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Category: Research - Topic: Economics


Construction Spending decreased 0.6% in March
Posted: May 1, 2015 at 10:00 AM (Friday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2015 was estimated at a seasonally adjusted annual rate of $966.6 billion, 0.6 percent (±1.3%)* below the revised February estimate of $972.9 billion. The March figure is 2.0 percent (±1.6%) above the March 2014 estimate of $947.3 billion. During the first 3 months of this year, construction spending amounted to $206.7 billion, 3.2 percent (±1.5%) above the $200.4 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $702.4 billion, 0.3 percent (±1.0%)* below the revised February estimate of $704.7 billion. Residential construction was at a seasonally adjusted annual rate of $349.0 billion in March, 1.6 percent (±1.3%) below the revised February estimate of $354.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $353.4 billion in March, 1.0 percent (±1.0%)* above the revised February estimate of $350.1 billion.

PUBLIC CONSTRUCTION
In March, the estimated seasonally adjusted annual rate of public construction spending was $264.2 billion, 1.5 percent (±2.3%)* below the revised February estimate of $268.2 billion. Educational construction was at a seasonally adjusted annual rate of $58.4 billion, 2.2 percent (±3.9%)* below the revised February estimate of $59.7 billion. Highway construction was at a seasonally adjusted annual rate of $78.0 billion, 2.4 percent (±6.3%)* below the revised February estimate of $79.9 billion.


March Manufacturing ISM expanded slower at 51.5
Posted: May 1, 2015 at 10:00 AM (Friday)

Economic activity in the manufacturing sector expanded in April for the 28th consecutive month, and the overall economy grew for the 71st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The April PMI® registered 51.5 percent, the same reading as in March. The New Orders Index registered 53.5 percent, an increase of 1.7 percentage points from the reading of 51.8 percent in March. The Production Index registered 56 percent, 2.2 percentage points above the March reading of 53.8 percent. The Employment Index registered 48.3 percent, 1.7 percentage points below the March reading of 50 percent, reflecting contracting employment levels from March. Inventories of raw materials registered 49.5 percent, a decrease of 2 percentage points from the March reading of 51.5 percent. The Prices Index registered 40.5 percent, 1.5 percentage points above the March reading of 39 percent, indicating lower raw materials prices for the sixth consecutive month. While the March and April PMI® were equal, both registering 51.5 percent, 15 of the 18 manufacturing industries reported growth in April while only 10 industries reported growth in March, indicating a broader distribution of growth in April among the 18 industries.

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


University of Michigan Consumer Confidence up in April to 95.9
Posted: May 1, 2015 at 10:00 AM (Friday)

Consumer optimism rose in April of 2015 to its second highest level since 2007—only below the January 2015 level. Moreover, the Sentiment Index has recorded a higher average level during the past five months than anytime since May 2004. Although recent gains in jobs and incomes have prompted the most favorable personal financial expectations in eight years, consumers’ assessments of their financial situation are still far below the peaks recorded in earlier decades. Consumer optimism has become increasingly dependent on the persistence of low inflation and low interest rates as well as slowly improving prospects for jobs and incomes. Despite a slower pace in the 1st quarter, personal consumption spending is expected to post a 3.0% gain in 2015.

Personal Finances Post Significant Improvement
Personal financial gains were expected by 37% of all consumers in the April survey, the highest proportion since April 2007. The improvement was due to both higher income expectations as well as more job opportunities, although the anticipated gains in incomes and jobs remained quite modest. Record low inflation expectations meant that consumers expected improved living standards during the year ahead as inflation-adjusted income gains were expected more frequently than since 2006.

Home Selling Boosts Home Buying
Since most home buyers must sell their current home, it was the significant improvement in home selling conditions in April that will have a critical influence on improving future home sales. Among all consumers, 58% reported favorable home selling conditions, the highest percentage since May of 2006. Rising home prices, low interest rates and gains in the value of the homes they owned all contributed to the improvement.

The Consumer Sentiment Index was 95.9 in the April 2015 survey, up from 93.0 in March and significantly above last April’s 84.1. The Current Conditions Index was 107.0 in April, up from 105.0 in March and well above last year’s 98.7. The Expectations Index rose slightly to 88.8 in April from 85.3 in March, but posted a substantial gain from last March’s 74.7.

While nearly two-thirds of all consumers anticipate rising interest rates during the year ahead, they nonetheless expect very minimal increases. For a successful Fed policy, consumers must judge whether the negative impact of higher interest rates will be easily offset by the positive impact of expanding jobs and incomes. That tradeoff accompanied rate hikes in the past, but it has never been undertaken when interest rates have been so low for so long. Along with other changes in consumer evaluations that have recently occurred, consumers are likely to have become more responsive to much smaller changes in interest rates than in the past.


Chicago Purchasing Managers Index rose 6.0 points to 52.3 in April
Posted: April 30, 2015 at 10:00 AM (Thursday)

The Chicago Business Barometer made a positive start to the second quarter, rising by 6.0 points to 52.3 in April, the highest since January, and further distancing itself from February’s 5½-year low.

The Barometer was supported by gains in four of its five components including a double digit gain in New Orders that reversed around two-thirds of February’s sharp drop. Order Backlogs also rose strongly but remained below the 50 breakeven line, a reflection of the recent downturn in orders. Production moved out of contraction and the strong gain in New Orders should help to underpin output over the coming months.

Feedback from panelists was very mixed. Comments from service sector companies were more positive than manufacturers.

In line with the improvement in orders and output, Employment increased to the highest since January, following the slump in February and March that affected nearly all of the indicators in the survey as growth in the US economy decelerated sharply in Q1.

Lead times for Supplier Deliveries declined for a second month, although an overwhelming majority of survey panelists reported that they were unchanged from last month. Quicker lead times were due in part to better weather, a resumption of normality following the disruption of the West Coast port strike and the Chinese New Year. In contrast, days to source Production Materiel rose for the second month and to the longest since August 2014.

Following a sharp increase in March, inventories of finished goods edged slightly lower in line with the pick-up in orders in April after weaker sales than expected in the previous two months.

Disinflationary pressures intensified in April as Prices Paid contracted at a faster rate, hitting the lowest level since July 2009. Some purchasers cited weakness in oil and steel related products.

In a special question posed in April, half of the panel thought that a rate hike by the Fed over the next six months would have no impact on their business as it had already been factored in.

Chief Economist of MNI Indicators Philip Uglow said, “The bounce back in activity at the start of Q2 is consistent with a resumption of normal activity following the poor weather and port strikes earlier in the year. In percentage terms, the April jump is similar to last year, although the level of activity is lower overall.“


DJ-BTMU U.S. Business Barometer dropped by 0.2%
Posted: April 30, 2015 at 10:00 AM (Thursday)

For the week ending April 18 2015, the BTMU U.S. Business Barometer dropped by 0.2 percent to 98.8. This week’s barometer was mainly driven by weak performances in most production indexes, particularly steel production, which reported the largest weekly drop (-3.8 percent) in a year. Lumber production as well declined by 2.2 percent. Although auto and coal production posted significant gains, they were not enough to offset the losses of other productions indexes. As to the consumption side, MBA’s purchase index rose by 5.0 percent, but it was somewhat offset by drops in chain store sales and railroad freight car loadings.

On a year-over-year basis, the barometer showed a gain of 0.6 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, stayed at 98.8. Its year-over-year growth rate was 0.6 percent.


Personal Income increased less than 0.1%, Spending increased 0.4%
Posted: April 30, 2015 at 08:30 AM (Thursday)

Personal income increased $6.2 billion, or less than 0.1 percent, and disposable personal income (DPI) increased $1.6 billion, or less than 0.1 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $53.4 billion, or 0.4 percent. In February, personal income increased $66.4 billion, or 0.4 percent, DPI increased $61.2 billion, or 0.5 percent, and PCE increased $20.8 billion, or 0.2 percent, based on revised estimates.

Real DPI decreased 0.2 percent in March, in contrast to an increase of 0.3 percent in February. Real PCE increased 0.3 percent, in contrast to a decrease of less than 0.1 percent.


Employment Cost Index up 0.7% in 1Q2015
Posted: April 30, 2015 at 08:30 AM (Thursday)

Compensation costs for civilian workers increased 0.7 percent, seasonally adjusted, for the 3-month period ending March 2015, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.7 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.6 percent.


Weekly Initial Unemployment Claims Decrease 34,000 to 262,000
Posted: April 30, 2015 at 08:30 AM (Thursday)

In the week ending April 25, the advance figure for seasonally adjusted initial claims was 262,000, a decrease of 34,000 from the previous week's revised level. This is the lowest level for initial claims since April 15, 2000 when it was 259,000. The previous week's level was revised up by 1,000 from 295,000 to 296,000. The 4-week moving average was 283,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 500 from 284,500 to 285,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending April 18, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 18 was 2,253,000, a decrease of 74,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 2, 2000 when it was 2,229,000. The previous week's level was revised up 2,000 from 2,325,000 to 2,327,000. The 4-week moving average was 2,290,750, a decrease of 18,500 from the previous week's revised average. This is the lowest level for this average since December 23, 2000 when it was 2,288,500. The previous week's average was revised up by 500 from 2,308,750 to 2,309,250.


FOMC target funds rate reaffirmed at 0 - 1/4%
Posted: April 29, 2015 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady. A range of labor market indicators suggests that underutilization of labor resources was little changed. Growth in household spending declined; households' real incomes rose strongly, partly reflecting earlier declines in energy prices, and consumer sentiment remains high. Business fixed investment softened, the recovery in the housing sector remained slow, and exports declined. Inflation continued to run below the Committee's longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Although growth in output and employment slowed during the first quarter, the Committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of declines in energy and import prices dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

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

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams.


Pending Home Sales Index rose 1.1% in March
Posted: April 29, 2015 at 10:00 AM (Wednesday)

Pending home sales in March continued their recent momentum, rising for the third straight month and remaining at their highest level since June 2013, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 1.1 percent to 108.6 in March from an upward revision of 107.4 in February and is now 11.1 percent above March 2014 (97.7). The index has now increased year-over-year for seven consecutive months and is at its highest level since June 2013 (109.4).

Contract signings picked up in March as more buyers than usual entered this year's competitive spring market. Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year. While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news1. It indicates this year's activity is being driven by more long-term homeowners.

Expect a gradual improvement in home sales in the months ahead but insufficient supply and accelerating prices could be a drawback to sales reaching their full potential.

Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer. This in turn has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.

The PHSI in the Northeast fell (1.5 percent) for the fourth straight month to 80.2 in March, but is still 0.6 percent above a year ago. In the Midwest the index declined 2.5 percent to 107.5 in March, but is 11.3 percent above March 2014.

Pending home sales in the South increased 4.0 percent to an index of 126.5 in March and are 12.4 percent above last March. The index in the West rose 1.7 percent in March to 103.7, and is now 15.6 percent above a year ago.


1Q2015 GDP advance estimate increased 0.2%
Posted: April 29, 2015 at 08:30 AM (Wednesday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 0.2 percent in the first quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.2 percent.

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

The deceleration in real GDP growth in the first quarter reflected a deceleration in PCE, downturns in exports, in nonresidential fixed investment, and in state and local government spending, and a deceleration in residential fixed investment that were partly offset by a deceleration in imports and upturns in private inventory investment and in federal government spending.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 1.5 percent in the first quarter, compared with a decrease of 0.1 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 0.3 percent, compared with an increase of 0.7 percent.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 29, 2015 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 April 24, 2015.

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 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 21 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 55 percent of total applications, its lowest level since September 2014, from 56 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications. The average loan size for purchase applications rose to a survey high of $297,000.

The FHA share of total applications increased to 13.7 percent from 13.6 percent the week prior. The VA share of total applications increased to 11.3 percent from 11.0 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85 percent from 3.83 percent, with points increasing to 0.35 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.82 percent from 3.83 percent, with points increasing to 0.31 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.66 percent from 3.65 percent, with points increasing to 0.16 from 0.12 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.14 percent from 3.11 percent, with points increasing to 0.31 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.88 percent from 2.89 percent, with points decreasing to 0.27 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 gained 5 points to a reading of -3
Posted: April 28, 2015 at 10:00 AM (Tuesday)

Manufacturing activity remained soft in April, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments, order backlogs, and the volume of new orders declined, although at a slower pace compared to last month. Manufacturing employment grew mildly, while the average workweek increased and wages rose slightly.

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

Survey participants planned more hiring, along with moderate growth in wages and a pickup in the average workweek during the next six months.

Prices of finished goods rose more rapidly in April compared to last month. Additionally, prices of raw materials grew slightly faster than a month ago. Firms looked for faster growth in prices paid and prices received over the next six months, although their outlook was below March’s expectations.

Overall, manufacturing conditions remained soft in April. The composite index for manufacturing moved to a reading of −3 following last month's reading of −8. The index for shipments and the index for new orders gained seven points in April, although both indicators finished at only −6. Manufacturing employment grew mildly this month. The indicator gained one point, ending at a reading of 7.

The indicator for vendor lead time remained negative. That gauge moved up three points to a reading of −6. Capacity utilization remained soft. The index moved up three points ending at −4. The index for backlog of new orders gained four points, finishing at a reading of −8. Finished goods inventories rose at a slower pace than a month ago. The index lost seven points, ending at 18.

Additionally, raw materials inventories increased at a slower rate compared to last month. That gauge moved to 19 from 25.


Consumer Confidence declined in April to 95.2
Posted: April 28, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in March, declined in April. The Index now stands at 95.2 (1985=100), down from 101.4 in March. The Present Situation Index decreased from 109.5 last month to 106.8 in April. The Expectations Index declined from 96.0 last month to 87.5 in April.

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 April 17.

“Consumer confidence, which had rebounded in March, gave back all of the gain and more in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lackluster performance of the labor market, and apprehension about the short-term outlook. The Present Situation Index declined for the third consecutive month. Coupled with waning expectations, there is little to suggest that economic momentum will pick up in the months ahead.”

Consumers’ appraisal of current-day conditions continued to soften. Those saying business conditions are “good” edged down from 26.7 percent to 26.5 percent. However, those claiming business conditions are “bad” also decreased from 19.4 percent to 18.2 percent. Consumers were less favorable in their assessment of the job market. Those stating jobs are “plentiful” declined from 21.0 percent to 19.1 percent, while those claiming jobs are “hard to get” rose from 25.5 percent to 26.4 percent.

Consumers’ optimism about the short-term outlook, which had rebounded in March, retreated in April. The percentage of consumers expecting business conditions to improve over the next six months decreased from 16.8 percent to 16.0 percent, while those expecting business conditions to worsen increased from 8.1 percent to 9.4 percent.

Consumers’ outlook for the labor market also deteriorated. Those anticipating more jobs in the months ahead decreased from 15.3 percent to 13.8 percent, while those anticipating fewer jobs rose from 13.6 percent to 16.3 percent. The proportion of consumers expecting growth in their incomes decreased from 18.8 percent to 18.3 percent, while the proportion expecting a decline increased from 9.7 percent to 11.2 percent.


S&P/Case-Shiller Home Price Indices increase 0.1% in February
Posted: April 28, 2015 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released for February 2015 show that home prices continued their rise across the country over the last 12 months.

