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Category: Research - Topic: Economics



2Q2017 Current Account Deficit Increased
Posted: September 19, 2017 at 08:30 AM (Tuesday)

The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.

The $9.6 billion increase in the current-account deficit reflected a $7.5 billion increase in the deficit on secondary income, a $2.9 billion decrease in the surplus on primary income, and a $0.8 billion increase in the deficit on goods. These changes were partly offset by a $1.6 billion increase in the surplus on services.


U.S. Import Price Index increased 0.6% in August
Posted: September 19, 2017 at 08:30 AM (Tuesday)

U.S. import prices increased 0.6 percent in August, the U.S. Bureau of Labor Statistics reported today, following declines in the previous 3 months. The price index for U.S. exports also advanced 0.6 percent in August, after increasing 0.5 percent in July.

Hurricane Harvey: Hurricane Harvey did not impact the collection of the import and export price index data for August because the reference period for the data is the first week of the month.


August Housing Starts down 0.8%, Permits up 5.7%
Posted: September 19, 2017 at 08:30 AM (Tuesday)

Building Permits
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,300,000. This is 5.7 percent (±2.0 percent) above the revised July rate of 1,230,000 and is 8.3 percent (±1.6 percent) above the August 2016 rate of 1,200,000. Single-family authorizations in August were at a rate of 800,000; this is 1.5 percent (±1.3 percent) below the revised July figure of 812,000. Authorizations of units in buildings with five units or more were at a rate of 464,000 in August.

Housing Starts
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,180,000. This is 0.8 percent (±9.6 percent)* below the revised July estimate of 1,190,000, but is 1.4 percent (±8.9 percent)* above the August 2016 rate of 1,164,000. Single-family housing starts in August were at a rate of 851,000; this is 1.6 percent (±9.0 percent)* above the revised July figure of 838,000. The August rate for units in buildings with five units or more was 323,000.

Housing Completions
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 1,075,000. This is 10.2 percent (±12.3 percent)* below the revised July estimate of 1,197,000, but is 3.4 percent (±13.0 percent)* above the August 2016 rate of 1,040,000. Single-family housing completions in August were at a rate of 724,000; this is 13.3 percent (±14.7 percent)* below the revised July rate of 835,000. The August rate for units in buildings with five units or more was 348,000.


Treasury International Capital Data for July 2017
Posted: September 18, 2017 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for July 2017. The sum total in July of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $7.3 billion. Of this, net foreign private inflows were $6.0 billion, and net foreign official outflows were $13.3 billion.

Foreign residents increased their holdings of long-term U.S. securities in July; net purchases were $5.1 billion. Net purchases by private foreign investors were $21.0 billion, while net sales by foreign official institutions were $16.0 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $3.8 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $1.3 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $43.1 billion in July.

Foreign residents increased their holdings of U.S. Treasury bills by $3.1 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $7.4 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $28.4 billion.


Builder Confidence fell 3 points to 64 in September
Posted: September 18, 2017 at 10:00 AM (Monday)

Builder confidence in the market for newly-built single-family homes fell three points to a level of 64 in September from a downwardly revised August reading of 67 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”

“Despite this month’s drop, builder confidence is still on very firm ground,” said NAHB Chief Economist Robert Dietz. “With ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year.”

All three HMI components posted losses in September but remain at healthy levels. The component gauging current sales conditions fell four points to 70 and the index charting sales expectations in the next six months dropped four points to 74. Meanwhile, the component measuring buyer traffic slipped a single point to 47.

Looking at the three-month moving averages for regional HMI scores, the West increased three points to 77 and the Northeast rose one point to 49. The South dropped a single point to 66 and the Midwest fell three points to 63.


Business Inventories up 0.2% in July
Posted: September 15, 2017 at 10:00 AM (Friday)

The combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,358.8 billion, up 0.2 percent (±0.1 percent) from June 2017 and was up 4.9 percent (±0.4 percent) from July 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,873.9 billion, up 0.2 percent (±0.1 percent) from June 2017 and were up 3.0 percent (±0.3 percent) from July 2016.

The total business Inventories/Sales Ratio based on seasonally adjusted data at the end of July was 1.38. The July 2016 ratio was 1.40.


University of Michigan Consumer Confidence Preliminary September Results at 95.3
Posted: September 15, 2017 at 10:00 AM (Friday)

Consumer confidence edged downward in early September due to concerns over the outlook for the national economy. Consumers' assessments of current economic conditions improved, however, with the Current Conditions Index reaching the highest level since November of 2000. The two hurricanes had a greater impact on expected economic conditions. Across all interviews in early September, 9% spontaneously mentioned concerns that Harvey, Irma, or both, would have a negative impact on the overall economy. Among those who mentioned the hurricanes, the Sentiment Index was 80.2, while among those who did not spontaneously mention either hurricane, the Sentiment Index remained unchanged from last month at 96.8. Given the widespread devastation in Texas and Florida, it is not surprising to find these very negative initial reactions, nor would it be surprising if these negative assessments last longer than following most past hurricanes. While consumers anticipated slight increases in gas prices and a slightly higher overall inflation rate, those concerns were neutralized by the best assessments of their financial situation in more than a decade. Renewed gains in incomes as well as rising home and equity values have acted to counterbalance the negative impacts from the hurricanes. Given the current resilience of consumers, recent events are unlikely to derail confidence.


Industrial Production declined 0.9%
Capacity Utilization decreased at 76.1%

Posted: September 15, 2017 at 09:15 AM (Friday)

Industrial production declined 0.9 percent in August following six consecutive monthly gains. Hurricane Harvey, which hit the Gulf Coast of Texas in late August, is estimated to have reduced the rate of change in total output by roughly 3/4 percentage point. The index for manufacturing decreased 0.3 percent; storm-related effects appear to have reduced the rate of change in factory output in August about 3/4 percentage point. The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins.

The output of mining fell 0.8 percent in August, as Hurricane Harvey temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas. The output of utilities dropped 5.5 percent, as unseasonably mild temperatures, particularly on the East Coast, reduced the demand for air conditioning.

At 104.7 percent of its 2012 average, total industrial production in August was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.8 percentage point in August to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.


U.S. Retail Sales for August Decrease 0.2%, Ex-Auto up 0.2%
Posted: September 15, 2017 at 08:30 AM (Friday)

Advance estimates of U.S. retail and food services sales for August 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.8 billion, a decrease of 0.2 percent (±0.5 percent)* from the previous month, and 3.2 percent (±0.7 percent) above August 2016. Total sales for the June 2017 through August 2017 period were up 3.2 percent (±0.7 percent) from the same period a year ago. The June 2017 to July 2017 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.3 percent (±0.1 percent).

Retail trade sales were down 0.3 percent (±0.5 percent)* from July 2017, and up 3.3 percent (±0.7 percent) from last year. Nonstore Retailers were up 8.4 percent (±1.6 percent) from August 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 7.5 percent (±1.9 percent) from last year


Empire State Manufacturing Survey Conditions continued to grow strongly in September
Posted: September 15, 2017 at 08:30 AM (Friday)

Business activity continued to grow strongly in New York State, according to firms responding to the September 2017 Empire State Manufacturing Survey. The headline general business conditions index held steady at 24.4. The new orders index rose four points to 24.9 and the shipments index climbed four points to 16.2, pointing to ongoing solid gains in orders and shipments. Unfilled orders increased, and delivery times continued to lengthen. Labor market indicators pointed to a modest increase in employment and hours worked. Both input prices and selling prices rose at a faster pace than last month. Indexes assessing the six-month outlook suggested that firms remained optimistic about future conditions.

Brisk Pace of Growth Continues
Manufacturing firms in New York State reported that business activity continued to expand strongly in September. After reaching a three-year high in August, the general business conditions index held steady at 24.4. Forty percent of respondents reported that conditions had improved over the month, while 16 percent reported that conditions had worsened. The new orders index climbed four points to 24.9, pointing to another month of solid gains in orders, and the shipments index advanced to 16.2. The unfilled orders index moved out of negative territory, its fourteen-point rise to 8.9 signaling an increase in unfilled orders. The delivery time index rose nine points to 14.6, pointing to longer deliver times, and the inventories index rose to 6.5, a sign that inventory levels were somewhat higher.

Price Increases Pick Up
Labor market conditions improved in September. The index for number of employees advanced four points to 10.6, suggesting a modest increase in employment levels, and the average workweek index remained positive at 5.7, indicating that the average workweek was somewhat longer. Prices increased at a faster clip than last month: the prices paid index rose five points to 35.8, and the prices received index moved up eight points to 13.8.

Firms Remain Optimistic
Indexes assessing the six-month outlook suggested that firms continued to be optimistic about future conditions. The index for future business conditions came in at 39.3, and the index for future new orders edged up two points to 43.7. Employment was expected to increase modestly. The capital expenditures index climbed thirteen points to 24.4, and the technology spending index moved up to 17.1.


Consumer Price Index 0.4% in August, Ex Fd & Engy rose 0.2%
Posted: September 14, 2017 at 08:30 AM (Thursday)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.9 percent.

Increases in the indexes for gasoline and shelter accounted for nearly all of the seasonally adjusted increase in the all items index. The energy index rose 2.8 percent in August as the gasoline index increased 6.3 percent. The shelter index rose 0.5 percent in August with the rent index up 0.4 percent. The food index rose slightly in August, with the index for food away from home increasing and the food at home index declining.

The index for all items less food and energy rose 0.2 percent in August. Along with the shelter index, the indexes for motor vehicle insurance, medical care, and recreation all increased in August. The indexes for airline fares and for used cars and trucks were among those that declined in August.

