Research >> Economics

Category: Research - Topic: Economics



Pending Home Sales Index slid 3.7% in May
Posted: June 29, 2016 at 10:00 AM (Wednesday)

After steadily increasing for three straight months, pending home sales letup in May and declined year-over-year for the first time in almost two years, according to the National Association of Realtors®. All four major regions experienced a cutback in contract activity last month.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slid 3.7 percent to 110.8 in May from a downwardly revised 115.0 in April and is now slightly lower (0.2 percent) than May 2015 (111.0). With last month’s decline, the index reading is still the third highest in the past year, but declined year-over-year for the first time since August 2014.

Lawrence Yun, NAR chief economist, says pending sales slumped in May across most of the country. “With demand holding firm this spring and homes selling even faster than a year ago1, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity,” he said. “Realtors® are acknowledging with increasing frequency lately that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”

Despite mortgage rates hovering around three-year lows for most of the year, Yun says scant supply and swiftly rising home prices – which surpassed their all-time high last month2 – are creating an availability and affordability crunch that’s preventing what should be a more robust pace of sales.

“Total housing inventory at the end of each month has remarkably decreased year-over-year now for an entire year3,” adds Yun. “There are simply not enough homes coming onto the market to catch up with demand and to keep prices more in line with inflation and wage growth.”

Looking ahead to the second half of the year, Yun says the fallout from the U.K.’s decision to leave the European Union breeds both immediate opportunity as well as potential headwinds for the U.S. housing market.

“In the short term, volatility in the financial markets could very likely lead to even lower mortgage rates and increased demand from foreign buyers looking for a safer place to invest their cash,” he said. “On the other hand, any prolonged market angst and further economic uncertainty overseas could negatively impact our economy and end up tempering the overall appetite for homebuying.”

In spite of last month’s step back in contract signings, existing-home sales this year are still expected to be around 5.44 million, a 3.7 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.
Regional Breakdown

The PHSI in the Northeast dropped 5.3 percent to 93.0 in May, and is now unchanged from a year ago. In the Midwest the index slipped 4.2 percent to 108.0 in May, and is now 1.8 percent below May 2015.

Pending home sales in the South declined 3.1 percent to an index of 126.6 in May but are still 0.6 percent higher than last May. The index in the West decreased 3.4 percent in May to 102.6, and is now 0.1 percent below a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.


Personal Income increased 0.2%, Spending increased 0.4%
Posted: June 29, 2016 at 08:30 AM (Wednesday)

Personal income increased $37.1 billion, or 0.2 percent, and disposable personal income (DPI) increased $33.9 billion, or 0.2 percent, in May, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $53.5 billion, or 0.4 percent. In April, personal income increased $75.4 billion, or 0.5 percent, DPI increased $68.6 billion, or 0.5 percent, and PCE increased $141.2 billion, or 1.1 percent, based on revised estimates.

Real DPI increased 0.1 percent in May, compared with an increase of 0.2 percent in April. Real PCE increased 0.3 percent, compared with an increase of 0.8 percent.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: June 29, 2016 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 24, 2016.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 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 4 percent compared with the previous week and was 13 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 58.1 percent of total applications from 57.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.9 percent of total applications.

The FHA share of total applications decreased to 10.6 percent from 11.7 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.1 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) to its lowest level since May 2013, 3.75 percent, from 3.76 percent, with points increasing to 0.36 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.74 percent from 3.70 percent, with points increasing to 0.34 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.61 percent, with points increasing to 0.37 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 15-year fixed-rate mortgages decreased to 3.02 percent from 3.04 percent, with points increasing to 0.38 from 0.36 (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 2.88 percent from 2.92 percent, with points increasing to 0.30 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.


Richmond Fed's Current Activity Index dropped 6 points to a reading of -7
Posted: June 28, 2016 at 10:00 AM (Tuesday)

Fifth District manufacturing activity weakened in June, according to the most recent survey by the Federal Reserve Bank of Richmond. New orders and shipments declined this month, while backlogs decreased further compared to last month. Manufacturing employment softened, while firms continued to increase wages. Prices of raw materials rose somewhat more slowly this month and finished goods prices rose slightly faster in June, compared to last month.

Manufacturers' positive expectations faded in June. Producers anticipated mild growth in shipments and in the volume of new orders in the next six months. Compared to last month's outlook, backlogs and capacity utilization were expected to level off. Firms looked for vendor lead times to lengthen slightly during the six months ahead.

Looking ahead, more survey participants expected slower growth in the number of employees and a shorter average workweek. However, an increasing number of firms anticipated wage increases. Producers expected faster growth in prices paid and received.

Overall, manufacturing conditions weakened in June. The composite index for manufacturing dropped to a reading of −7. The indicators for shipments and order backlogs remained in negative territory this month. Those indexes ended at readings of −3 and −17, respectively. The volume of new orders dropped sharply in June; the index lost 14 points, ending at −14. Additionally, the third component of the composite index, the employment index, flattened this month. That indicator moved down five points to end −1.

The capacity utilization index slipped four points this month, pulling the index down to a reading of −10. Vendor lead time was unchanged compared to last month, with that indicator moving down five points to end at 1. Finished goods inventories rose across more firms compared to a month ago; that index gained eight points, ending at a reading of 27. Growth in raw materials inventories broadened at a slightly faster pace in June, with that indicator adding one point to end the survey period at 26.