Year-over-Year
Both the 10-City and 20-City Composites saw larger year-over-year increases in February compared to January. The 10-City Composite gained 4.8% year-over-year, up from 4.3% in January. The 20-City Composite gained 5.0% year-over-year, compared to a 4.5% increase in January. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in February 2015, weaker than the 4.4% increase in January 2015.

Denver and San Francisco reported the highest year-over-year gains, as prices increased by 10.0% and 9.8%, respectively, over the last 12 months. It was the first double digit increase for Denver since August 2013. Seventeen cities reported higher year-over-year price increases in the year ended February 2015 than in the year ended January 2015, with San Francisco showing the largest acceleration. Three cities -- San Diego, Las Vegas and Portland, OR -- reported that the pace of annual price increases slowed.

Month-over-Month
The National Index rebounded in February, reporting a 0.1% change for the month. Both the 10- and 20-City Composites reported significant month-over-month increases of 0.5%, their largest increase since July 2014. Of the sixteen cities that reported increases, San Francisco and Denver led all cities in February with increases of 2.0%and 1.4%. Cleveland reported the largest drop as prices fell 1.0%. Las Vegas and Boston reported declines of -0.3% and -0.2% respectively.

Analysis
Home prices continue to rise and outpace both inflation and wage gains. The S&P/Case-Shiller National Index has seen 34 consecutive months with positive year-over-year gains; all 20 cities have shown year-over-year gains every month since the end of 2012. While prices are certainly rebounding, only two cities – Denver and Dallas – have surpassed their housing boom peaks. Nationally, prices are almost 10% below the high set in July 2006. Las Vegas fell 61.7% peak to trough and has the farthest to go to set a new high; it is 41.5% below its high. If a complete recovery means new highs all around, we’re not there yet.

A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation adjusted numbers. Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9% or a 1.7% annual rate. The highest price gain over the last 15 years was in Los Angeles with a 4.3% real annual rate; the lowest was Detroit with a -3.6% real annual rate. While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in February 2015. The 10- and 20-City Composites reported year-over-year increases of 4.8% and 5.0%.

As of February 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 15-17%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 28.8% and 29.5%.


Texas Manufacturing Activity Weakens Again
Posted: April 27, 2015 at 10:00 AM (Monday)

Texas factory activity declined in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a second negative reading in a row, coming in at -4.7.

Other measures of current manufacturing activity also reflected continued contraction in April. The new orders index edged up but remained negative at -14. The growth rate of orders index held steady at -15.5, posting its sixth consecutive negative reading. The capacity utilization index pushed further negative to -10.4, its lowest level since August 2009, and the shipments index edged up but stayed below zero at -5.6.

Perceptions of broader business conditions remained quite pessimistic for a fourth month in a row. The general business activity index stayed negative but ticked up to -16 in April, while the company outlook index moved down to -7.8, reaching its lowest reading in nearly two and a half years.

Labor market indicators reflected slight employment gains but shorter workweeks. The April employment index rebounded to 1.8 after dipping below zero last month. Nineteen percent of firms reported net hiring, compared with 17 percent reporting net layoffs. The hours worked index stayed at -5 in April, suggesting a fourth month in a row of slightly shorter workweeks.

Downward pressure on prices remained in April, while wages continued to rise. The raw materials prices index edged down to -11.2, and the finished goods prices index edged up to -7.7. The negative April readings for these indexes mark a fourth consecutive month of lower input costs and selling prices. Meanwhile, the wages and benefits index remained positive and held fairly steady at 16.5.

Measures of future business conditions weakened in April. The index of future general business activity fell 9 points to -5.9, while the index of future company outlook declined from 12.8 to 5.3. Indexes for future manufacturing activity also moved down but remained in solid positive territory.


New Orders for Durable Goods Increased 4.0%, Ex-Trans Down 0.2%
Posted: April 24, 2015 at 08:30 AM (Friday)

New orders for manufactured durable goods in March increased $9.3 billion or 4.0 percent to $240.2 billion, the U.S. Census Bureau announced today. This increase, up two of the last three months, followed a 1.4 percent February decrease. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders increased 2.6 percent. Transportation equipment, also up two of the last three months, drove the increase, $9.5 billion or 13.5 percent to $80.3 billion.

Shipments of manufactured durable goods in March, up following two consecutive monthly decreases, increased $2.7 billion or 1.1 percent to $246.7 billion. This followed a 0.2 percent February decrease. Transportation equipment, up three of the last four months, drove the increase, $3.2 billion or 4.3 percent to $78.0 billion.

Unfilled orders for manufactured durable goods in March, up following three consecutive monthly decreases, increased $0.3 billion or slightly to $1,156.4 billion. This followed a 0.5 percent February decrease. Transportation equipment, also up following three consecutive monthly decreases, drove the increase, $2.3 billion or 0.3 percent to $734.5 billion.

Inventories of manufactured durable goods in March, up twenty-three of the last twenty-four months, increased $0.3 billion or 0.1 percent to $412.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent February increase. Computers and electronic products, up seven of the last eight months, drove the increase, $0.3 billion or 0.7 percent to $50.1 billion.

Nondefense new orders for capital goods in March increased $2.7 billion or 3.5 percent to $80.2 billion. Shipments decreased $0.3 billion or 0.4 percent to $79.7 billion. Unfilled orders increased $0.5 billion or 0.1 percent to $728.6 billion. Inventories increased $0.1 billion or 0.1 percent to $186.7 billion. Defense new orders for capital goods in March increased $1.4 billion or 17.0 percent to $9.5 billion. Shipments increased $0.8 billion or 8.8 percent to $9.9 billion. Unfilled orders decreased $0.4 billion or 0.3 percent to $152.1 billion. Inventories decreased $0.3 billion or 1.1 percent to $24.5 billion.

Revised seasonally adjusted February figures for all manufacturing industries were: new orders, $468.0 billion (revised from $468.3 billion); shipments, $481.1 billion (revised from $481.3 billion); unfilled orders, $1,156.2 billion (revised from $1,156.3 billion); and total inventories, $650.8 billion (revised from $651.0 billion).


Kansas City Fed Manufacturing Activity declined further in April
Posted: April 23, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined further in April, while producers’ expectations improved slightly from last month. Most price indexes continued to decrease, particularly for future raw materials. In a special question about the impact of the stronger dollar, many firms said that although it has put downward pressure on input prices, international sales have weakened considerably.

The month-over-month composite index was -7 in April, down from -4 in March and 1 in February. The last time the composite index was lower was in May 2009. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declining durable goods manufacturing, including a sharp decline in aircraft production and continued weakness in metals and machinery. Looking across District states, the most severe declines continued to be in energy-producing states such as Oklahoma and Wyoming. Most other month-over-month indexes also decreased from the previous month. The shipments index fell from 0 to -7, and the order backlog and employment indexes dropped to their lowest levels since 2009. In contrast, the production index remained unchanged at -2, and the new orders index rose slightly but still remained negative. The finished goods inventory index increased from -1 to 5, while the raw materials inventory index was basically unchanged.

Year-over-year factory indexes were mixed but remained negative overall. The composite year-over-year index inched lower from -2 to -3, and the employment index fell to its lowest level since July 2007. The production, shipments, and order backlog indexes all improved slightly but were still in negative territory. The new orders index was unchanged, while the capital expenditures index rose from 3 to 8. The finished goods inventory index decreased from 9 to 4, but the raw materials inventory index was unchanged.

Most future factory indexes increased slightly in April. The future composite index edged higher from 4 to 6, and the future production and order backlog indexes also rose modestly. The future new orders index jumped from 6 to 21, and the future capital expenditures index also improved. In contrast, the future employment index fell into negative territory for the first time since 2009, and the future new orders for exports indexes dropped from 4 to -6. The future finished goods inventory index moved higher from -9 to -2, while the future raw materials inventory index was basically unchanged.

Most price indexes continued to decrease in April. The month-over-month finished goods price index eased from -6 to -10, while the raw materials price index edged higher. The year-over-year raw materials price index fell from 22 to 7, and the finished goods price index inched lower. The future raw materials price index dropped from 24 to 9, its lowest level since May 2009, and the future finished goods price index also fell.


New Home Sales in March at annual rate of 481,0000
Posted: April 23, 2015 at 10:00 AM (Thursday)

Sales of new single-family houses in March 2015 were at a seasonally adjusted annual rate of 481,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.4 percent (±18.6%) below the revised February rate of 543,000, but is 19.4 percent (±21.8%)* above the March 2014 estimate of 403,000.

The median sales price of new houses sold in March 2015 was $277,400; the average sales price was $343,300. The seasonally adjusted estimate of new houses for sale at the end of March was 213,000. This represents a supply of 5.3 months at the current sales rate.


DJ-BTMU U.S. Business Barometer rose by 0.2%
Posted: April 23, 2015 at 10:00 AM (Thursday)

For the week ending April 11 2015, the BTMU U.S. Business Barometer rose by 0.2 percent to 99.0, the highest level since the beginning of the year. This week’s barometer was mainly fuelled by strong performances in consumption indexes. Chain store sales increased by 0.9 percent, extending the positive trend for three weeks in a row. Railroad freight car loadings as well rose by 1.1 percent after declining by 1.8 percent last week. As to the production side, all indexes except steel and truck production reported losses. For example, lumber and coal production dropped by 1.7 and 1.6 percent, respectively.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased again by 0.1 percent to 98.8. Its year-over-year growth rate was 0.6 percent.


Weekly Initial Unemployment Claims Increase 1,000 to 295,000
Posted: April 23, 2015 at 08:30 AM (Thursday)

In the week ending April 18, the advance figure for seasonally adjusted initial claims was 295,000, an increase of 1,000 from the previous week's unrevised level of 294,000. The 4-week moving average was 284,500, an increase of 1,750 from the previous week's unrevised average of 282,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending April 11, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 11 was 2,325,000, an increase of 50,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,268,000 to 2,275,000. The 4-week moving average was 2,308,750, a decrease of 22,000 from the previous week's revised average. This is the lowest level for this average since December 23, 2000 when it was 2,288,500. The previous week's average was revised up by 1,750 from 2,329,000 to 2,330,750.


Existing-Home Sales increased 6.1% in March
Posted: April 22, 2015 at 10:00 AM (Wednesday)

Existing-home sales jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the National Association of Realtors®. Led by the Midwest, all major regions experienced strong sales gains in March and are above their year-over-year sales pace.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 6.1 percent to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February—the highest annual rate since September 2013 (also 5.19 million). Sales have increased year-over-year for six consecutive months and are now 10.4 percent above a year ago, the highest annual increase since August 2013 (10.7 percent). March's sales increase was the largest monthly increase since December 2010 (6.2 percent).

The housing market appears to be off to an encouraging start this spring. After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.

Total housing inventory at the end of March climbed 5.3 percent to 2.00 million existing homes available for sale, and is now 2.0 percent above a year ago (1.96 million). Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7 months in February.

The median existing-home price for all housing types in March was $212,100, which is 7.8 percent above March 2014. This marks the 37th consecutive month of year-over-year price gains and the largest since February 2014 (8.8 percent).

The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign. For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market.

The percent share of first-time buyers was 30 percent in March, marking the third time since last March that the first-time buyer share was at or above 30 percent. First-time buyers represented 29 percent of all buyers last month; they were 30 percent in March 2014.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased in March for the second consecutive month, rising to 3.77 percent from 3.71 percent in February. Despite the slight increase, the monthly average is still below 4.00 percent for the fourth straight month.

There needs to be additional choices for borrowers looking for safe and secure mortgage products to finance their home purchase. Realtors® urge the U.S. Senate to schedule a vote for the bipartisan Mortgage Choice Act, which passed the U.S. House of Representatives last week.

This legislation levels the playing field for brokerages with affiliated business agreements by eliminating the 3 percent cap on the calculations of fees and points in the Dodd-Frank Ability-to-Repay/Qualified Mortgage rule.

All-cash sales were 24 percent of transactions in March, down from 26 percent in February and down considerably from a year ago (33 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in March, unchanged from last month and down from 17 percent in March 2014. Seventy percent of investors paid cash in March.

Distressed sales—foreclosures and short sales—were 10 percent of sales in March, down from 11 percent in February and 14 percent a year ago. Seven percent of March sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (17 percent in February), while short sales were also discounted 16 percent (15 percent in February).

A NAR study released earlier this week revealed that nearly a million formerly distressed owners of prime quality have become re-eligible for Federal Housing Administration or similar financing programs and may have purchased a home again, and an additional 1.5 million are likely to become eligible over the next five years. However, damaged credit and other factors will severely limit the overall number of those being able to return.

Properties typically stayed on the market for a shorter time period in March (52 days) compared to February (62 days), and are also selling slightly faster than a year ago (55 days). Short sales were on the market the longest at a median of 165 days in March, while foreclosures sold in 56 days and non-distressed homes took 51 days. Forty percent of homes sold in March were on the market for less than a month.

Single-family home sales rose 5.5 percent to a seasonally adjusted annual rate of 4.59 million in March from 4.35 million in February, and are now 10.9 percent above the 4.14 million pace a year ago. The median existing single-family home price was $213,500 in March, up 8.7 percent from March 2014.

Existing condominium and co-op sales increased 11.1 percent to a seasonally adjusted annual rate of 600,000 units in March from 540,000 units in February, and are now 7.1 percent higher than March 2014 (560,000 units). The median existing condo price was $201,400 in March, which is 1.6 percent higher than a year ago.

March existing-home sales in the Northeast increased 6.9 percent to an annual rate of 620,000, and are 1.6 percent above a year ago. The median price in the Northeast was $240,500, which is 1.6 percent below a year ago.

In the Midwest, existing-home sales jumped 10.1 percent to an annual rate of 1.20 million in March, and are now 12.1 percent above March 2014. The median price in the Midwest was $163,600, up 9.7 percent from a year ago.

Existing-home sales in the South climbed 3.8 percent to an annual rate of 2.19 million in March, and are now 11.7 percent above March 2014. The median price in the South was $187,900, up 9.3 percent from a year ago.

Existing-home sales in the West rose 6.3 percent to an annual rate of 1.18 million in March, and are now 11.3 percent above a year ago. The median price in the West was $305,000, which is 8.3 percent above March 2014.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: April 22, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 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 April 17, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier to its highest level since June 2013. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 16 percent higher than the same week one year ago.

"Purchase applications increased for the fourth time in five weeks as we proceed further into the spring home buying season. Despite mortgage rates below four percent, refinance activity increased less than one percent from the previous week," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity decreased to 56 percent of total applications, its lowest level since October 2014, from 58 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.5 percent of total applications.

The FHA share of total applications increased to 13.6 percent from 13.5 percent the week prior. The VA share of total applications decreased to 11.0 percent from 11.1 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent, its lowest level since January 2015, from 3.87 percent, with points decreasing to 0.32 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 $417,000) decreased to 3.83 percent from 3.84 percent, with points decreasing to 0.22 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 30-year fixed-rate mortgages backed by the FHA decreased to 3.65 percent, its lowest level since May 2013, from 3.67 percent, with points decreasing to 0.12 from 0.23 (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 3.11 percent, its lowest level since January 2015, from 3.16 percent, with points decreasing to 0.24 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.89 percent from 2.82 percent, with points decreasing to 0.29 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Philadelphia Nonmanufacturing Activity Continues to Expand in April
Posted: April 21, 2015 at 10:00 AM (Tuesday)

Responses to this month's Nonmanufacturing Business Outlook Survey suggest that expansion in local nonmanufacturing sectors continued in April. The survey's indicators for general activity remained high, and indicators for new orders and sales or revenues improved on last month's readings. Responding firms continue to be optimistic about activity over the next six months.