The all items index rose 1.9 percent for the 12 months ending August, a larger increase than the 1.7 percent increase for the 12 months ending July. The 12-month change in the index for all items less food and energy remained at 1.7 percent for the fourth month in a row. It has remained in the range of 1.6 percent to 2.3 percent since June 2011. The energy index rose 6.4 percent over the past 12 months, and the food index increased 1.1 percent.


Real Average Hourly Earnings decreased 0.3% in August
Posted: September 14, 2017 at 08:30 AM (Thursday)

Real average hourly earnings for all employees decreased 0.3 percent from July to August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.1-percent increase in average hourly earnings being more than offset by a 0.4-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased 0.6 percent over the month due to the change in real average hourly earnings combined with a 0.3-percent decrease in the average workweek.

Real average hourly earnings increased 0.6 percent, seasonally adjusted, from August 2016 to August 2017. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.9-percent increase in real average weekly earnings over this period.


Weekly Initial Unemployment Claims Decrease 14,000 to 284,000
Posted: September 14, 2017 at 08:30 AM (Thursday)

In the week ending September 9, the advance figure for seasonally adjusted initial claims was 284,000, a decrease of 14,000 from the previous week's unrevised level of 298,000. The 4-week moving average was 263,250, an increase of 13,000 from the previous week's unrevised average of 250,250. This is the highest level for this average since August 13, 2016 when it was 263,250. Hurricanes Harvey and Irma impacted this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending September 2, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 2 was 1,944,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised up 11,000 from 1,940,000 to 1,951,000. The 4-week moving average was 1,948,500, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 2,750 from 1,948,250 to 1,951,000.


Producer Price Index advanced 0.2% in August, ex Fd & Engy up 0.2%
Posted: September 13, 2017 at 08:30 AM (Wednesday)

The Producer Price Index for final demand advanced 0.2 percent in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices edged down 0.1 percent in July and moved up 0.1 percent in June. On an unadjusted basis, the final demand index increased 2.4 percent for the 12 months ended in August.

Three-quarters of the August increase in final demand prices is attributable to the index for final demand goods, which climbed 0.5 percent. Prices for final demand services inched up 0.1 percent.

The index for final demand less foods, energy, and trade services increased 0.2 percent in August following no change in July. For the 12 months ended in August, prices for final demand less foods, energy, and trade services rose 1.9 percent.

Final Demand
Final demand goods: Prices for final demand goods advanced 0.5 percent in August, the largest rise since moving up 0.5 percent in April. Most of the August increase can be traced to the index for final demand energy, which climbed 3.3 percent. Prices for final demand goods less foods and energy moved up 0.2 percent. In contrast, the index for final demand foods fell 1.3 percent.

Product detail: Three-quarters of the August increase in the final demand goods index can be traced to prices for gasoline, which jumped 9.5 percent. The indexes for jet fuel, industrial chemicals, potatoes, home heating oil, and light motor trucks also moved higher. Conversely, prices for meats fell 3.4 percent. The indexes for fresh vegetables (except potatoes) and for plastic resins and materials also declined.

Final demand services: The index for final demand services edged up 0.1 percent in August after falling 0.2 percent in July. Over 70 percent of the increase can be traced to a 0.1-percent advance in the index for final demand services less trade, transportation, and warehousing. Additionally, prices for final demand transportation and warehousing services climbed 0.3 percent. Margins for final demand trade services were unchanged. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Over half of the August increase in the index for final demand services can be attributed to prices for consumer loans (partial), which advanced 1.7 percent. The indexes for outpatient care (partial), machinery and equipment wholesaling, truck transportation of freight, and food retailing also moved higher. In contrast, margins for fuels and lubricants retailing fell 6.8 percent. The indexes for chemicals and allied products wholesaling, guestroom rental, and airline passenger services also declined.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: September 13, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 9.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 8, 2017. This week's results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week. The seasonally adjusted Purchase Index increased 11 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 7 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 51.0 percent of total applications from 50.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.7 percent of total applications.

The FHA share of total applications increased to 9.9 percent from 9.6 percent the week prior. The VA share of total applications increased to 10.3 percent from 9.7 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.03 percent from 4.06 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.00 percent from 3.96 percent, with points increasing to 0.24 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.94 percent from 3.98 percent, with points decreasing to 0.34 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.30 percent from 3.34 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.17 percent from 3.14 percent, with points increasing to 0.36 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings little changed at 6.2 million in July
Posted: September 12, 2017 at 10:00 AM (Tuesday)

The number of job openings was little changed at 6.2 million on the last business day of July, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5.5 million and 5.3 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.2 percent and 1.2 percent, respectively. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job Openings
On the last business day of July, there were 6.2 million job openings, little changed from June. The job openings rate was 4.0 percent. The number of job openings was little changed for total private and decreased for government (-58,000). Job openings increased in a number of industries with the largest increases occurring in other services (+111,000), transportation, warehousing, and utilities (+70,000), and educational services (+26,000). Job openings decreased in health care and social assistance (-72,000), state and local government, excluding education (-46,000), and federal government (-21,000). The number of job openings was little changed in the regions.

Hires
The number of hires was little changed at 5.5 million in July. The hires rate was 3.8 percent. The number of hires was little changed for total private and for government. The number of hires increased for federal government (+9,000), and was little changed for all other industries. The number of hires was little changed in all four regions. (See table 2.)

Separations
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.

The number of total separations was little changed at 5.3 million in July. The total separations rate was 3.6 percent. The number of total separations was little changed for total private and for government. Total separations increased in federal government (+8,000) but decreased in educational services (-19,000). The number of total separations was little changed in all four regions.

The number of quits was little changed at 3.2 million in July. The quits rate was 2.2 percent. The number of quits was little changed for total private and for government. Quits decreased in educational services (-16,000). The number of quits was little changed in all four regions.

There were 1.8 million layoffs and discharges in July, little changed from June. The layoffs and discharges rate was 1.2 percent in July. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level increased in federal government (+9,000). The number of layoffs and discharges was little changed in all four regions.

The number of other separations was little changed in July. The other separations level was also little changed for total private and for government. Other separations increased in professional and business services (+31,000) and in information (+6,000), but decreased in wholesale trade (-15,000). In all four regions, the number of other separations was little changed.

Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in July, hires totaled 63.6 million and separations totaled 61.5 million, yielding a net employment gain of 2.1 million. These totals include workers who may have been hired and separated more than once during the year.


NFIB Small Business Optimism Index rose rose 0.1 points to 105.3 in August
Posted: September 12, 2017 at 07:00 AM (Tuesday)

The Index of Small Business Optimism rose 0.1 points to 105.3 in August, basically unchanged from July. Five of the 10 Index components posted a gain and five declined. The Index peaked for this recovery at 105.9 in January, just 0.6 points above the August reading. It is unlikely that progress in Washington D.C. is the source of continued owner optimism because there isn’t any on the major issues of health care and tax reform. So owner optimism is more like a “relief rally”, relief that they did not get another four years of costly federal regulations which increased the hold of government on the private sector. The Congressional Record is nearly empty compared to years of record new and changed regulations posted for the past eight years.

“Productivity” increased 0.1% in the first quarter and 0.9% in the second quarter (annual rates). Did workers get that much better in three months? Not likely. Defined as a change in “output per hour worked,” its measurement has occupied economists for decades. Consider the productivity of an employee at a burger joint. The number of burgers served per hour measures productivity. But this varies with the economy; in good times, there are more customers and in bad time fewer. But the fundamental skills of the burger server do not change. These “skills” and the available capital equipment will determine over the long run what the worker’s productivity CAN be. What it WILL be depends on how many customers actually buy a burger. There was no amazing improvement in worker skills from the first quarter to the second, just a change in demand which resulted in more sales per hour for the existing employees.

Some argue that sluggish productivity growth can slow economic growth and prevent wages from rising much. For the burger worker, it is slow economic growth that reduces the number of burgers purchased per hour, it is not the employee’s ability to deliver burgers. Only if the demand for burgers reaches the limits of the worker to deliver them could the employee’s productivity limit growth, a “supply” problem that can be alleviated by hiring another worker or getting a machine or a reorganization of the burger production line (management skills).

Strong demand results in better utilization of capacity and creates new jobs, all of which comes about through higher wages paid to attract applicants and keep good employees. The reverse is not true. Mandating a $15 minimum wage will not increase the number of burgers served per hour by the employee to cover the higher wage cost. That will only raise costs for the business which will have to raise prices to recover those costs or fire an employee if burger demand falls due to higher prices.

One simple fact holds true: employee compensation can rise in real terms over time only if employees produce more stuff per hour e.g. productivity rises. This depends on both supply and demand factors. To make sure that the employee CAN produce more if asked, we invest in training, research, technology, improved equipment, all to increase the capacity to produce. However, demand plays an important role. The employee can’t produce more burgers per hour unless there are sufficient customers to make it happen. Thus, the need for pro-growth policies which will help finance the capital investments needed to improve long-run productivity.

Second quarter GDP growth was revised up to 3 percent (annual rate) revealing stronger consumer and private sector spending which raises the odds that the Federal Reserve will raise rates again. With little good news from Washington D.C., it appears that owner optimism is holding at record levels because of private sector activity on Main Street, a reason to hire and build inventories and make capital purchases. Eventually, something will happen to taxes and health care, presumably improving on the current situation, so at least the outcome will not be a negative for owners.


Consumer Credit Increased at an annual rate of 6.00%
Posted: September 8, 2017 at 03:00 PM (Friday)

In July, consumer credit increased at a seasonally adjusted annual rate of 6 percent. Revolving credit increased at an annual rate of 3-1/4 percent, while nonrevolving credit increased at an annual rate of 7 percent.