Consumer Confidence improved in June to 98.0
Posted: June 28, 2016 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had decreased in May, improved in June. The Index now stands at 98.0 (1985=100), up from 92.4 in May. The Present Situation Index increased from 113.2 to 118.3, while the Expectations Index rose from 78.5 to 84.5 in June.

“Consumer confidence rebounded in June, after declining in May,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers were less negative about current business and labor market conditions, but only moderately more positive, suggesting no deterioration in economic conditions, but no strengthening either. Expectations regarding business and labor market conditions, as well as personal income prospects, improved moderately. Overall, consumers remain cautiously optimistic about economic growth in the short-term.”

Consumers’ appraisal of current conditions improved in June. Those stating business conditions are “good” increased slightly from 26.1 percent to 26.9 percent, while those saying business conditions are “bad” decreased from 21.4 percent to 17.7 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” declined from 24.5 percent to 23.4 percent, however those claiming jobs are “hard to get” also decreased from 24.5 percent to 23.3 percent.

Consumers’ optimism regarding the short-term outlook improved in June. Those expecting business conditions to improve over the next six months increased from 15.0 percent to 16.8 percent, while those expecting business conditions to worsen decreased slightly, from 11.7 percent to 11.4 percent.

Consumers’ outlook for the labor market was more favorable than last month. The percentage anticipating more jobs in the months ahead increased from 12.5 percent to 14.2 percent, while those anticipating fewer jobs decreased marginally from 18.2 percent to 17.9 percent. The proportion of consumers expecting their incomes to increase improved from 16.5 percent to 18.2 percent, while the proportion expecting a reduction edged down from 12.6 percent to 11.5 percent.


S&P/Case-Shiller Home Price Indices gained 1.0% in April
Posted: June 28, 2016 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 April 2016 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR
The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, reported a 5.0% annual gain in April, down from 5.1% the previous month. The 10-City Composite posted a 4.7% annual increase, down from 4.8% in March. The 20-City Composite reported a year-over-year gain of 5.4%, down from 5.5% from the prior month.

Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities with another month of annual price increases. Portland led the way with a 12.3% year-over-year price increase, followed by Seattle at 10.7%, and Denver with a 9.5% increase. Nine cities reported greater price increases in the year ending April 2016 versus the year ending March 2016.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 1.0% in April. The 10-City Composite recorded a 1.0% month-over-month increase, while the 20-City Composite posted a 1.1% increase in April. After seasonal adjustment, the National Index recorded a 0.1% month-over-month increase, the 10-City Composite posted a 0.3% increase, and the 20-City Composite reported a 0.5% month-over-month increase. After seasonal adjustment, 15 cities saw prices rise, two cities were unchanged, and three cities experienced negative monthly prices changes.

ANALYSIS
”The housing sector continues to turn in a strong price performance with the S&P/Case-Shiller National Index rising at a 5% or greater annual rate for six consecutive months,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The home price increases reflect the low unemployment rate, low mortgage interest rates, and consumers’ generally positive outlook. One result is that an increasing number of cities have surpassed the high prices seen before the Great Recession. Currently, seven cities – Denver, Dallas, Portland OR, San Francisco, Seattle, Charlotte, and Boston – are setting new highs.

“However, the outlook is not without a lot of uncertainty and some risk. Last week’s vote by Great Britain to leave the European Union is the most recent political concern while the U.S. elections in the fall raise uncertainty and will distract home buyers and investors in the coming months. The details in the S&P/Case-Shiller Home Price data also hint at possible softness. Seasonally adjusted figures in the report show that three cities saw lower prices in April compared to only one city in March. Among the 20 cities, 16 saw either declines or smaller increases in monthly prices in the seasonally adjusted numbers.”

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.0% annual gain in April 2016. The 10-City and 20-City Composites reported year-over-year increases of 4.7% and 5.4%.

As of April 2016, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 10.7-12.7%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 37.7% and 39.2%.


1Q2016 GDP final estimate increased 1.1%
Posted: June 28, 2016 at 08:30 AM (Tuesday)

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 1.1 percent in the first quarter of 2016, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2015, real GDP increased 1.4 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 0.8 percent. With the third estimate for the first quarter, the general picture of economic growth remains the same; exports increased more than previously estimated.

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

The deceleration in real GDP in the first quarter primarily reflected a deceleration in PCE, a larger decrease in nonresidential fixed investment, and a downturn in federal government spending that were partly offset by upturns in state and local government spending and exports and an acceleration in residential fixed investment.

Real gross domestic income (GDI), which measures the value of the production of goods and services in the United States as the costs incurred and the incomes earned in production, increased 2.9 percent in the first quarter, compared with an increase of 1.9 percent in the fourth. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.0 percent in the first quarter, compared with an increase of 1.7 percent in the fourth.

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 0.9 percent in the first quarter, compared with an increase of 1.5 percent in the fourth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.2 percent in the first quarter, compared with an increase of 0.4 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 1.4 percent, compared with an increase of 1.0 percent.

Current-dollar GDP -- the market value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production -- increased 1.4 percent, or $65.3 billion, in the first quarter to a level of $18,230.1 billion. In the fourth quarter, current-dollar GDP increased 2.3 percent, or $104.6 billion.

The upward revision to the percent change in real GDP primarily reflected upward revisions to exports and to nonresidential fixed investment that were partly offset by a downward revision to PCE.


Texas Manufacturing Activity Declines Again in June
Posted: June 27, 2016 at 10:30 AM (Monday)

Texas factory activity declined again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a second consecutive negative reading but rose from -13.1 to -7.0, suggesting the pace of contraction eased somewhat from May.