Nonmanufacturing Activity Continued to Expand
The diffusion index for current activity at the firm level was little changed at 43.6 in April. Fifty-nine percent of the respondents reported an increase in activity in April, exceeding the 15 percent who reported a decrease. Firms perceived increasing activity, on balance, for the region as well. The regional general activity index decreased but remained high, at 41.0. The percentage of firms reporting increases in the region (46 percent) exceeded the percentage reporting decreases (5 percent); however, the highest percentage of firms reported no change in regional conditions from last month (49 percent).

New Orders and Sales or Revenues Remained Positive
The new orders and sales/revenues indexes continued to grow this month. The new orders index rose from 30.2 in March to 35.9 in April. Slightly more than 10 percent of the firms reported decreases in new orders this month, down from 19 percent last month, while 46 percent of the respondents reported increases this month. The sales/revenues index also increased, from 34.9 to 38.5, as the share of firms reporting decreases fell from 23 percent last month to 13 percent this month. Further, more than 51 percent of the firms reported increases in sales or revenues.

Labor Market Indicators Grew
Survey results suggest generally positive labor market conditions, as firms continued to report increases in hiring and hours, on net. The full-time employment index increased for the second consecutive month, rising 2 points to 23.1, and sits at its highest reading since July 2014. The percentage of firms reporting increases in full-time staff (31 percent) exceeded the percentage of firms reporting decreases (8 percent). The part-time employment index decreased from 25.6 in March to 23.1 in April, and the workweek index was essentially unchanged at 23.1.

Price Pressures Moderated Somewhat
The prices of inputs continued to increase for firms in April, on balance, but the prices paid index decreased 5 points, to 17.9, as fewer firms reported increases in prices this month compared with last month. The percentage of respondents reporting increases in input prices (23 percent) exceeded the percentage of respondents reporting decreases (5 percent), and most respondents (62 percent) reported no change. The prices received for firms' own goods index stabilized in April after falling sharply in March, rising 3 points, to 5.1. More than 56 percent of the respondents reported no change in prices received, and the share reporting increases (18 percent) exceeded the share reporting decreases (13 percent).

Firms Increased Capital Expenditures
Firms continued to report increases, on net, in capital expenditures this month, and both spending indexes improved from last month's readings. The index for expenditures on physical plant increased 3 points, to 5.1, but remains below levels in 2014 (see Chart 2 above). The percentage of respondents reporting increases (18 percent) exceeded the percentage reporting decreases (13 percent); the majority of respondents (46 percent) reported no change. Firms reported more spending on equipment and software: One-third of the respondents reported increases, up from 26 percent last month. The equipment and software expenditures index rose 7 points, to 25.6.

Firms Expect Future Activity to Increase
Responding firms continued to be optimistic about activity over the next six months. Index readings for both future activity indicators increased slightly from last month's readings. The firm-level future general activity index edged up 2 points, to 74.4 (see Chart 1). Nearly 77 percent of the firms expect activity at their own firms to increase over the next six months, far exceeding the 3 percent who expect activity six months from now to decrease. The future activity index for the region also showed a slight increase to 82.1, as more than 84 percent of the respondents expect activity in the region to increase.

Summary
The April Nonmanufacturing Business Outlook Survey results suggest that activity in the region among nonmanufacturing firms continued to grow. Indicators for general activity at both the company and regional levels, new orders, sales/revenues, and employment remained high. Firms remained optimistic about future growth.


Chicago Fed National Activity somewhat below historical trend in March
Posted: April 20, 2015 at 08:30 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, decreased to –0.27 in March from –0.12 in February. March’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.09 in March from –0.02 in February. Thirty-eight of the 85 individual indicators made positive contributions to the CFNAI in March, while 47 made negative contributions. Thirty-seven indicators improved from February to March, while 48 indicators deteriorated. Of the indicators that improved, 14 made negative contributions.

Production-related indicators made a contribution of –0.27 to the CFNAI in March, down from –0.08 in February. Industrial production declined 0.6 percent in March after moving up 0.1 percent in February. The contribution of the sales, orders, and inventories category to the CFNAI was unchanged at +0.01 in March.

Employment-related indicators contributed –0.03 to the CFNAI in March, down from +0.11 in February. Nonfarm payrolls increased by 126,000 in March, following a gain of 264,000 in the previous month. However, the unemployment rate was steady at 5.5 percent in March.

The contribution of the personal consumption and housing category to the CFNAI increased to –0.13 in March from –0.22 in February. Housing starts moved up to 926,000 annualized units in March from 908,000 in February. However, housing permits decreased to 1,039,000 annualized units in March from 1,102,000 in the previous month.

The CFNAI was constructed using data available as of April 16, 2015. At that time, March data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The February monthly index was revised to –0.18 from an initial estimate of –0.11. 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 February monthly index was due primarily to the former.


U.S. Leading Economic Index increased 0.2%
Posted: April 17, 2015 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.2 percent in March to 121.4 (2010 = 100), following a 0.1 percent increase in February, and a 0.2 percent increase in January.

Although the leading economic index still points to a moderate expansion in economic activity, its slowing growth rate over recent months suggests weaker growth may be ahead. Building permits was the weakest component this month, but average working hours and manufacturing new orders have also slowed the LEI’s growth over the last six months.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in March to 112.0 (2010 = 100), following a 0.2 percent increase in February, and a 0.2 percent increase in January.

The Conference Board Lagging Economic Index®(LAG) for the U.S. increased 0.4 percent in March to 116.2 (2010 = 100), following a 0.3 percent increase in February, and a 0.3 percent increase in January.


Consumer Price Index increased 0.2% in March, Ex Fd & Engy rose 0.2%
Posted: April 17, 2015 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index declined 0.1 percent before seasonal adjustment.

Increases in the energy and shelter indexes more than offset a decline in the food index and were the main factors in the rise of the seasonally adjusted all items index. The energy index rose 1.1 percent as advances in the gasoline and fuel oil indexes outweighed declines in the electricity and natural gas indexes. In contrast, the food index declined 0.2 percent, with the food at home index posting its largest decline since April 2009.

The index for all items less food and energy rose 0.2 percent in March, the\ same increase as in January and February. Along with the shelter index, a broad array of indexes rose in March, including medical care, used cars and trucks, apparel, new vehicles, household furnishings and operations, and recreation. The index for airline fares, in contrast, declined for the fourth time in the last 5 months.

The all items index declined 0.1 percent for the 12 months ending March. The energy index declined 18.3 percent over the span, more than offsetting increases in the indexes for food (up 2.3 percent) and all items less food and energy (up 1.8 percent)


Real Average Hourly Earnings increased 0.1% in March
Posted: April 17, 2015 at 08:30 AM (Friday)

Real average hourly earnings for all employees increased 0.1 percent from February to March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings being partially offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased by 0.2 percent over the month due to the increase in real average hourly earnings being more than offset by a 0.3-percent decrease in the average workweek.

Real average hourly earnings increased by 2.2 percent, seasonally adjusted, from March 2014 to March 2015. This increase in real average hourly earnings, combined with no change in the average workweek, resulted in a 2.2-percent increase in real average weekly earnings over this period


Philadelphia Fed March Outlook Continues to Suggest Slight Growth
Posted: April 16, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased modestly in April, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity and new orders were positive but remained at low readings. Firms reported overall declines in shipments this month, but employment and work hours increased at the reporting firms. Firms reported continued price reductions in April, with indicators for prices of inputs and the firms’ own products remaining negative. The survey’s indicators of future activity suggest a continuation of modest growth in the manufacturing sector over the next six months.

Indicators Suggest Slight Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 5.0 in March to 7.5 this month. The index has hovered in a single-digit range for the first four months of this year (see Chart 1). The demand for manufactured goods, as measured by the survey’s current new orders index, was virtually flat this month. The index was only slightly positive and fell 3 points from its reading in March. The current shipments index rebounded 6 points but remained negative for the second consecutive month.

Firms’ responses suggest some improvement in labor market conditions compared with March. The current employment index increased 8 points, to 11.5, its highest reading in five months. The percentage of firms reporting an increase in employees in April (21 percent) exceeded the percentage reporting a decrease (9 percent). Firms reported modest increases in the workweek: The percentage of firms reporting a longer workweek (14 percent) was greater than the percentage reporting a shorter workweek (10 percent) for the first time in four months.

Some Firms Report Price Reductions
Input price pressures continued to moderate for reporting manufacturers: The prices paid index fell 5 points, to -7.5, its second consecutive negative reading and lowest reading since June 2009 (see Chart 2). Although 77 percent of the firms reported that input prices were unchanged, the percentage of firms reporting price reductions (14 percent) exceeded those reporting increases (6 percent). With respect to prices received for manufactured goods, the largest percentage of firms (80 percent) reported no change in prices. The percentage of firms reporting price reductions (11 percent) exceeded those reporting price increases (7 percent) for the fourth consecutive month.

Manufacturers Expect Growth over the Next Six Months
The diffusion index for future activity increased from 32.0 in March to 35.5 this month but remained well below the readings over the past year (see Chart 1). The future indexes for new orders fell 4 points, while the future shipments index increased 2 points. The future employment index showed some improvement this month, increasing 6 points. Although nearly 53 percent of the firms are expecting no change in their employment levels over the next six months, the percentage expecting increases in employment rose from 25 percent in March to 32 percent this month.

In this month’s special questions, firms were surveyed about the effects of the stronger dollar on their manufacturing business. On balance, the stronger dollar since last year is having negative effects on manufacturing, although the largest share of firms characterized the effect as slight, overall.

Summary
The Manufacturing Business Outlook Survey suggests continued modest expansion of the region’s manufacturing sector in April. The indicators for general activity and new orders both suggest expansion, but at a very modest pace. Firms, however, reported an increase in employment this month. Some respondents continued to report downward price pressures for inputs. For their own manufactured products, more firms reported price decreases than reported price increases, although 80 percent of the firms reported steady prices. Indicators reflecting firms’ expectations for the next six months improved modestly this month, and the firms were notably more optimistic in their forecast for future employment growth.


DJ-BTMU U.S. Business Barometer increased slightly by 0.1%
Posted: April 16, 2015 at 10:00 AM (Thursday)

For the week ending April 4 2015, the DJ-BTMU U.S. Business Barometer increased slightly by 0.1 percent to 98.8, extending the positive trend for three straight weeks as strong performances in consumption indexes were more than enough to offset the losses in some production indexes. Chain store sales rose by 1.0 percent following a 3.4 percent gain in the prior week. MBA’s purchase reported another important gain of 6.8 percent, after increasing by 5.7 percent last week. As to the production side, three out of six indexes reported losses, specially electric output and auto production, which dipped by 3.0 and 4.1 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 0.5 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, increased slightly by 0.1 percent to 98.6. Its year-over-year growth rate was 0.5 percent.


March Housing Starts up 2.0%, Permits down 5.7%
Posted: April 16, 2015 at 08:30 AM (Thursday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,039,000. This is 5.7 percent (±2.0%) below the revised February rate of 1,102,000, but is 2.9 percent (±0.9%) above the March 2014 estimate of 1,010,000. Single-family authorizations in March were at a rate of 636,000; this is 2.1 percent (±0.9%) above the revised February figure of 623,000. Authorizations of units in buildings with five units or more were at a rate of 378,000 in March.

HOUSING STARTS
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 926,000. This is 2.0 percent (±13.0%) above the revised February estimate of 908,000, but is 2.5 percent (±11.5%) below the March 2014 rate of 950,000. Single-family housing starts in March were at a rate of 618,000; this is 4.4 percent (±12.3%) above the revised February figure of 592,000. The March rate for units in buildings with five units or more was 287,000.

HOUSING COMPLETIONS
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 823,000. This is 3.9 percent (±10.4%) below the revised February estimate of 856,000 and is 5.8 percent (±10.2%) below the March 2014 rate of 874,000. Single-family housing completions in March were at a rate of 602,000; this is 0.8 percent (±11.5%) above the revised February rate of 597,000. The March rate for units in buildings with five units or more was 211,000.


Weekly Initial Unemployment Claims Increase 12,000 to 294,000
Posted: April 16, 2015 at 08:30 AM (Thursday)

In the week ending April 11, the advance figure for seasonally adjusted initial claims was 294,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 281,000 to 282,000. The 4-week moving average was 282,750, an increase of 250 from the previous week's revised average. The previous week's average was revised up by 250 from 282,250 to 282,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending April 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 4 was 2,268,000, a decrease of 40,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 9, 2000 when it was 2,263,000. The previous week's level was revised up 4,000 from 2,304,000 to 2,308,000. The 4-week moving average was 2,329,000, a decrease of 32,750 from the previous week's revised average. This is the lowest level for this average since December 30, 2000 when it was 2,325,750. The previous week's average was revised up by 1,000 from 2,360,750 to 2,361,750.


Treasury International Capital Data for February 2015
Posted: April 15, 2015 at 04:00 PM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2015. The sum total in February of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $4.1 billion. Of this, net foreign private outflows were $7.2 billion, and net foreign official inflows were $11.3 billion.

Foreign residents increased their holdings of long-term U.S. securities in February; net purchases were $12.8 billion. Net purchases by private foreign investors were $23.0 billion, while net sales by foreign official institutions were $10.2 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $3.0 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $9.8 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 $10.6 billion in February.

Foreign residents increased their holdings of U.S. Treasury bills by $19.9 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $26.3 billion. Banks' own net dollar-denominated liabilities to foreign residents decreased by $11.7 billion.


Beige Book: Economic Activity continued to expand across most regions
Posted: April 15, 2015 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts indicate that the economy continued to expand across most regions from mid-February through the end of March. Activity in the Richmond, Chicago, Minneapolis, Dallas, and San Francisco Districts grew at a moderate pace, while New York, Philadelphia, and St. Louis cited modest growth. Boston reported that business activity continues to expand, while Cleveland cited a slight pace of growth. Atlanta and Kansas City described economic conditions as steady.

Demand for manufactured products was mixed during the current reporting period. Weakening activity was attributed in part to the strong dollar, falling oil prices, and the harsh winter weather. Business service firms saw rising activity, especially for high-tech services, and they expect positive near-term growth. Cargo diversions resulting from labor disputes on the West Coast boosted activity at several East Coast ports. A majority of Districts reported higher retail sales, and they cited consumer savings from lower energy prices as helping boost transactions. Auto sales rose in most Districts. Tourism and business travel is rebounding from the harsh winter, with contacts expecting growth for the remainder of the year in corporate and leisure travel. Residential real estate activity was steady to improving across most Districts, although there was some slowing in housing starts due to abnormal seasonal patterns owing to the harsh weather. Multifamily construction remains strong. Activity in nonresidential real estate was stable or improved slightly across many Districts. Agricultural conditions worsened slightly. Factors contributing to these conditions varied by District, but included wet fields, persistent drought, and a harsh winter. Investment in oil and gas drilling declined, while mining activity was mixed. Banking conditions were largely stable, with some improvement seen in loan demand.

Labor markets remained stable or continued to improve modestly. Layoffs related to the decline in oil and gas prices were reported in multiple Districts. Difficulty finding skilled workers was frequently reported. Districts noted modest upward pressure on wages and overall prices.