Employment Trends Index increased in August to 134.62
Posted: September 8, 2017 at 10:00 AM (Friday)

The Conference Board Employment Trends Index™ (ETI) increased in August, after increasing in July. The index now stands at 134.62, up from 133.60 (a downward revision) in July. The change represents a 5.6 percent gain in the ETI compared to a year ago.

“The rapid growth in the Employment Trends Index continued in August, suggesting solid job growth in the months ahead,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “While Friday’s job numbers were slightly disappointing, the ETI does not provide any indication of slowing employment growth.”

August’s increase in the ETI was fueled by positive contributions from six of the eight components. From the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Industrial Production, Real Manufacturing and Trade Sales, Initial Claims for Unemployment Insurance, Ratio of Involuntarily Part-time to All Part-time Workers, and Number of Employees Hired by the Temporary-Help Industry.


2Q2017 Productivity Growth increased 1.5%
Posted: September 7, 2017 at 08:30 AM (Thursday)

Nonfarm business sector labor productivity increased 1.5 percent during the second quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as output increased 4.0 percent and hours worked increased 2.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2016 to the second quarter of 2017, productivity increased 1.3 percent, reflecting a 2.8-percent increase in output and a 1.5-percent increase in hours worked.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.

Unit labor costs in the nonfarm business sector increased 0.2 percent in the second quarter of 2017, reflecting a 1.8-percent increase in hourly compensation and a 1.5-percent increase in productivity. Unit labor costs decreased 0.2 percent over the last four quarters.


Weekly Initial Unemployment Claims Increase 62,000 to 298,000
Posted: September 7, 2017 at 08:30 AM (Thursday)

Hurricane Harvey impacted this week's initial claims.. In the week ending September 2, the advance figure for seasonally adjusted initial claims was 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. This is the highest level for initial claims since April 18, 2015 when it was 298,000. The 4-week moving average was 250,250, an increase of 13,500 from the previous week's unrevised average of 236,750.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 26, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 26 was 1,940,000, a decrease of 5,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 1,942,000 to 1,945,000. The 4-week moving average was 1,948,250, a decrease of 4,000 from the previous week's revised average. The previous week's average was revised up by 750 from 1,951,500 to 1,952,250.


Beige Book: Economic Activity continues to expand at a modest or moderate pace
Posted: September 6, 2017 at 02:00 PM (Wednesday)

Economic activity expanded at a modest to moderate pace across all twelve Federal Reserve Districts in July and August. Consumer spending increased in most Districts, with gains reported for nonauto retail sales and tourism, but mixed results for vehicle sales. Capital spending also increased in several Districts. Manufacturing activity expanded modestly on balance. That said, reports were mixed regarding auto production, and contacts in many Districts expressed concerns about a prolonged slowdown in the auto industry. Both residential and commercial construction increased slightly overall. Low inventories of homes for sale continued to weigh on residential real estate activity across the country, while commercial real estate activity increased slightly. Activity in the energy and natural resources sector was generally positive prior to shutdowns arising from Hurricane Harvey. Agricultural conditions were mixed overall, with drought conditions reported in multiple Districts. Business and consumer loan demand grew at a modest pace in most Districts, with a number of banks reporting rising competition from both other banks and non-bank lenders.

Employment and Wages
Employment growth slowed some on balance, ranging from a slight to a modest rate in most Districts. Labor markets were widely characterized as tight. There were reports of worker shortages in numerous industries, most notably in manufacturing and construction. Firms in the Atlanta, St. Louis, and Minneapolis Districts said that they had turned down business because they could not find the necessary workers. Many Districts indicated that businesses were having difficulty filling openings at all skill levels. In spite of the tight labor market, the majority of Districts reported limited wage pressures and modest to moderate wage growth. That said, there were reports from firms in the Dallas and San Francisco Districts that labor shortages were pushing up wages.

Prices
Prices rose modestly overall across the country. Input and materials costs generally increased, most notably for freight, lumber, and steel. In contrast, movements in energy and agricultural commodity prices were mixed. A number of Districts indicated that pass-through to downstream prices was limited, with increases in input prices exceeding gains in selling prices. Home prices moved up overall, as low inventories put upward pressure on prices in many regions.

A Special Note on the Impact of Hurricane Harvey
Hurricane Harvey created broad disruptions to economic activity along the Gulf Coast in the Dallas and Atlanta Districts, although it was too soon to gauge the full extent of the impact. Many firms and organizations in the affected areas closed due to flooding. A fifth of the oil and natural gas production in the Gulf of Mexico was offline, and many onshore producers in the Eagle Ford region temporarily stopped production. Harvey also affected fuel and petrochemical production, forcing fifteen refineries in the region to shut down temporarily and several others to operate at reduced capacity. Some areas experienced gasoline shortages, and supply was expected to remain tight in the Southeastern United States because of pipeline disruptions. Contacts in the Richmond District indicated that spot freight prices jumped after the storm, as freight was being redirected around the country. The Port of Charleston expected increased volumes in coming weeks as freight traffic is routed away from the Port of Houston.


ISM Non-Manufacturing Index increased to 55.3% in August
Posted: September 6, 2017 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in August for the 92nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 55.3 percent, which is 1.4 percentage points higher than the July reading of 53.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 57.5 percent, 1.6 percentage points higher than the July reading of 55.9 percent, reflecting growth for the 97th consecutive month, at a faster rate in August. The New Orders Index registered 57.1 percent, 2 percentage points higher than the reading of 55.1 percent in July. The Employment Index increased 2.6 percentage points in August to 56.2 percent from the July reading of 53.6 percent. The Prices Index increased 2.2 percentage points from the July reading of 55.7 percent to 57.9 percent, indicating prices increased in August for the third consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth. The non-manufacturing sector has rebounded from the prior month’s cooling-off period. The majority of respondents are optimistic about business conditions going forward.

INDUSTRY PERFORMANCE
The 15 non-manufacturing industries reporting growth in August — listed in order — are: Retail Trade; Information; Management of Companies & Support Services; Real Estate, Rental & Leasing; Other Services; Wholesale Trade; Utilities; Mining; Educational Services; Accommodation & Food Services; Finance & Insurance; Public Administration; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance. The two industries reporting contraction in August are: Agriculture, Forestry, Fishing & Hunting; and Transportation & Warehousing.


Goods and Services Deficit Increased in July 2017
Posted: September 6, 2017 at 08:30 AM (Wednesday)

The Nation's international trade deficit in goods and services increased to $43.7 billion in July from $43.5 billion in June (revised), as exports decreased more than imports.

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 $43.7 billion in July, up $0.1 billion from $43.5 billion in June, revised. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports.

The July increase in the goods and services deficit reflected a decrease in the goods deficit of less than $0.1 billion to $65.3 billion and a decrease in the services surplus of $0.2 billion to $21.6 billion.

Year-to-date, the goods and services deficit increased $27.9 billion, or 9.6 percent, from the same period in 2016. Exports increased $76.8 billion or 6.0 percent. Imports increased $104.8 billion or 6.7 percent.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: September 6, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending September 1, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 5 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to its highest level since January 2017, 50.9 percent of total applications, from 49.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.2 percent of total applications.

The FHA share of total applications decreased to 9.6 percent from 9.7 percent the week prior. The VA share of total applications decreased to 9.7 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.06 percent, from 4.11 percent, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to its lowest level since November 2016, 3.96 percent, percent from 4.00 percent, with points remaining unchanged at 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since November 2016, 3.98 percent, from 4.02 percent, with points decreasing to 0.35 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.34 percent, from 3.36 percent, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to its lowest level since November 2016, 3.14 percent, from 3.26 percent, with points decreasing to 0.31 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New orders for manufactured goods decreased 3.3% in July
Posted: September 5, 2017 at 10:00 AM (Tuesday)

New orders for manufactured goods in July, down three of the last four months, decreased $15.8 billion or 3.3 percent to $466.4 billion, the U.S. Census Bureau reported today. This followed a 3.2 percent June increase. Shipments, up seven of the last eight months, increased $1.6 billion or 0.3 percent to $474.3 billion. This followed a 0.1 percent June increase. Unfilled orders, down two of the last three months, decreased $3.6 billion or 0.3 percent to $1,131.9 billion. This followed a 1.3 percent June increase. The unfilled orders-to-shipments ratio was 6.75, down from 6.82 in June. Inventories, up eight of the last nine months, increased $1.4 billion or 0.2 percent to $651.6 billion. This followed a 0.3 percent June increase. The inventories-to-shipments ratio was 1.37, down from 1.38 in June.

New Orders
New orders for manufactured durable goods in July, down three of the last four months, decreased $16.8 billion or 6.8 percent to $228.9 billion, virtually unchanged from the previously published decrease. This followed a 6.4 percent June increase. Transportation equipment, also down three of the last four months, drove the decrease, $17.6 billion or 19.2 percent to $74.1 billion. New orders for manufactured nondurable goods increased $1.0 billion or 0.4 percent to $237.4 billion.

Shipments
Shipments of manufactured durable goods in July, up two of the last three months, increased $0.6 billion or 0.2 percent to $236.9 billion, down from the previously published 0.4 percent increase. This followed a virtually unchanged June decrease. Computers and electronic products, up three consecutive months, led the increase, $0.3 billion or 1.0 percent to $26.9 billion. Shipments of manufactured nondurable goods, up three of the last four months, increased $1.0 billion or 0.4 percent to $237.4 billion. This followed a 0.2 percent June increase. Petroleum and coal products, up following five consecutive monthly decreases, led the increase, $0.9 billion or 2.2 percent to $41.3 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in July, down two of the last three months, decreased $3.6 billion or 0.3 percent to $1,131.9 billion, virtually unchanged from the previously published decrease. This followed a 1.3 percent June increase. Transportation equipment, also down two of the last three months, drove the decrease, $4.8 billion or 0.6 percent to $772.2 billion.

