declined 1.7 percent to a seasonally adjusted annual rate of 590,000 units in August from 600,000 in July, and are now 7.8 percent below the 640,000 unit pace a year ago. The median existing condo price was $213,900 in August, which is 2.1 percent higher than a year ago.


Chicago Fed National Activity decelerated in August
Posted: September 22, 2014 at 08:30 AM (Monday)

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to –0.21 in August from +0.26 in July. Two of the four broad categories of indicators that make up the index decreased from July, and two of the four categories made negative contributions to the index in August.

The index’s three-month moving average, CFNAI-MA3, decreased to +0.07 in August from +0.20 in July, marking its sixth consecutive reading above zero. August’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.14 in August from +0.23 in July. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 40 made negative contributions. Forty-two indicators improved from July to August, while 43 indicators deteriorated. Of the indicators that improved, 12 made negative contributions.

Production-related indicators made a contribution of –0.17 to the CFNAI in August, down from +0.24 in July. Manufacturing production decreased 0.4 percent in August after rising 0.7 percent in July, and manufacturing capacity utilization declined to 77.2 percent in August from 77.6 percent in the previous month.

Employment-related indicators made a neutral contribution to the CFNAI in August, down from +0.10 in July. The unemployment rate decreased to 6.1 percent in August from 6.2 percent in July, while nonfarm payrolls increased by 142,000 in August after rising by 212,000 in the previous month.

The contribution of the sales, orders, and inventories category to the CFNAI edged up to +0.08 in August from +0.04 in July. The Institute for Supply Management’s Manufacturing Purchasing Managers’ New Orders Index rose to 66.7 in August from 63.4 in July, reaching its highest level since April 2004.

The contribution of the consumption and housing category to the CFNAI ticked up to –0.12 in August from –0.13 in July. Consumption indicators, on balance, improved, pushing the category’s contribution higher. However, housing starts declined to 956,000 annualized units in August from 1,117,000 in July, and housing permits decreased to 998,000 annualized units in August from 1,057,000 in the previous month.

The CFNAI was constructed using data available as of September 18, 2014. At that time, August data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The July monthly index was revised to +0.26 from an initial estimate of +0.39. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the July monthly index was due primarily to the latter.


U.S. Leading Economic Index increased 0.2%
Posted: September 19, 2014 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.2 percent in August to 103.8 (2004 = 100), following a 1.1 percent increase in July, and a 0.7 percent increase in June.

The LEI continued to rise in August, although at a slower rate than in July. The LEI’s six-month growth trend has been held back slightly by lackluster contributions from housing permits and new orders for nondefense capital orders. Despite concerns about investment picking up, the economy should continue expanding at a moderate pace for the remainder of the year.

The leading indicators point to an economy that is continuing to gain traction, but most likely won’t repeat its stellar second quarter performance in the second half. Meanwhile, the CEI, a measure of current economic activity, continued to expand through August, amid improving personal income, employment and retail sales. However, industrial production registered a slight decrease for the first time in seven months.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in August to 109.7 (2004 = 100), following a 0.1 percent increase in July, and a 0.3 percent increase in June.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in August to 125.1 (2004 = 100), following a 0.3 percent increase in July, and a 0.4 percent increase in June.


Philadelphia August Outlook Suggests continued expansion
Posted: September 18, 2014 at 10:00 AM (Thursday)

Firms responding to the Manufacturing Business Outlook Survey indicated continued growth in the region’s manufacturing sector in September. Although the current activity index fell from its relatively high reading in August, the other broad indicators increased from their readings last month. The survey’s indicators for future manufacturing conditions reflect general optimism about growth in activity and employment over the next six months.

Indicators Reflect Continuing Growth
The diffusion index for current activity fell from a reading of 28.0, its highest reading since March 2011, to 22.5 this month. The current new orders and shipments indexes edged higher this month, however, increasing 1 point and 5 points, respectively. Indexes for both unfilled orders and delivery times were positive this month, suggesting continued strengthening conditions.

