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New orders for manufactured goods increased 2.7% in October
Posted: December 6, 2016 at 10:26 AM (Tuesday)

New orders for manufactured goods in October, up four consecutive months, increased $12.5 billion or 2.7 percent to $469.4 billion, the U.S. Census Bureau reported today. This followed a 0.6 percent September increase.

Shipments, up seven of the last eight months, increased $1.7 billion or 0.4 percent to $464.7 billion. This followed a 0.9 percent September increase. Unfilled orders, up following four consecutive monthly decreases, increased $8.2 billion or 0.7 percent to $1,128.5 billion. This followed a 0.2 percent September decrease. The unfilled orders-to-shipments ratio was 6.78, up from 6.70 in September.

Inventories, up three of the last four months, increased $0.3 billion or virtually unchanged to $621.4 billion. This followed a 0.1 percent September decrease. The inventories-to-shipments ratio was 1.34, unchanged from September.


3Q2016 Productivity Growth Increased 3.1%
Posted: December 6, 2016 at 08:30 AM (Tuesday)

Nonfarm business sector labor productivity increased at a 3.1-percent annual rate during the third quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 3.6 percent and hours worked increased 0.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The quarterly increase in nonfarm business sector labor productivity was the first increase after three consecutive declines in the measure. From the third quarter of 2015 to the third quarter of 2016, productivity was unchanged.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Measures released today are based on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 0.7 percent in the third quarter of 2016, reflecting a 3.8-percent increase in hourly compensation and a 3.1-percent increase in productivity. Unit labor costs increased 3.0 percent over the last four quarters.

BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them.

Manufacturing sector labor productivity increased 0.4 percent in the third quarter of 2016, as output and hours worked increased 0.6 percent and 0.3 percent, respectively. Output per hour increased 3.0 percent in the durable goods manufacturing sector and decreased 3.0 percent in the nondurable goods sector. Over the last four quarters, manufacturing sector productivity was unchanged, as output and hours worked both declined 0.1 percent. Unit labor costs in manufacturing increased 3.3 percent in the third quarter of 2016 and rose 3.6 percent from the same quarter a year ago. Hourly compensation increased 3.7 percent in the third quarter of 2016.

Preliminary third-quarter 2016 measures of productivity and costs were announced for the nonfinancial corporate sector. Productivity increased 7.1 percent in the third quarter of 2016--the largest gain since an 8.8-percent gain in the first quarter of 2010--as output increased 8.3 percent and hours worked increased 1.1 percent. Over the last four quarters, productivity increased 1.6 percent. Unit labor costs decreased 2.7 percent in the third quarter of 2016 and increased 0.9 percent over the last four quarters.

Revised measures
In the third quarter of 2016, nonfarm business labor productivity was not revised; output and hours were both revised up by 0.2 percentage points. Unit labor costs were revised up from a 0.3-percent increase to a 0.7-percent increase, due solely to an upward revision to hourly compensation growth from 3.4 percent to 3.8 percent. In the manufacturing sector, productivity increased 0.4 percent rather than increasing 1.0 percent as previously reported, due both to a downward revision to output and an upward revision to hours. Unit labor costs increased 3.3 percent, a larger increase than the preliminary estimate.

In the second quarter of 2016, nonfarm business labor productivity, output, and hours were unrevised. Unit labor costs increased 6.2 percent, rather than increasing 3.9 percent as previously reported, the result of a large upward revision to hourly compensation. In the manufacturing sector, labor productivity was not revised. Hourly compensation was revised up to an 8.0 percent increase from a previous estimate of 6.2 percent. As a result, unit labor costs were revised up, and increased 8.5 percent instead of 6.8 percent.

Second-quarter 2016 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity decreased 1.2 percent rather than decreasing 2.3 percent as reported on November 3, due to a 1.1-percentage point upward revision to output.


Goods and Services Deficit Increased in October 2016
Posted: December 6, 2016 at 08:30 AM (Tuesday)

The Nation's international trade deficit in goods and services increased to $42.6 billion in October from $36.2 billion in September (revised), as exports decreased and imports increased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $42.6 billion in October, up $6.4 billion from $36.2 billion in September, revised. October exports were $186.4 billion, $3.4 billion less than September exports. October imports were $229.0 billion, $3.0 billion more than September imports.

The October increase in the goods and services deficit reflected an increase in the goods deficit of $6.3 billion to $63.4 billion and a decrease in the services surplus of $0.1 billion to $20.8 billion.

Year-to-date, the goods and services deficit decreased $8.8 billion, or 2.1 percent, from the same period in 2015. Exports decreased $58.7 billion or 3.1 percent. Imports decreased $67.5 billion or 2.9 percent.


Employment Trends Index increased in November to 129.96
Posted: December 5, 2016 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased again in November, after increasing in October. The index now stands at 129.96, up from 128.95 in October. The change represents a 2.7 percent gain in the ETI compared to a year ago.

“The Employment Trends Index is showing some signs of acceleration, suggesting that employment growth will not slow down further in the coming months,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “Moderate employment growth will be enough to make the labor market even tighter, leading to more visible acceleration in wages and inflation.”

November’s improvement in the ETI was fueled by positive contributions from six of the eight components. In order from the largest positive contributor to the smallest, these were: Ratio of Involuntarily Part-time to All Part-time Workers, Percentage of Firms With Positions Not Able to Fill Right Now, Initial Claims for Unemployment Insurance, Real Manufacturing and Trade Sales, Number of Employees Hired by the Temporary-Help Industry, and Industrial Production.


ISM Non-Manufacturing Index grew at 57.2% in November
Posted: December 5, 2016 at 10:00 AM (Monday)

Economic activity in the non-manufacturing sector grew in November for the 82nd consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 57.2 percent in November, 2.4 percentage points higher than the October reading of 54.8 percent. This represents continued growth in the non-manufacturing sector at a faster rate. This is the 12-month high, and the highest reading since the 58.3 registered in October of 2015. The Non-Manufacturing Business Activity Index increased to 61.7 percent, 4 percentage points higher than the October reading of 57.7 percent, reflecting growth for the 88th consecutive month, at a faster rate in November. The New Orders Index registered 57 percent, 0.7 percentage point lower than the reading of 57.7 percent in October. The Employment Index increased 5.1 percentage points in November to 58.2 percent from the October reading of 53.1 percent. The Prices Index decreased 0.3 percentage point from the October reading of 56.6 percent to 56.3 percent, indicating prices increased in November for the eighth consecutive month at a slightly slower rate. According to the NMI®, 14 non-manufacturing industries reported growth in November. The Non-Manufacturing sector rebounded after a slight cooling-off in October. The majority of respondents' comments are positive about business conditions and the direction of the overall economy.

INDUSTRY PERFORMANCE
The 14 non-manufacturing industries reporting growth in November — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Retail Trade; Arts, Entertainment & Recreation; Transportation & Warehousing; Other Services; Management of Companies & Support Services; Construction; Finance & Insurance; Professional, Scientific & Technical Services; Accommodation & Food Services; Information; Health Care & Social Assistance; Wholesale Trade; and Mining. The two industries reporting contraction in November are: Real Estate, Rental & Leasing; and Public Administration.


November Employment increased by 178,000
Unemployment Rate declined to 4.6%

Posted: December 2, 2016 at 08:30 AM (Friday)

The unemployment rate declined to 4.6 percent in November, and total nonfarm payroll employment increased by 178,000, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in professional and business services and in health care.

Household Survey Data
In November, the unemployment rate decreased by 0.3 percentage point to 4.6 percent, and the number of unemployed persons declined by 387,000 to 7.4 million. Both measures had shown little movement, on net, from August 2015 through October 2016.

Among the major worker groups, the unemployment rate for adult men declined to 4.3 percent in November. The rates for adult women (4.2 percent), teenagers (15.2 percent), Whites (4.2 percent), Blacks (8.1 percent), Asians (3.0 percent), and Hispanics (5.7 percent) showed little or no change over the month.

The number of job losers and persons who completed temporary jobs edged down by 194,000 to 3.6 million in November. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.9 million and accounted for 24.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed was down by 198,000.

The civilian labor force participation rate, at 62.7 percent, changed little in November, and the employment-population ratio held at 59.7 percent. These measures have shown little movement in recent months.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.7 million, changed little in November but was down by 416,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In November, 1.9 million persons were marginally attached to the labor force, up by 215,000 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 591,000 discouraged workers in November, little different 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 1.3 million persons marginally attached to the labor force in November had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment rose by 178,000 in November. Thus far in 2016, employment growth has averaged 180,000 per month, compared with an average monthly increase of 229,000 in 2015. In November, employment gains occurred in professional and business services and in health care.

Employment in professional and business services rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs. Employment continued to trend up in administrative and support services (+36,000), computer systems design and related services (+5,000), and management and technical consulting services (+4,000).

Health care employment rose by 28,000 in November. Within the industry, employment growth occurred in ambulatory health care services (+22,000). Over the past 12 months, health care has added 407,000 jobs.

Employment in construction continued on its recent upward trend in November (+19,000), with a gain in residential specialty trade contractors (+15,000). Over the past 3 months, construction has added 59,000 jobs, largely in residential construction.

Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in November. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.

The change in total nonfarm payroll employment for September was revised up from +191,000 to +208,000, and the change for October was revised down from +161,000 to +142,000. With these revisions, employment gains in September and October combined were 2,000 less than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.