Builder Confidence Rose 4 Points in March to 56
Posted: April 15, 2015 at 10:00 AM (Wednesday)

Builder confidence in the market for newly built, single-family homes in April rose four points to a level of 56 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

As the spring buying season gets underway, home builders are confident that current low interest rates and continued job growth will draw consumers to the market.

The HMI component index measuring future sales expectations rose five points in April to its highest level of the year. This uptick shows builders are feeling optimistic that the housing market will continue to strengthen throughout 2015.

All three HMI components registered gains in April. The component charting sales expectations in the next six months jumped five points to 64, the index measuring buyer traffic increased four points to 41, and the component gauging current sales conditions rose three points to 61.

Looking at the three-month moving averages for regional HMI scores, the South rose one point to 56 and the Northwest held steady at 42. The Midwest fell by two points to 54 and the West dropped three points to 58.


Industrial Production decreased 0.6%
Capacity Utilization decreased to 78.4%

Posted: April 15, 2015 at 09:15 AM (Wednesday)

Industrial production decreased 0.6 percent in March after increasing 0.1 percent in February. For the first quarter of 2015 as a whole, industrial production declined at an annual rate of 1.0 percent, the first quarterly decrease since the second quarter of 2009. The decline last quarter resulted from a drop in oil and gas well drilling and servicing of more than 60 percent at an annual rate and from a decrease in manufacturing production of 1.2 percent. In March, manufacturing output moved up 0.1 percent for its first monthly gain since November; however, factory output in January is now estimated to have fallen 0.6 percent, about twice the size of the previously reported decline. The index for mining decreased 0.7 percent in March. The output of utilities fell 5.9 percent to largely reverse a similarly sized increase in February, which was related to unseasonably cold temperatures. At 105.2 percent of its 2007 average, total industrial production in March was 2.0 percent above its level of a year earlier. Capacity utilization for the industrial sector decreased 0.6 percentage point in March to 78.4 percent, a rate that is 1.7 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Show Growth Paused
Posted: April 15, 2015 at 08:30 AM (Wednesday)

The April 2015 Empire State Manufacturing Survey indicates that business activity was flat for New York manufacturers. The headline general business conditions index turned slightly negative for the first time since December, falling eight points to -1.2. The new orders index, negative for a second consecutive month, dropped four points to -6.0—evidence that orders were declining. The shipments index climbed to 15.2, indicating that shipments expanded at a solid pace. Labor market indicators pointed to an increase in employment levels but a somewhat shorter workweek. Input price increases picked up, with the prices paid index rising seven points to 19.2, while the prices received index fell four points to 4.3. The future general business conditions index climbed for a second consecutive month, suggesting greater optimism among manufacturers than in February and March, and the capital spending and technology spending indexes also advanced.

Growth Pauses
The general business conditions index fell below zero for the first time since December, declining eight points to -1.2 in a sign that activity was flat for New York manufacturers. Twenty-five percent of respondents reported that conditions had improved, while 26 percent reported that conditions had worsened. The new orders index fell for a third consecutive month, its four-point decline to -6.0 pointing to a drop-off in orders. The shipments index, however, climbed seven points to 15.2, indicating that shipments grew at a solid clip. The unfilled orders index was little changed at -11.7, and the delivery time index edged down to -4.3. The inventories index climbed out of negative territory for the first time since November; rising to 2.1, it signaled that inventory levels were slightly higher.

Labor Market Conditions Mixed
Labor market conditions were mixed. Although the index for number of employees fell, it remained well above zero at 9.6, indicating that employment continued to grow. However, the average workweek index fell nine points to -4.3, pointing to a slight decline in the average workweek. Input price increases picked up this month, with the prices paid index rising seven points to 19.2. The prices received index, by contrast, fell four points to 4.3, indicating only a small increase in selling prices.

Conditions Expected to Improve
Many of the indexes assessing the six-month outlook conveyed more optimism about future business activity than they had in February and March. The index for future general business conditions climbed for a second consecutive month, rising six points to 37.1 The future new orders and shipments indexes posted similar increases. The future prices paid index advanced to 38.3, suggesting that manufacturers expected a pickup in input price increases, while the future prices received index was little changed at 13.8. The index for future employment was lower, but still suggested that employment levels were expected to rise significantly in the months ahead. The capital expenditures index moved up six points to 24.5, and the technology spending index rose to 16.0.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 15, 2015 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 April 10, 2015.

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 2 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 2 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 58 percent of total applications from 57 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications increased to 13.5 percent from 13.2 percent the week prior. The VA share of total applications increased to 11.1 percent from 10.7 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.87 percent from 3.86 percent, with points increasing to 0.38 from 0.27 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.84 percent from 3.81 percent, with points increasing to 0.35 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.67 percent from 3.69 percent, with points increasing to 0.23 from 0.18 (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 increased to 3.16 percent from 3.15 percent, with points remaining unchanged from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.82 percent from 2.76 percent, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Business Inventories up 0.3% in February
Posted: April 14, 2015 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for February, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,313.1 billion, virtually unchanged (±0.2%)* from January 2015, but were down 1.2 percent (±0.4%) from February 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,790.2 billion, up 0.3 percent (±0.1%) from January 2015 and were up 3.3 percent (±0.4%) from February 2014.

The total business inventories/sales ratio based on seasonally adjusted data at the end of February was 1.36. The February 2014 ratio was 1.30.


Producer Price Index increased 0.2% in March, ex Fd & Engy up 0.2%
Posted: April 14, 2015 at 08:30 AM (Tuesday)

The Producer Price Index for final demand increased 0.2 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved down 0.5 percent in February and 0.8 percent in January. On an unadjusted basis, the index for final demand decreased 0.8 percent for the 12 months ended in March.

In March, more than half of the rise in final demand prices can be attributed to a 0.3-percent advance in the index for final demand goods. Prices for final demand services moved up 0.1 percent.

Within intermediate demand, prices for processed goods edged down 0.1 percent, the index for unprocessed goods dropped 1.7 percent, and prices for services rose 0.2 percent.


U.S. Retail Sales for March increase 0.9%, Ex-Auto up 0.4%
Posted: April 14, 2015 at 08:30 AM (Tuesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $441.4 billion, an increase of 0.9 percent (±0.5%) from the previous month, and 1.3 percent (±0.9%) above March 2014. Total sales for the January 2015 through March 2015 period were up 2.2 percent (±0.7%) from the same period a year ago. The January 2015 to February 2015 percent change was revised from -0.6 percent (±0.5%) to -0.5 percent (±0.2%).

Retail trade sales were up 0.9 (±0.5%) from February 2015, and 0.5 percent (±0.9%)* above last year. Food services and drinking places were up 7.7 percent (±3.5%) from March 2014 and building material and garden equipment and supplies dealers were up 6.3 percent (±2.5%) from last year.


NFIB Small Business Optimism Index fell 2.8 points to 95.2
Posted: April 14, 2015 at 07:30 AM (Tuesday)

The Small Business Optimism Index fell 2.8 points to 95.2, declining in sympathy with the rather weak stream of reports on the economy. Bad weather was certainly depressing, for both shoppers and the construction industry. All 10 Index components declined, contributing to the 31 point decline in net positive responses. The only good news is that the 10 Index components didn’t fall further, not much to hang on to. Consumer spending has not shown much strength and the saving rate has increased. Not a recession scenario overall for sure, but there is not much growth energy in the economy, especially with the energy boom deflating a bit.

First quarter growth is looking quite weak, due in part to weather (reduced shopping, construction etc.), the sharp decline in energy prices (loweremployment and capital investment), weakness among our trading partners (lower exports) and dock strikes in the western part of the country. It is surprising that job markets have looked as good as they have given that GDP growth continued to slow from Q4 2014 rates.

The Federal Reserve did all it could to improve the markets’ view of existing cash flows by lowering interest rates and supporting asset prices but did little to contribute to better cash flows for most of America’s firms. The Federal Reserve and other central banks are hoarding risk free assets while the demand for these assets is rising. This keeps long term interest rates artificially low and creates longer term financial problems (like how to fund future pension liabilities) while denying savers a decent return on their savings. Thinking that their policies significantly impact the real economy,in spite of evidence to the contrary, the Fed persists in holding rates down and is probably not inclined to raise rates until GDP and employment growth rates pick up substantially. The fact that the Fed doesn’t raise rates signals that they don’t expect the economy to improve.

Meanwhile, the government continues to extend its control over the private sector, taking actions to restrict the growth in the energy sector, promulgating policies to support union growth in the small business sector, supporting climate change policies that will crush economic growth, unleashing the EPA to regulate every aspect of business activity and ignoring the issues that are important to small business growth such as tax reform and the regulatory avalanche that diverts the use of capital and owner time to unproductive activities.

So it is no surprise that optimism is muted and that owners’ expectations about the future are less than exuberant. Government policies increasingly impinge on the private sector, diverting resources to unproductive uses like 9,000 IRS employees to exact ACA penalties on taxpayers. When new business owners were asked to characterize difficulties encountered and whether or not they were more difficult or less difficult than expected, 60 percent said that government regulations and red tape were much worse than expected, far more than any other factor. That survey was taken in 1990 – it has only worsened.


U.S. Import Price Index fell 0.3% in March
Posted: April 10, 2015 at 08:30 AM (Friday)

U.S. import prices fell 0.3 percent in March following a 0.2-percent upturn the previous month, the U.S. Bureau of Labor Statistics reported today. In March, lower nonfuel prices more than offset a rise in fuel prices. The price index for U.S. exports rose in March, ticking up 0.1 percent, after declining 0.2 percent in February.


Wholesale Inventories up 0.3% in February
Posted: April 9, 2015 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that February 2015 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $444.2 billion, down 0.2 percent (+/-0.5%) from the revised January level and were down 1.5 percent (+/-1.2%) from the February 2014 level. The January preliminary estimate was revised downward $1.6 billion or 0.3 percent. February sales of durable goods were down 2.4 percent (+/-0.7%) from last month, but were up 3.5 percent (+/-1.2%) from a year ago. Sales of electrical and electronic goods were down 5.0 percent from last month and sales of machinery, equipment, and supplies were down 3.4 percent. Sales of nondurable goods were up 1.9 percent (+/-0.7%) from January, but were down 5.8 percent (+/-1.6%) from last February. Sales of petroleum and petroleum products were up 5.5 percent from last month and sales of drugs and druggists' sundries were up 4.0 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $574.0 billion at the end of February, up 0.3 percent (+/-0.4%) from the revised January level and were up 6.1 percent (+/-1.2%) from the February 2014 level. The January preliminary estimate was revised upward $1.0 billion or 0.2 percent. February inventories of durable goods were up 0.3 percent (+/-0.5%) from last month and were up 7.6 percent (+/-1.6%) from a year ago. Inventories of motor vehicle and motor vehicle parts and supplies were up 2.4 percent from last month, while inventories of lumber and other construction materials were down 2.2 percent. Inventories of nondurable goods were up 0.2 percent (+/-0.4%) from January and were up 3.8 percent (+/-1.6%) from last February. Inventories of petroleum and petroleum products were up 2.4 percent from last month, while inventories of chemicals and allied products were down 2.9 percent.

The February inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.29. The February 2014 ratio was 1.20.


DJ-BTMU U.S. Business Barometer rose by 0.4%
Posted: April 9, 2015 at 10:00 AM (Thursday)

For the week ending March 28 2015, the DJ-BTMU U.S. Business Barometer rose by a solid 0.4 percent to 98.7. This week’s barometer was chiefly driven by strong performances in consumption indexes, in which chain store sales picked up by a sharp 3.4 percent due to improving consumer demand at wholesale clubs, electronics stores, and department stores. MBA’s purchase index also showed a significant gain of 5.7 percent, extending the positive trend for two consecutive weeks. As to the production side, electric output increased by 2.5 percent, but it was entirely offset by losses in other production indexes.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased slightly by 0.1 percent to 98.5. Its year-over-year growth rate was 0.6 percent.


Weekly Initial Unemployment Claims Increase 14,000 to 281,000
Posted: April 9, 2015 at 08:30 AM (Thursday)

In the week ending April 4, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 268,000 to 267,000. The 4-week moving average was 282,250, a decrease of 3,000 from the previous week's revised average. This is the lowest level for this average since June 3, 2000 when it was 281,500. The previous week's average was revised down by 250 from 285,500 to 285,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending March 28, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 28 was 2,304,000, a decrease of 23,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 9, 2000 when it was 2,263,000. The previous week's level was revised up 2,000 from 2,325,000 to 2,327,000. The 4-week moving average was 2,360,750, a decrease of 27,500 from the previous week's revised average. This is the lowest level for this average since January 13, 2001 when it was 2,360,500. The previous week's average was revised up by 500 from 2,387,750 to 2,388,250.


Purchase Apps up, Refi's down in Latest MBA Weekly Survey
Posted: April 8, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 3, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 7 percent from one week earlier, reaching its highest level since July 2013. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 12 percent higher than the same week one year ago.

Purchase mortgage application volume last week increased to its highest level since July 2013, spurred on by still low mortgage rates and strengthening housing markets. Purchase volume has increased for three straight weeks now on a seasonally adjusted basis.

The refinance share of mortgage activity decreased to 57 percent of total applications, its lowest level since October 2014, from 60 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5 percent of total applications.

The FHA share of total applications increased to 13.2 percent last week from 12.8 percent the week prior. The VA share of total applications increased to 10.7 percent last week from 10.5 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.86 percent from 3.89 percent, with points decreasing to 0.27 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.81 percent, its lowest level since May 2013, from 3.90 percent, with points decreasing to 0.26 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.69 percent from 3.73 percent, with points increasing to 0.18 from 0.13 (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 3.15 percent from 3.21 percent, with points unchanged from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.76 percent, its lowest level since May 2013, from 2.93 percent, with points increasing to 0.45 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Credit Increased at an annual rate of 5.50%
Posted: April 7, 2015 at 03:00 PM (Tuesday)

In February, consumer credit increased at a seasonally adjusted annual rate of 5-1/2 percent. Revolving credit decreased at an annual rate of 5 percent, while nonrevolving credit increased at an annual rate of 9-1/2 percent.


Job Openings were 5.1 million in February
Posted: April 7, 2015 at 10:00 AM (Tuesday)

There were 5.1 million job openings on the last business day of February, little changed from 5.0 million in January, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 4.9 million in February and separations were little changed at 4.7 million. Within separations, the quits rate was 1.9 percent and the layoffs and discharges rate was 1.1 percent; both rates were little different from the previous month. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 5.1 million job openings on the last business day of February, little changed from January. This was the highest level of job openings since January 2001. The job openings rate for February was 3.5 percent. The number of job openings was little changed for total private and government and no industries posted significant changes from January. Job openings increased in the Midwest region.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in February for total nonfarm, total private, and government. Job openings increased over the year for many industries including professional and business services, health care and social assistance, and accommodation and food services. Job openings decreased over the year in mining and logging. The number of openings increased over the year in all four regions.


Employment Trends Index declined slightly in March to 127.65
Posted: April 6, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) declined slightly in March. The index now stands at 127.65, down from 127.77 in February. However, that still represents a 5.6 percent gain in the ETI compared to a year ago.

The growth in the Employment Trends Index slowed down in the first quarter of 2015. The combination of the disappointing March employment report and the recent weakness in the ETI suggests that the likelihood of a slowdown in employment has increased. Even so, it is unlikely that job growth in the second quarter would fall much below the trend of 200,000 jobs per month.