The survey’s indicators for labor market conditions suggest notable improvement this month. The employment index increased 12 points to its highest reading since May 2011. The percentage of firms reporting increases in employment (26 percent) exceeded the percentage reporting decreases (5 percent). The workweek index was positive for the seventh consecutive month but fell nearly 9 points.

Price Indexes Increase Moderately
Over 31 percent of the firms reported higher input prices this month, just slightly higher than the level reported last month. The prices paid index increased 2 points. The prices received index, which reflects firms’ own final goods prices, also edged slightly higher, from 4.2 to 8.8. The percent of firms reporting higher prices (13 percent) exceeded the percentage reporting lower prices (4 percent), although nearly 80 percent of the firms reported steady prices.

Firms Expect Increases in Employment
Most of the survey’s indicators of future growth declined from their 22-year high readings reached last month. The future general activity index decreased 10 points. The future indexes for new orders and shipments also decreased this month, declining 7 and 9 points, respectively. Firms raised their expectations about employment growth over the next six months. Nearly 44 percent of the firms are expecting growth in their employment levels over the next six months, compared with 37 percent last month. The future employment index increased sharply, from 24.7 to 39.6, its highest reading since September 1983.

In Special Questions, firms were asked to estimate their total production growth for the third quarter ending this month along with expected growth for the fourth quarter. Firms anticipating increases in third quarter production (59 percent) exceeded those anticipating decreases (29 percent). Firms expect average production growth of 2 percent in the third quarter. With regard to the fourth quarter, the percentage of firms forecasting acceleration in the rate of their production growth (54 percent) was greater than the percentage forecasting deceleration in growth (21 percent).

The September Manufacturing Business Outlook Survey suggests continued expansion of the region’s manufacturing sector. Firms reported continued increases in overall activity, new orders, shipments, and employment this month. The survey’s future activity indexes remained at high readings, suggesting continued optimism about manufacturing growth. Firms were more optimistic about employment increases over the next six months.


DJ-BTMU U.S. Business Barometer rose by 0.7%
Posted: September 18, 2014 at 10:00 AM (Thursday)

For the week ending September 6 2014, the DJ-BTMU U.S. Business Barometer rose by 0.7 percent to 99.3 from last week, reaching the second highest level since the Great Recession (the highest peak was in July 5 this year). This week’s barometer is driven by both consumption and production indexes. Chain store sales jumped 0.8 percent after being flat the prior week. As to the production side, auto production bounced back by 10.8 percent following an 8.6 percent drop last week; and electric out continued with its strong momentum.

On a year-over-year basis, the barometer showed a gain of 1.6 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, climbed by 0.2 percent to 98.9. Its year-over-year growth rate was 1.4 percent.


Weekly Initial Unemployment Claims Decrease 36,000 to 280,000
Posted: September 18, 2014 at 08:30 AM (Thursday)

In the week ending September 13, the a dvance figure for seasonally adjusted initial claims was 280,000, a decrease of 36,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 315,000 to 316,000. The 4-week moving average was 299,500, a decrease of 4 ,750 from the previous week's revised average. The previous week's average was revised up by 250 from 304,000 to 304,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 6, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 6 was 2,429,000, a decrease of 63,000 from the previous week's revised level. This is the lowest level for insured unemployment since May 19, 2007 when it was 2,417,000. The previous week's level was revised up 5,000 from 2,487,000 to 2,492,000. The 4-week moving average was 2,481,750, a decrease of 18,250 from the previous week's revised average. This is the lowest level for this average since June 23, 2007 when it was 2,477,250. The previous week's average was revised up by 1,250 from 2,498,750 to 2,500,000.