November Manufacturing ISM registered 53.2
Posted: December 1, 2016 at 10:00 AM (Thursday)

Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 90th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The November PMI® registered 53.2 percent, an increase of 1.3 percentage points from the October reading of 51.9 percent. The New Orders Index registered 53 percent, an increase of 0.9 percentage point from the October reading of 52.1 percent. The Production Index registered 56 percent, 1.4 percentage points higher than the October reading of 54.6 percent. The Employment Index registered 52.3 percent, a decrease of 0.6 percentage point from the October reading of 52.9 percent. Inventories of raw materials registered 49 percent, an increase of 1.5 percentage points from the October reading of 47.5 percent. The Prices Index registered 54.5 percent in November, the same reading as in October, indicating higher raw materials prices for the ninth consecutive month. Comments from the panel cite increasing demand, some tightness in the labor market and plans to reduce inventory by the end of the year.

Of the 18 manufacturing industries, 11 are reporting growth in November in the following order: Miscellaneous Manufacturing; Petroleum & Coal Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; and Primary Metals. The six industries reporting contraction in November — listed in order — are: Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Furniture & Related Products.


Construction Spending increased 0.5% in October
Posted: December 1, 2016 at 10:00 AM (Thursday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during October 2016 was estimated at a seasonally adjusted annual rate of $1,172.6 billion, 0.5 percent (±1.5%) above the revised September estimate of $1,166.5 billion. The October figure is 3.4 percent (±1.8%) above the October 2015 estimate of $1,134.4 billion. During the first 10 months of this year, construction spending amounted to $972.2 billion, 4.5 percent (±1.0%) above the $930.7 billion for the same period in 2015.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $885.9 billion, 0.2 percent (±0.8%) below the revised September estimate of $887.4 billion. Residential construction was at a seasonally adjusted annual rate of $466.2 billion in October, 1.6 percent (±1.3%) above the revised September estimate of $458.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $419.6 billion in October, 2.1 percent (±0.8%) below the revised September estimate of $428.6 billion.

PUBLIC CONSTRUCTION
In October, the estimated seasonally adjusted annual rate of public construction spending was $286.8 billion, 2.8 percent (±2.8%) above the revised September estimate of $279.1 billion. Educational construction was at a seasonally adjusted annual rate of $72.2 billion, 4.1 percent (±3.0%) above the revised September estimate of $69.4 billion. Highway construction was at a seasonally adjusted annual rate of $91.5 billion, 1.9 percent (±6.7%) above the revised September estimate of $89.8 billion.


Weekly Initial Unemployment Claims Increase 17,000 to 268,000
Posted: December 1, 2016 at 08:30 AM (Thursday)

In the week ending November 26, the advance figure for seasonally adjusted initial claims was 268,000, an increase of 17,000 from the previous week's unrevised level of 251,000. The 4-week moving average was 251,500, an increase of 500 from the previous week's unrevised average of 251,000. There were no special factors impacting this week's initial claims. This marks 91 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending November 19, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 19 was 2,081,000, an increase of 38,000 from the previous week's unrevised level of 2,043,000. The 4-week moving average was 2,037,500, an increase of 12,750 from the previous week's unrevised average of 2,024,750.


Challenger Layoffs decrease to 26,936 in November
Posted: December 1, 2016 at 07:30 AM (Thursday)

The pace of downsizing fell to the lowest level of the year in November, as U.S.-based employers announced plans to shed 26,936 workers from payrolls during the month, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

November job cuts were 12 percent lower than the 30,740 cuts announced in October. They were down 13 percent from last November, when job cuts totaled 30,953.

Last month’s total was the lowest of the year, falling below the previous low of 30,157, recorded in May. It was slightly higher than last December’s 23,622 job cuts, which was the lowest monthly total since June, 2000, when employers announced just 17,241 planned layoffs.

To date, employers have announced 493,288 job cuts in 2016. That is 5.5 percent fewer than the 521,847 job cuts recorded by this point in 2015.

“Barring an unlikely December surge in downsizing, the year-end job cut total should remain well below the 598,510 layoffs announced last year. Even if the new administration creates some uncertainty among corporate forecasters, most employers are in a strong enough position and to take a wait-and-see approach when planning for next year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

The retail sector saw the heaviest job cutting in November, with 4,850 announced layoffs. Most of these resulted from the bankruptcy of American Apparel, which could impact nearly 3,500 workers.

The retail losses are more than offset by the surge in holiday hiring. In September, Challenger tracked retail hiring announcements totaling 317,000.

“These represent just a small fraction of the jobs being created, since most retailers, including the thousands of small, independent stores across the country, do not formally announce hiring intentions,” said Challenger.

Overall, retail job cuts are down 12 percent from a year ago. Through November, these employers have announced plans to shed 57,969 workers, compared to 65,609 job cuts recorded during the same period in 2015.

Even with the decline, year-to-date retail job cuts rank third among all industries, behind computer and energy. Computer firms have announced 66,188 job cuts in 2016, including 1,677 in November. The 2016 total is up 7 percent from 61,516 a year ago.

Meanwhile, heavy job cutting in the energy sector has ebbed in recent months, but the industry still leads all others with 105,041 job cuts, to date. That is 13 percent more than the 92,727 energy-sector job cuts recorded between January and November 2015.

“Despite a few notable exceptions, including energy and computer, most industries have seen job cuts decline in 2016. The pace of downsizing has continued to slow throughout the year, with the monthly average falling from 52,292 in the first six months of 2016 to 35,907 in the five-month period ending in November,” said Challenger.

“The second-half slowdown is likely to continue in December. In the past, the holiday season offered no protection against year-end surges in job cuts. In fact, prior to the Great Recession, the December job-cut average was consistently higher than the 12-month average. That has not been the case in the five years since the end of the downturn,” said Challenger.

Indeed, from 1993 through 2007, December job cuts averaged 76,990, compared to an overall monthly average of 71,275 during the same period. In five years since the end of the recession in 2009, December job cuts averaged 32,205, markedly lower than a monthly average of 45,141.

“One might attribute this to the recovery. However, even during the boom years of the late 1990s, December job cuts were higher than the monthly average. It is impossible to pinpoint the complex set of reasons for the recent decline in year-end job cuts, but it may not be a coincidence that it corresponds with the rise of social media.

“Job cuts around the holidays always presented a public relations risk, but most news stories remained fairly neutral. That is not the case with social media, where the sharing of news is often paired with biting commentary that can have serious consequences on an employer’s image and brand reputation,” said Challenger.


Beige Book: Economic Activity continues to expand at a modest or moderate pace
Posted: November 30, 2016 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts indicate that the economy continued to expand across most regions from early October through mid-November. Activity in the Boston, Minneapolis, and San Francisco Districts grew at a moderate pace, while Atlanta, Chicago, St. Louis, and Dallas cited modest growth. Philadelphia, Cleveland, and Kansas City cited a slight pace of growth. Richmond characterized economic activity as mixed, and New York said activity has remained flat since the last report. Outlooks were mainly positive, with six Districts expecting moderate growth.

Demand for manufactured products was mixed during the current reporting period, with the strong dollar being cited as a headwind to more robust demand in a few Districts. Modest to moderate increases in capital investment are expected in several other Districts. Business service firms saw rising activity, especially for high-tech and information technology services. Reports from ground freight carriers were mixed, while port cargo increased. A majority of Districts reported higher retail sales, especially for apparel and furniture. New motor vehicle sales declined in most Districts, with a few Districts noting a shift in demand toward used vehicles. Tourism was mostly positive relative to year-ago levels. Residential real estate activity improved across most Districts. Single-family construction starts were higher in a majority of Districts, while multifamily construction reports were mixed. Activity in nonresidential real estate expanded in many Districts. Banking conditions were largely stable, with some improvement seen in loan demand. Farmers across reporting Districts were generally satisfied with this year's harvests. However, low commodity prices continue to weigh on farm income. Investment in oil and gas drilling increased slightly, while reports on coal production were mixed. A tightening in labor market conditions was reported by seven Districts, with modest employment growth on balance. Districts noted slight upward pressure on overall prices.


Help Wanted OnLine Labor Demand decreased 115,300 to 4,723,000 in November
Posted: November 30, 2016 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 115,300 to 4,723,000 in November, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The October Supply/Demand rate stands at 1.61 unemployed for each advertised vacancy with a total of 2.9 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.8 million in October.

“With a pattern of monthly gains followed by losses, online demand has shown little movement in the second half of 2016,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The current data clearly indicate that 2016 will end with a large loss for the year.”

The Professional occupational category saw large losses in Management (−16.6), Business/Finance (−15.1), Computer/Math (−27.7) and Health (&ninus;21.2). The Services/Production category saw small gains in several occupational groups but large losses in Sales (−24.3) and Office/Admin (−21.5).


Pending Home Sales Index inched up 0.1% in October
Posted: November 30, 2016 at 10:00 AM (Wednesday)

Pending home sales were mostly unchanged in October, but did squeak out a meager gain for the second consecutive month, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched up 0.1 percent to 110.0 in October from a slight downward revision of 109.9 in September. With last month's small increase, the index is now 1.8 percent higher than last October (108.1).

Lawrence Yun, NAR chief economist, says October's minuscule uptick in contract activity nudged pending sales up to their highest level since July (111.2). "Most of the country last month saw at least a small increase in contract signings and more notably, activity in all four major regions is up from a year ago," added Yun. "Despite limited listings and steadfast price growth that's now carried into the fall, buyer demand has remained strong because of the consistently reliable job creation in a majority of metro areas."