In March, the negative contributions from Percentage of Firms with Positions Not Able to Fill Right Now, Ratio of Involuntarily Part-time to All Part-time Workers and Percentage of Respondents Who Say They Find “Jobs Hard to Get” more than offset positive contributions from the remaining five components.


ISM Non-Manufacturing Index grew slower at 56.5%
Posted: April 6, 2015 at 10:00 AM (Monday)

Economic activity in the non-manufacturing sector grew in March for the 62nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

TThe NMI® registered 56.5 percent in March, 0.4 percentage point lower than the February reading of 56.9 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 57.5 percent, which is 1.9 percentage points lower than the February reading of 59.4 percent, reflecting growth for the 68th consecutive month at a slower rate. The New Orders Index registered 57.8 percent, 1.1 percentage points higher than the reading of 56.7 percent registered in February. The Employment Index increased 0.2 percentage point to 56.6 percent from the February reading of 56.4 percent and indicates growth for the 13th consecutive month. The Prices Index increased 2.7 percentage points from the February reading of 49.7 percent to 52.4 percent, indicating prices increased in March after three consecutive months of decreasing. According to the NMI®, 14 non-manufacturing industries reported growth in March. The majority of respondents’ comments reflect stability and are mostly positive about business conditions and the overall economy.

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


March Employment increased by 126,000
Unemployment Rate unchanged at 5.5%

Posted: April 3, 2015 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 126,000 in March, and the unemployment rate was unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in professional and business services, health care, and retail trade, while mining lost jobs.

In March, the unemployment rate held at 5.5 percent, and the number of unemployed persons was little changed at 8.6 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.1 percentage points and 1.8 million, respectively.

Among the major worker groups, the unemployment rates for adult men (5.1 percent), adult women (4.9 percent), teenagers (17.5 percent), whites (4.7 percent), blacks (10.1 percent), Asians (3.2 percent), and Hispanics (6.8 percent) showed little or no change in March.

Among the unemployed, the number of new entrants decreased by 157,000 in March and is down by 342,000 over the year. Unemployed new entrants are those who never previously worked.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.6 million in March. These individuals accounted for 29.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.1 million.

The civilian labor force participation rate was little changed at 62.7 percent in March. Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent. In March, the employment-population ratio was 59.3 percent for the third consecutive month.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in March at 6.7 million. 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 March, 2.1 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 738,000 discouraged workers in March, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in March had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment increased in March (+126,000). Over the prior 12 months, employment growth had averaged 269,000 per month. In March, employment continued to trend up in professional and business services, health care, and retail trade, while employment in mining declined.

In March, the average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.5 hours. The manufacturing workweek decreased by 0.1 hour to 40.9 hours, and factory overtime remained at 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours.

In March, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $24.86. Over the year, average hourly earnings have risen by 2.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $20.86 in March.

The change in total nonfarm payroll employment for January was revised from +239,000 to +201,000, and the change for February was revised from +295,000 to +264,000. With these revisions, employment gains in January and February combined were 69,000 less than previously reported. Over the past 3 months, job gains have averaged 197,000 per month.


New orders for manufactured goods increased 0.2%
Posted: April 2, 2015 at 10:00 AM (Thursday)

New orders for manufactured goods in February, up following six consecutive monthly decreases, increased $0.8 billion or 0.2 percent to $468.3 billion, the U.S. Census Bureau reported today. This followed a 0.7 percent January decrease. Excluding transportation, new orders increased 0.8 percent.

Shipments, up following four consecutive monthly decreases, increased $3.6 billion or 0.7 percent to $481.3 billion. This followed a 2.3 percent January decrease.

Unfilled orders, down three consecutive months, decreased $5.9 billion or 0.5 percent to $1,156.3 billion. This followed a 0.3 percent January decrease. The unfilled orders-to-shipments ratio was 6.71, unchanged from January.

Inventories, up following two consecutive monthly decreases, increased $0.9 billion or 0.1 percent to $651.0 billion. This followed a 0.4 percent January decrease. The inventories-to-shipments ratio was 1.35, down from 1.36 in January.


DJ-BTMU U.S. Business Barometer increased by 0.2%
Posted: April 2, 2015 at 10:00 AM (Thursday)

For the week ending March 21 2015, the DJ-BTMU U.S. Business Barometer picked up by 0.2 percent to 98.3. This week’s recovery stemmed from positive performances in both consumption and production indexes. MBA’s purchase index jumped 4.9 percent after falling by 1.5 percent last week. Railroad freight car loadings as well rose by 1.3 percent, although it was offset by declines in chain store sales. As to the production side, all indexes reported gains. For instance, lumber and coal production increased by 2.8 and 2.7 percent, respectively; while electric output slightly recovered, following a sharp drop of 14.4 percent last week.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.3. Its year-over-year growth rate was 0.6 percent.


Weekly Initial Unemployment Claims Decrease 30,000 to 268,000
Posted: April 2, 2015 at 08:30 AM (Thursday)

In the week ending March 28, the advance figure for seasonally adjusted initial claims was 268,000, a decrease of 20,000 from the previous week's revised level. The previous week's level was revised up by 6,000 from 282,000 to 288,000. The 4-week moving average was 285,500, a decrease of 14,750 from the previous week's revised average. The previous week's average was revised up by 3,250 from 297,000 to 300,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending March 21, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 21 was 2,325,000, a decrease of 88,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 16, 2000 when it was 2,322,000. The previous week's level was revised down by 3,000 from 2,416,000 to 2,413,000. The 4-week moving average was 2,387,750, a decrease of 20,000 from the previous week's revised average. The previous week's average was revised down by 14,500 from 2,422,250 to 2,407,750.


Goods and Services Deficit Decreased in February 2015
Posted: April 2, 2015 at 08:30 AM (Thursday)

The Nation’s international trade deficit in goods and services decreased to $35.4 billion in February from $42.7 billion in January (revised), as imports decreased more than exports.

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 $35.4 billion in February, down $7.2 billion from $42.7 billion in January, revised. February exports were $186.2 billion, $3.0 billion less than January exports. February imports were $221.7 billion, $10.2 billion less than January imports.

The February decrease in the goods and services deficit reflected a decrease in the goods deficit of $7.4 billion to $55.2 billion and a decrease in the services surplus of $0.1 billion to $19.7 billion.

Year-to-date, the goods and services deficit decreased $2.6 billion, or 3.2 percent, from the same period in 2014. Exports decreased $5.3 billion or 1.4 percent. Imports decreased $7.9 billion or 1.7 percent.


New York Purchasing Managers Business Activity rose to 63.1 in February
Posted: April 2, 2015 at 08:30 AM (Thursday)

New York City business activity shifted into neutral, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions fell to 50.0 in March. The last three months have been the most uneven stretch in six years.

Future optimism moderated, but remained elevated. The Six-Month Outlook was at 69.4 in March.

Job growth improved moderately after contracting last month. Employment rose to 53.7 in March.

Purchase volume expanded steadily. Quantity of Purchases posted 54.8 for a second straight month in March.

The top line and forward guidance both eased. Current Revenues were at 50.0 in March, and Expected Revenues were at 58.7 in March. Price measures were more contained.

Prices Paid fell to 54.2 in March, and Prices Received came in at 52.2 in March.

Potential Business Opportunities/Impediments: Competition was the second largest net impediment alongside the usual suspects of cost of benefits and cost of labor. At the other end of the table, skilled labor was the biggest net opportunity and banking second. The significant drop off of domestic demand as a net opportunity bears watching.


Challenger Layoffs totaling 36,594 in March
Posted: April 2, 2015 at 07:00 AM (Thursday)

Following two consecutive months of job cuts in excess of 50,000, the pace of downsizing slowed significantly in March, as US-based employers announced plans to trim payrolls by 36,594 during the month, according to new figures released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The March total was 27.6 percent lower than the 50,579 job cuts in February. It was the lowest monthly total since December, when 32,640 were announced.

Despite last month’s decline, the March figure was 6.4 percent higher than the same month a year ago (34,399), making it the fourth consecutive year-over-year increase.

Through the first quarter of 2014, employers announced 140,214 job cuts, up 15.6 percent from the 120,341 cuts tracked the first three months of 2014. The first quarter saw 17 percent more job cuts than in the final quarter of 2014, when 119,763 job cuts were recorded.

Of the 140,214 job cuts announced in the first quarter, 47,610 were directly attributed to falling oil prices.

Without these oil related cuts, we could have been looking one of lowest quarters for job-cutting since the mid-90s when three-month tallies totaled fewer than 100,000. However, the drop in the price of oil has taken a significant toll on oil field services, energy providers, pipelines, and related manufacturing this year.

First quarter job cuts were dominated by the energy sector, where employers announced 37,811 job cuts in the first three months of 2015. The three-month total is up a whopping 3,900 percent compared to a year ago, when fewer than 1,000 energy cuts were reported.

Oil companies are not the only energy-related firms who are getting hit this year. Coal mine closings in West Virginia and elsewhere around the country are also costing jobs.

The good news is that the pace of energy-sector job cuts appear to be slowing. Only 1,279 job cuts were announced by energy firms in March, which is 92 percent fewer than the 16,000 announced in February.

The retail sector has tallied the second highest number of job cuts this year, with 22,502 planned layoffs through the first three months of 2014. That figure includes 6,640 in March, most of which were due to a major announcement from Target.

While energy and retail top the year-to-date job-cut tallies, the heaviest job cutting in March occurred among industrial goods manufacturers, whose payroll reductions totaled 9,383 during the month. That brings the sector’s 2015 total to 17,738, which ranks third among all industries.

Oil prices impacted energy firms directly at the end of 2014 up until February. Now, peripheral manufacturers are losing contracts and laying off workers in an effort to limit major losses.

The flip side of losses due to oil prices appear to be occurring in automotive and transportation hiring. Automotive manufacturers announced over 7,000 new jobs so far this year, according to Challenger tracking. That is up from just over 2,000 by this time last year. Meanwhile, companies in the transportation sector have announced over 6,700 new jobs, compared to just over 2,000 through the first quarter of 2014.

This is just a fraction of the actual hiring occurring across the country, but a jump in these numbers suggest auto and transportation companies are benefitting by the oil slump which could ultimately positively impact consumers,” said Challenger.


Construction Spending decreased 0.1% in February
Posted: April 1, 2015 at 10:00 AM (Wednesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during February 2015 was estimated at a seasonally adjusted annual rate of $967.2 billion, 0.1 percent (±1.2%) below the revised January estimate of $967.9 billion. The February figure is 2.1 percent (±1.6%) above the February 2014 estimate of $947.1 billion. During the first 2 months of this year, construction spending amounted to $132.9 billion, 2.0 percent (±1.5%) above the $130.3 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $698.2 billion, 0.2 percent (±1.0%) above the revised January estimate of $696.9 billion. Residential construction was at a seasonally adjusted annual rate of $349.9 billion in February, 0.2 percent (±1.3%) below the revised January estimate of $350.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $348.4 billion in February, 0.5 percent (±1.0%) above the revised January estimate of $346.5 billion.

PUBLIC CONSTRUCTION
In February, the estimated seasonally adjusted annual rate of public construction spending was $268.9 billion, 0.8 percent (±2.0%) below the revised January estimate of $271.0 billion. Educational construction was at a seasonally adjusted annual rate of $59.1 billion, 0.2 percent (±3.1%) above the revised January estimate of $58.9 billion. Highway construction was at a seasonally adjusted annual rate of $82.8 billion, 0.2 percent (±5.4%) below the revised January estimate of $83.0 billion.


February Manufacturing ISM expanded slower at 51.5
Posted: April 1, 2015 at 10:00 AM (Wednesday)

Economic activity in the manufacturing sector expanded in March for the 27th consecutive month, and the overall economy grew for the 70th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The March PMI® registered 51.5 percent, a decrease of 1.4 percentage points from February’s reading of 52.9 percent. The New Orders Index registered 51.8 percent, a decrease of 0.7 percentage point from the reading of 52.5 percent in February. The Production Index registered 53.8 percent, 0.1 percentage point above the February reading of 53.7 percent. The Employment Index registered 50 percent, 1.4 percentage points below the February reading of 51.4 percent, reflecting unchanged employment levels from February. Inventories of raw materials registered 51.5 percent, a decrease of 1 percentage point from the February reading of 52.5 percent. The Prices Index registered 39 percent, 4 percentage points above the February reading of 35 percent, indicating lower raw materials prices for the fifth consecutive month. Comments from the panel refer to continuing challenges from the West Coast port issue, lower oil prices having both positive and negative impacts depending upon the industry, residual effects of the harsh winter, higher costs of healthcare premiums, and challenges associated with the stronger dollar on international business.

Of the 18 manufacturing industries, 10 are reporting growth in March in the following order: Paper Products; Wood Products; Transportation Equipment; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Chemical Products; Primary Metals; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The seven industries reporting contraction in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Plastics & Rubber Products; and Furniture & Related Products.


Help Wanted OnLine Labor Demand increased 15,200 to 5,466,400 in March
Posted: April 1, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies increased 15,200 to 5,466,400 in March, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The February Supply/Demand rate stands at 1.60 unemployed for each advertised vacancy, with a total of 3.3 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.7 million in February.

Online demand growth over the first quarter of 2015 at +349,000 has been the strongest quarterly growth in eight years. The growth has been well-balanced across the regions of the country and the major occupational groups, reflecting an overall healthy employer demand so far in 2015.

In March, the Professional category saw the most gains with Management (6,500), Business and Finance (4,200), Computer and Math (8,800) and Healthcare (5,200). The Services/Production category saw losses in Transportation (−30,000), Building and Grounds (−11,800) and Installation and Repair (−8,500).


ADP National Employment Report increased by 189,000 in March
Posted: April 1, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 189,000 jobs from February
to March according to the March ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 108,000 jobs in March, up from 103,000 in February. Employment among companies with 50-499 employees increased by 62,000 jobs, up from 57,000 the previous month. Employment at large companies – those with 500 or more employees – decreased from February adding 19,000 jobs, down sharply from 53,000. Companies with 500-999 employees added 7,000 jobs, down from February’s 11,000. Companies with over 1,000 employees added 12,000 jobs, down from 43,000 the previous month.

Goods-producing employment rose by only 5,000 jobs in March, down from 22,000 jobs gained in February. The construction industry added 17,000 jobs, down from 28,000 last month. Meanwhile, manufacturing lost 1,000 jobs in March, after adding 2,000 in February.

Service-providing employment rose by 184,000 jobs in March, down from 192,000 in February. The ADP National Employment Report indicates that professional/business services contributed 40,000 jobs in March, up from February’s 34,000. Expansion in trade/transportation/utilities grew by 25,000, a decline from February’s 32,000. The 16,000 new jobs added in financial activities is a drop from last month’s 19,000.

March job gains came in under 200,000 for the first time since January of last year. The decline was centered in the largest companies, those with 1000 or more employees.

Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market. Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: April 1, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 27, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 8 percent higher than the same week one year ago. There was a broad based increase in mortgage applications last week relative to the week prior. The increase in purchase volume was led by a nearly 6 percent increase in both conventional and government markets, perhaps signaling that households are finally ready to begin the home-buying season.