August Housing Starts down 14.4%, Permits down 5.6%
Posted: September 18, 2014 at 08:30 AM (Thursday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 998,000. This is 5.6 percent (±1.4%) below the revised July rate of 1,057,000, but is 5.3 percent (±1.7%) above the August 2013 estimate of 948,000. Single-family authorizations in August were at a rate of 626,000; this is 0.8 percent (±1.5%)* below the revised July figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 343,000 in August.

HOUSING STARTS
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 956,000. This is 14.4 percent (±7.9%) below the revised July estimate of 1,117,000, but is 8.0 percent (±11.2%)* above the August 2013 rate of 885,000. Single-family housing starts in August were at a rate of 643,000; this is 2.4 percent (±9.7%)* below the revised July figure of 659,000. The August rate for units in buildings with five units or more was 304,000.

HOUSING COMPLETIONS
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 892,000. This is 3.2 percent (±13.0%)* above the revised July estimate of 864,000 and is 16.9 percent (±14.7%) above the August 2013 rate of 763,000. Single-family housing completions in August were at a rate of 591,000; this is 8.2 percent (±9.7%)* below the revised July rate of 644,000. The August rate for units in buildings with five units or more was 292,000.


Federal Open Market Committee Press Conference
Posted: September 17, 2014 at 02:30 PM (Wednesday)


FOMC target funds rate still 0 - 1/4%, QE now $15 bil
Posted: September 17, 2014 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in October, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $5 billion per month rather than $10 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $10 billion per month rather than $15 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee's sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will end its current program of asset purchases at its next meeting. However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Stanley Fischer; Narayana Kocherlakota; Loretta J. Mester; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action were Richard W. Fisher and Charles I. Plosser. President Fisher believed that the continued strengthening of the real economy, improved outlook for labor utilization and for general price stability, and continued signs of financial market excess, will likely warrant an earlier reduction in monetary accommodation than is suggested by the Committee's stated forward guidance. President Plosser objected to the guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for "a considerable time after the asset purchase program ends," because such language is time dependent and does not reflect the considerable economic progress that has been made toward the Committee's goals.


Builder Confidence rises 4 points in August to 59
Posted: September 17, 2014 at 10:00 AM (Wednesday)

Builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a level of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This latest four-point gain brings the index to its highest reading since November of 2005.

Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction.

While a firming job market is helping to unleash pent-up demand for new homes and contributing to a gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers. Other factors impeding the pace of the housing recovery include persistently tight credit conditions for consumers and rising costs for materials, lots and labor.

All three HMI components posted gains in September. The indices gauging current sales conditions and traffic of prospective buyers each rose five points to 63 and 47, respectively. The index gauging expectations for future sales increased two points to 67.

Builder confidence also rose across every region of the country in September. Looking at the three-month moving average for each region, the Midwest registered a five-point gain to 59, the South posted a four-point increase to 56, the Northeast recorded a three-point gain to 41 and the West posted a two-point increase to 58.


2Q2014 Current Account Deficit Decreased
Posted: September 17, 2014 at 08:30 AM (Wednesday)

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)—decreased to $98.5 billion (preliminary) in the second quarter of 2014 from $102.1 billion (revised) in the first quarter. The deficit decreased to 2.3 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter. The decrease in the current-account deficit was largely due to a decrease in the deficit on secondary income. In addition, the surpluses on services and primary income increased. These changes were partly offset by an increase in the deficit on goods.


Consumer Price Index decreased 0.2% in August, Ex Fd & Engy was unch%
Posted: September 17, 2014 at 08:30 AM (Wednesday)

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.2 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.

The seasonally adjusted decline in the all items index was the first since April 2013. The indexes for food and shelter rose, but the increases were more than offset by declines in energy indexes, especially gasoline. The energy index fell 2.6 percent, with the gasoline index declining 4.1 percent and the indexes for natural gas and fuel oil also decreasing.

The index for all items less food and energy was unchanged in August; this was the first month since October 2010 that the index did not increase. While the shelter index increased and the indexes for new vehicles and for alcoholic beverages also rose, these advances were offset by declines in several indexes, including airline fares, recreation, household furnishings and operations, apparel, and used cars and trucks.