On the topic of housing supply — which has been grossly inadequate all year — Yun explains that the unwelcoming but expected seasonal retreat in new listings is now arriving at a time when price growth remains around triple the pace of wages and properties continue to sell at a much faster pace than a year ago 1. Furthermore, highlighting the heightened imbalance of supply in relation to demand, 40 percent of sales in October sold at or above list price, an increase from 33 percent last October 2.

"Many of the successful shoppers in October likely had to move fast and outbid others for the few listings available in the affordable price range," explained Yun. "Those obtaining a mortgage last month were likely the last group of buyers to lock in a rate near historically low levels now that rates have marched to around 4 percent since the election."

With contract activity holding steady, Yun expects existing sales to close out 2016 at a pace of around 5.36 million, which surpasses 2015 (5.25 million) and is the highest since 2006 (6.48 million).

"Low supply has kept prices elevated all year and has put pressure on the budgets of buyers," added Yun. "With mortgage rates expected to rise into next year and put added strain on affordability, sales expansion will be contingent on more inventory coming onto the market and continued job gains."

The PHSI in the Northeast nudged forward 0.4 percent to 96.9 in October, and is now 3.9 percent above a year ago. In the Midwest the index rose 1.6 percent to 106.3 in October, and is now 1.2 percent higher than October 2015.

Pending home sales in the South declined 1.3 percent to an index of 120.1 in October but are still 0.8 percent higher than last October. The index in the West climbed 0.7 percent in October to 108.3, and is now 2.5 percent above a year ago.


Chicago Purchasing Managers Index rose 7.0 points to 57.6 in November
Posted: November 30, 2016 at 09:45 AM (Wednesday)

The MNI Chicago Business Barometer rose 7.0 points to 57.6 in November from 50.6 in October, the highest since January 2015.

The increase added momentum to the fourth quarter, with the three-month trend ascending to 54.1 this month, up from 52.1 in the three months to October.

Four of the five Barometer components increased, with only Employment falling. Although the Barometer has been volatile in recent months, the latest results are positive given that the Barometer was in contractionary territory in the same period last year.

The rise in New Orders contributed the most to the increase in the Barometer, increasing 10.7 points to 63.2 in November. Production also rose, regaining virtually all of October’s fall. Order Backlogs jumped out of contractionary territory, where it had been over the past three months, while Supplier Deliveries saw a smaller rise. Despite higher orders and output, demand for labor fell. Employment slipped back into contraction, making last month’s recovery short-lived.

This month’s special question asked firms how they expected business activity to fare in 2017. Most respondents expected businesses to do somewhat better than in 2016. Most respondents expected their business to grow less than 5% next year but there were many who were more optimistic and expected growth to be above 10%. The path of interest rates and the election outcome were said to be important factors that could impact activity in the coming year.

Companies increased their stock levels at the fastest pace since October 2015, with the Inventories Indicator moving back into expansion in November.

Inflationary pressures at the factory-gate eased slightly after picking up last month. Prices Paid fell to 56.8 in November, though above the 12-month average of 52.2.

“The November reading for the Business Barometer marked the sixth month of expansionary business activity in the US. Strength in orders, a recovery in oil prices and the stronger dollar have all impacted businesses with varying degrees.”

“Respondents to our survey also remain optimistic about business activity in 2017 although the new government’s policies and the Fed’s approach towards monetary tightening would impact the course of business activity over the next year.” said Shaily Mittal, senior economist at MNI Indicators.


Personal Income increased 0.6%, Spending increased 0.3%
Posted: November 30, 2016 at 08:30 AM (Wednesday)

Personal income increased $98.6 billion (0.6 percent) in October according to estimates released today
by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $86.5 billion (0.6 per
cent) and personal consumption expenditures (PCE) increased $38.1 billion (0.3 percent).

Real DPI increased 0.4 percent in October and Real PCE increased 0.1 percent. The PCE price index
increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.


ADP National Employment Report increased by 216,000 jobs in November
Posted: November 30, 2016 at 08:15 AM (Wednesday)

Private sector employment increased by 216,000 jobs from October to November according to the November ADP National Employment Report®.

“For the month of November 2016 we saw very strong job growth that has almost doubled in gains over October 2016,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This growth was seen in primarily consumer-driven industries like retail and, leisure and hospitality - across all company sizes. Overall, consumers are feeling confident and are driving the strong performance we currently see in the job market.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Businesses hired aggressively in November and there is little evidence that the uncertainty surrounding the presidential election dampened hiring. In addition, because of the tightening labor market, retailers may be accelerating seasonal hiring to secure an adequate workforce to meet holiday demand, although total expected seasonal hiring may be no higher than last year’s.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: November 30, 2016 at 07:00 AM (Wednesday)

Mortgage applications decreased 9.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 25, 2016. This week's results included an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 38 percent compared with the previous week. The Refinance Index decreased 16 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. The unadjusted Purchase Index decreased 34 percent compared with the previous week and was 3 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 55.1 percent of total applications, the lowest level since June 2016, from 58.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications, its highest level since June 2016. The average loan size for purchase applications reached a survey high at $312,400.

The FHA share of total applications decreased to 10.4 percent from 11.7 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.5 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since July 2015, 4.23 percent, from 4.16 percent, with points increasing to 0.41 from 0.39 (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 its highest level since July 2015, 4.18 percent, from 4.04 percent, with points decreasing to 0.29 from 0.37 (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 its highest level since July 2015, 4.00 percent, from 3.90 percent, with points increasing to 0.44 from 0.36 (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 its highest level since October 2014, 3.48 percent, from 3.35 percent, with points increasing to 0.33 from 0.32 (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 decreased to 3.23 percent from 3.24 percent, with points increasing to 0.44 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence increased significantly in November to 107.1
Posted: November 29, 2016 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined in October, increased significantly in November. The Index now stands at 107.1 (1985=100), up from 100.8 in October. The Present Situation Index increased from 123.1 to 130.3, while the Expectations Index improved from 86.0 last month to 91.7.

“Consumer confidence improved in November after a moderate decline in October, and is once again at pre-recession levels,” said Lynn Franco, Director of Economic Indicators at The Conference Board. (The Index stood at 111.9 in July 2007.) “A more favorable assessment of current conditions coupled with a more optimistic short-term outlook helped boost confidence. And while the majority of consumers were surveyed before the presidential election, it appears from the small sample of post-election responses that consumers’ optimism was not impacted by the outcome. With the holiday season upon us, a more confident consumer should be welcome news for retailers.”

Consumers’ assessment of current conditions improved in November. The percentage saying business conditions are “good” improved from 26.5 percent to 29.2 percent, while those saying business conditions are “bad” fell from 17.3 percent to 14.8 percent. Consumers’ appraisal of the labor market was moderately more positive than last month. The percentage of consumers stating jobs are “plentiful” increased from 25.3 percent to 26.9 percent, while those claiming jobs are “hard to get” was unchanged at 21.7 percent.

Consumers’ short-term outlook, on balance, was more optimistic in November. The percentage of consumers expecting business conditions to improve over the next six months fell from 16.4 percent to 15.3 percent; however those expecting business conditions to worsen also decreased, from 11.8 percent to 10.0 percent. Consumers’ outlook for the labor market was likewise somewhat mixed. The proportion expecting more jobs in the months ahead was virtually unchanged at 14.5 percent, but those anticipating fewer jobs fell from 16.6 percent to 13.8 percent. The percentage of consumers expecting their incomes to increase—17.5 percent—was little changed from last month, while the proportion expecting a drop in income fell moderately, from 10.2 percent to 9.0 percent.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.4% in September
Posted: November 29, 2016 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for September 2016 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, surpassed the peak set in July 2006 as the housing boom topped out. The National index reported a 5.5% annual gain in September, up from 5.1% last month. The 10-City Composite posted a 4.3% annual increase, up from 4.2% the previous month. The 20-City Composite reported a yearover-year gain of 5.1%, unchanged from August. Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over each of the last eight months. In September, Seattle led the way with an 11.0% year-over-year price increase, followed by Portland with 10.9%, and Denver with an 8.7% increase. 12 cities reported greater price increases in the year ending September 2016 versus the year ending August 2016.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.4% in September. Both the 10-City Composite and the 20-City Composite posted a 0.1% increase in September. After seasonal adjustment, the National Index recorded a 0.8% month-over-month increase, the 10-City Composite posted a 0.2% month-over-month increase, and the 20-City Composite reported a 0.4% month-over-month increase. 15 of 20 cities reported increases in September before seasonal adjustment; after seasonal adjustment, all 20 cities saw prices rise.

ANALYSIS
“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “While seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms -- Miami, Tampa, Phoenix and Las Vegas -- remain well below their all-time highs. Other housing indicators are also giving positive signals: sales of existing and new homes are rising and housing starts at an annual rate of 1.3 million units are at a post-recession peak.

From 1975 (the earliest date for the S&P Case-Shiller CoreLogic National Index) to this report, home prices rose at an annual rate of 4.9% before adjusting for inflation. The real or inflation adjusted pace was 1.1% per year. Real disposable personal income per capita – income after inflation and taxes on a per-person basis -- rose 1.9%, outpacing home prices over the entire period. The stock market, measured by the S&P 500 adjusted for inflation, did better at 4.4% per year. As seen in the table, the time frame makes a big difference. We are currently experiencing the best real estate returns since the bottom in July of 2012 when prices rose at a 5.9% real annual rate. Given history, this trend is unlikely to be sustained.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.5% annual gain in September 2016. The 10-City and 20-City Composites reported year-over-year increases of 4.3% and 5.1%. As of September 2016, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


3Q2016 GDP preliminary estimate increased 3.2%
Posted: November 29, 2016 at 08:30 AM (Tuesday)

Real gross domestic product increased at an annual rate of 3.2 percent in the third quarter of 2016, according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.9 percent. With the second estimate for the third quarter, the general picture of economic growth remains the same; the increase in personal consumption expenditures was larger than previously estimated.