Other measures of current manufacturing activity also reflected continued declines this month. The new orders index held steady at -14.2, while the growth rate of orders index fell four points to -18.6. The capacity utilization and shipments indexes remained negative for a second month but edged up, coming in at -9.3 and -8.6, respectively.

Perceptions of broader business conditions stayed pessimistic in June. The general business activity index has been negative since January 2015 and came in at -18.3 this month, up slightly from its May reading. The company outlook index posted a seventh consecutive negative reading but rose 5 points to -11.0.

Labor market measures indicated a sixth month of contraction in a row in June. The employment index fell to -11.5, its lowest reading since November 2009. The decline in the index was largely due to a falloff in the share of firms adding to headcounts. Only six percent of firms noted net hiring in June, down from 16 percent last month and well below the 18 percent noting net layoffs. The hours worked index edged down one point to -12.8, signaling continued contraction in workweek length.

Price pressures were mixed, and wages continued to rise. Input costs rose for a third month in a row, as the raw materials prices index held steady at 12.6. Selling prices continued to decline, with the finished goods prices index edging down to -5.2 in June. Meanwhile, the wages and benefits index stayed positive and relatively unchanged at 21.6, suggesting a continued rise in compensation.

Expectations regarding future business conditions improved in June. The index of future general business activity bounced back to a positive reading of 2.6 after dipping below zero last month. The index of future company outlook also ticked up, coming in at 7.9. Most indexes for future manufacturing activity pushed further into positive territory in June.


University of Michigan Consumer Confidence dropped in June to 93.5
Posted: June 24, 2016 at 10:00 AM (Friday)

Consumers were a bit less optimistic in June due to rising concerns about prospects for the economy. While no recession is anticipated, consumers increasingly expect a slower pace of growth in the year ahead. Importantly, the persistent strength in personal finances will keep consumer spending at relatively high levels and support an uninterrupted economic expansion. Although the data are consistent with GDP growth falling slightly below 2.0% in 2016, real consumer spending can be expected to rise by 2.5% in 2016 and 2.7% in 2017.

Personal Finances Best Since 2000
Consumers voiced the most positive assessments of their finances since late 2000 due to near record references to income increases and the fewest complaints about inflation. Recently improved finances were cited by 49% in June, unchanged from May, and the highest level in the last decade. Indeed, expected gains in inflation adjusted incomes reached their highest level since January 2007 despite the fact that consumers anticipated nominal income gains of just 1.6% in June.

Favorable Buying Attitudes
Favorable vehicle buying plans were dominated by low interest rates on credit purchases, especially among higher income and middle age groups, the most likely to purchase new vehicles. Home selling conditions have benefitted from higher home prices but home buying conditions became slightly less favorable due to those same price gains. Low mortgage rates, however, have dominated both buying and selling conditions, especially among households who have a higher probability of purchase.

Consumer Sentiment Index
The Sentiment Index was 93.5 in the June 2016 survey, below the 94.7 in May, and last June’s 96.1. The Current Conditions Index rose to 110.8 in June, reaching its highest level since the last cyclical peak in January 2007. The Expectations Index fell to 82.4 in June, down from 84.9 in May and 87.8 last June. This modest decline is not unexpected since the expansion has lasted for seven years. The data indicate a slower overall pace of growth in the national economy during the year ahead.

Consumer sentiment has remained at high levels and has shown only minor month-to-month variations in the past 18 months. This relative stability stands in sharp contrast to the much more volatile path of GDP. Most of the persistent strength can be trace to more favorable personal finances, despite rather small income gains. Overall, these favorable assessments represent an accommodation for financial planning purposes, but not an acceptance of the inevitability of such a lackluster outcome. Indeed, when asked to evaluate current economic policies, nearly twice as many consumers in June judged economic policies as poor rather than rating them favorably.


May New Orders for Durable Goods decreased 2.2%, Ex-Trans down 0.3%
Posted: June 24, 2016 at 08:30 AM (Friday)

New Orders
New orders for manufactured durable goods in May decreased $5.3 billion or 2.2 percent to $230.7 billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly increases, followed a 3.3 percent April increase. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 0.9 percent. Transportation equipment, also down following two consecutive monthly increases, led the decrease, $4.8 billion or 5.6 percent to $81.9 billion.

Shipments
Shipments of manufactured durable goods in May, down three of the last four months, decreased $0.5 billion or 0.2 percent to $231.7 billion. This followed a 0.4 percent April increase. Transportation equipment, also down three of the last four months, led the decrease, $0.4 billion or 0.5 percent to $80.0 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in May, up four of the last five months, increased $2.0 billion or 0.2 percent to $1,139.4 billion. This followed a 0.6 percent April increase. Transportation equipment, up three consecutive months, led the increase, $1.9 billion or 0.2 percent to $785.2 billion.

Inventories
Inventories of manufactured durable goods in May, down ten of the last eleven months, decreased $1.1 billion or 0.3 percent to $382.5 billion. This followed a 0.4 percent April decrease. Machinery, down nine of the last ten months, led the decrease, $0.5 billion or 0.8 percent to $65.4 billion.

Capital Goods
Nondefense new orders for capital goods in May decreased $0.6 billion or 0.8 percent to $73.8 billion. Shipments increased $0.8 billion or 1.2 percent to $72.8 billion. Unfilled orders increased $1.1 billion or 0.2 percent to $708.6 billion. Inventories decreased $0.6 billion or 0.3 percent to $171.3 billion. Defense new orders for capital goods in May decreased $3.7 billion or 28.0 percent to $9.5 billion. Shipments increased $0.2 billion or 2.1 percent to $9.8 billion. Unfilled orders decreased $0.3 billion or 0.2 percent to $140.3 billion. Inventories decreased $0.1 billion or 0.3 percent to $20.8 billion.