The all items index increased 1.7 percent over the last 12 months, a decline from the 2.0 percent figure for the 12 months ending July, and the smallest 12-month change since March. The index for all items less food and energy also rose 1.7 percent over the last 12 months. The food index has risen 2.7 percent over the span, while the energy index has increased 0.4 percent.


Real Average Hourly Earnings increased by 0.4% in August
Posted: September 17, 2014 at 08:30 AM (Wednesday)

Real average hourly earnings for all employees increased by 0.4 percent from July to August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase stems from a 0.2 percent increase in the average hourly earnings and a 0.2 percent decrease in the Consumer Price Index for All Urban Consumers (CPI-U). The change in real average hourly earnings is the largest 1-month percentage increase since November 2012.

Real average weekly earnings increased by 0.4 percent over the month due to the increase in real average hourly earnings and an unchanged average workweek.

Real average hourly earnings increased 0.4 percent, seasonally adjusted, from August 2013 to August 2014. The increase in real average hourly earnings, combined with an unchanged average workweek, resulted in a 0.4 percent increase in real average weekly earnings over this period.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: September 17, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 7.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 12, 2014. The previous week’s results included an adjustment for the Labor Day holiday.


The Market Composite Index, a measure of mortgage loan application volume, increased 7.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 14 percent compared with the previous week and was 10 percent lower than the same week one year ago.

“Application volume rebounded coming out of the Labor Day holiday, even as rates increased to their highest level in the last few months,” said Mike Fratantoni, MBA’s Chief Economist. “Given the volatility in activity around the long weekend, it can be helpful to look at the change over a two week span: refinance applications are down 1.4 percent while purchase applications are up 2.1 percent. Purchase volume continues to track almost ten percent behind last year’s levels.”

The refinance share of mortgage activity increased to 57 percent of total applications, the highest level since February 2014, from 55 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.6 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.36 percent, the highest level since June 2014, from 4.27 percent, with points decreasing to 0.20 from 0.25 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.24 percent from 4.15 percent, with points decreasing to 0.16 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.03 percent from 3.97 percent, with points decreasing to 0.05 from 0.08 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.56 percent from 3.44 percent, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.12 percent, with points decreasing to 0.29 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Treasury International Capital Data for July 2014
Posted: September 16, 2014 at 04:00 PM (Tuesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for July 2014. The sum total in July of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $57.7 billion. Of this, net foreign private inflows were $84.9 billion, and net foreign official outflows were $27.1 billion.

Foreign residents decreased their holdings of long-term U.S. securities in July; net sales were $3.9 billion. Net purchases by private foreign investors were $1.9 billion, while net sales by foreign official institutions were $5.8 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $14.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign sales of long-term securities were $18.6 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $48.3 billion in July.

Foreign residents decreased their holdings of U.S. Treasury bills by $6.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $6.0 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $112.0 billion.


Producer Price Index was unch% in August, ex Fd & Engy unch%
Posted: September 16, 2014 at 08:30 AM (Tuesday)

The Producer Price Index for final demand was unchanged in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.1 percent in July and 0.4 percent in June. On an unadjusted basis, the index for final demand increased 1.8 percent for the 12 months ended in August.

In August, a 0.3-percent rise in prices for final demand services offset a 0.3-percent decrease in the index for final demand goods.

Within intermediate demand, prices for processed goods fell 0.3 percent, the index for unprocessed goods declined 3.3 percent, and prices for services moved up 0.2 percent.


ICSC Chain Store Sales dropped by 2.6% in Sept 13 Wk
Posted: September 16, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.0% for the week ending September 13 - relative to the prior year. On a week-over-week basis, sales dropped 2.6%.