Real gross domestic income (GDI) increased 5.2 percent in the third quarter, compared with an increase of 0.7 percent in the second (revised). The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 4.2 percent in the third quarter, compared with an increase of 1.1 percent in the second.

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

The acceleration in real GDP in the third quarter primarily reflected an upturn in private inventory investment, an acceleration in exports, an upturn in federal government spending, and smaller decreases in state and local government spending and residential fixed investment, that were partly offset by a deceleration in PCE, an acceleration in imports, and a deceleration in nonresidential fixed investment.

Current-dollar GDP increased 4.6 percent, or $207.8 billion, in the third quarter to a level of $18,657.9 billion. In the second quarter, current dollar GDP increased 3.7 percent, or $168.5 billion.

The price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 2.1 percent in the second quarter (table 4). The PCE price index increased 1.4 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.

The upward revision to the percent change in real GDP primarily reflected an upward revision to PCE that was partly offset by downward revisions to nonresidential fixed investment and private inventory investment.

For the second quarter of 2016, the percent change in real GDI was revised up 0.9 percentage point from -0.2 percent to 0.7 percent based on newly available second-quarter tabulations from the BLS Quarterly Census of Employment and Wages program.

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $133.8 billion in the third quarter, in contrast to a decrease of $12.5 billion in the second.

Profits of domestic financial corporations increased $50.9 billion in the third quarter, compared with an increase of $5.6 billion in the second. Profits of domestic nonfinancial corporations increased $76.5 billion, in contrast to a decrease of $56.1 billion. The rest-of-the-world component of profits increased $6.4 billion, compared with an increase of $38.0 billion. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world. In the third quarter, receipts decreased $0.2 billion, and payments decreased $6.6 billion.


Paychex-IHS Small Business Jobs Index declined to 100.38 in November
Posted: November 29, 2016 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index moderated slightly in November, down 0.02 percent from the previous month. This marks the third consecutive decline, which saw the national index decrease from 100.70 in August to 100.38 in November. Despite this, small business employment growth levels remain consistent with the same period a year ago. Among regions, the East South Central is experiencing the strongest growth, up 3.42 percent from last year. Georgia overtook Washington as the top-ranked state for small business employment growth. Seattle maintained its lead as the top metro area, with Atlanta following as a close second. Small business jobs growth for Leisure and Hospitality increased by 0.20 percent from the previous month, while Construction declined 0.17 percent.

“At 100.38, the Paychex | IHS Small Business Jobs Index was essentially unchanged from the previous month and from November 2015, representing consistent small business job growth rates from this time a year ago,” said James Diffley, chief regional economist at IHS Markit.

“Given the election results, small business owners seemed to take a ‘wait and see’ attitude,” said Martin Mucci, Paychex president and CEO. “We’ll be watching the next few indexes closely to see what the numbers may indicate about the sentiment and outlook for small business.”


Texas Fed Manufacturing Activity Increased Again in November
Posted: November 28, 2016 at 10:30 AM (Monday)

Texas factory activity increased again in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a fifth consecutive positive reading and edged up to 8.8.

Other measures of current manufacturing activity showed mixed movements. The new orders and growth rate of orders indexes posted their third consecutive negative readings in November but moved up, coming in at -1.4 and -0.8, respectively. The capacity utilization index rose three points to 3.6, while the shipments index dipped slightly negative to -1.9.

Perceptions of broader business conditions improved markedly this month. The general business activity index shot up to 10.2 after nearly two years of negative readings. The company outlook index also posted a large gain, increasing nine points to a reading of 11.0.

Labor market measures indicated increased employment levels and longer workweeks. The employment index came in at 4.5 after a near-zero reading last month. Seventeen percent of firms noted net hiring, compared with 13 percent noting net layoffs. The hours worked index returned to positive territory in November, coming in at 2.5.

Prices and wages rose this month. Input cost increases accelerated slightly, with the raw materials prices index rising from 13.7 to 18.2. The finished goods prices index posted a second positive reading, climbing from 1.2 to 8.0, and indicates a likely end to the period of deflation in manufactured goods prices that began in 2015. Wages and benefits continued to rise, with the index edging up to 18.4.

Expectations regarding future business conditions improved notably in November. The index of future general business activity advanced 27 points to 31.6. The index of future company outlook also jumped up more than 20 points, coming in at 34.9. Other indexes for future manufacturing activity pushed markedly higher in to positive territory.


New Home Sales in October at annual rate of 563,000
Posted: November 23, 2016 at 10:17 AM (Wednesday)

Sales of new single-family houses in October 2016 were at a seasonally adjusted annual rate of 563,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.9 percent (±13.1%)* below the revised September rate of 574,000, but is 17.8 percent (±16.9%) above the October 2015 estimate of 478,000.

The median sales price of new houses sold in October 2016 was $304,500; the average sales price was $354,900. The seasonally adjusted estimate of new houses for sale at the end of October was 246,000. This represents a supply of 5.2 months at the current sales rate.


University of Michigan Consumer Confidence up in November to 93.8
Posted: November 23, 2016 at 10:00 AM (Wednesday)

The initial reaction of consumers to Trump’s victory was to express greater optimism about their personal finances as well as improved prospects for the national economy. The post-election gain in the Sentiment Index was +8.2 points above the November preelection reading, pushing the Index +6.6 points higher for the entire month. The post-election boost in optimism was widespread, with gains recorded among all income and age subgroups and across all regions of the country. The upsurge in favorable economic prospects is not surprising given Trump’s populist policy views, and it was perhaps exaggerated by what most considered a surprising victory as well as a widespread sense of relief that the election had finally ended. Overall, the data indicate that real personal consumption expenditures will advance by 2.5% in 2017.

Personal Finances
More consumers expected their finances to improve during the year ahead than in any other survey during the past decade. Importantly, consumers also anticipated rising living standards as they expected the most favorable inflation-adjusted income gains since October 2006. Those anticipated gains were among households with incomes in the bottom third of the income distribution as well as among those with incomes in the top third.

Prospects for Economy
More consumers anticipated an improving economy in the latest survey. Nearly half of all consumers expected good times in the economy as a whole during the year ahead. More importantly, nearly half anticipated an uninterrupted expansion over the next five years, an optimistic view that has only been exceeded in four other surveys in the past decade. As a result, the majority anticipated no change in the current low rate of unemployment.

The Consumer Sentiment Index was 93.8 in the November 2016 survey, up from 87.2 in October and 91.3 last November. The largest gains were in the Expectations Index, which rose by 10.9% from last month, with most of the gain recorded after the election. The Current Conditions Index also improved, rising by 4.0% in November from October. All indices recorded an annual gain of just under 3% in November.

No surge in economic expectations can long be sustained without actual improvements in economic conditions. Presidential honeymoons represent a period in which the promise of gains holds sway over actual economic conditions. Presidential honeymoons, however, can quickly end if they are unaccompanied by prospects that economic conditions will actually improve in the future. President-elect Trump appears to appreciate the importance of his first hundred days; the key issue is whether his economic policies will resonate with the nation’s consumers. The honeymoon may be shorter than usual given the intensity of the opposition, although President-elect Trump has proven himself to be a skilled communicator.


October New Orders for Durable Goods increased 4.8%, Ex-Trans up 1.0%
Posted: November 23, 2016 at 08:30 AM (Wednesday)

New Orders
New orders for manufactured durable goods in October increased $11.0 billion or 4.8 percent to $239.4 billion, the U.S. Census Bureau announced today. This increase, up four consecutive months, followed a 0.4 percent September increase. Excluding transportation, new orders increased 1.0 percent. Excluding defense, new orders increased 5.2 percent. Transportation equipment, also up four consecutive months, led the increase, $9.5 billion or 12.0 percent to $88.2 billion.

Shipments
Shipments of manufactured durable goods in October, up four of the last five months, increased $0.2 billion or 0.1 percent to $234.6 billion. This followed a 0.8 percent September increase. Fabricated metal products, up three of the last four months, drove the increase, $0.3 billion or 1.1 percent to $30.5 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in October, up following four consecutive monthly decreases, increased $8.2 billion or 0.7 percent to $1,128.6 billion. This followed a 0.2 percent September decrease. Transportation equipment, also up following four consecutive monthly decreases, led the increase, $7.5 billion or 1.0 percent to $773.1 billion.

Inventories
Inventories of manufactured durable goods in October, up four consecutive months, increased $0.1 billion or virtually unchanged to $383.7 billion. This followed a virtually unchanged September increase. Transportation equipment, up three of the last four months, drove the increase, $0.2 billion or 0.2 percent to $123.8 billion.

Capital Goods
Nondefense new orders for capital goods in October increased $10.2 billion or 14.5 percent to $80.1 billion. Shipments decreased $0.4 billion or 0.6 percent to $71.5 billion. Unfilled orders increased $8.7 billion or 1.3 percent to $703.1 billion. Inventories decreased $0.6 billion or 0.4 percent to $169.6 billion. Defense new orders for capital goods in October decreased $0.4 billion or 3.7 percent to $10.8 billion. Shipments increased $0.3 billion or 2.9 percent to $10.6 billion. Unfilled orders increased $0.2 billion or 0.1 percent to $138.7 billion. Inventories increased $0.4 billion or 1.9 percent to $21.2 billion.