Revised April Data
Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $460.1 billion (revised from $460.5 billion); shipments, $456.4 billion (revised from $456.8 billion); unfilled orders, $1,137.4 billion (revised from $1,137.3 billion); and total inventories, $619.8 billion (revised from $620.8 billion).


Kansas City Fed Manufacturing Activity increased slightly in June
Posted: June 23, 2016 at 11:00 AM (Thursday)

Tenth District manufacturing activity increased slightly, posting a positive reading for the first time in eighteen months. Expectations for future activity remained generally solid, and most price indexes rose modestly.

The month-over-month composite index was 2 in June, up from -5 in May and -4 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The improvement came from both durable and nondurable goods-producing plants, particularly aircraft, food, plastics, and electronic equipment. Most month-over-month indexes increased markedly. The production index jumped from -11 to 12, and the shipments, news orders, and order backlog indexes also rose considerably. The employment index edged up from -13 to -4, its highest level in over a year. The finished goods inventory index edged up from -12 to -5, while the raw materials inventory index was unchanged.

Year-over-year factory indexes improved moderately but remained negative. The composite year-over-year index was rose from -19 to -15, and the production, shipments, new orders, order backlog, and employment indexes also increased slightly. The capital spending index improved from -15 to -3, its highest level in seven months. The raw materials inventory index fell from -15 to -22, while the finished goods inventory index inched higher.

Future factory indexes were mixed in June but remained generally solid. The future composite index edged up from 4 to 7, and the future order backlog and employment indexes moved back into positive territory. The future capital spending index increased from -3 to 8, and the new orders for exports index also climbed higher. The future production index was unchanged, while the future shipments and new orders indexes eased slightly. Both future inventory indexes fell further into negative territory.

Price indexes rose modestly or were unchanged in June. The month-over-month finished goods price index rose from -8 to -4, while the raw materials price index was basically unchanged. The year-over-year finished goods price index jumped from -4 to 8, and the raw materials price index also increased markedly. The future finished goods price index edged higher from -1 to 5, while the future raw materials price index was unchanged for the third straight month.


New Home Sales in May at annual rate of 551,000
Posted: June 23, 2016 at 10:00 AM (Thursday)

Sales of new single-family houses in May 2016 were at a seasonally adjusted annual rate of 551,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.0 percent (±12.8%) below the revised April rate of 586,000, but is 8.7 percent (±14.6%) above the May 2015 estimate of 507,000.

The median sales price of new houses sold in May 2016 was $290,400; the average sales price was $358,900. The seasonally adjusted estimate of new houses for sale at the end of May was 244,000. This represents a supply of 5.3 months at the current sales rate.


U.S. Leading Economic Index declined 0.2% in May
Posted: June 23, 2016 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.2 percent in May to 123.7 (2010 = 100), following a 0.6 percent increase in April, and a 0.1 percent increase in March.

“The US LEI declined in May, primarily due to a sharp increase in initial claims for unemployment insurance. The growth rate of the LEI has moderated over the past year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “While the LEI suggests the economy will continue growing at a moderate pace in the near term, volatility in financial markets and a moderating outlook in labor markets could pose downside risks to growth.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. was unchanged in May, remaining at 113.5 (2010 = 100), following a 0.2 percent increase in April, and no change in March.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in May to 121.9 (2010 = 100), following a 0.2 percent increase in April, and a 0.6 percent increase in March.


Weekly Initial Unemployment Claims Decrease 18,000 to 259,000
Posted: June 23, 2016 at 08:30 AM (Thursday)

In the week ending June 18, the advance figure for seasonally adjusted initial claims was 259,000, a decrease of 18,000 from the previous week's unrevised level of 277,000. The 4-week moving average was 267,000, a decrease of 2,250 from the previous week's unrevised average of 269,250. There were no special factors impacting this week's initial claims. This marks 68 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending June 11, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 11 was 2,142,000, a decrease of 20,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,157,000 to 2,162,000. The 4-week moving average was 2,147,000, a decrease of 4,500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,150,250 to 2,151,500.


Chicago Fed National Activity slowed in May
Posted: June 23, 2016 at 08:30 AM (Thursday)

The index’s three-month moving average, CFNAI-MA3, decreased to –0.36 in May from –0.25 in April. May’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, moved down to –0.30 in May from –0.23 in April. Twenty-eight of the 85 individual indicators made positive contributions to the CFNAI in May, while 57 made negative contributions. Twenty-eight indicators improved from April to May, while 56 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.

The contribution from production-related indicators to the CFNAI fell to –0.32 in May from +0.13 in April. Manufacturing industrial production declined by 0.4 percent in May after increasing by 0.2 percent in April, and manufacturing capacity utilization declined to 74.8 percent in May from 75.2 percent in the previous month. In contrast, the sales, orders, and inventories category made a contribution of –0.01 to the CFNAI in May, down only slightly from a neutral contribution in April.

The contribution from employment-related indicators to the CFNAI edged down to –0.09 in May from –0.06 in April. Nonfarm payrolls increased by only 38,000 in May after rising by 123,000 in the previous month. However, the civilian unemployment rate fell to 4.7 percent in May from 5.0 percent in April. The contribution of the personal consumption and housing category to the CFNAI decreased to –0.09 in May from –0.02 in April.