The refinance share of mortgage activity decreased to 60 percent of total applications from 61 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent of total applications. The FHA share of total applications decreased to 12.8 percent this week from 13.3 percent last week. The VA share of total applications increased to 10.5 percent this week from 10.1 percent last week. The USDA share of total applications remained unchanged from last week at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.89 percent from 3.90 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.90 percent from 3.89 percent, with points increasing to 0.34 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.73 percent from 3.71 percent, with points decreasing to 0.13 from 0.21 (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 3.21 percent from 3.22 percent, with points increasing to 0.29 from 0.28 (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 2.93 percent from 2.97 percent, with points increasing to 0.41 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Confidence improved in March to 101.3
Posted: March 31, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had decreased in February, improved in March. The Index now stands at 101.3 (1985=100), up from 98.8 in February. The Expectations Index increased from 90.0 last month to 96.0 in March. The Present Situation Index, however, decreased from 112.1 in February to 109.1.

Consumer confidence improved in March after retreating in February. This month’s increase was driven by an improved short-term outlook for both employment and income prospects; consumers were less upbeat about business conditions. Consumers’ assessment of current conditions declined for the second consecutive month, suggesting that growth may have softened in Q1, and doesn’t appear to be gaining any significant momentum heading into the spring months.

Consumers’ assessment of present-day conditions turned moderately less favorable for a second straight month. The percentage saying business conditions are “good” was unchanged at 26.7 percent, while those claiming business conditions are “bad” increased from 16.7 percent to 19.4 percent. Consumers were mixed in their assessment of the job market. The proportion stating jobs are “plentiful” edged up from 20.3 percent to 20.6 percent, while those claiming jobs are “hard to get” also edged up from 25.1 percent to 25.4 percent.

Consumers’ optimism about the short-term outlook, which had declined last month, rebounded in March. The percentage of consumers expecting business conditions to improve over the next six months decreased slightly, from 17.6 percent to 16.7 percent; however, those expecting business conditions to worsen also fell, from 8.9 percent to 8.0 percent.

Consumers’ outlook for the labor market saw stronger gains. Those anticipating more jobs in the months ahead increased from 13.8 percent to 15.5 percent, while those anticipating fewer jobs declined from 14.8 percent to 13.5 percent. The proportion of consumers expecting growth in their incomes improved from 16.4 percent to 18.4 percent, while the proportion expecting a drop declined from 10.8 percent to 9.9 percent.


Chicago Purchasing Managers Index increased 0.5 points to 46.3 in MArch
Posted: March 31, 2015 at 10:00 AM (Tuesday)

The Chicago Business Barometer remained in contraction for the second consecutive month in March, failing to bounce back from the sharp plunge in February and pointing to a slowdown in the US economy.

The Barometer increased 0.5 point to 46.3 in March, following a 13.6 point drop in February to a 5½-year low. The Chicago Business Barometer averaged 50.5 in Q1, down from 61.3 in Q4 and the lowest outturn since Q3 2009. While part of this decline may be attributable to the cold weather snap and strike action at west coast ports, the continued weakness in March points to a wider slowdown in business conditions.

Of the five components which make up the Barometer, Production posted the sharpest increase, rising 4.5 points to 49.3, but remaining below the 50 breakeven level. New Orders and Order Backlogs rose slightly, but like Production were unable to move out of contraction after suffering double digit losses in February. A small rise in Employment was in line with muted gains in the ordering components, lifting it back above 50. Supplier Deliveries was the only component to decrease in March.

Generally, purchasers reported business in Q1 was slow as orders softened. There was, however, an expectation that orders would pick-up over the coming quarter. According to a special question included in the March survey, 56% of purchasers surveyed expected higher New Orders within the next three months, while 36% expected orders to remain the same. Only 9% of the purchasers surveyed said they thought New Orders would be lower in Q2.

Disinflationary pressures were still evident in March in line with lower oil prices, with Prices Paid contracting at a faster pace.

Companies built inventories of finished goods at the fastest pace in four months, with the Inventories Indicator rising above 50 for the first time since December. Inventory accumulation was due to both an unplanned rise following weaker demand, as well as some planned stock building due to forecasts of stronger orders in Q2.

Commenting on the Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, “There was some expectation that the Barometer would bounce back in March following the sharp fall in February. Instead we are faced with a second consecutive sub-50 reading and the weakest quarterly outturn for more than five years. While purchasers expect to see demand increase over the second quarter, for now the data point to a significant loss of momentum in the US economy during Q1.”


S&P/Case-Shiller Home Price Indices increase 0.1% in January
Posted: March 31, 2015 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for January 2015 show that home prices continued their rise across the country over the last 12 months. However, monthly data reveal slowing increases and seasonal weakness.

Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year increases in January compared to December. The 10-City Composite gained 4.4% year-over-year, up from 4.3% in December. The 20-City Composite gained 4.6% year-over-year, compared to a 4.4% increase in December. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.5% annual gain in January 2015 versus a 4.6% increase in December 2014.

Denver and Miami reported the highest year-over-year gains, as prices increased by 8.4% and 8.3%, respectively, over the last 12 months. Fourteen cities reported higher price increases in the year ended January 2015 over the year ended December 2014. Chicago led the way with a reported increase of 2.5%, up 11 basis points from December. Six cities reported declines, with San Francisco leading the declining annual returns with a reported rate of 7.9%, down from 9.4% annually.

Month-over-Month
The National index declined for the fifth consecutive month in January, reporting a -0.1% change for the month. Both the 10- and 20-City Composites reported virtually flat month-over-month changes. Of the nine cities that reported increases, Charlotte, Miami, and San Diego led all cities in January with increases of 0.7%. San Francisco reported the largest decrease of all 20 cities, with a month-over-month decrease of -0.9%. Seattle and Washington D.C. reported decreases of -0.5%. Unusually cold and wet weather may have weakened activity in some cities.

Analysis
The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices. Regional patterns in recent months continue: strength in the west and southwest paced by Denver and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and Las Vegas. The northeast and Midwest are mostly weaker than the national index.

Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.5% annual gain in January 2015. The 10- and 20-City Composites reported year-over-year increases of 4.4% and 4.6%.

As of January 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 28.2% and 29.0%.


Paychex-IHS Small Business Jobs Index declined to 100.79 in March
Posted: March 31, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index declined 0.05 percent during the past month, bringing the national index to 100.79 in March. The minor retreat, however, did not halt the positive momentum generated in January and February. The national index is up 0.23 percent for the first quarter of 2015, representing the best three-month gain since the index was publicly released last year. The West North Central region continued its strong showing and remains the top-ranked regional index. Indiana and Washington lead the state index ranking, with Texas falling to third. Dallas extends its streak to six consecutive months in the top spot among metro areas.

At 100.79, the Paychex | IHS Small Business Jobs Index matches levels seen last fall, indicating strong job gains, though not as strong as the gains seen during last spring and summer.

Even with the March growth rate slowing slightly, the first three months of 2015 were the best quarter of small business job growth that we've seen in the past year.

With the national index at 100.79, employment conditions in the U.S. remain strong despite a slowdown of 0.36 percent since last March. While the pace of job growth increased for a majority of the regions during the first quarter of 2015, the New England and Middle Atlantic regions declined further, possibly related to one of the harshest winters on record.

At 102.81, the West North Central increased its lead as the top-ranked regional index, spiking 0.41 percent in March and 1.55 percent in the past 12 months, despite weak overall jobs data per the BLS. The Pacific region had its best three-month growth rate in more than two years at 0.63 percent, boosting the national index in 2015. While most regions have rebounded in the first three months of 2015, New England has weakened further with the lowest regional index at 99.74.


Texas Manufacturing Activity Weakens
Posted: March 30, 2015 at 10:30 AM (Monday)

Texas factory activity declined in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell to -5.2, posting its first negative reading in nearly two years.

Other measures of current manufacturing activity also reflected contraction in March. The new orders index pushed further into negative territory, coming in at -16.1, and the growth rate of orders index remained negative for a fifth consecutive month but edged up to -15.3 in March. The shipments and capacity utilization indexes slipped to more negative readings, -8.7 and -6.4, respectively.

Perceptions of broader business conditions were rather pessimistic for a third month in a row. The general business activity index declined 6 points to -17.4 in March, while the company outlook index was largely unchanged at -4.

Labor market indicators reflected slight employment declines and shorter workweeks. The March employment index dipped to -1.8, its first negative reading since May 2013. Thirteen percent of firms reported net hiring, compared with 14 percent reporting net layoffs. The hours worked index has been gradually declining for six months and came in at -5.3 in March, down from -1.6 in February.

Prices declined in March, and upward pressure on wages continued to ease slightly. The raw materials prices index fell to -9.4, its lowest reading since May 2009. The finished goods prices index pushed further negative to -9.8, also reaching a low not seen since 2009. The wages and benefits index came in at 15.6, down from 16.8 in February.

Expectations regarding future business conditions remained fairly weak in March. The index of future general business activity edged down to 3, while the index of future company outlook inched up to 12.8. Both indexes remain well below the levels seen throughout 2014. Indexes for future manufacturing activity, however, improved markedly in March. The indexes of future production, capacity utilization and growth rate of orders posted double-digit gains from their February readings.


Pending Home Sales Index rose 3.1% in February
Posted: March 30, 2015 at 10:00 AM (Monday)

Pending home sales in February increased to their highest level since June 2013 as sizeable gains in the Midwest and West offset smaller declines in the Northeast and South, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 3.1 percent to 106.9 in February from a slight downward revision of 103.7 in January and is now 12.0 percent above February 2014 (95.4). The index is at its highest level since June 2013 (109.4), has increased year-over-year for six consecutive months and is above 100 – considered an average level of activity – for the 10th consecutive month.

Demand appears to be strengthening as we head into the spring buying season. Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents. These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale.

According to NAR’s monthly Realtors® Confidence Index, the percent share of first-time buyers increased slightly for the first time in February since November 2014, up to 29 percent from 28 percent in January.

Several markets remain highly-competitive due to supply pressures, and Realtors® are reporting severe shortages of move-in ready and available properties in lower price ranges. The return of first-time buyers this year will depend on how quickly inventory shows up in the market.

The PHSI in the Northeast fell 2.3 percent to 81.7 in February, but is 4.1 percent above a year ago. In the Midwest the index leaped 11.6 percent to 110.4 in February, and is now 13.8 percent above February 2014.

Pending home sales in the South decreased 1.4 percent to an index of 120.2 in February, but is still 10.8 percent above last February. The index in the West climbed 6.6 percent in February to 102.1 (highest since June 2013 at 111.4) and is now 18.3 percent above a year ago.

Total existing-homes sales in 2015 are forecast to be around 5.25 million, an increase of 6.4 percent from 2014. The national median existing-home price for all of this year is expected to increase around 5.6 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.


Personal Income increased 0.4%, Spending increased 0.1%
Posted: March 30, 2015 at 08:30 AM (Monday)

Personal income increased $58.6 billion, or 0.4 percent, and disposable personal income (DPI) increased $54.2 billion, or 0.4 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $11.8 billion, or 0.1 percent. In January, personal income increased $61.8 billion, or 0.4 percent, DPI increased $61.5 billion, or 0.5 percent, and PCE decreased $28.5 billion, or 0.2 percent, based on revised estimates.

Real DPI increased 0.2 percent in February, compared with an increase of 0.9 percent in January. Real PCE decreased 0.1 percent, in contrast to an increase of 0.2 percent.


University of Michigan Consumer Confidence down in March to 93.0
Posted: March 27, 2015 at 10:00 AM (Friday)

Consumer optimism reached a ten-year peak of 95.5 in the 1st quarter of 2015—its highest level since the 3rd quarter of 2004. Although optimism has eased back slightly since the start of the year, January’s surge in confidence was largely due to falling gasoline prices and the small retreat since then was largely due to the unusually harsh winter. Most of the recent variation was among lower income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours. Households with incomes in the middle and top thirds of the distribution, in contrast, recorded gains in confidence in the March survey. While consumer spending weakened in the 1st quarter of 2015, it is still likely to post a gain of 3.3% for the year as a whole.

Wage Gains Begin to Broaden
While the current finances of consumers were a little less positive in March than in January and February, they were still judged more favorably than anytime in the prior eight years. While the largest income gains were expected by those under age 45 and by households with incomes in the top third, the largest improvements during the past year were among middle income households and those aged 45 to 64. The broadening of positive income expectations is certainly a good indication for future spending.

Mortgage Rates Trump Prices
Views of home buying conditions remained very favorable in the March 2015 survey, although the reasons given by consumers have shifted from a reliance on low prices to being dependent on low mortgage rates. The smallest proportion of consumers since 2006 cited low home prices, and the highest proportion in the last ten years cited low mortgage rates in the surveys conducted in the 1st quarter of 2015.

The Consumer Sentiment Index was 93.0 in the March 2015 survey, just below February’s 95.4, but was significantly above last March’s 80.0. The Current Conditions Index retreated to 105.0 in March from 106.9 one month ago, and was well above last year’s 95.7. The Expectations Index fell to 85.3 in March from 88.0 in February, but posted a substantial gain from last March’s 70.0.

The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Nonetheless, expanding job opportunities as well as more favorable wage gains have meant that consumer spending will strongly rebound during the balance of the year. The appeal of attractive pricing as a spending driving force has begun to fade, and has been increasingly replaced by more attractive credit conditions. The greater sensitivity of consumers to credit conditions will increase the power of the Fed’s actions, so that they can accomplish more with a smaller change than was true in the past.


4Q2014 GDP final estimate increased 2.2%
Posted: March 27, 2015 at 08:30 AM (Friday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 2.2 percent in the fourth quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 5.0 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 2.2 percent. While increases in exports and in personal consumption expenditures (PCE) were larger than previously estimated and the change in private inventories was smaller, GDP growth is unrevised, and the general picture of the economy for the fourth quarter remains the same.

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

The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE and in state and local government spending.


Kansas City Fed Manufacturing Activity declined in March
Posted: March 26, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined in March, and producers’ expectations moderated somewhat but remained slightly positive. Most price indexes continued to decrease, with several reaching their lowest level since 2009. In a special question about the West Coast port disruptions, 32 percent of firms said it had affected them negatively.

The month-over-month composite index was -4 in March, down from 1 in February and 3 in January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declines in plastics, food, and chemical production and continued weakness in metals and machinery. Looking across District states, the largest decline was in Oklahoma, with moderate slowdowns in Kansas and Nebraska. Other month-over-month indexes decreased from the previous month. The production and shipments indexes fell after rising last month, and the new orders and order backlog indexes dropped to their lowest levels in over two years. In contrast, the employment and new orders for exports indexes inched higher but remained negative. The finished goods inventory index eased from 3 to -2, and the raw materials inventory index also moved into negative territory.

Year-over-year factory indexes also decreased. The composite year-over-year index declined from 9 to -2, and the production, shipments, new orders, and employment indexes also moved into negative territory. The capital expenditures index eased from 9 to 3, and the order backlog index decreased further. Both inventory indexes moderated somewhat.

Most future factory indexes eased slightly but remained positive. The future composite index moved down from 11 to 4, and the future production, shipments, and new orders index also decreased moderately. The future employment index dropped from 14 to 7, its lowest level in over a year, and the future capital expenditures index fell to a five-year low. In contrast, the future order backlog index was unchanged, and the future new orders for exports index edged slightly higher. The future finished goods inventory index fell from 0 to -9, and the future raw materials inventory index also decreased.