Revised September Data
Revised seasonally adjusted September figures for all manufacturing industries were: new orders, $457.3 billion (revised from $455.5 billion); shipments, $463.3 billion (revised from $463.0 billion); unfilled orders, $1,120.4 billion (revised from $1,118.8 billion) and total inventories, $620.9 billion (revised from $621.4 billion).


Weekly Initial Unemployment Claims Increase 18,000 to 251,000
Posted: November 23, 2016 at 08:30 AM (Wednesday)

In the week ending November 19, the advance figure for seasonally adjusted initial claims was 251,000, an increase of 18,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 235,000 to 233,000. The 4-week moving average was 251,000, a decrease of 2,000 from the previous week's revised average. The previous week's average was revised down by 500 from 253,500 to 253,000. There were no special factors impacting this week's initial claims. This marks 90 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending November 12, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 12 was 2,043,000, an increase of 60,000 from the previous week's revised level. The previous week's level was revised up 6,000 from 1,977,000 to 1,983,000. The 4-week moving average was 2,024,750, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 1,500 from 2,022,500 to 2,024,000.


Purchase Apps up, Refi's down in Latest MBA Weekly Survey
Posted: November 23, 2016 at 07:00 AM (Wednesday)

Mortgage applications increased 5.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 18, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week to its lowest level since January 2016. The seasonally adjusted Purchase Index increased 19 percent from one week earlier. The unadjusted Purchase Index increased 13 percent compared with the previous week and was 11 percent higher than the same week one year ago.

"Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016," said Michael Fratantoni, Chief Economist and Senior Vice President of Research & Technology at the Mortgage Bankers Association. "Refinance volume dropped further over the week, particularly for refinances of FHA and VA loans. Purchase volume increased sharply for the week compared to both last week, which included the Veteran's Day holiday, and last year, with purchase volume up more than 11 percent on a year over year basis. The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310 thousand, the highest in the survey, which dates back to 1990."

The refinance share of mortgage activity decreased to 58.2 percent of total applications from 61.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent of total applications.

The FHA share of total applications decreased to 11.7 percent from 12.2 percent the week prior. The VA share of total applications decreased to 12.5 percent from 12.6 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since January 2016, 4.16 percent, from 3.95 percent, with points unchanged at 0.39 (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 its highest level since January 2016, 4.04 percent, from 3.89 percent, with points increasing to 0.37 from 0.26 (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 its highest level since January 2016, 3.90 percent, from 3.73 percent, with points increasing to 0.36 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 15-year fixed-rate mortgages increased to its highest level since January 2016, 3.35 percent, from 3.15 percent, with points increasing to 0.32 from 0.29 (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 its highest level since December 2015, 3.24 percent, from 3.11 percent, with points decreasing to 0.28 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Existing-Home Sales grew 2.0% in October
Posted: November 22, 2016 at 10:00 AM (Tuesday)

Existing-home sales ascended in October for the second straight month and eclipsed June's cyclical sales peak to become the highest annualized pace in nearly a decade, according to the National Association of Realtors®. All major regions saw monthly and annual sales increases in October.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0 percent to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million in September. October's sales pace is 5.9 percent above a year ago (5.29 million) and surpasses June's pace (5.57 million) as the highest since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says the wave of sales activity the last two months represents a convincing autumn revival for the housing market. "October's strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply," he said. "Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes."

Added Yun, "The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion. These two factors and low mortgage rates have kept buyer interest at an elevated level so far this fall."

The median existing-home price for all housing types in October was $232,200, up 6.0 percent from October 2015 ($219,100). October's price increase marks the 56th consecutive month of year-over-year gains.

Total housing inventory at the end of October declined 0.5 percent to 2.02 million existing homes available for sale, and is now 4.3 percent lower than a year ago (2.11 million) and has fallen year-over-year for 17 straight months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.4 months in September.

"The ramp-up in housing starts in October is a hopeful sign that overall supply can steadily increase enough to provide more choices for buyers and also moderate price growth," said Yun. "A prolonged continuation of the robust single-family starts pace seen last month (869,000) would go a long way in giving homeowners much-needed assurance that they can list their home for sale and find a new home to buy within a reasonable timeframe."

Properties typically stayed on the market for 41 days in October, up from 39 days in September but down considerably from a year ago (57 days). Short sales were on the market the longest at a median of 99 days in October, while foreclosures sold in 50 days and non-distressed homes took 39 days. Forty-three percent of homes sold in October were on the market for less than a month.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage inched up in October for the second straight month, rising to 3.47 percent from 3.46 percent in September. The average commitment rate for all of 2015 was 3.85 percent.

"As a result of the anticipated economic stimulus in early 2017, mortgage rates post-election have now surged to around 4 percent as investors expect a strengthening economy and higher inflation," said Yun. "In the short-term, some prospective buyers may rush to lock in their rate and buy now, while others — especially those in higher-priced markets — may be forced to delay as a larger monthly payment outstretches their budget."

First-time buyers were 33 percent of sales in October, which is down from 34 percent in September but up from and 31 percent a year ago. NAR's 2016 Profile of Home Buyers and Sellers — released last month — revealed that the annual share of first-time buyers was 35 percent (32 percent in 2015), which is the highest since 2013 (38 percent).

On the subject of first-time buyers, NAR President William E. Brown, a Realtor® from Alamo, California, says the Federal Housing Administration's low-down-payment mortgage option helps many young and moderate income borrowers achieve homeownership. FHA's just released (link is external) actuarial report shows the Mutual Mortgage Insurance Fund is on consistently solid financial footing, and FHA should take responsible steps to continue managing their risk while also addressing the high premiums and lifetime insurance requirements that often times dissuade would-be buyers from considering a FHA mortgage.

"To alleviate the cost for borrowers and better reflect the current risk in the marketplace, Realtors® encourage FHA to reduce mortgage insurance premiums and consider eliminating ‘life of loan' mortgage insurance," he said. "These two moves would help the current homeownership rate recover from its near all-time low and give more prospective first-time buyers a more affordable financing option."

All-cash sales were 22 percent of transactions in October, up from 21 percent in September but down from 24 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in October, down from 14 percent in September and unchanged from a year ago. Sixty-one percent of investors paid in cash in October.

Distressed sales — foreclosures and short sales — inched forward to 5 percent in October, up from 4 percent in September but down from 6 percent a year ago. Four percent of October sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in October (15 percent in September), while short sales were discounted 16 percent (11 percent in September).

Inventory data from Realtor.com® (link is external) reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in October were San Francisco-Oakland-Hayward, Calif., 35 days; San Jose-Sunnyvale-Santa Clara, Calif., 37 days; Seattle-Tacoma-Bellevue, Wash., 42 days; Nashville-Davidson-Murfreesboro-Franklin, Tenn., 43 days; and Denver-Aurora-Lakewood, Colo., at 44 days.

Single-family and Condo/Co-op Sales
Single-family home sales increased 2.3 percent to a seasonally adjusted annual rate of 4.99 million in October from 4.88 million in September, and are now 6.6 percent above the 4.68 million pace a year ago. The median existing single-family home price was $233,700 in October, up 5.9 percent from October 2015.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 610,000 units in October (unchanged from September and a year ago). The median existing condo price was $220,300 in October, which is 6.2 percent above a year ago.

Regional Breakdown
October existing-home sales in the Northeast climbed 1.4 percent to an annual rate of 750,000, and are now 1.4 percent above a year ago. The median price in the Northeast was $255,500, which is 2.9 percent above October 2015.

In the Midwest, existing-home sales grew 2.3 percent to an annual rate of 1.36 million in October, and are now 6.3 percent above a year ago. The median price in the Midwest was $181,500, up 5.8 percent from a year ago.

Existing-home sales in the South in October rose 2.8 percent to an annual rate of 2.22 million, and are now 4.7 percent above October 2015. The median price in the South was $202,300, up 7.4 percent from a year ago.

Existing-home sales in the West increased 0.8 percent to an annual rate of 1.27 million in October, and are now 10.4 percent higher than a year ago. The median price in the West was $345,800, up 7.8 percent from October 2015.


Richmond Fed's Current Activity Index gained 8 points to a reading of 4
Posted: November 22, 2016 at 10:00 AM (Tuesday)

Fifth District manufacturing activity expanded in November, after a three-month contraction period. New orders increased in the most recent survey period, while shipments remained flat. Hiring activity continued to strengthen mildly across firms and wage increases were more widespread. Prices of raw materials and finished goods rose at a somewhat slower pace in November.

Manufacturers anticipated positive business conditions during the next six months. Producers expected faster growth in shipments and in the volume of new orders. Survey participants looked for backlogs to grow in the months ahead and anticipated increased capacity utilization. Firms looked for slightly longer vendor lead times during the next six months.

Looking ahead, survey participants planned more hiring. In November, more respondents reported future wage increases, while they anticipated somewhat longer average workweeks. Manufacturers looked for faster growth in prices paid and prices received.

Overall manufacturing conditions expanded this month. The composite index for manufacturing gained eight points, moving into positive territory to end at a reading of 4. The new orders indicator increased this month, ending at a reading of 7, while the shipments index remained at a flat reading of 1. The manufacturing employment index changed little this month. The index added two points to end at 5.