Housing starts moved down to 1,164,000 annualized units in May from 1,167,000 in April, but housing permits moved up to 1,138,000 annualized units in May from 1,130,000 in the previous month.

The CFNAI was constructed using data available as of June 17, 2016. At that time, May data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The April monthly index value was revised to +0.05 from an initial estimate of +0.10, and the March monthly index value was revised to –0.64 from last month’s estimate of –0.55. Revisions to the monthly index value can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the April and March monthly index values were due primarily to the former.


Existing-Home Sales grew 1.8% in May
Posted: June 22, 2016 at 10:00 AM (Wednesday)

Existing-home sales sprang ahead in May to their highest pace in almost a decade, while the uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high, according to the National Association of Realtors®. All major regions except for the Midwest saw strong sales increases last month.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.8 percent to a seasonally adjusted annual rate of 5.53 million in May from a downwardly revised 5.43 million in April. With last month's gain, sales are now up 4.5 percent from May 2015 (5.29 million) and are at their highest annual pace since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. "This spring's sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize," he said. "With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now."

Adds Yun, "Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer."

Surpassing the peak median sales price set last June ($236,300), the median existing-home price for all housing types in May was $239,700, up 4.7 percent from May 2015 ($228,900). May's price increase marks the 51st consecutive month of year-over-year gains.

Total housing inventory at the end of May rose 1.4 percent to 2.15 million existing homes available for sale, but is still 5.7 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.7-month supply at the current sales pace, which is unchanged from April.

"Existing inventory remains subdued throughout much of the country and continues to lag even last year's deficient amount," adds Yun. "While new home construction has thankfully crept higher so far this year, there's still a glaring need for even more, to help alleviate the supply pressures that are severely limiting choices and pushing prices out of reach for plenty of prospective first-time buyers."

The share of first-time buyers was 30 percent in May, down from 32 percent both in April and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage inched backward from 3.61 percent in April to 3.60 percent in May, which is the lowest since May 2013 (3.54 percent). The average commitment rate for all of 2015 was 3.85 percent.

Properties typically stayed on the market for 32 days in May (39 days in April), which is below a year ago (40 days) and the shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 103 days in May, while foreclosures sold in 51 days and non-distressed homes took 30 days. Forty-nine percent of homes sold in May were on the market for less than a month — the highest percentage since NAR began tracking.

May inventory data from Realtor.com® (link is external) shows that the top five metropolitan statistical areas where listings stayed on the market the shortest amount of time were San Francisco-Oakland-Hayward, Calif., and Seattle-Tacoma-Bellevue, Wash., both at a median of 25 days; San Jose-Sunnyvale-Santa Clara, Calif., 26 days; and Denver-Aurora-Lakewood, Colo., and Vallejo-Fairfield, Calif., both at 30 days.

Earlier this month, NAR released a new survey looking at the home buying opportunities of student debt borrowers who are current in their repayment. The findings affirmed the notion that repaying student debt is a contributing factor to the low homeownership rate among young adults and the underperforming share of first-time buyers. Nearly three-quarters of non-homeowners in the survey believed that their student debt is delaying them from buying a home, with most of them citing not being able to save for a down payment as the primary reason.

"At a time of historically low interest rates, responsible student loan borrowers should have the opportunity to refinance their loans from their current rates, which can oftentimes run over double-digit percentage points," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "In addition to policy proposals that streamline income-based repayment programs and allow student loan borrowers the ability to refinance into lower rates, NAR supports those that promote student loan simplification, clarity and education. Furthermore, it's important that mortgage underwriting guidelines related to student loan debt are standardized and do not impair homeownership opportunities."

All-cash sales were 22 percent of transactions in May, down from both 24 percent in April and a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in May, unchanged from April and down from 14 percent a year ago. Sixty-three percent of investors paid cash in May.

Distressed sales — foreclosures and short sales — declined to 6 percent of sales in May, down from 7 percent in April and 10 percent a year ago. Five percent of May sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 12 percent below market value in May (17 percent in April), while short sales were discounted 11 percent (10 percent in April).

Single-family and Condo/Co-op Sales
Single-family home sales increased 1.9 percent to a seasonally adjusted annual rate of 4.90 million in May from 4.81 million in April, and are now 4.7 percent higher than the 4.68 million pace a year ago. The median existing single-family home price was $241,000 in May, up 4.6 percent from May 2015.

Existing condominium and co-op sales rose 1.6 percent to a seasonally adjusted annual rate of 630,000 units in May from 620,000 in April, and are now 3.3 percent above May 2015 (610,000 units). The median existing condo price was $229,600 in May, which is 6.0 percent above a year ago.

Regional Breakdown
May existing-home sales in the Northeast increased 4.1 percent to an annual rate of 770,000, and are now 11.6 percent above a year ago. The median price in the Northeast was $268,600, which is 0.1 percent below May 2015.

In the Midwest, existing-home sales dropped 6.5 percent to an annual rate of 1.30 million in May, but are still 3.2 percent above May 2015. The median price in the Midwest was $190,000, up 4.8 percent from a year ago.

Existing-home sales in the South expanded 4.6 percent to an annual rate of 2.28 million in May, and are now 6.5 percent above May 2015. The median price in the South was $211,500, up 5.9 percent from a year ago.