Most price indexes continued to decrease in March. The month-over-month finished goods price index eased from -3 to -6, and the raw materials price index dropped from -6 to -12. The year-over-year raw materials price index fell from 29 to 22, and the finished goods price index inched lower. The future raw materials price index eased slightly, while the future finished goods price index rose somewhat, from 6 to 12.


DJ-BTMU U.S. Business Barometer dropped by 0.3%
Posted: March 26, 2015 at 10:00 AM (Thursday)

For the week ending March 14 2015, the DJ-BTMU U.S. Business Barometer dropped by 0.3 percent to 98.1. This week’s barometer was largely dragged down by weak performances in production indexes. Electric output, for instance, plummeted by a solid 14.4 percent following a 5.6 percent drop in the previous week. Lumber, steel and coal production also reported losses, albeit they were partially offset by gains in auto and truck production. As to the consumption side, chain store sales rose for two consecutive weeks; while MBA’s purchase index declined by 1.5 percent after growing by 1.9 percent last week.

On a year-over-year basis, the barometer showed a gain of 0.6 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, fell slightly by 0.1 percent to 98.3. Its year-over-year growth rate was 0.8 percent.


Weekly Initial Unemployment Claims Decrease 9,000 to 282,000
Posted: March 26, 2015 at 08:30 AM (Thursday)

In the week ending March 21, the advance figure for seasonally adjusted initial claims was 282,000, a decrease of 9,000 from the previous week's unrevised level of 291,000. The 4-week moving average was 297,000, a decrease of 7,750 from the previous week's unrevised average of 304,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending March 14, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 14 was 2,416,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,417,000 to 2,422,000. The 4-week moving average was 2,422,250, an increase of 3,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,418,000 to 2,419,250.


New Orders for Durable Goods Decreased 1.4%, Ex-Trans Down 0.4%
Posted: March 25, 2015 at 08:30 AM (Wednesday)

New orders for manufactured durable goods in February decreased $3.2 billion or 1.4 percent to $231.3 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 2.0 percent January increase. Excluding transportation, new orders decreased 0.4 percent. Excluding defense, new orders decreased 1.0 percent. Transportation equipment, also down three of the last four months, led the decrease, $2.5 billion or 3.5 percent to $69.5 billion.

Shipments of manufactured durable goods in February, down four of the last five months, decreased $0.5 billion or 0.2 percent to $244.0 billion. This followed a 1.4 percent January decrease. Primary metals, down five consecutive months, led the decrease, $0.3 billion or 1.1 percent to $26.1 billion.

Unfilled orders for manufactured durable goods in February, down three consecutive months, decreased $5.6 billion or 0.5 percent to $1,156.9 billion. This followed a 0.3 percent January decrease. Transportation equipment, also down three consecutive months, led the decrease, $4.6 billion or 0.6 percent to $731.6 billion.

Inventories of manufactured durable goods in February, up twenty-two of the last twenty-three months, increased $1.1 billion or 0.3 percent to $413.0 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.3 percent January increase. Transportation equipment, also up twenty-two of the last twenty-three months, drove the increase, $1.2 billion or 0.9 percent to $135.4 billion.

Nondefense new orders for capital goods in February decreased $2.1 billion or 2.6 percent to $77.3 billion. Shipments decreased slightly to $80.2 billion. Unfilled orders decreased $2.9 billion or 0.4 percent to $727.8 billion. Inventories increased $0.3 billion or 0.1 percent to $186.8 billion. Defense new orders for capital goods in February increased $0.8 billion or 10.2 percent to $8.3 billion. Shipments decreased $0.1 billion or 0.8 percent to $9.0 billion. Unfilled orders decreased $0.7 billion or 0.4 percent to $152.9 billion. Inventories increased $0.7 billion or 3.0 percent to $24.9 billion.

Revised seasonally adjusted January figures for all manufacturing industries were: new orders, $467.7 billion (revised from $470.0 billion); shipments, $477.8 billion (revised from $479.1 billion); unfilled orders, $1,162.5 billion (revised from $1,163.4 billion); and total inventories, $650.1 billion (revised from $650.5 billion).


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: March 25, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 9.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 20, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 9 percent compared with the previous week. The Refinance Index increased 12 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier to its highest level since January 2015. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 61 percent of total applications from 59 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.8 percent of total applications.The FHA share of total applications decreased to 13.3 percent this week from 14.3 percent last week. The VA share of total applications decreased to 10.1 percent this week from 10.3 percent last week. The USDA share of total applications decreased to 0.8 percent this week from 0.9 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.90 percent, its lowest level since February 2015, from 3.99 percent, with points decreasing to 0.37 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.89 percent, its lowest level since January 2015, from 3.94 percent, with points decreasing to 0.25 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.71 percent, its lowest level since January 2015, from 3.74 percent, with points increasing to 0.21 from 0.12 (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 3.22 percent, its lowest level since February 2015, from 3.28 percent, with points decreasing to 0.28 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.97 percent, its lowest level since January 2015, from 2.99 percent, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New Home Sales in February at annual rate of 539,0000
Posted: March 24, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in February 2015 were at a seasonally adjusted annual rate of 539,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8 percent (±15.2%)* above the revised January rate of 500,000 and is 24.8 percent (±20.4%) above the February 2014 estimate of 432,000.

The median sales price of new houses sold in February 2015 was $275,500; the average sales price was $341,000. The seasonally adjusted estimate of new houses for sale at the end of February was 210,000. This represents a supply of 4.7 months at the current sales rate.


Philadelphia Nonmanufacturing Activity Continues to Expand in March
Posted: March 24, 2015 at 10:00 AM (Tuesday)

Responses to this month's Nonmanufacturing Business Outlook Survey suggest that local nonmanufacturing activity continued to expand in March. The survey's indicators for general activity, new orders, and sales or revenues decreased slightly but remained at elevated levels. Responding firms continue to be optimistic about activity over the next six months.

Nonmanufacturing Activity Continues to Expand
The diffusion index for current activity at the firm level decreased from 51.0 in February to 44.2 in March. More than 65 percent of the respondents reported increases in activity, up slightly from 61 percent last month. Firms perceived increasing activity for the region as well; as a result, the regional general activity index edged up to 48.8. The more than 55 percent of the respondents who indicated increasing activity in the region far exceeded the 7 percent who indicated decreasing activity.

New Orders and Sales or Revenues Were Positive
Demand for firms' services, as measured by the new orders and sales/revenues indexes, continued to grow this month. The new orders index edged down from 32.7 in February to 30.2 in March. The share of firms reporting increases in new orders this month (49 percent) exceeded the share of firms reporting decreases (19 percent). The sales/revenues index also decreased, falling 8 points to 34.9. The percentage of firms reporting decreases in sales or revenues grew to 23 percent from 14 percent last month; however, more than 58 percent of the firms reported increases.

Employment Indexes
Labor Market Indicators Grew
Survey results suggest generally positive labor market conditions this month. The full-time employment index rose to its highest reading for the year, increasing 7 points to 20.9. The percentage of firms reporting increases in full-time staff (28 percent) exceeded the percentage of firms reporting decreases (7 percent). The part-time employment index changed little, edging up to 25.6 in March from 24.5 in February. Firms also reported increases in hours, as the workweek index increased 7 points, to 23.3.

Firms Reported Increased Price Pressures
The prices of inputs rose for firms in March, on balance, as the index for prices paid rose for the third consecutive month, to 23.3. The percentage of respondents reporting increases in input prices (33 percent) exceeded the percentage of respondents reporting decreases (9 percent), and most respondents (49 percent) reported no change. Firms were nearly evenly split on changes in prices for their own goods. More than 23 percent of the respondents reported higher prices received, slightly exceeding the nearly 21 percent of the respondents who reported lower prices received. However, the prices received index decreased 18 points, to 2.3, as the share of respondents reporting lower prices this month (21 percent) increased from last month (6 percent).

Capital Expenditures Grew Slightly
Firms continued to report slight increases, on net, in capital expenditures this month, but both spending indexes decreased from last month's readings. The index for expenditures on physical plant fell 10 points, to 2.3. The percentage of respondents reporting increases (9 percent) narrowly exceeded the percentage reporting decreases (7 percent). The equipment and software expenditures index also decreased, from 24.5 last month to 18.6 this month. More than a quarter of the respondents reported increases in equipment and software spending.

Future Indicators Remain High
Responding firms continued to be optimistic about activity over the next six months; however, index readings for both future activity indicators decreased from last month. The firm-level future general activity index decreased nearly 10 points, to 72.1, nearing its December 2014 reading. More than 72 percent of the firms expect activity to increase over the next six months; none of the respondents expect activity six months from now to decrease. The future activity index for the region decreased slightly but also remained high, at 79.1.

Summary
The March Nonmanufacturing Business Outlook Survey results suggest continued increased activity in the region among nonmanufacturing firms. Indicators for general activity at both the company and regional levels, new orders, and sales/revenues remained high, and indicators for employment continued to show improvement. Firms remained optimistic about future growth.


Richmond Fed's Current Activity Index dropped 8 points to a reading of -8
Posted: March 24, 2015 at 10:00 AM (Tuesday)

Manufacturing activity declined in March, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders dropped. Order backlogs fell and capacity utilization declined. Hiring in the manufacturing sector was soft and the average workweek shortened. Wage growth remained modest.

Looking ahead six months, producers anticipated more favorable business conditions. Producers expected strength in shipments and new orders, and a jump in capacity utilization. Expectations were for a growing backlog of orders and a slight rise in vendor lead-times. Further, producers anticipated robust growth in hiring and wages, along with a modestly longer workweek.

Prices of raw materials and finished goods rose only slightly in March. Manufacturers anticipated mildly faster price growth over the next six months, compared with the current pace.

Manufacturing activity decelerated this month after flattening in February. The composite index fell to −8 in March from a reading of 0 a month earlier. The shipments index collapsed to −13, as did the index for the volume of new orders, compared to month-ago readings of −1 and −2, respectively. Capacity utilization also fell, with that index shrinking three points to −7.

The gauge for vendor lead-times dropped to −9 from 2. Finally, backlogs of new orders lost two points, settling at −12 in March.

As shipments declined, finished goods inventories rose, pulling the index to 25 from 20. Raw materials inventories also grew, with that indicator gaining nine points to end the survey period at 25.


Consumer Price Index increased 0.2% in February, Ex Fd & Engy rose 0.2%
Posted: March 24, 2015 at 08:30 AM (Tuesday)

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

The seasonally adjusted increase in the all items index was broad-based, with increases in shelter, energy, and food indexes all contributing. The energy index rose after a long series of declines, increasing 1.0 percent as the gasoline index turned up after falling in recent months. The food index, unchanged last month, also rose in February, though major grocery store food group indexes were mixed.

The index for all items less food and energy rose 0.2 percent in February, the same increase as in January. In addition to shelter, the indexes for used cars and trucks, apparel, new vehicles, tobacco, and airline fares were among those that increased. The medical care index was unchanged, while the personal care index declined.

The all items index was unchanged over the past 12 months, after showing a 0.1-percent decline for the 12 months ending January. Over the last 12 months the food index rose 3.0 percent and the index for all items less food and energy increased 1.7 percent. These increases were offset by an 18.8-percent decline in the energy index.


Real Average Hourly Earnings decreased 0.1% in February
Posted: March 24, 2015 at 08:30 AM (Tuesday)

Real average hourly earnings for all employees decreased 0.1 percent from January to February, 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 offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased by 0.1 percent over the month due to the decrease in real average hourly earnings combined with no change in the average workweek.

Real average hourly earnings increased by 2.1 percent, seasonally adjusted, from February 2014 to February 2015. This increase in real average hourly earnings, combined with a 0.6-percent increase in the average workweek, resulted in a 2.6-percent increase in real average weekly earnings over this period.


Existing-Home Sales rose 1.2% in February
Posted: March 23, 2015 at 10:00 AM (Monday)

Existing-home sales increased modestly in February, but constrained inventory levels pushed price growth to its fastest pace in a year, 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, rose 1.2 percent to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7 percent higher than a year ago and above year-over-year totals for the fifth consecutive month.

The median existing-home price for all housing types in February was $202,600, which is 7.5 percent above February 2014. This marks the 36th consecutive month of year-over-year price gains and the largest since last February (8.8 percent).

Although February sales showed modest improvement, there’s been some stagnation in the market in recent months. Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels. Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.

Severe below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country.

Total housing inventory at the end of February increased 1.6 percent to 1.89 million existing homes available for sale, but remains 0.5 percent below a year ago (1.90 million). For the second straight month, unsold inventory is at a 4.6-month supply at the current sales pace.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in February slightly rose to 3.71 percent from 3.67 percent in January, marking the first monthly increase since September 2014.

With all indications pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – affordability concerns could heighten as home prices and rents both continue to exceed wages.

A NAR study released earlier this month found that the disparity between rent and income growth is widening in metro areas throughout the country and is making it harder for renters to become homeowners.

The percent share of first-time buyers was 29 percent in February, up from 28 percent in January and the first increase since November 2014. First-time buyers represented 28 percent of all buyers in February 2014.

All-cash sales were 26 percent of transactions in February, down from 27 percent in January and down considerably from a year ago (35 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in February, down from 17 percent last month and 21 percent in February 2014. Sixty-seven percent of investors paid cash in February.

Distressed sales – foreclosures and short sales – were 11 percent of sales in February, unchanged for the third consecutive month and down from 16 percent a year ago. Eight percent of February sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in February (15 percent in January), while short sales were discounted 15 percent (12 percent in January).

Investor sales are trending downward due to the continued rise in prices and fewer bargains available from distressed properties coming onto the market. Furthermore, Realtors® in areas popular to foreign buyers, such as South Florida and the West Coast, are reporting tempered demand from international clients – who typically pay in cash – due to the strengthening U.S. dollar compared to foreign currencies.

Properties typically stayed on the market for 62 days in February, down from 69 days in January and unchanged from a year ago. Short sales were on the market the longest at a median of 120 days in February, while foreclosures sold in 58 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month.

Single-family home sales increased 1.4 percent to a seasonally adjusted annual rate of 4.34 million in February from 4.28 million in January, and are 5.9 percent above the 4.10 million pace a year ago. The median existing single-family home price was $204,200 in February, up 8.2 percent from February 2014.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 540,000 units in February, unchanged from January, but 3.6 below February 2014 (560,000 units). The median existing condo price was $190,200 in February, which is 2.8 percent higher than a year ago.


Chicago Fed National Activity slightly below average in February
Posted: March 23, 2015 at 08:30 AM (Monday)

The Chicago Fed National Activity Index (CFNAI) edged lower to –0.11 in February from –0.10 in January. Two of the four broad categories of indicators that make up the index decreased from January, and two of the four categories made negative contributions to the index in February.

The index’s three-month moving average, CFNAI-MA3, declined to –0.08 in February from +0.26 in January. February’s CFNAI-MA3 suggests that growth in national economic activity was slightly below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to a neutral reading in February from +0.10 in January. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in February, while 37 made negative contributions. Forty-six indicators improved from January to February, while 39 indicators deteriorated. Of the indicators that improved, ten made negative contributions.