The backlog of new orders index remained negative in November as that gauge added one point to end at 12. The capacity utilization index moved up to a flat reading of −1. Vendor lead time lengthened only slightly this month with the index slipping three points, ending at 4. Finished goods inventories rose across more firms than they fell; the index remained at 18. Similarly, growth in raw materials inventories outweighed declines in November, with that indicator ending at 23.


Philadelphia NonManufacturing Activity Suggest A Continued Modest Pace
Posted: November 22, 2016 at 08:30 AM (Tuesday)

The November Nonmanufacturing Business Outlook Survey suggests that business activity continued to expand at a modest pace. The survey’s firm-level indicator of general activity remained steady, while the indexes for new orders and sales/revenues increased. The employment indexes suggest expansion in employment for both full-time and part-time employees. Overall, expectations for growth over the next six months show optimism.

Current Indicators Signal Growth in Overall Activity
Firms indicated modest growth in current business activity. The diffusion index for general activity at the firm level edged down, from 16.3 in October to 15.6 in November (see Chart 1). Nearly 41 percent of the firms reported an increase in activity at their firm, while 25 percent reported a decrease. The index remains below its historical average of 28.1. However, firms signaled a weakening in their perception of current regional economic activity. The regional activity index fell nearly 11 points, to 10.6, after averaging 19 points over the previous six months. The regional general activity index is now 11 points below its historical average of 22.8.

The sales/revenues index increased 11 points, to 17.2. Thirty-nine percent of the firms indicated an increase in sales/revenues in November, compared with 32 percent last month. Meanwhile, the percentage of firms reporting a decrease in sales/revenues fell from 26 percent to 22 percent. Additionally, new orders experienced gains, rising 7 points to 12.6.

Full-Time and Part-Time Employment Expands
The full-time employment index rose 6 points, to 14.3, slightly above its historical average of 14.1. More than 27 percent of the firms reported an increase in full-time employment, compared with 20 percent in October. The part-time employment index increased 13 points, to 9.4, after two months in negative territory. Only 5 percent of the firms reported a decrease in part-time employment this month, compared with 15 percent in October.

Firms Report Pickup in Prices Received
Price increases for firms’ inputs and own products accelerated modestly from October. More than 21 percent of the firms reported higher prices for inputs in November, the same percentage as in October. The prices paid index rose 2 points, to 16.5, still below its historical average of 20.1. With respect to their own prices, 23 percent of the firms reported higher prices in November, compared with 15 percent in October. The prices received index increased 15 points, to 17.9, beyond its historical average of 12.

Firms’ Own Prices Expected to Be Higher than the Rate of Inflation
In this month’s special questions, firms were asked to forecast the changes in the prices of their own products and services and for U.S. consumers over the next four quarters (see Special Questions). The median forecast was for an increase in their own prices of 2.8 percent, up from a 2.5 percent forecast in the third quarter when the same questions were last asked. When asked about the average rate of inflation for U.S. consumers over the next year, the median response was 2 percent, down from 2.5 percent last quarter. Additionally, firms forecast an increase in compensation per employee of 3 percent over the next year, the same value reported in the third quarter. Firms expect the average rate of inflation for U.S. consumers over the next 10 years to be 3 percent, up from 2.5 percent last quarter.
Forecasts for Future Growth Remain Optimistic

The respondents to this month’s survey remained optimistic about future activity over the next six months. Nearly 54 percent of the firms expect increases in activity at their firms over the next six months, and only 13 percent expect decreases. The diffusion index for future activity at the firm level remained unchanged at 40.4 percent (see Chart 1). Forecasts for growth in the region dampened slightly but remain optimistic overall. The future regional activity index decreased 3 points, to 34.2.

Summary
Results from the Nonmanufacturing Business Outlook Survey suggest continued business expansion in November. Though the indicator for firm-level general activity edged down, indicators for new orders and sales/revenues rose above their positive readings from October. Employment grew among the reporting firms, for both full-time and part-time employees. Firms’ six-month forecasts remained optimistic.


Chicago Fed National Activity Growth Increased Slightly in October
Posted: November 21, 2016 at 08:30 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, edged down to –0.27 in October from –0.20 in September. October’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.35 in October from –0.16 in September. Thirty-four of the 85 individual indicators made positive contributions to the CFNAI in October, while 51 made negative contributions. Fifty indicators improved from September to October, while thirty-four indicators deteriorated and one was unchanged. Of the indicators that improved, 21 made negative contributions.

The contribution from production-related indicators to the CFNAI rose to –0.04 in October from –0.10 in September. Total industrial production was unchanged in October after decreasing 0.2 percent in September; and manufacturing industrial production increased by 0.2 percent for the second straight month in October. The sales, orders, and inventories category made a contribution of –0.01 to the CFNAI in October, up from –0.03 in September.

Employment-related indicators made a neutral contribution to the CFNAI in October, up slightly from –0.01 in September. The civilian unemployment rate fell to 4.9 percent in October from 5.0 percent in September; but nonfarm payrolls increased by 161,000 in October after increasing by 191,000 in the previous month.

The contribution of the personal consumption and housing category to the CFNAI rose to –0.03 in October from –0.09 in September.

Housing starts increased to 1,323,000 annualized units in October from 1,054,000 in September; and housing permits ticked up to 1,229,000 annualized units in October from 1,225,000 in the previous month.

The CFNAI was constructed using data available as of November 17, 2016. At that time, October data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The September monthly index value was revised to –0.23 from an initial estimate of –0.14, and the August monthly index value was revised to –0.52 from last month’s estimate of –0.72. Revisions to the monthly index value 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 the September and August monthly index values were due to both factors almost equally.


Kansas City Fed Manufacturing Activity expanded slightly in November
Posted: November 18, 2016 at 11:00 AM (Friday)

Tenth District manufacturing activity expanded slightly, and producers’ expectations for future activity remained solid. Price indexes increased moderately in November.

The month-over-month composite index was 1 in November, down from 6 in October and September. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods production continued to grow modestly, while nondurable goods activity fell moderately, particularly for food and plastics products. Most month-over-month indexes slowed somewhat in November. The production index decreased from 18 to 9, and the shipments, new orders, and order backlog indexes also dropped. The employment index eased from 7 to 1, still the second highest reading in over a year. The finished goods inventory index fell from -9 to -13, while the raw materials inventory index was unchanged.
Most year-over-year factory indexes remained below zero. The composite year-over-year index was basically unchanged at -10, while the production, new orders, and order backlog indexes fell further into negative territory. The shipments index was unchanged, while the employment index inched higher from -14 to -11. The capital expenditures index improved somewhat from -7 to -1, while the new orders for exports index remained generally stable. The raw materials inventory index increased from -19 to -15, and the finished goods inventory index also moved higher.

Expectations for future factory activity were mixed, but remained generally solid. The future composite index moderated from 18 to 12, and the future production, shipments, and employment indexes also fell from year-long highs. However, the future new orders and order backlog indexes rose moderately, and the future capital spending index jumped from 8 to 19. The future raw materials inventory index dropped from 13 to 2, and the future finished goods index also decreased considerably.

Price indexes increased in November. The month-over-month finished goods price index edged higher from -5 to -2, and the raw materials price index jumped from 0 to 16. The year-over-year finished goods price index moved higher from 1 to 10, and the raw materials price rose slightly. The future finished goods price index inched higher from 8 to 11, and the future raw materials price index also increased.


U.S. Leading Economic Index increased 0.1% in October
Posted: November 18, 2016 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.1 percent in October to 124.5 (2010 = 100), following a 0.2 percent increase in September, and a 0.2 percent decline in August.

“The U.S. LEI increased in October for a second consecutive month. Although its six-month growth rate has moderated, the index still suggests that the economy will continue expanding into early 2017,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The interest rate spread and average weekly hours were the main drivers of October’s improvement, helping to offset some of the weaknesses in claims for unemployment insurance and new orders.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in October to 114.3 (2010 = 100), following a 0.1 percent increase in September, and a 0.2 percent increase in August.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in October to 122.9 (2010 = 100), following a 0.2 percent increase in September, and a 0.3 percent increase in August.


Consumer Price Index increased 0.4% in October, Ex Fd & Engy up 0.1%
Posted: November 17, 2016 at 08:30 AM (Thursday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.6 percent before seasonal adjustment.

As in September, increases in the shelter and gasoline indexes were the main causes of the rise in the all items index. The gasoline index rose 7.0 percent in October and accounted for more than half of the increase in the all items index. The shelter index increased 0.4 percent for the second straight month.

The energy index increased 3.5 percent, its largest advance since February 2013. The indexes for fuel oil and gasoline were up 5.9 percent and 7.0 percent, respectively, while the indexes for electricity and natural gas saw relatively smaller increases of 0.4 percent and 0.9 percent. In contrast, the index for food was unchanged for the fourth consecutive month, as the food at home index continued to decline.

The index for all items less food and energy rose 0.1 percent for the second straight month. Along with the shelter index, the indexes for apparel, new vehicles, and motor vehicle insurance all increased in October, as did the indexes for education, household furnishings and operations, alcoholic beverages, and tobacco. The indexes for personal care, communication, used cars and trucks, recreation, and airfare all declined. The medical care index was flat over the month.

The all items index rose 1.6 percent for the 12 months ending October, its largest 12-month increase since October 2014. The index for all items less food and energy rose 2.1 percent for the 12 months ending October. The food index declined 0.4 percent over the span, while the energy index rose 0.1 percent.