Existing-home sales in the West jumped 5.4 percent to an annual rate of 1.18 million in May, but are still 1.7 percent lower than a year ago. The median price in the West was $346,900, which is 7.7 percent above May 2015.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 22, 2016 at 07:00 AM (Wednesday)

Mortgage applications increased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 17, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 12 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 57.7 percent of total applications from 55.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

The FHA share of total applications decreased to 11.7 percent from 11.8 percent the week prior. The VA share of total applications remained unchanged at 11.1 percent. The USDA share of total applications remained unchanged at 0.6 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.76 percent, from 3.79 percent, with points increasing to 0.33 from 0.32 (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 its lowest level since January 2011, 3.70 percent, from 3.75 percent, with points increasing to 0.28 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged from 3.61 percent, with points decreasing to 0.24 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 15-year fixed-rate mortgages decreased to 3.04 percent from 3.06 percent, with points increasing to 0.36 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 increased to 2.92 percent from 2.87 percent, with points decreasing to 0.21 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Philadelphia NonManufacturing Activity Continues Moderate Growth
Posted: June 21, 2016 at 08:30 AM (Tuesday)

The pace of growth for regional nonmanufacturing activity remains at a moderate level, according to firms responding to June’s Nonmanufacturing Business Outlook Survey. While the survey’s index for current general activity at the firm level changed little, the index for current general activity in the region rose. Firms reported positive but slower growth in new orders and sales, and a sharper rise in full-time employment. Survey respondents continued to be optimistic about business activity at their own firms and in the region over the next six months.

Firms Report Moderate Growth
The diffusion index for current activity at the firm level edged down slightly, to 17.6, in June (see Chart 1 above). This index has changed little since March and sits below its historical average of 28.9. Almost 40 percent of the respondents reported an increase in firm-level activity in June, compared with 22 percent who reported a decrease. The diffusion index for current general activity in the region increased 6 points, to 10.8. This index has been below its historical average (22.8) for six months.

New Orders and Sales Remain Positive but Weaken
Firms reported slower growth in new orders and sales, overall, this month as the new orders and sales/revenues indexes both experienced declines but remained positive. The new orders index fell 14 points, to 9.4. The share of firms reporting increases (30 percent) exceeded the share of firms reporting decreases (20 percent); however, the share of firms reporting decreases rose from last month. Similarly, the sales/revenues index fell 9 points, to 15.0, as the share of firms reporting declines grew from last month. The unfilled orders index also decreased, edging down 2 points to 2.6.

Full-time Employment Improves
More firms reported increases in full-time staff levels in June, as the index for full-time employment rose 8 points, to 18.3 (see Chart 2 below). This is the first month this index has been above its historical average of 14.4 since December 2015. The share of firms reporting an increase in full-time employment was 29 percent this month, compared with 11 percent reporting a decrease. Conditions for part-time employment were little changed from last month, however, as the index for part-time employment decreased 1 point, to 10.3. This index has been below its historical average of 14.8 for four consecutive months. The workweek index fell 10 points, to 8.9, and the wage and benefit index held steady at 26.7.

Firms Report Overall Price Increases
The prices paid index increased 3 points, to 25.7, in June. Thirty percent of the firms reported an increase in input prices, and only 4 percent reported a decrease. More firms reported increases in prices for their own goods and services, with the index for prices received rising 5 points, to 10.5, in June. Despite increases in these indexes, most respondents reported no change for both prices paid (51 percent) and prices received (55 percent).

More Firms Increase Spending on Equipment and Software
Firms reported increases in capital spending, particularly on equipment and software. The index for capital spending on equipment and software rose 7 points, to 27.7. The share of firms reporting increased spending on equipment and software was 35 percent, up from 25 percent last month, while the share reporting decreased spending was 8 percent. The index for physical plant spending fell 5 points, to 12.8. Nineteen percent of the respondents reported increases in plant spending, and 6 percent reported decreases.

Optimism for Future Activity Remained High
Respondents to the survey continue to be optimistic about future activity both at their firms and in the region through the end of the year. The firm-level future activity index fell slightly from 39.1 in May to 36.7 in June. Fifty percent of the respondents expect activity to increase at their firms, while 14 percent expect activity to decrease. The regional future activity index moved up 1 point, to 26.8: Forty-two percent of the firms expect activity to increase in the region, and 15 percent of the firms expect activity to decrease. Both future activity indexes, however, remain below their historical averages of 49.4 for the firm level and 43.4 for the region.

Summary
Results from the Nonmanufacturing Business Outlook Survey suggest continued moderate expansion in the region among nonmanufacturing firms. The index for general activity at the firm level changed little, while index readings for general activity in the region and full-time employment improved. The indexes for prices paid and prices received were up slightly. Indicators for new orders and sales fell but remained positive. Firms remained optimistic about growth over the next six months.


May Housing Starts down 0.3%, Permits up 0.7%
Posted: June 17, 2016 at 08:30 AM (Friday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,138,000. This is 0.7 percent (±1.3%)* above the revised April rate of 1,130,000, but is 10.1 percent (±1.8%) below the May 2015 estimate of 1,266,000. Single-family authorizations in May were at a rate of 726,000; this is 2.0 percent (±0.9%) below the revised April figure of 741,000. Authorizations of units in buildings with five units or more were at a rate of 381,000 in May.

HOUSING STARTS
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,164,000. This is 0.3 percent (±14.0%)* below the
revised April estimate of 1,167,000, but is 9.5 percent (±16.0%)* above the May 2015 rate of 1,063,000. Single-family housing starts in May were at a rate of 764,000; this is 0.3 percent (±13.8%)* above the revised April figure of 762,000. The May rate for units in buildings with five units or more was 396,000.