Inventories
Inventories of manufactured durable goods in July, up twelve of the last thirteen months, increased $1.3 billion or 0.3 percent to $398.7 billion, virtually unchanged from the previously published increase. This followed a 0.5 percent June increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $0.5 billion or 0.4 percent to $129.6 billion. Inventories of manufactured nondurable goods, up two consecutive months, increased $0.2 billion or 0.1 percent to $252.8 billion. This followed a 0.1 percent June increase. Petroleum and coal products, up following four consecutive monthly decreases, drove the increase, $0.3 billion or 0.8 percent to $34.5 billion. By stage of fabrication, July materials and supplies increased 0.1 percent in durable goods and decreased 0.1 percent in nondurable goods. Work in process was virtually unchanged in durable goods and increased 1.8 percent in nondurable goods. Finished goods increased 0.9 percent in durable goods and decreased 0.6 percent in nondurable goods.


New York Purchasing Managers Business Activity dropped to 56.6 in August
Posted: September 5, 2017 at 08:30 AM (Tuesday)

New York City purchasing managers reported decreased current business conditions while indicating a significant increase in employment and moderate improvement to the six-month outlook, according to the survey taken by the Institute for Supply Management-New York.

New York Metro
Current Business Conditions came in at 56.6 in August, down from 62.8 in July, a seven-month high. The Six-Month Outlook increased to 60.5 in August, ending what had been four consecutive months of decreases. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, increased to 56.4 in August, significantly increasing from the ten-month low of 37.8 we saw in July. Quantity of Purchases decreased slightly to 51.6 in August. News for the top line and forward guidance took different directions without making major changes in August. Current Revenues increased to 48.4 in August, up from 44.4 in July, the lowest point on record. Since this index was tracked in February of 2012, Current Revenues has never been below 50.0 for more than a month at a time until June-July-August 2017. Expected Revenues fell by 0.6 to 68.8 in August. Prices Paid came in at the breakeven point in August, falling to 50.0 from 52.8 in July.


Construction Spending decreased 1.3% in July
Posted: September 1, 2017 at 10:00 AM (Friday)

Construction spending during July 2017 was estimated at a seasonally adjusted annual rate of $1,211.5 billion, 0.6 percent (±1.5 percent) below the revised June estimate of $1,219.2 billion. The July figure is 1.8 percent (±1.8 percent) above the July 2016 estimate of $1,189.8 billion. During the first 7 months of this year, construction spending amounted to $691.2 billion, 4.7 percent (±1.3 percent) above the $659.9 billion for the same period in 2016.

Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $945.5 billion, 0.4 percent (±1.0 percent) below the revised June estimate of $949.4 billion. Residential construction was at a seasonally adjusted annual rate of $517.5 billion in July, 0.8 percent (±1.3 percent) above the revised June estimate of $513.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $428.0 billion in July, 1.9 percent (± 1.0 percent) below the revised June estimate of $436.2 billion.

Public Construction
In July, the estimated seasonally adjusted annual rate of public construction spending was $266.0 billion, 1.4 percent (±2.6 percent) below the revised June estimate of $269.8 billion. Educational construction was at a seasonally adjusted annual rate of $66.2 billion, 4.4 percent (±3.9 percent) below the revised June estimate of $69.2 billion. Highway construction was at a seasonally adjusted annual rate of $84.8 billion, 0.1 percent (±6.9 percent) above the revised June estimate of $84.7 billion.


August Manufacturing ISM expanded to 58.8
Posted: September 1, 2017 at 10:00 AM (Friday)

Economic activity in the manufacturing sector expanded in August, and the overall economy grew for the 99th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The August PMI® registered 58.8 percent, an increase of 2.5 percentage points from the July reading of 56.3 percent. The New Orders Index registered 60.3 percent, a decrease of 0.1 percentage point from the July reading of 60.4 percent. The Production Index registered 61 percent, a 0.4 percentage point increase compared to the July reading of 60.6 percent. The Employment Index registered 59.9 percent, an increase of 4.7 percentage points from the July reading of 55.2 percent. The Supplier Deliveries Index registered 57.1 percent, a 1.7 percentage point increase from the July reading of 55.4 percent. The Inventories Index registered 55.5 percent, an increase of 5.5 percentage points from the July reading of 50 percent. The Prices Index registered 62 percent in August, the same reading as July, indicating higher raw materials’ prices for the 18th consecutive month. Comments from the panel reflect expanding business conditions, with new orders, production, employment, backlog and exports all growing in August, as well as supplier deliveries slowing (improving) and inventories increasing during the period. The Customers’ Inventories Index experienced a sharp decline in August compared to July.

Of the 18 manufacturing industries, 14 reported growth in August, in the following order: Textile Mills; Petroleum & Coal Products; Machinery; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Paper Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Chemical Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; and Food, Beverage & Tobacco Products. Three industries reported contraction in August compared to July: Apparel, Leather & Allied Products; Primary Metals; and Furniture & Related Products.


University of Michigan Consumer Confidence increased in August to 96.8
Posted: September 1, 2017 at 10:00 AM (Friday)

Consumer confidence has remained at a very favorable level, although slipping somewhat from mid-month. The Sentiment Index has been higher during the first eight months of 2017 than in any year since 2000, which was the peak year of the longest expansion in U.S. history. The renewed strength in 2017 was mainly due to consumers' favorable assessments of their own financial situations. Lows in unemployment, inflation, and interest rates, as well as renewed gains in the value of their homes and stock portfolios, pushed personal financial evaluations to near all-time peaks. When asked about news of recent developments, surprisingly few consumers made any reference to Charlottesville, North Korea, or Harvey-although too few interviews were conducted to fully assess the storm's ultimate impact. Harvey may diminish the 3rd quarter pace of economic growth, and higher gas prices will directly impact consumers. Prior to the storm, consumers anticipated no increase in gas prices in the year ahead (an expected change of just +0.4 cents). Given the current resilience of consumers, temporary increases in gas prices as well as a brief period of weakness in economic growth and employment are unlikely to derail confidence. Nonetheless, all of these events are more likely to increase precautionary motives and to slightly temper spending trends.


August Employment increased by 156,000
Unemployment Rate at 4.4%

Posted: September 1, 2017 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 156,000 in August, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining.

Household Survey Data
In August, the unemployment rate, at 4.4 percent, and the number of unemployed persons, at 7.1 million, were little changed. After declining earlier in the year, the unemployment rate has been either 4.3 or 4.4 percent since April.

Among the major worker groups, the unemployment rates for adult men (4.1 percent), adult women (4.0 percent), teenagers (13.6 percent), Whites (3.9 percent), Blacks (7.7 percent), Asians (4.0 percent), and Hispanics (5.2 percent) showed little or no change in August.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in August at 1.7 million and accounted for 24.7 percent of the unemployed.

The labor force participation rate, at 62.9 percent, was unchanged in August and has shown little movement on net over the past year. The employment-population ratio, at 60.1 percent, was little changed over the month and thus far this year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 5.3 million in August and has shown little movement in recent months. 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 August, 1.5 million persons were marginally attached to the labor force, about the same as a year earlier. (These 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 448,000 discouraged workers in August, down 128,000 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 1.1 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment increased by 156,000 in August. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining. Employment growth has averaged 176,000 per month thus far this year, about in line with the average monthly gain of 187,000 in 2016.

Manufacturing employment rose by 36,000 in August. Job gains occurred in motor vehicles and parts (+14,000), fabricated metal products (+5,000), and computer and electronic products (+4,000). Manufacturing has added 155,000 jobs since a recent employment low in November 2016.

In August, construction employment rose by 28,000, after showing little change over the prior 5 months. Employment among residential specialty trade contractors edged up by 12,000 over the month.

Employment in professional and technical services continued to trend up in August (+22,000) and has grown by 262,000 over the last 12 months. In August, job gains occurred in computer systems design and related services (+8,000).

Health care employment continued on an upward trend over the month (+20,000) and has risen by 328,000 over the year. Employment in hospitals edged up over the month (+6,000).

Mining continued to add jobs in August (+7,000), with all of the growth in support activities for mining. Since a recent low in October 2016, employment in mining has risen by 62,000, or 10 percent.

Employment in food services and drinking places changed little in August (+9,000), following an increase of 53,000 in July. Over the year, the industry has added 283,000 jobs.

Employment in other major industries, including wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.4 hours in August. In manufacturing, the workweek declined by 0.2 hour to 40.7 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fifth consecutive month.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $26.39, after rising by 9 cents in July. Over the past 12 months, average hourly earnings have increased by 65 cents, or 2.5 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.12.

The change in total nonfarm payroll employment for June was revised down from +231,000 to +210,000, and the change for July was revised down from +209,000 to +189,000. With these revisions, employment gains in June and July combined were 41,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 185,000 per month over the past 3 months.


Pending Home Sales Index decreased 0.8% in July
Posted: August 31, 2017 at 10:00 AM (Thursday)

Pending homes sales stumbled in July for the fourth time in five months as only the West saw an increase in contract activity, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 0.8 percent to 109.1 in July from a downwardly revised 110.0 in June. After last month’s decline, the index is now 1.3 percent below a year ago and has fallen on an annual basis in three of the past four months.

Lawrence Yun, NAR chief economist, says the staggering inventory woes throughout the country continue to stall contract activity. “With the exception of a minimal gain in the West, pending sales were weaker in most areas in July as house hunters saw limited options for sale and highly competitive market conditions,” he said. “The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace.”