Real Average Hourly Earnings increased 0.1% in September
Posted: November 17, 2016 at 08:30 AM (Thursday)

Real average hourly earnings for all employees increased 0.1 percent from September to October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.4-percent increase in average hourly earnings being nearly offset by a 0.4-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings were about unchanged over the month due to the increase in real average hourly earnings combined with no change to the average workweek.

Real average hourly earnings increased 1.2 percent, seasonally adjusted, from October 2015 to October 2016. This increase in real average hourly earnings combined with a 0.3-percent decrease in the average workweek resulted in a 0.9-percent increase in real average weekly earnings over this period.


October Housing Starts up 25.5%, Permits up 0.3%
Posted: November 17, 2016 at 08:30 AM (Thursday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,229,000. This is 0.3 percent (±2.0%)* above the revised September rate of 1,225,000 and is 4.6 percent (±1.4%) above the October 2015 estimate of 1,175,000. Single-family authorizations in October were at a rate of 762,000; this is 2.7 percent (±1.4%) above the revised September figure of 742,000. Authorizations of units in buildings with five units or more were at a rate of 439,000 in October.

HOUSING STARTS
Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,323,000. This is 25.5 percent (±12.6%) above the revised September estimate of 1,054,000 and is 23.3 percent (±14.4%) above the October 2015 rate of 1,073,000. Single-family housing starts in October were at a rate of 869,000; this is 10.7 percent (±10.2%) above the revised September figure of 785,000. The October rate for units in buildings with five units or more was 445,000.

HOUSING COMPLETIONS
Privately-owned housing completions in October were at a seasonally adjusted annual rate of 1,055,000. This is 5.5 percent (±10.1%)* above the revised September estimate of 1,000,000 and is 7.2 percent (±12.3%)* above the October 2015 rate of 984,000. Single-family housing completions in October were at a rate of 749,000; this is 3.9 percent (±11.3%)* above the revised September rate of 721,000. The October rate for units in buildings with five units or more was 300,000.


Philadelphia Fed Outlook Reported Activity edged down in November
Posted: November 17, 2016 at 08:30 AM (Thursday)

Results from the November Manufacturing Business Outlook Survey suggest that regional manufacturing activity continued to expand. The indexes for general activity, new orders, and shipments all remained positive this month. Overall, labor market conditions remained weak, however. More firms reported increases in prices in November compared with October. Firms expect continued growth for manufacturing over the next six months, although expectations were less optimistic than last month.

New Orders and Shipments Pick Up
The index for current manufacturing activity in the region edged down, from a reading of 9.7 in October to 7.6 this month. The index has been positive now for four consecutive months (see Chart 1). Other broad indicators showed improvement. The current new orders and shipments indexes increased from their readings in October, by 2 points and 4 points, respectively. Both the delivery times and unfilled orders indexes were positive this month, suggesting longer delivery times and an increase in unfilled orders. The current inventories index moved into positive territory for the first time in 17 months.

Firms reported continued weakness in manufacturing employment. The percentage of firms reporting a decrease in employment in November (20 percent) exceeded the percentage reporting an increase (18 percent). The current employment index, which has now remained negative for 11 consecutive months, edged 1 point higher to -2.6. One sign of improvement was the average workweek index, which was positive for the first time in eight months.

Firms Report Higher Prices
Firms reported increases in the prices paid for inputs and the prices received for their own manufactured goods this month. The prices paid index increased 21 points, to 27.5. Twenty-nine percent of the firms reported higher input prices this month, compared with 15 percent last month. Most firms (69 percent), however, reported that input prices were unchanged. With respect to prices received for firms’ own manufactured goods, more firms reported higher prices this month. Although the largest percentage of firms (75 percent) reported no change in prices, 20 percent of the firms reported price increases for their own products this month, compared with 6 percent last month. The index for current prices received increased 20 points.

Expectations Are Still Positive but Moderated
Firms remained optimistic about overall business conditions over the next six months, but the survey’s six-month general activity index moderated 3 points from last month (see Chart 1). Nearly 36 percent of the firms expect increases in activity over the next six months, lower than the 45 percent that expected increases last month. The indexes for future new orders and shipments also fell from their October readings, by 2 points and 11 points, respectively. The future employment index also fell 14 points. One-quarter of the manufacturers said they expect to expand employment over the next six months, while 13 percent expect to reduce employment.

Firms Expect Price Increases to Nearly Match the Rate of Inflation
In this month’s special questions, firms were asked to forecast the changes in the prices of their own products and for U.S. consumers over the next four quarters (see Special Questions). The median forecast was for an increase in their own prices of 2 percent, up from a 1 percent forecast in the third quarter. When asked about the rate of inflation for U.S. consumers over the next year, the firms’ median forecast was 2.3 percent, which was slightly higher than the 2 percent that was forecast last quarter. Firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise at a pace of 3 percent over the next four quarters.

Summary
Responses to the November Manufacturing Business Outlook Survey suggest continued modest growth in the region’s manufacturing sector. The indexes for general activity, new orders, and shipments all indicated expansion. The survey’s price indexes were notably higher this month. Firms reported continued reductions in overall employment this month, although average work hours increased. Firms remained generally optimistic about increases in overall business activity over the next six months, although forecasts were less optimistic than in October.


Weekly Initial Unemployment Claims Decrease 19,000 to 235,000
Posted: November 17, 2016 at 08:30 AM (Thursday)

In the week ending November 12, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 19,000 from the previous week's unrevised level of 254,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 253,500, a decrease of 6,500 from the previous week's revised average. The previous week's average was revised up by 250 from 259,750 to 260,000. There were no special factors impacting this week's initial claims. This marks 89 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 5, 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 November 5 was 1,977,000, a decrease of 66,000 from the previous week's revised level. This is the lowest level for insured unemployment since April 15, 2000 when it was 1,962,000. The previous week's level was revised up 2,000 from 2,041,000 to 2,043,000. The 4-week moving average was 2,022,500, a decrease of 19,250 from the previous week's revised average. This is the lowest level for this average since June 17, 2000 when it was 2,016,750. The previous week's average was revised up by 2,250 from 2,039,500 to 2,041,750.


Builder Confidence held steady at 63 in November
Posted: November 16, 2016 at 10:00 AM (Wednesday)

Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“With most of our members responding before the November elections, confidence levels remained unchanged as they awaited the results,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Still, builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth.”

“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. This will help keep housing on a steady, upward glide path in the months ahead,” said NAHB Chief Economist Robert Dietz.

The HMI components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.

Looking at the three-month moving averages for regional HMI scores, the Northeast, Midwest and West each posted respective two-point gains to 45, 58 and 77. The South remained unchanged at 66.


Industrial Production unch%
Capacity Utilization edged down to 75.3%

Posted: November 16, 2016 at 09:15 AM (Wednesday)

Industrial production was unchanged in October after decreasing 0.2 percent in September. Although the level of industrial production in September was the same as the previous estimate, revisions to the index for utilities raised the rate of change in total industrial production in August and lowered it in September. In October, manufacturing output increased 0.2 percent, and mining posted a gain of 2.1 percent for its largest increase since March 2014. The index for utilities dropped 2.6 percent, as warmer-than-normal temperatures reduced the demand for heating. At 104.3 percent of its 2012 average, total industrial production in October was 0.9 percent lower than its year-earlier level. Capacity utilization for the industrial sector edged down 0.1 percentage point in October to 75.3 percent, a rate that is 4.7 percentage points below its long-run (1972–2015) average.


Producer Price Index unch% in October, ex Fd & Engy down 0.1%
Posted: November 16, 2016 at 08:30 AM (Wednesday)

The Producer Price Index for final demand was unchanged in October, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.3 percent in
September and were unchanged in August. On an unadjusted basis, the final
demand index increased 0.8 percent for the 12 months ended in October, the largest 12-month
rise since advancing 0.9 percent in December 2014.

Within final demand in October, a 0.4-percent increase in the index for final demand goods
offset a 0.3-percent decline in prices for final demand services.

Prices for final demand less foods, energy, and trade services edged down 0.1 percent in October
after rising 0.3 percent in both August and September. For the 12 months ended in October, the
index for final demand less foods, energy, and trade services advanced 1.6 percent, the largest
increase since climbing 1.7 percent for the 12 months ended September 2014.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: November 16, 2016 at 07:00 AM (Wednesday)

Mortgage applications decreased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 11, 2016.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index decreased 11 percent from the previous week to its lowest level since March 2016. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier to its lowest level since January 2016. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 3 percent higher than the same week one year ago.

"Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year," said David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association. "Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity."

The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.7 percent of total applications.

The FHA share of total applications increased to 12.2 percent from 11.6 percent the week prior. The VA share of total applications increased to 12.6 percent from 12.3 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since January 2016, 3.95 percent, from 3.77 percent, with points increasing to 0.39 from 0.38 (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 its highest level since January 2016, 3.89 percent, from 3.75 percent, with points decreasing to 0.26 from 0.27 (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 its highest level since April 2016, 3.73 percent, from 3.61 percent, with points decreasing to 0.28 from 0.35 (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 its highest level since March 2016, 3.15 percent, from 3.03 percent, with points decreasing to 0.29 from 0.38 (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 its highest level since March 2016, 3.11 percent, from 2.92 percent, with points decreasing to 0.42 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Business Inventories up 0.1% in September
Posted: November 15, 2016 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for September, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,314.6 billion, up 0.7 percent (±0.2%) from August 2016 and was up 0.8 percent (±0.4%) from September 2015.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,818.7 billion, up 0.1 percent (±0.1%)* from August 2016 and were up 0.6 percent (±0.6%)* from September 2015.