"According to the ICSC-GS consumer tracking survey business over the past week was healthy overall and strong for wholesale clubs, dollar, discount, electronics, and furniture stores," said Michael Niemira, ICSC research consultant. "This past week saw the tail end of back to school demand and is still a bit before fall apparel demand will fully kick in. With both back to school and fall apparel mixing in throughout the month, I expect sales to continue to show a healthy trend - increasing by 4-5%," he added.


Industrial Production edged down 0.1%
Capacity Utilization decreased 0.3% to 78.8%

Posted: September 15, 2014 at 09:15 AM (Monday)

The index of industrial production edged down 0.1 percent in August, and the index for manufacturing output decreased 0.4 percent; the declines were the first for each since January. The gains in July for both indexes were revised down. The declines in total industrial production and in manufacturing output in August reflected a decrease of 7.6 percent in the production of motor vehicles and parts, which had jumped more than 9 percent in July. Excluding motor vehicles and parts, factory output rose 0.1 percent in both July and August. The production at mines moved up 0.5 percent in August, and the output of utilities rose 1.0 percent. At 104.1 percent of its 2007 average, total industrial production in August was 4.1 percent above its year-earlier level. Capacity utilization for total industry decreased 0.3 percentage point in August to 78.8 percent, a rate 1.0 percentage point above its level of a year earlier and 1.3 percentage points below its long-run (1972–2013) average.


Empire State Manufacturing Survey Conditions expanded at a robust pace
Posted: September 15, 2014 at 08:30 AM (Monday)

The September 2014 Empire State Manufacturing Survey indicates that business activity expanded at a robust pace for New York manufacturers. The headline general business conditions index rose thirteen points to 27.5, a multiyear high. The new orders index moved up three points to 16.9, and the shipments index advanced two points to 27.1. The unfilled orders index fell three points to -10.9. The prices paid index declined three points to 23.9, indicating a slower pace of input price increases, while the prices received index climbed nine points to 17.4, suggesting a pickup in the pace of selling price increases. Employment indexes showed a slight increase in employment levels and hours worked. Indexes for the six-month outlook conveyed a high degree of optimism about future business conditions.

Business Activity Expands Robustly
Growth in business activity for New York manufacturers was solid, according to the September 2014 survey. The general business conditions index climbed thirteen points to 27.5, its highest level since late 2009. Forty-six percent of respondents reported that conditions had improved over the month, while 18 percent reported that conditions had worsened. The new orders index rose three points to 16.9, indicating a sturdy increase in orders, and the shipments index advanced two points to 27.1, pointing to a substantial increase in shipments. The unfilled orders index dropped three points to -10.9, suggesting that fewer orders remained unfilled over the month. The delivery time index was little changed at -5.4, and the inventories index, up seven points to -7.6, showed a decline in inventory levels for a third consecutive month.

Selling Prices Rise More Sharply
The prices paid index was slightly lower this month, falling three points to 23.9—a sign that input price increases were somewhat less widespread. The prices received index, however, jumped nine points to 17.4, indicating a pickup in the pace of selling price increases. Employment indexes pointed to a small increase in employment levels and hours worked: the index for number of employees fell ten points to 3.3, and the average workweek index dropped five points to 3.3.

Outlook Remains Bright
Optimism about future business conditions remained high. The index for future general business conditions was unchanged from last month at 46.7. The future new orders index fell five points to 45.6, and the future shipments index declined seven points to 47.5. Though both of these indexes were somewhat below their August levels, they remained high by historical standards. The index for expected number of employees dipped to 14.1, and the future average workweek index was 5.4. The capital expenditures index fell five points to 13.0, and the technology spending index edged down three points to 9.8.


Business Inventories up 0.4% in July
Posted: September 12, 2014 at 10:00 AM (Friday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,360.3 billion, up 0.8 percent (±0.2%) from June 2014 and were up 5.3 percent (±0.6%) from July 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,750.1 billion, up 0.4 percent (±0.1%) from June 2014 and up 5.9 percent (±0.4%) from July 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of July was 1.29. The July 2013 ratio was 1.28.

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Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works.

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