According to Yun, in the past five years, the national median sales price has risen 38 percent, while hourly earnings have increased less than a third of that (12 percent). This unsustainable trend is putting considerable pressure on affordability in some markets – especially for prospective first-time buyers – and is pricing out some households who would otherwise be looking to buy a home. Despite this growing obstacle, Yun says data and feedback from Realtors® continues to confirm that the slowdown in existing sales since spring is the result of a supply problem and not one of diminished demand.

“Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April, and inventory at the end of July was 9.0 percent lower than last July,” said Yun. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”

With autumn at the doorstep, Yun expects existing-home sales to close out the year at around 5.49 million, which is only an increase of 0.7 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

“The combination of weaker contract signings and the expected pause in activity in the Houston region because of Hurricane Harvey will likely slow overall sales growth in coming months,” said Yun.

The PHSI in the Northeast inched backward 0.3 percent to 97.7 in July, but is still 2.4 percent above a year ago. In the Midwest the index decreased 0.7 percent to 103.3 in July, and is now 2.8 percent lower than July 2016.

Pending home sales in the South declined 1.7 percent to an index of 123.1 in July and are now 0.2 percent below last July. The index in the West expanded 0.6 percent in July to 102.3, but is still 4.0 percent below a year ago.


Chicago Purchasing Managers Index remained stable at 58.9 in August
Posted: August 31, 2017 at 09:45 AM (Thursday)

The MNI Chicago Business Barometer remained stable at July’s level of 58.9, the joint-lowest level since April.

While marking the eighteenth consecutive above-50 reading, this month’s unchanged result follows July’s sharp decline that snapped a run of five straight monthly increases in sentiment. Apart from Employment, all other components of the Barometer were above their respective levels seen last August with all of them were above their January levels, pointing to robust confidence among US firms.

The stability in sentiment was the result of gains in production and demand being offset by losses in backlogs, employment and supplier deliveries. Both New Orders and Production increased slightly, following hefty falls last month. Firms also saw the level of backlogs fall in August. The Order Backlogs indicator fell for the second consecutive month following the 23-year high set in June. Suppliers took slightly less time to deliver key inputs, with the respective indicator down to hit 59.3, a four-month low.

Companies saw stock levels fall significantly in August. Some companies reported that they could not satisfy odd requests or huge orders in a timely fashion due to limited inventory. The Inventories indicator fell by 6.4 points to dive into contraction, hitting the lowest level since the start of the year.

The Employment indicator slipped for the third month in a row in August, falling below 50 for the first time since March. Though the indicator has performed materially better since the start of 2017, the indicator’s recent slide raises concerns about the adequacy of well trained workers.

This month’s special question asked firms about their current level of inventories. 16% of firms said they were carrying too little, while the majority, at 57.4%, said their inventory level was about right. That left 26.2% of firms reporting stock levels to be too high. When the same question was posed in November 2015, 44.2% of firms reported having too high inventories while 53.9% held the right level of inventories. That meant only 2% deemed their stock levels to be limited, in contrast to the current year where higher demand expectations have warranted firms to hold higher inventories.

Having picked up last month, inflationary pressures at the factory gate eased slightly again in August. Since the turn of the year, the survey shows that the indicator has been on a downward trend, in line with FOMC’s concerns over the weaker inflation data in the last few months and inflation expectations tilted to the softer side.

“Following the sharp rise in the Barometer to a more than three-year high in June it isn’t too surprising to see activity subsequently ease somewhat. However, overall, the trend remains firm, consistent with the growth story of the US. The disappointment comes from the employment indicator which once again contracted, the sixth time in the last 12 months, with fewer firms expecting an increase in hiring,” said Shaily Mittal, Senior Economist at MNI Indicators.


Personal Income increased 0.4%, Spending increased 0.3%
Posted: August 31, 2017 at 08:30 AM (Thursday)

Personal income increased $65.6 billion (0.4 percent) in July according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.6 billion (0.3 percent) and personal consumption expenditures (PCE) increased $44.7 billion (0.3 percent).

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

The increase in personal income in July primarily reflected increases in wages and salaries and personal income receipts on assets (table 3).

The $29.3 billion increase in real PCE in July reflected an increase of $18.7 billion in spending for goods and an $11.8 billion increase in spending for services (table 7). Within goods, furnishings and durable household equipment was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for food services and accommodations. Detailed information on monthly real PCE spending can be found on Table 2.3.6U.

Personal outlays increased $45.2 billion in July (table 3). Personal saving was $510.2 billion in July and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.5 percent.


Weekly Initial Unemployment Claims Increase 1,000 to 236,000
Posted: August 31, 2017 at 08:30 AM (Thursday)

In the week ending August 26, the advance figure for seasonally adjusted initial claims was 236,000, an increase of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 236,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 237,750 to 238,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 19, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 19 was 1,942,000, a decrease of 12,000 from the previous week's unrevised level of 1,954,000. The 4-week moving average was 1,951,500, a decrease of 6,250 from the previous week's unrevised average of 1,957,750.


Challenger Layoffs increased to 33,825 jobs in August
Posted: August 31, 2017 at 07:00 AM (Thursday)

U.S.-based employers announced plans to cut payrolls by 33,825 in August, a 19.4 percent increase from the 28,307 recorded cuts announced in July, according to a report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The August job-cut total is 5 percent higher than the same month last year, when 32,188 cuts were recorded. This month’s total marks the first increase in job cuts in the past five months of this year. Job cuts have declined each month of this year following the announcement of 43,310 payroll cuts in March.

So far this year, employers announced 289,132 planned job cuts, down 26.1 percent from the 391,288 cuts announced through the first eight months of 2016.

“Although job cuts have risen this month, they continue to be significantly lower compared to the same time last year," said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

“Although we have seen high layoffs in retail with store closings and some companies filing for bankruptcy, there has also been increased hiring in new areas of the sector as retailers build out their e-commerce platforms. Shipping and technology jobs are expanding and going unfilled. We are seeing a labor market in which skilled technical and logistics/supply chain talent is in high demand,” said Challenger.

Retail continues to lead all sectors this year, with 67,596 announced cuts, 3,607 in August. Retail job cuts are 51.4 percent higher this year than through the same point last year, when 44,643 retail cuts were announced.

The construction industry announced the highest number of job cuts in August, with 4,332. Companies in the financial sector cut 3,414 jobs in August, for an eight-month total of 10,799. The services industry announced 3,039 cuts in August, bringing that sector’s total to 21,061.

"Retail is pivoting, and with the holiday rush just around the corner, a big jump in seasonal jobs is imminent. An increasing number of these jobs will involve new technologies and be more customer-centric, as brick-and-mortar retailers seek to create experiences that consumers cannot find online," said Challenger.


Help Wanted OnLine Labor Demand decreased 125,900 to 4,479,800 in August
Posted: August 30, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 125,900 to 4,479,800 in August, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The July Supply/Demand rate stands at 1.52 unemployed for each advertised vacancy, with a total of 2.4 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.0 million in July.

The Professional occupational category saw losses in Education (-13.9) and Computer and Math (-11.3). The Services/Production occupational category saw losses in Sales (-33.7), Office and Administrative Support (-29.3), and Installation (-11.5).


2Q2017 GDP preliminary estimate increased 3.0%
Posted: August 30, 2017 at 08:30 AM (Wednesday)

Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter of 2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 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 2.6 percent. With this second estimate for the second quarter, the general picture of economic growth remains the same; increases in personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than previously estimated. These increases were partly offset by a larger decrease in state and local government spending (see "Updates to GDP" below).

Real gross domestic income (GDI) increased 2.9 percent in the second quarter, compared with an increase of 2.7 percent (revised) in the first. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 3.0 percent in the second quarter, compared with an increase of 2.0 percent in the first quarter.

The increase in real GDP in the second quarter reflected positive contributions from PCE, nonresidential fixed investment, exports, federal government spending, and private inventory investment 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 second quarter primarily reflected upturns in private inventory investment and federal government spending and an acceleration in PCE that were partly offset by downturns in residential fixed investment and state and local government spending and a deceleration in exports.

Current-dollar GDP increased 4.0 percent, or $189.0 billion, in the second quarter to a level of $19,246.7 billion. In the first quarter, current-dollar GDP increased 3.3 percent, or $152.2 billion.

The price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 2.6 percent in the first quarter (table 4). The PCE price index increased 0.3 percent, compared with an increase of 2.2 percent. Excluding food and energy prices, the PCE price index increased 0.9 percent, compared with an increase of 1.8 percent.

Updates to GDP
The percent change in real GDP was revised up from the advance estimate, reflecting upward revisions to PCE and to nonresidential fixed investment that were partly offset by a downward revision to state and local government spending.

For the first quarter of 2017, the percent change in real GDI was revised from 2.6 percent to 2.7 percent based on revised first-quarter tabulations from the BLS Quarterly Census of Employment and Wages program.

Corporate Profits
Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $26.8 billion in the second quarter, in contrast to a decrease of $46.2 billion in the first quarter.

Profits of domestic financial corporations decreased $29.4 billion in the second quarter, compared with a decrease of $40.7 billion in the first quarter. Profits of domestic nonfinancial corporations increased $64.8 billion, compared with an increase of $3.8 billion. The rest-of-the-world component of profits decreased $8.6 billion, compared with a decrease of $9.3 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 second quarter, receipts increased $8.5 billion, and payments increased $17.1 billion.


ADP National Employment Report increased by 237,000 jobs in August
Posted: August 30, 2017 at 08:15 AM (Wednesday)

Private sector employment increased by 237,000 jobs from July to August according to the August ADP National Employment Report®.