The total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.38. The September 2015 ratio was 1.39.


Empire State Manufacturing Survey Conditions were essentially flat in November
Posted: November 15, 2016 at 08:30 AM (Tuesday)

Business activity stabilized in New York State, according to firms responding to the November 2016 Empire State Manufacturing Survey. The headline general business conditions index climbed out of negative territory for the first time in four months, rising eight points to 1.5. The new orders and shipments indexes also turned positive, rising to 3.1 and 8.5, respectively. Labor market conditions remained weak, with the number of employees and average workweek indexes both at -10.9. The inventories index fell eleven points to -23.6, pointing to a marked decline in inventory levels. Although price indexes were lower, they remained positive, suggesting a slower pace of growth in both input prices and selling prices. Indexes for the six-month outlook conveyed somewhat less optimism about future conditions than in October.

Business Activity Steadies
Manufacturing firms in New York State reported that business activity was essentially flat in November. On the heels of three consecutive negative readings, the general business conditions index rose eight points to 1.5. Twenty-seven percent of respondents reported that conditions had improved over the month, while 25 percent reported that conditions had worsened. The new orders index climbed nine points to 3.1, indicating that orders edged higher, and the shipments index rose nine points to 8.5, pointing to an increase in shipments. The unfilled orders index inched down to -12.7, and at -5.5, the delivery time index signaled shorter delivery times. The inventories index fell eleven points to -23.6, a multiyear low, indicating that inventory levels declined significantly.

Labor Market Conditions Remain Weak
Both employment indexes remained negative in November. The index for number of employees dropped six points to -10.9, a sign that employment levels were contracting, and the average workweek index, little changed at -10.9, pointed to a decline in hours worked. The prices paid index fell seven points to 15.5, indicating that input price increases slowed, and the prices received index edged down to 2.7, signaling that selling prices were marginally higher.

Optimism Slightly Lower
Indexes for the six-month outlook suggested that respondents were somewhat less optimistic about future conditions than they were last month. The index for future business conditions retreated six points to 29.9. The index for future new orders and the index for future shipments fell to similar levels. Indexes for future employment and the future average workweek, at 10.9 and 10.0, respectively, indicated that firms expected to expand employee rolls and hours worked in the months ahead. Indexes for future prices suggested that firms anticipated an increase in both input prices and selling prices over the next six months. The capital expenditures and technology spending indexes were little changed, and pointed to modest increases in spending for both categories.


U.S. Retail Sales for October Increase 0.8%, Ex-Auto up 0.8%
Posted: November 15, 2016 at 08:30 AM (Tuesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $465.9 billion, an increase of 0.8 percent (±0.5%) from the previous month, and 4.3 percent (±0.9%) above October 2015. Total sales for the August 2016 through October 2016 period were up 3.3 percent (±0.7%) from the same period a year ago. The August 2016 to September 2016 percent change was revised from up 0.6 percent (±0.5%) to up 1.0 percent (±0.1%).

Retail trade sales were up 1.0 percent (±0.5%) from September 2016, and up 4.3 percent (±0.7%) from last year. Nonstore retailers were up 12.9 percent (±1.6%) from October 2015, while Miscellaneous stores retailers were up 9.5 percent (±4.2%) from last year.


U.S. Import Price Index increased 0.5% in October
Posted: November 15, 2016 at 08:30 AM (Tuesday)

U.S. import prices advanced 0.5 percent in October, the U.S. Bureau of Labor Statistics reported today, after a 0.2-percent increase in September. The October increase was driven by higher fuel prices which more than offset declining nonfuel prices. The price index for U.S. exports increased 0.2 percent in October following a 0.3-percent advance the previous month.


Forecasters Predict Slightly Lower Growth over the Next Three Years
Posted: November 14, 2016 at 10:00 AM (Monday)

Growth in the U.S. economy looks slightly weaker now than it did three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia before the election on November 8. The forecasters expect real GDP to grow at an annual rate of 2.2 percent this quarter and in each of the next four quarters in 2017. On an annual-average over annual-average basis, the forecasters see real GDP growing 1.5 percent in 2016, no change from the estimate in the survey of three months ago. The forecasters predict real GDP will grow 2.2 percent in 2017, 2.1 percent in 2018, and 2.1 percent in 2019. The forecasts for 2017, 2018, and 2019 are slightly weaker than the previous estimates.

The projections for unemployment are little changed from those of the previous survey. The forecasters predict the unemployment rate will average 4.9 percent in 2016, before falling to 4.7 percent in 2017, 4.6 percent in 2018, and 4.7 percent in 2019. The current projections for 2018 and 2019 are unchanged from those of the previous survey.

On the employment front, the forecasters have revised upward marginally their estimates for job gains in 2016 and 2017. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 206,000 in 2016, up slightly from the previous estimate of 204,600, and 173,600 in 2017, up from the previous estimate of 161,100. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)

Inflation Outlook Holds Steady
The forecasters see little change in the outlook for headline CPI inflation compared with their predictions of three months ago. Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average 1.5 percent in 2016, 2.2 percent in 2017, and 2.2 percent in 2018. The projections for headline PCE inflation over the next three years remained unchanged from the survey of three months ago. Measured on a fourth-quarter over fourth-quarter basis, headline PCE inflation is expected to average 1.4 percent in 2016, 1.9 percent in 2017, and 2.0 percent in 2018.

Over the next 10 years, 2016 to 2025, the forecasters expect headline CPI inflation to average 2.22 percent at an annual rate, up slightly from the previous estimate of 2.15 percent. The corresponding estimate for 10-year annual-average PCE inflation is 2.00 percent, which is unchanged from the previous estimate.

Downward Revisions Characterize the Risk of a Negative Quarter
The forecasters see much less than a one-in-five chance of a contraction in real GDP in any of the next five quarters. For the current quarter, they predict a 9.9 percent chance of negative growth, down from 15.6 percent in the survey of three months ago. The forecasters also see a lower probability of a negative quarter in the first three quarters in 2017 than they estimated three months ago.


University of Michigan Consumer Confidence Preliminary November Results rose to 91.1
Posted: November 11, 2016 at 10:00 AM (Friday)

The Sentiment Index in early November erased the small October decline to climb to its highest level since mid 2016 and rise slightly above the 2016 average of 91.1. The recent gain in sentiment was driven by an improved outlook for the economy. The most striking finding in early November was that both near and long-term inflation expectations jumped to 2.7% from last month's record matching lows of 2.4%. These increases must be replicated before they can be taken to indicate a troublesome development; thus far, the data has simply repeated the March 2016 peaks. Nonetheless, it may be viewed as added justification for next month's expected interest rate hike. The expected small increase in interest rates had little impact on favorable buying attitudes, and still supports a 2.5% increase in real consumer spending during 2017. Unfortunately, the November data must be accompanied by the proviso that it was collected before the result of the Presidential election was known late Tuesday.


Weekly Initial Unemployment Claims Decrease 11,000 to 254,000
Posted: November 10, 2016 at 08:30 AM (Thursday)

In the week ending November 5, the advance figure for seasonally adjusted initial claims was 254,000, a decrease of 11,000 from the previous week's unrevised level of 265,000. The 4-week moving average was 259,750, an increase of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 257,750 to 258,000. There were no special factors impacting this week's initial claims. This marks 88 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending October 29, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 29 was 2,041,000, an increase of 18,000 from the previous week's revised level. The previous week's level was revised down by 3,000 from 2,026,000 to 2,023,000. The 4-week moving average was 2,039,500, a decrease of 2,250 from the previous week's revised average. This is the lowest level for this average since July 1, 2000 when it was 2,036,500. The previous week's average was revised down by 750 from 2,042,500 to 2,041,750.


Wholesale Inventories up 0.1% in September
Posted: November 9, 2016 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that September 2016 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 $444.9 billion, up 0.2 percent (+/-0.4%) from the revised August level and were up 0.4 percent (+/-1.1%) from the September 2015 level. The July 2016 to August 2016 percent change was unrevised from the preliminary estimate of up 0.7 percent (+/-0.5%). September sales of durable goods were up 0.2 percent (+/-0.7%) from last month and were up 0.2 percent (+/-1.8%) from a year ago. Sales of electrical and electronic goods were up 1.5 percent from August, while sales of hardware, plumbing and heating equipment and supplies were down 2.4 percent. Sales of nondurable goods were up 0.1 percent (+/-0.5%) from August and were up 0.5 percent (+/-1.2%) from last September. Sales of petroleum and petroleum products were up 5.0 percent from last month, while sales of farm product raw materials were down 12.0 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $590.2 billion at the end of September, up 0.1 percent (+/-0.2%) from the revised August level. Total inventories are down 0.1 percent (+/-1.9%) from the revised September 2015 level. The August 2016 to September 2016 percent change was revised from the advance estimate of up 0.2 percent (+/-0.4%) to up 0.1 percent (+/-0.2%). September inventories of durable goods were down 0.4 percent (+/-0.4%) from last month and were down 1.9 percent (+/-1.6%) from a year ago. Inventories of motor vehicle and motor vehicle parts and supplies were down 1.7 percent from last month. Inventories of nondurable goods were up 0.9 percent (+/-0.4%) from August and were up 2.7 percent (+/-3.3%) from last September. Inventories of petroleum and petroleum products were up 3.8 percent from last month and inventories of drugs and druggists' sundries were up 3.3 percent.

The September inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.33. The September 2015 ratio was 1.33.


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