HOUSING COMPLETIONS
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 988,000. This is 5.1 percent (±15.5%)* above the revised April estimate of 940,000, but is 3.5 percent (±13.1%)* below the May 2015 rate of 1,024,000. Single-family housing completions in May were at a rate of 717,000; this is 2.3 percent (±14.8%)* above the revised April rate of 701,000. The May rate for units in buildings with five units or more was 263,000.


Builder Confidence rose two points to 60 in June
Posted: June 16, 2016 at 10:00 AM (Thursday)

After holding steady for the past four months, builder confidence in the market for newly constructed single-family homes rose two points in June to a level of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since January 2016.

“Builders in many markets across the nation are reporting higher traffic and more committed buyers at their job sites,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “However, our members are also relating ongoing concerns regarding the shortage of buildable lots and labor and noting pockets of softness in scattered markets.”

“Rising home sales, an improving economy and the fact that the HMI gauge measuring future sales expectations is running at an eight-month high are all positive factors indicating that the housing market should continue to move forward in the second half of 2016,” said NAHB Chief Economist Robert Dietz.

All three HMI components posted gains in June. The component gauging current sales conditions rose one point to 64, the index charting sales expectations in the next six months increased five points to 70, and the component measuring buyer traffic climbed three points to 47.

Looking at the three-month moving averages for regional HMI scores, the South registered a two-point uptick to 61 and the West rose one point to 68. The Northeast dropped two points to 39 and the Midwest fell one point to 57.


1Q2016 Current Account Deficit Increased
Posted: June 16, 2016 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, and secondary income—increased to $124.7 billion (preliminary) in the first quarter of 2016 from $113.4 billion (revised) in the fourth quarter of 2015, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.7 percent of current-dollar gross domestic product (GDP) from 2.5 percent in the fourth quarter.

The $11.3 billion increase reflected a $9.6 billion decrease in the surplus on primary income to $37.5 billion and a $4.0 billion increase in the deficit on secondary income to $40.3 billion. These changes were partly offset by a $2.0 billion decrease in the deficit on goods to $186.4 billion and a $0.4 billion increase in the surplus on services to $64.6 billion.


Consumer Price Index increased 0.2% in May, Ex Fd & Engy up 0.2%
Posted: June 16, 2016 at 08:30 AM (Thursday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.0 percent before seasonal adjustment.

The food index declined in May, but the indexes for energy and all items less food and energy rose, resulting in the seasonally adjusted all items increase. The food index fell 0.2 percent, as all six major grocery store food group indexes declined. The energy index increased 1.2 percent as the gasoline index rose 2.3 percent and the indexes for fuel oil and natural gas also advanced.

The index for all items less food and energy increased 0.2 percent in May. The shelter index rose 0.4 percent, and the indexes for medical care, apparel, motor vehicle insurance, and education were among indexes that also increased. These advances more than offset declines in an array of indexes including used cars and trucks, communications, household furnishings and operations, airline fares, and new vehicles.

The all items index rose 1.0 percent for the 12 months ending May, compared to a 1.1-percent increase for the 12 months ending April. The index for all items less food and energy rose 2.2 percent over the last 12 months. The food index has risen 0.7 percent over the last year, with the index for food at home declining 0.7 percent and the index for food away from home rising 2.6 percent. The energy index has declined 10.1 percent over the past 12 months, with all major components falling over the span.


Real Average Hourly Earnings increased 0.2% in May
Posted: June 16, 2016 at 08:30 AM (Thursday)

Real average hourly earnings for all employees were unchanged from April to May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.2-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 were unchanged over the month due to no changes in both real average hourly earnings and the average workweek.

Real average hourly earnings increased 1.4 percent, seasonally adjusted, from May 2015 to May 2016. This increase in real average hourly earnings combined with a 0.3-percent decrease in the average workweek resulted in a 1.1-percent increase in real average weekly earnings over this period.


Philadelphia Fed Outlook Reported Indicators Are Mixed in May
Posted: June 16, 2016 at 08:30 AM (Thursday)

Firms responding to the Manufacturing Business Outlook Survey reported little growth this month. Though the indicator for general activity was positive in June, other broad indicators continued to reflect general weakness in business conditions. The indicators for both employment and work hours remained negative. Forecasts of future activity weakened from last month but continued to suggest that manufacturers expect growth over the next six months.

Current Indicators Are Mixed
The diffusion index for current activity rose almost 7 points, to 4.7, and returned to positive territory this month after two consecutive negative readings. About one-quarter of the firms reported increases in activity, similar to last month, while 20 percent of the firms reported decreases, down from 26 percent last month. More than 52 percent of the firms reported steady activity. The current new orders and shipments indexes, however, remained slightly negative, slipping 1 and 2 points, respectively. Nearly 55 percent of the respondents reported no change in new orders this month, and 45 percent reported no change in shipments. As with the other broad indicators this month, the unfilled orders, delivery times, and inventories indexes all remained negative.

The survey’s labor market indicators suggest continued weak employment conditions. The employment index was negative for the sixth consecutive month, falling from –3.3 in May to –10.9 in June. Though nearly 72 percent of the firms reported no change in employment this month, the percentage reporting decreases (20 percent) exceeded the percentage reporting increases (9 percent). The average workweek index edged up slightly but remained negative, at –13.1.