“In August, the goods-producing sector saw the best performance in months with solid increases in both construction and manufacturing,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Additionally, the trade industry pulled ahead to lead job gains across all industries, adding the most jobs it has seen since the end of 2016. This could be an industry to watch as consumer spending and wage growth improves.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward. Job creation is strong across nearly all industries, company sizes. Mounting labor shortages are set to get much worse. The initial BLS employment estimate is often very weak in August due to measurement problems, and is subsequently revised higher. The ADP number is not impacted by those problems.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: August 30, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 25, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 49.4 percent of total applications from 48.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.

The FHA share of total applications decreased to 9.7 percent from 10.1 percent the week prior. The VA share of total applications decreased to 10.0 percent from 10.2 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.11 percent, from 4.12 percent, with points increasing to 0.43 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.00 percent from 3.99 percent, with points decreasing to 0.20 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 4.02 percent, with points increasing to 0.41 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 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.36 percent, from 3.40 percent, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.26 percent from 3.27 percent, with points increasing to 0.35 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence improved further in August to 122.9
Posted: August 29, 2017 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in July, improved further in August. The Index now stands at 122.9 (1985=100), up from 120.0 in July. The Present Situation Index increased from 145.4 to 151.2, while the Expectations Index rose marginally from 103.0 last month to 104.0.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was August 16.

“Consumer confidence increased in August following a moderate improvement in July,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ more buoyant assessment of present-day conditions was the primary driver of the boost in confidence, with the Present Situation Index continuing to hover at a 16-year high (July 2001, 151.3). Consumers’ short-term expectations were relatively flat, though still optimistic, suggesting that they do not anticipate an acceleration in the pace of economic activity in the months ahead.”

Consumers’ appraisal of current conditions improved further in August. Those saying business conditions are “good” increased from 32.5 percent to 34.5 percent, while those saying business conditions are “bad” moderated from 13.5 percent to 13.1 percent. Consumers’ assessment of the labor market was also more upbeat. Those stating jobs are “plentiful” rose from 33.2 percent to 35.4 percent, while those claiming jobs are “hard to get” decreased from 18.7 percent to 17.3 percent.

Consumers’ optimism about the short-term outlook was relatively flat in August. The percentage of consumers expecting business conditions to improve over the next six months decreased from 22.4 percent to 19.6 percent, but those expecting business conditions to worsen declined from 8.4 percent to 7.3 percent.

Consumers’ outlook for the labor market was also mixed. The proportion expecting more jobs in the months ahead declined from 18.5 percent to 17.1 percent, while those anticipating fewer jobs decreased marginally from 13.2 percent to 13.0 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased moderately from 20.0 percent to 20.9 percent, while the proportion expecting a decline decreased from 9.5 percent to 7.8 percent.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.9% in June
Posted: August 29, 2017 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 June 2017 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, reported a 5.8% annual gain in June, up from 5.7% the previous month. The 10-City Composite posted a 4.9% annual increase, down from 5.0% the previous month. The 20-City Composite reported a 5.7% year-over-year gain, the same as the previous month.

Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In June, Seattle led the way with a 13.4% year-over-year price increase, followed by Portland with 8.2%, and Dallas with a 7.7% increase. Nine cities reported greater price increases in the year ending June 2017 versus the year ending May 2017.

The chart below compares the year-over-year returns across the twenty cities followed by the S&P Corelogic Case-Shiller Home Price Indices as of this report. Seattle prices are rising 5.2 percentage points faster than Portland, the city with the next highest increase. Seattle has seen the highest year-over-year percentage gains for the last ten months.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.9% in June. The 10-City and 20-City Composites both reported a 0.7% increase in June. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase. The 10-City Composite remained stagnant with no month-over-month increase. The 20-City Composite posted a 0.1% month-over-month increase. All 20 cities reported increases in June before seasonal adjustment; after seasonal adjustment, 14 cities saw prices rise.

ANALYSIS
“The trend of increasing home prices is continuing,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Price increases are supported by a tight housing market. Both the number of homes for sale and the number of days a house is on the market have declined for four to five years. Currently the months-supply of existing homes for sale is low, at 4.2 months. In addition, housing starts remain below their pre-financial crisis peak as new home sales have not recovered as fast as existing home sales.”

“Rising prices are the principal factor driving affordability down. However, other drivers of affordability are more favorable: the national unemployment rate is down, and the number of jobs created continues to grow at a robust pace, rising to close to 200,000 per month. Wages and salaries are increasing, maintaining a growth rate a bit ahead of inflation. Mortgage rates, up slightly since the end of 2016, are under 4%. Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.8% annual gain in June 2017. The 10-City and 20-City Composites reported year-over-year increases of 4.9% and 5.7%, respectively. As of June 2017, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


Paychex-IHS Small Business Jobs Index decreased to 99.96 in August
Posted: August 29, 2017 at 08:30 AM (Tuesday)

The Paychex | IHS Markit Small Business Employment Watch shows a slowdown in small business job growth for the sixth consecutive month in August, while hourly earnings continue to gain momentum. The Small Business Jobs Index stands at 99.96, but the monthly decline in August was minimal at only 0.02 percent. Small business wages continue to rise, reaching a 3.00 percent ($0.76) annual growth rate in August and a 3.27 percent three-month annualized growth rate. National hourly earnings in August were $25.98, an $0.07 increase from July.

"There was little change in August, signifying the index's dip below 100 in July was not a fluke," said James Diffley, chief regional economist at IHS Markit. "Earnings continued to accelerate, with the growth rate now up 3.00 percent from a year ago."

"In reaching 3.00 percent, wage growth hit an important milestone this month," said Martin Mucci, Paychex president and CEO. "The combination of steadily rising wages and relatively consistent job growth are indicators of a healthy small business sector, especially in a year when small business owners are uncertain about potential policy changes and their business implications."


Texas Fed Manufacturing Activity Expands Again in August
Posted: August 28, 2017 at 10:30 AM (Monday)

Texas factory activity continued to increase in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged down to 20.3, indicating output grew but at a slightly slower pace than in July.

Other measures of current manufacturing activity also indicated continued growth. The new orders and the growth rate of orders indexes ticked down but stayed solidly positive, coming in at 14.3 and 11.7, respectively. The capacity utilization index fell six points to 12.2, while the shipments index increased seven points to 18.1.

Perceptions of broader business conditions remained positive in August. The general business activity index was largely unchanged at a robust 17.0. The company outlook index posted its 12th consecutive positive reading but slipped 10 points to 16.3 after surging to a multiyear high last month.

Labor market measures suggested continued employment gains and longer workweeks this month. The employment index came in at 9.9, slightly below the July reading, extending this year’s string of positive readings. Eighteen percent of firms noted net hiring, compared with eight percent noting net layoffs. The hours worked index rose five points to 14.5.

Upward pressure on prices and wages increased in August. The raw materials prices index pushed up 11 points to 26.9, reaching its highest level in six months. The finished goods prices index climbed five points to 10.2. The wages and benefits index also rose, up six points to 26.9.

Expectations regarding future business conditions continued to improve. The indexes of future general business activity and future company outlook remained elevated at 29.2 and 34.5, respectively. Other indexes of future manufacturing activity showed mixed movements but remained solidly in positive territory.


July New Orders for Durable Goods decreased 6.8%, Ex-Trans up 0.5%
Posted: August 25, 2017 at 08:30 AM (Friday)

New Orders
New orders for manufactured durable goods in July decreased $16.7 billion or 6.8 percent to $229.2 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 6.4 percent June increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 7.8 percent. Transportation equipment, also down three of the last four months, drove the decrease, $17.4 billion or 19.0 percent to $74.3 billion.

Shipments
Shipments of manufactured durable goods in July, up three consecutive months, increased $1.0 billion or 0.4 percent to $237.4 billion. This followed a virtually unchanged June increase. Transportation equipment, up two of the last three months, led the increase, $0.4 billion or 0.5 percent to $79.2 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in July, down two of the last three months, decreased $3.8 billion or 0.3 percent to $1,131.8 billion. This followed a 1.3 percent June increase. Transportation equipment, also down two of the last three months, drove the decrease, $4.8 billion or 0.6 percent to $772.2 billion.

Inventories
Inventories of manufactured durable goods in July, up twelve of the last thirteen months, increased $1.3 billion or 0.3 percent to $398.8 billion. This followed a 0.5 percent June increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $0.6 billion or 0.5 percent to $129.6 billion.

Capital Goods
Nondefense new orders for capital goods in July decreased $17.1 billion or 20.2 percent to $67.5 billion. Shipments increased $1.4 billion or 2.0 percent to $72.6 billion. Unfilled orders decreased $5.0 billion or 0.7 percent to $704.5 billion. Inventories decreased $0.4 billion or 0.2 percent to $177.5 billion. Defense new orders for capital goods in July increased $1.5 billion or 14.7 percent to $11.7 billion. Shipments increased $0.3 billion or 3.2 percent to $10.3 billion. Unfilled orders increased $1.4 billion or 1.0 percent to $142.2 billion. Inventories increased $0.7 billion or 3.2 percent to $23.2 billion.

Revised June Data
Revised seasonally adjusted June figures for all manufacturing industries were: new orders, $481.4 billion (revised from $481.1 billion); shipments, $471.9 billion (revised from $471.5 billion); unfilled orders, $1,135.6 billion (revised from $1,135.7 billion) and total inventories, $649.4 billion (revised from $649.1 billion).


Kansas City Fed Manufacturing Activity expanded at a faster pace in August
Posted: August 24, 2017 at 11:00 AM (Thursday)

Tenth District manufacturing activity expanded at a faster pace in August, and expectations for future activity also remained solid. Price indexes rose across the board, especially the expectations index for finished goods prices.