Production-related indicators made a contribution of –0.07 to the CFNAI in February, up from –0.20 in January. Industrial production increased 0.1 percent in February after declining 0.3 percent in the previous month, and manufacturing production decreased 0.2 percent in February after declining 0.3 percent in January. The contribution of the sales, orders, and inventories category to the CFNAI ticked up to +0.02 in February from +0.01 in January.

Employment-related indicators contributed +0.11 to the CFNAI in February, down slightly from +0.16 in January. The unemployment rate decreased to 5.5 percent in February. However, civilian employment increased by 96,000 in February, following a gain of 759,000 in January; and average weekly initial unemployment insurance claims increased more in February than in the previous month.

The contribution of the personal consumption and housing category to the CFNAI decreased to –0.17 in February from –0.07 in January. Housing starts declined to 897,000 annualized units in February from 1,081,000 in the previous month. However, housing permits edged up to 1,092,000 annualized units in February from 1,060,000 in January.

The CFNAI was constructed using data available as of March 19, 2015. At that time, February data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The January monthly index was revised to –0.10 from an initial estimate of +0.13. 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 January monthly index was due primarily to the former.


U.S. Leading Economic Index increased 0.2%
Posted: March 19, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.2 percent in February to 121.4 (2010 = 100), following a 0.2 percent increase in January, and a 0.4 percent increase in December.

Widespread gains among the leading indicators continue to point to short-term growth. However, easing in the LEI’s six-month change suggests that we may be entering a period of more moderate expansion. With the February increase, the LEI remains in growth territory, but weakness in the industrial sector and business investment is holding economic growth back, despite improvements in labor markets and consumer confidence.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in February to 111.9 (2010 = 100), following a 0.2 percent increase in January, and a 0.3 percent increase in December.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in February to 115.8 (2010 = 100), following a 0.3 percent increase in January, and a 0.2 percent increase in December.


Philadelphia February Outlook Continues to Suggest Modest Growth
Posted: March 19, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased at a modest pace in March, according to firms responding to this month’s Manufacturing Business Outlook Survey. The survey’s current indicators for general activity and new orders were positive and remained near their low readings in February. Firms reported overall declines in shipments and in work hours, while overall employment increased only slightly. Firms reported more widespread price reductions in March, although most firms continued to report steady prices. The survey's indicators of future activity showed mixed results but continued to suggest that the manufacturing sector is expected to continue growing over the next six months.

Indicators Suggest Modest Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, at 5.0, was virtually unchanged from its reading of 5.2 in February (see Chart 1). The demand for manufactured goods, as measured by the current new orders index, remained at a very low, albeit positive, reading of 3.9 and edged 2 points lower than in February. The current shipments index fell more dramatically (16 points) and returned the index to negative territory (its second negative reading in three months). Firms reported faster delivery times and a decrease in unfilled orders this month compared with February.

Firms’ responses suggest weaker labor market conditions compared with most of last year. Although the current employment index, at just 3.5, was virtually unchanged from last month, the index remains well below its average reading of about 14 over the second half of last year. The percentage of firms reporting an increase in employees in March (17 percent) narrowly exceeded the percentage reporting a decrease (14 percent). Firms also reported reductions in the workweek in March: The percentage of firms reporting a shorter workweek (24 percent) was greater than the percentage reporting a longer workweek (13 percent).

Share of Firms Reporting Price Reductions Has Increased
Input price pressures continued to moderate for reporting manufacturers: The prices paid index fell 8 points to -3.0 in March, its first negative reading since the summer of 2009 (see Chart 2). Although most firms (68 percent) reported that input prices were unchanged, the percentage of firms reporting price reductions (17 percent) exceeded those reporting increases (14 percent). With respect to prices received for manufactured goods, the percentage of firms reporting price reductions (17 percent) exceeded those reporting price increases (10 percent). The prices received index fell 6 points to -6.4, its third consecutive negative reading. The largest percentage of firms (71 percent) reported no change in manufactured goods prices.

Most Future Indicators Remain Positive but Are at Lower Levels Than Last Year
The diffusion index for future activity edged up from 29.7 to 32.0 but remained lower than readings over the past year (see Chart 1). The future indexes for new orders and shipments, however, moved in the opposite direction, falling 9 points and 6 points, respectively. The future employment index also was weaker this month. The future employment index decreased 12 points, to its lowest reading since April 2013. Although nearly 57 percent of the firms are expecting no change in their employment levels over the next six months, the percentage expecting increases in employment (25 percent) remained greater than the percentage expecting decreases (11 percent).

In this month’s special questions, firms were surveyed about capital spending plans for 2015 compared with actual levels in 2014. These questions were asked for the last four years.

Summary
The Manufacturing Business Outlook Survey suggests continued modest expansion of the region’s manufacturing sector in March. The indicators for general activity and new orders both continued to suggest modest growth. Firms reported an overall reduction in shipments and average labor hours for March. Respondents also indicated that downward price pressures continued for inputs. Also, for their own products, more firms reported price decreases than reported price increases. Firms remain optimistic about increases in overall business and employment over the next six months, although optimism was less widespread than just a few months ago.


DJ-BTMU U.S. Business Barometer unch%
Posted: March 19, 2015 at 10:00 AM (Thursday)

For the week ending March 7 2015, the DJ-BTMU U.S. Business Barometer remained at 98.5 as gains in consumption indexes were completely cancelled out by losses in production indexes. On one hand, chain store sales rose by 1.3 percent due to improvements in demand on department, drug, and electronics stores. In the same line, MBA’s purchase index picked up by 1.9 percent following 0.2 percent drop in the prior week. However, on the other hand, all production indexes except lumber production reported losses, especially auto and truck production, which dropped by 7.0 and 4.5 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 1.1 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

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


3Q2014 Current Account Deficit Increased
Posted: March 19, 2015 at 08:30 AM (Thursday)

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)—increased to $113.5 billion (preliminary) in the fourth quarter of 2014 from $98.9 billion (revised) in the third quarter. The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.2 percent in the third quarter. The increase in the current-account deficit was primarily accounted for by a decrease in the surplus on primary income. In addition, the deficits on goods and secondary income increased. These changes were partly offset by an increase in the surplus on services.


Weekly Initial Unemployment Claims Increase 1,000 to 291,000
Posted: March 19, 2015 at 08:30 AM (Thursday)

In the week ending March 14, the advance figure for seasonally adjusted initial claims was 291,000, an increase of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 289,000 to 290,000. The 4-week moving average was 304,750, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 302,250 to 302,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending March 7, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 7 was 2,417,000, a decrease of 11,000 from the previous week's revised level. The previous week's level was revised up 10,000 from 2,418,000 to 2,428,000. The 4-week moving average was 2,418,000, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 2,500 from 2,416,750 to 2,419,250.


FOMC target funds rate reaffirmed at 0 - 1/4%
Posted: March 18, 2015 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in January suggests that economic growth has moderated somewhat. Labor market conditions have improved further, with strong job gains and a lower unemployment rate. A range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow and export growth has weakened. Inflation has declined further below the Committee's longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and other factors dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. Consistent with its previous statement, the Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

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

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: March 18, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 13, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 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 5 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 1 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 59 percent of total applications, the lowest level since October 2014, from 60 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5 percent of total applications.

The FHA share of total applications increased to 14.3 percent this week from 14.0 percent last week. The VA share of total applications decreased to 10.3 percent this week from 10.8 percent last week. The USDA share of total applications increased to 0.9 percent this week from 0.8 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.99 percent from 4.01 percent, with points increasing to 0.40 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.94 percent from 4.02 percent, with points increasing to 0.33 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 decreased to 3.74 percent from 3.80 percent, with points decreasing to 0.12 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.28 percent from 3.29 percent, with points increasing to 0.34 from 0.30 (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 2.99 percent from 3.18 percent, with points increasing to 0.43 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


February Housing Starts down 17.0%, Permits up 3.0%
Posted: March 17, 2015 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,092,000. This is 3.0 percent (±1.7%) above the revised January rate of 1,060,000 and is 7.7 percent (±2.0%) above the February 2014 estimate of 1,014,000. Single-family authorizations in February were at a rate of 620,000; this is 6.2 percent (±0.9%) below the revised January figure of 661,000. Authorizations of units in buildings with five units or more were at a rate of 445,000 in February.

HOUSING STARTS
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 897,000. This is 17.0 percent (±9.5%) below the revised January estimate of 1,081,000 and is 3.3 percent (±12.5%) below the February 2014 rate of 928,000. Single-family housing starts in February were at a rate of 593,000; this is 14.9 percent (±10.0%) below the revised January figure of 697,000. The February rate for units in buildings with five units or more was 297,000.

HOUSING COMPLETIONS
Privately-owned housing completions in February were at a seasonally adjusted annual rate of 850,000. This is 13.8 percent (±9.0%) below the revised January estimate of 986,000 and is 1.8 percent (±11.7%) below the February 2014 rate of 866,000. Single-family housing completions in February were at a rate of 595,000; this is 12.1 percent (±10.0%) below the revised January rate of 677,000. The February rate for units in buildings with five units or more was 236,000.


Treasury International Capital Data for January 2015
Posted: March 16, 2015 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for January 2015. The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $88.3 billion. Of this, net foreign private inflows were $60.7 billion, and net foreign official inflows were $27.6 billion.

Foreign residents decreased their holdings of long-term U.S. securities in January; net sales were $39.8 billion. Net sales by private foreign investors were $27.8 billion, while net sales by foreign official institutions were $12.0 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $12.6 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign sales of long-term securities were $27.2 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 $39.3 billion in January.

Foreign residents decreased their holdings of U.S. Treasury bills by $10.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $8.1 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $135.7 billion.


Builder Confidence Drops 2 Points in March to 53
Posted: March 16, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in March fell two points to a level of 53 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

Even with this slight slip, the HMI remains in positive territory and we expect the market to improve as we enter the spring buying season.

The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards. These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand.

Two of the three HMI components posted losses in March. The component gauging current sales conditions fell three points to 58 while the component measuring buyer traffic dropped two points to 37. The gauge charting sales expectations in the next six months held steady at 59.

Looking at the three-month moving averages for regional HMI scores, the Northeast and South each posted a two-point drop to 43 and 55, respectively. The Midwest rose two points to 56, while the West fell seven points to 61.


Industrial Production increased 0.1%
Capacity Utilization decreased to 78.9%

Posted: March 16, 2015 at 09:15 AM (Monday)

Industrial production increased 0.1 percent in February after decreasing 0.3 percent in January. In February, manufacturing output moved down 0.2 percent, its third consecutive monthly decline. The rates of change for the total index in January and for manufacturing in both December and January are lower than previously reported. The index for mining fell 2.5 percent in February; drops in the indexes for coal mining and for oil and gas well drilling and servicing primarily accounted for the decrease. The output of utilities jumped 7.3 percent, as especially cold temperatures drove up demand for heating. At 105.8 percent of its 2007 average, total industrial production in February was 3.5 percent above its level of a year earlier. Capacity utilization for the industrial sector decreased to 78.9 percent in February, a rate that is 1.2 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Continue to Improve Modestly
Posted: March 16, 2015 at 08:30 AM (Monday)

The March 2015 Empire State Manufacturing Survey indicates that business activity continued to expand at a modest pace for New York manufacturers. The headline general business conditions index, at 6.9, remained close to last month’s level. The new orders index fell four points to -2.4, pointing to a small decline in orders, and the shipments index declined six points to 7.9. Labor market indicators pointed to a solid increase in employment levels and a lengthening in the average workweek. Pricing pressures remained subdued, with the prices paid index inching down two points to 12.4, and the prices received index at 8.3. As in February, indexes for the six-month outlook conveyed less optimism than in many of the preceding months, and the capital spending and technology spending indexes declined.

Business Conditions Continue to Improve Modestly
The general business conditions index was little changed at 6.9 in March, suggesting that conditions for New York manufacturers continued to improve modestly and at roughly the same pace as in the past several months. Twenty-six percent of respondents reported that conditions had improved, while 19 percent reported that conditions had worsened. The new orders index declined for a second consecutive month, falling four points to -2.4—evidence of a slight decline in orders. The shipments index fell six points to 7.9, and the unfilled orders index fell seven points to -13.4. The delivery time index dropped to -2.0, indicating slightly shorter delivery times, and the inventories index fell to -5.1, signaling that inventory levels were lower.

Solid Gains in Employment
Pricing pressures remained subdued. The prices paid index edged down two points to 12.4, signaling a moderate increase in input prices for a sixth consecutive month. The prices received index climbed five points to 8.3, indicating a modest increase in selling prices. The index for number of employees climbed eight points to 18.6, pointing to significant gains in employment, and the average workweek rose six points to 5.2, indicating a small increase in the average workweek.

Firms Remain Less Optimistic Than in Previous Months
As in February, indexes assessing the six-month outlook, though generally positive, conveyed more restrained optimism about future business activity than they had throughout much of the past year. After plunging last month, the index for future general business conditions rose five points to 30.7, remaining well below readings that were generally above 40 from May 2014 through January 2015. The future new orders and shipments indexes declined. The future prices paid and future prices received indexes edged higher, but remained subdued. A significant expansion in employment levels was anticipated, with the index for expect number of employees rising to 28.9. After reaching a multiyear high last month, the capital expenditures index fell back to 18.6, and the technology spending index dropped to 7.2.


Producer Price Index fell 0.5% in February, ex Fd & Engy down 0.1%
Posted: March 13, 2015 at 08:30 AM (Friday)

The Producer Price Index for final demand fell 0.5 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved down 0.8 percent in January and 0.2 percent in December. On an unadjusted basis, the index for final demand decreased 0.6 percent for the 12 months ended in February.

In February, about 70 percent of the decline in final demand prices can be attributed to a 0.5-percent decrease in the index for final demand services. Prices for final demand goods moved down 0.4 percent.

Within intermediate demand, the index for processed goods fell 0.6 percent, the index for unprocessed goods dropped 3.9 percent, and prices for services edged up 0.1 percent.


Business Inventories unch% in January
Posted: March 12, 2015 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for January, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,302.5 billion, down 2.0 percent (±0.2%) from December 2014 and were down 0.3 percent (±0.3%)* from January 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,761.7 billion, virtually unchanged (±0.1%)* from December 2014, but were up 3.4 percent (±0.5%) from January 2014.

The total business inventories/sales ratio based on seasonally adjusted data at the end of January was 1.35. The January 2014 ratio was 1.30.


DJ-BTMU U.S. Business Barometer declined slightly by 0.1%
Posted: March 12, 2015 at 10:00 AM (Thursday)

For the week ending February 28 2015, the DJ-BTMU U.S. Business Barometer declined slightly by 0.1 percent to 98.5. The biggest factor that contributed to the performance of this week’s barometer was steel production, which dipped by a solid 3.0 percent, extending the falling trend for three consecutive weeks. The drop in steel production, however, was partially offset by gains in electric output and auto production, which rose by 2.6 and 7.1 percent, respectively. As to the consumption side, MBA’s purchase index fell marginally by 0.2 percent.

On a year-over-year basis, the barometer showed a gain of 1.2 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 1.2 percent.


U.S. Import Price Index Increased 0.4% in February
Posted: March 12, 2015 at 08:30 AM (Thursday)

U.S. import prices increased 0.4 percent in February following declines of 3.1 percent in January and 2.5 percent in December, the U.S. Bureau of Labor Statistics reported today. An upturn in fuel prices led the February rise. Prices for U.S. exports edged down 0.1 percent in February, after a 1.9-percent drop the previous month.

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

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