The month-over-month composite index was 16 in July, up from 10 in July and 11 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased solidly at durable goods plants, particularly for electronics, metals, and aircraft products, while nondurable goods activity rose more modestly. Most month-over-month indexes increased over the previous month. The production index jumped from 4 to 22, and shipments, new orders, and order backlog indexes rebounded strongly after falling last month. The employment index has remained basically unchanged for the past three months, while the new orders for exports index edged higher. The finished goods inventory index fell from 7 to 2, while the raw materials inventory index was unchanged.

The year-over-year factory indexes were mixed in August. The composite index was unchanged at 23, while the production, shipments, new orders, and order backlog indexes eased slightly but remained well above zero. However, the employment index was stable at 22, and the capital expenditures index rose from 15 to 21. The raw materials inventory index increased from 10 to 18, while the finished goods inventory index was basically unchanged.

Expectations for future factory activity edged higher after easing slightly last month, and remained solid overall. The future composite index rose from 19 to 23, and the future production, shipments, new orders, and order backlog indexes all increased slightly. The future employment index was unchanged at 26, while the future capital expenditures index inched higher from 16 to 18. The future raw materials inventory index decreased from 4 to -2, and the future finished goods inventory index also fell into negative territory.

Price indexes increased in August. The month-over-month finished goods price index edged up from 5 to 8, and the raw materials price index also inched higher. The year-over-year finished goods price index rose from 20 to 29, and the year-over-year raw materials price index also increased slightly. The future finished goods price index jumped from 13 to 34, and the future raw materials price index moved slightly higher.


Existing-Home Sales slipped 1.3% in July
Posted: August 24, 2017 at 10:00 AM (Thursday)

Listings in July typically went under contract in under 30 days for the fourth consecutive month because of high buyer demand, but existing-home sales ultimately pulled back as large declines in the Northeast and Midwest outweighed sales increases in the South and West, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.

Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”

The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.

Total housing inventory at the end of July declined 1.0 percent to 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.

“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”

Properties typically stayed on the market for 30 days in July, which is up from 28 days in June but down from 36 days a year ago. Fifty-one percent of homes sold in July were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in July were Seattle-Tacoma-Bellevue, Wash., 28 days; San Jose-Sunnyvale-Santa Clara, Calif., 30 days; and Salt Lake City, Utah, and Vallejo-Fairfield, Calif., 31 days.

“July was the fourth consecutive month that the typical listing went under contract in under one month,” said Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”

First-time buyers were 33 percent of sales in July, which is up from 32 percent both in June and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35 percent.

According to President William E. Brown, a Realtor® from Alamo, California, there’s a prominent misconception – especially among non-homeowners – that a down payment of at least 20 percent is needed to buy a home. “Every month this year, roughly 60 percent of buyers who financed their purchase with a mortgage made a down payment that was 6 percent or less,” he said. “Potential buyers with solid employment and manageable levels of debt will find that there are mortgage options available. Talk to a lender to find out what you qualify for based on your savings and let that guide you as you begin your home search with a Realtor®.”

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage rose to 3.97 percent in July from 3.90 percent in June. The average commitment rate for all of 2016 was 3.65 percent.

All-cash sales were 19 percent of transactions in July, up from 18 percent in June but down from 21 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in July, unchanged from June and down from 11 percent a year ago. Distressed sales – foreclosures and short sales – were 5 percent of sales in July, up from 4 percent in June and unchanged from a year ago. Four percent of July sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales decreased 0.8 percent to a seasonally adjusted annual rate of 4.84 million in July from 4.88 million in June, but are still 1.7 percent above the 4.76 million pace a year ago. The median existing single-family home price was $260,600 in July, up 6.3 percent from July 2016.

Existing condominium and co-op sales fell 4.8 percent to a seasonally adjusted annual rate of 600,000 units in July, but are still 5.3 percent higher than a year ago. The median existing condo price was $239,800 in July, which is 5.3 percent above a year ago.

Regional Breakdown
July existing-home sales in the Northeast dropped 14.5 percent to an annual rate of 650,000, and are now 1.5 percent below a year ago. The median price in the Northeast was $290,000, which is 4.1 percent above July 2016.

In the Midwest, existing-home sales fell 5.3 percent to an annual rate of 1.25 million in July, and are now 1.6 percent below a year ago. The median price in the Midwest was $205,400, up 5.9 percent from a year ago.

Existing-home sales in the South rose 2.2 percent to an annual rate of 2.28 million in July, and are now 3.6 percent higher than a year ago. The median price in the South was $227,700, up 6.7 percent from a year ago. Existing-home sales in the West jumped 5.0 percent to an annual rate of 1.26 million in July, and are 5.0 percent above a year ago. The median price in the West was $373,000, up 7.6 percent from July 2016. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.


Weekly Initial Unemployment Claims Increase 2,000 to 234,000
Posted: August 24, 2017 at 08:30 AM (Thursday)

In the week ending August 19, the advance figure for seasonally adjusted initial claims was 234,000, an increase of 2,000 from the previous week's unrevised level of 232,000. The 4-week moving average was 237,750, a decrease of 2,750 from the previous week's unrevised average of 240,500.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 12, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 12 was 1,954,000, unchanged from the previous week's revised level. The previous week's level was revised up 1,000 from 1,953,000 to 1,954,000. The 4-week moving average was 1,957,750, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised up by 250 from 1,960,250 to 1,960,500.


New Home Sales in July at annual rate of 571,000
Posted: August 23, 2017 at 10:00 AM (Wednesday)

Sales of new single-family houses in July 2017 were at a seasonally adjusted annual rate of 571,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.4 percent (±12.9 percent)* below the revised June rate of 630,000 and is 8.9 percent (±15.4 percent)* below the July 2016 estimate of 627,000.

Sales Price
The median sales price of new houses sold in July 2017 was $313,700. The average sales price was $371,200.

For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of July was 276,000. This represents a supply of 5.8 months at the current sales rate.


Purchase Apps down, Refi's up in Latest MBA Weekly Survey
Posted: August 23, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 18, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 48.7 percent of total applications from 47.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.4 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.2 percent the week prior. The VA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.12 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 remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 3.99 percent from 4.04 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.02 percent from 4.01 percent, with points decreasing to 0.37 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.40 percent from 3.41 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.27 percent from 3.34 percent, with points increasing to 0.31 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Richmond Fed's Current Activity Index unchanged at a reading of 14
Posted: August 22, 2017 at 10:00 AM (Tuesday)

Reports on Fifth District manufacturing activity were largely unchanged in August, according to the latest survey by the Federal Reserve Bank of Richmond. The composite index remained at 14 in August, with an increase in the employment index offsetting a decrease in the shipments index and a very slight decline in the new orders metric. Although the employment index rose from 10 to 17 in August, other measures of labor market activity — wages and average workweek — were largely unchanged.

Expectations around manufacturing activity six months ahead were somewhat tempered from July, but manufacturers remained optimistic. Every index for expected activity was well into positive territory, although almost all of the indexes declined from July to August. The one exception was the measure for expected lead time, which rose from 7 in July to 10 in August.

Survey responses show that growth in both prices paid and prices received moderated in August. Meanwhile, reports on inventory levels were little changed, with the index for finished goods inventories down from 17 to 15 and the index for raw materials inventories rising from 17 to 19.


Philadelphia NonManufacturing Activity Indicators continued to expand in August
Posted: August 22, 2017 at 08:30 AM (Tuesday)

Respondents to the August Nonmanufacturing Business Outlook Survey suggested that business activity continued to expand. The firm-level general activity index rose to its highest reading in four months, and the indexes for new orders and sales also improved. However, the indexes for full-time and part-time employment fell. The indicators for prices paid and prices received showed little movement. Both future activity indexes increased, but the respondents’ optimism has waned somewhat since the first half of the year.

Current Indicators Show Growth
The diffusion index for current general activity at the firm level rose 13 points to 30.7 (see Chart). This is the highest reading for this index since April 2017. More than 43 percent of the firms reported an increase in activity in August, while 12 percent reported a decrease. Firms’ perceptions of current activity in the region increased as well, as the regional activity index rose 8 points to 31.8.

New Orders and Sales/Revenues Indicators Strengthen
The indicators for new orders and sales/revenues rose. The new orders index increased from -0.1 in July to 19.4 in August. The percentage of firms that reported an increase in new orders rose 12 points to 38 percent. The sales/revenues index rose 7 points to 24.5. Almost 41 percent of the respondents reported an increase in sales or revenues in August, while 16 percent reported a decrease.

Employment Growth Flattens
The full-time employment index fell 16 points to 3.1, its lowest reading since July 2015. Most firms (74 percent) reported no change in full-time employment in August, while the percentage of firms reporting increases (14 percent) narrowly exceeded the percentage reporting decreases (11 percent). The part-time employment index fell 5 points to 8.7, while the workweek index rose 3 points to 22.4. The wage and benefit costs indicator rose from 30.0 in July to 35.9 in August.

Price Signals Are Steady
The prices paid index increased 2 points to 22.7, which is close to its historical average of 20.1. Almost 26 percent of the respondents reported increases in input prices compared with only 3 percent who reported decreases; most firms (59 percent) reported no change. The prices received index fell slightly to 6.0 and remains below its historical average of 11.7 for the third consecutive month. Most firms (66 percent) continued to report no change in prices received for their own goods and services.

Expectations for Inflation Hold Steady
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 2.2 percent, down slightly from 2.5 percent when the same question was last asked in May 2017. Firms expect their employee compensation costs (wages plus benefits on a per employee basis) to hold steady at 3.0 percent over the next year. When asked about the average rate of inflation for U.S. consumers over the next year, the median response was essentially unchanged at 2.9 percent. The firms also provided a 10-year inflation forecast, and the median remained at 3.0 percent.

Firms Continue to Expect Growth
The respondents continued to report optimism about future activity over the next six months. The diffusion index for future activity at the firm level rose 5 points to 44.9 (see Chart); however, the index remains below its historical average of 49.5 and the higher readings seen earlier this year. Nonetheless, the share of firms that expect to see an increase in activity at their firms over the next six months (59 percent) exceeds the share of firms that expect to see a decrease (14 percent). The future regional activity index also showed improvement, rising 10 points to 44.1.

Summary
Results from this month’s Nonmanufacturing Business Outlook Survey suggest continued business expansion in the region. Although the indicators for employment softened, other indicators of current activity rose from the prior month. Respondents remained optimistic about growth over the next six months.


Chicago Fed National Activity points to growth near historical trend in July
Posted: August 21, 2017 at 08:30 AM (Monday)

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.06 in July from +0.01 in June. Forty-two of the 85 individual indicators made positive contributions to the CFNAI in July, while 43 made negative contributions. Forty indicators improved from June to July, while 45 indicators deteriorated. Of the indicators that improved, 14 made negative contributions.

The contribution from production-related indicators to the CFNAI decreased to –0.02 in July from +0.03 in June. Manufacturing industrial production decreased 0.1 percent in July after increasing 0.2 percent in June; however, total industrial production increased 0.2 percent in July after moving up 0.4 percent in June. The sales, orders, and inventories category made a contribution of –0.01 to the CFNAI in July, down from +0.06 in June.

Employment-related indicators contributed +0.09 to the CFNAI in July, down from +0.13 in June. Nonfarm payroll employment increased by 209,000 in July after rising by 231,000 in June; that said, the civilian unemployment rate ticked down to 4.3 percent in July from 4.4 percent in June.

The contribution of the personal consumption and housing category to the CFNAI edged up to –0.06 in July from –0.07 in June. Consumption indicators improved, on balance, pushing up the category’s overall contribution. However, housing starts decreased to 1,155,000 annualized units in July from 1,213,000 in June, and housing permits decreased to 1,223,000 annualized units in July from 1,275,000 in the previous month.

The CFNAI was constructed using data available as of August 17, 2017. At that time, July data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The June monthly index value was revised to +0.16 from an initial estimate of +0.13, and the May monthly index value was unchanged from last month’s estimate of –0.30. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the June monthly index value was primarily due to the latter.


University of Michigan Consumer Confidence Preliminary August Results at 97.6
Posted: August 18, 2017 at 10:00 AM (Friday)

Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects. The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound. As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017. Too few interviews were conducted following Charlottesville to assess how much it will weaken consumers' economic assessments. The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August. Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump's economic policy agenda have diminished. Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group. At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.


U.S. Leading Economic Index increased 0.3% in July
Posted: August 17, 2017 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for theU.S. increased 0.3 percent in July to 128.3 (2010 = 100), following a 0.6 percent increase in June, and a 0.3 percent increase in May.

“The U.S. LEI improved in July, suggesting the U.S. economy may experience further improvements in economic activity in the second half of the year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The large negative contribution from housing permits, a reversal from June, was more than offset by gains in the financial indicators, new orders and sentiment.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in July to 115.7 (2010 = 100), following a 0.1 percent increase in June, and a 0.3 percent increase in May.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in July to 124.8 (2010 = 100), following a 0.2 percent increase in June and a 0.2 percent increase in May.


Industrial Production increased 0.2%
Capacity Utilization unchanged at 76.7%

Posted: August 17, 2017 at 09:15 AM (Thursday)

Industrial production rose 0.2 percent in July following an increase of 0.4 percent in June. In July, manufacturing output edged down 0.1 percent; the production of motor vehicles and parts fell substantially, but that decrease was mostly offset by a net gain of 0.2 percent for other manufacturing industries. Following a six-month string of increases beginning in September 2016, factory output was little changed, on net, between February and July. The indexes for mining and utilities in July rose 0.5 percent and 1.6 percent, respectively. At 105.5 percent of its 2012 average, total industrial production was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector was unchanged in July at 76.7 percent, a rate that is 3.2 percentage points below its long-run (1972–2016) average.


Weekly Initial Unemployment Claims Decrease 12,000 to 232,000
Posted: August 17, 2017 at 08:30 AM (Thursday)

In the week ending August 12, the advance figure for seasonally adjusted initial claims was 232,000, a decrease of 12,000 from the previous week's unrevised level of 244,000. The 4-week moving average was 240,500, a decrease of 500 from the previous week's unrevised average of 241,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 5, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 5 was 1,953,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 1,951,000 to 1,956,000. The 4-week moving average was 1,960,250, a decrease of 6,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 1,965,000 to 1,966,250.


Philadelphia Fed Outlook Reported Activity continued to advance in August
Posted: August 17, 2017 at 08:30 AM (Thursday)

Manufacturing conditions in the region continued to advance in August, according to firms responding to this month’s Manufacturing Business Outlook Survey. The diffusion index for general activity fell slightly but continued to reflect growth. There was a notable improvement in the new orders and shipments indexes, and overall employment expansion continued among the reporting firms. The survey’s indexes of future activity indicate that firms expect a continuation of growth in the region’s manufacturing sector over the next six months.

Current Indicators All Remain Positive
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell slightly from 19.5 in July to 18.9 in August. The index has been positive for 13 consecutive months (see Chart). Despite the fallback in the general activity index, the demand for manufactured goods, as measured by the survey’s current new orders index, showed notable improvement: The diffusion index increased from 2.1 to 20.4. Firms reported that shipments also continued to rise. The current shipments index increased 17 points to 29.4.

The survey’s indicators for labor market conditions suggest modest growth in employment. The percentage of firms reporting increases in employment (15 percent) was greater than the percentage reporting decreases (5 percent). The employment index held near steady at 10.1. Firms also reported overall increases in average work hours in August, and the workweek index was positive for the 10th consecutive month.

Price Indexes Suggest Modest Price Pressures
The survey’s price indicators suggest moderate price pressures this month: Both the prices paid and prices received indexes remained positive and increased modestly from their July readings. With regard to prices paid for inputs, 24 percent of the respondents reported higher input prices, the same as last month. The current prices paid index edged 2 points higher after declining for the previous four months. The prices received index increased 5 points, with 16 percent of the firms reporting higher prices and 3 percent reporting lower prices.

Firms Expect Their Own Price Increases to Be Slightly Below 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). Regarding their own prices, the firms’ median forecast was for an increase of 2.0 percent, the same as when the question was last asked in May 2017. When asked about the rate of inflation for U.S. consumers over the next year, the firms’ median forecast was 2.5 percent, an increase from the previous forecast of 2.2 percent in May. Firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise 3.0 percent over the next four quarters, the same as the previous forecast in May. Firms’ forecast for the long-run (10-year average) inflation rate remained unchanged at 3.0 percent this quarter.

Six-Month Forecasts Show Improvement
The diffusion index for future general activity increased from a reading of 36.9 in July to 42.3 this month, its highest reading in four months (see Chart). Over the next six months, nearly 49 percent of the firms expect increases in activity, and only 7 percent expect decreases. The indexes for future new orders and shipments also increased from their July readings, by 10 points and 18 points, respectively. The future employment index increased 6 points, marking its highest reading in four months. Over 38 percent of the manufacturers said they expect to expand employment over the next six months, while only 5 percent expect to reduce employment. Although the future capital spending index fell 3 points, firms remain optimistic in their investment plans, with 42 percent of the firms expecting to increase capital spending over the next six months.

Summary
Responses to the August Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector, as all of the broad current indicators remained positive. Firms reported a notable expansion in new orders and shipments this month. The survey’s future indexes indicate that respondents continue to expect growth over the next six months.


July Housing Starts down 4.8%, Permits down 4.1%
Posted: August 16, 2017 at 08:30 AM (Wednesday)

Building Permits
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent (±0.9 percent) below the revised June rate of 1,275,000, but is 4.1 percent (±1.8 percent) above the July 2016 rate of 1,175,000. Single-family authorizations in July were at a rate of 811,000; this is unchanged from the revised June figure of 811,000. Authorizations of units in buildings with five units or more were at a rate of 377,000 in July.

Housing Starts
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000. This is 4.8 percent (±10.2 percent)* below the revised June estimate of 1,213,000 and is 5.6 percent (±8.5 percent)* below the July 2016 rate of 1,223,000. Single-family housing starts in July were at a rate of 856,000; this is 0.5 percent (±8.5 percent)* below the revised June figure of 860,000. The July rate for units in buildings with five units or more was 287,000.

Housing Completions
Privately-owned housing completions in July were at a seasonally adjusted annual rate of 1,175,000. This is 6.2 percent (±14.3 percent)* below the revised June estimate of 1,252,000, but is 8.2 percent (±12.6 percent)* above the July 2016 rate of 1,086,000. Single-family housing completions in July were at a rate of 814,000; this is 1.6 percent (±11.9 percent)* below the revised June rate of 827,000. The July rate for units in buildings with five units or more was 354,000.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 16, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 11, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 10 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 47.8 percent of total applications, its highest level since February 2017, from 46.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.

The FHA share of total applications remained unchanged from the week prior at 10.2 percent. The VA share of total applications decreased to 10.5 percent from 10.7 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.12 percent, from 4.14 percent, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.04 percent from 4.07 percent, with points increasing to 0.27 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.01 percent from 4.02 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.41 percent, with points decreasing to 0.35 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.34 percent from 3.31 percent, with points increasing to 0.29 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


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