More Firms Report Input Price Increases
Though most firms (68 percent) reported no changes in prices for inputs, more than 26 percent of the firms reported increases in input prices this month. The prices paid index rose for the fourth consecutive month, climbing 7 points to 23.0. The respondents reported moderating prices for their own goods, as the prices received index decreased from 14.8 in May to 3.9 in June. The percentage of firms indicating an increase (14 percent) edged out the percentage of firms indicating a decrease (11 percent), and three-quarters of the firms reported no change.

Future Growth Expectations Soften but Remain Positive
The survey’s future indicators decreased for the second consecutive month but continue to suggest that firms expect growth through the end of the year. The diffusion index for future general activity declined from 36.1 in May to 29.8 in June (see Chart). More than 46 percent of the firms expect an increase in activity over the next six months, while 16 percent expect a decline. Indicators for future new orders and shipments also declined, falling 10 points and 6 points, respectively. The future employment index edged down slightly, to 11.2. Almost 26 percent of the surveyed firms expect to increase employment levels over the next six months, a slight improvement from last month. Firms also foresee increases in prices: The indexes for future prices paid and received both rose.

Most Firms Expect Increased Production in the Third Quarter
In this month’s special questions, firms were asked to estimate their total production growth for the second quarter ending this month along with expected growth for the third quarter. The share of firms reporting increases in second-quarter production (44 percent) was slightly greater than the share reporting decreases (40 percent). Looking ahead to the third quarter, 45 percent of the firms forecast acceleration in the rate of production, while 26 percent of the firms forecast deceleration. For those firms expecting to accelerate production, respondents indicated this would be achieved by increasing the productivity of current workers (42 percent) rather than increasing work hours of current staff (29 percent) or hiring additional workers (23 percent).

Summary
This month’s Manufacturing Business Outlook Survey suggests tepid growth of the region’s manufacturing sector. The survey’s indicator for general activity returned to positive territory, but indicators for new orders, shipments, and employment remained negative. Though indicators for future conditions fell from last month’s readings, firms continued to expect future growth.


Weekly Initial Unemployment Claims Increase 13,000 to 277,000
Posted: June 16, 2016 at 08:30 AM (Thursday)

In the week ending June 11, the advance figure for seasonally adjusted initial claims was 277,000, an increase of 13,000 from the previous week's unrevised level of 264,000. The 4-week moving average was 269,250, a decrease of 250 from the previous week's unrevised average of 269,500. There were no special factors impacting this week's initial claims. This marks 67 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending June 4, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 4 was 2,157,000, an increase of 45,000 from the previous week's revised level. The previous week's level was revised up 17,000 from 2,095,000 to 2,112,000. The 4-week moving average was 2,150,250, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 4,250 from 2,145,000 to 2,149,250.


Treasury International Capital Data for April 2016
Posted: June 15, 2016 at 04:00 PM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for April 2016. The sum total in April of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $80.4 billion. Of this, net foreign private inflows were $110.9 billion, and net foreign official outflows were $30.4 billion.

Foreign residents decreased their holdings of long-term U.S. securities in April; net sales were $68.7 billion. Net sales by private foreign investors were $60.5 billion, while net sales by foreign official institutions were $8.2 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $10.9 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign sales of long-term securities were $79.6 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $91.5 billion in April.

Foreign residents decreased their holdings of U.S. Treasury bills by $26.2 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $15.0 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $186.9 billion.


Federal Open Market Committee Press Conference
Posted: June 15, 2016 at 02:30 PM (Wednesday)


FOMC target funds rate reaffirmed at 1/4 to 1/2%
Posted: June 15, 2016 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will strengthen. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to 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. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

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, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.


Industrial Production decreased 0.4%
Capacity Utilization decreased to 74.9%

Posted: June 15, 2016 at 09:15 AM (Wednesday)

Industrial production decreased 0.4 percent in May after increasing 0.6 percent in April. Declines in the indexes for manufacturing and utilities in May were slightly offset by a small gain for mining. The output of manufacturing moved down 0.4 percent, led by a large step-down in the production of motor vehicles and parts; factory output aside from motor vehicles and parts edged down 0.1 percent. The index for utilities fell 1.0 percent, as a drop in the output of electric utilities was partly offset by a gain for natural gas utilities. After eight straight monthly declines, the production at mines moved up 0.2 percent. At 103.6 percent of its 2012 average, total industrial production in May was 1.4 percent below its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in May to 74.9 percent, a rate that is 5.1 percentage points below its long-run (1972–2015) average.


Producer Price Index rose 0.4% in May, ex Fd & Engy down 0.1%
Posted: June 15, 2016 at 08:30 AM (Wednesday)

The Producer Price Index for final demand increased 0.4 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in April and declined 0.1 percent in March. On an unadjusted basis, the final demand index inched down 0.1 percent for the 12 months ended in May.

In May, over 60 percent of the advance in the final demand index can be traced to prices for final demand goods, which climbed 0.7 percent. The index for final demand services moved up 0.2 percent.

Prices for final demand less foods, energy, and trade services edged down 0.1 percent in May after rising 0.3 percent in April. For the 12 months ended in May, the index for final demand less foods, energy, and trade services increased 0.8 percent.


Empire State Manufacturing Survey Conditions Improve in June
Posted: June 15, 2016 at 08:30 AM (Wednesday)

The June 2016 Empire State Manufacturing Survey indicates that business activity expanded modestly for New York manufacturers. The headline general business conditions index climbed fifteen points to 6.0. The new orders index and the shipments index rose from negative values to 10.9 and 9.3, respectively—a sign that orders and shipments were increasing after last month’s decline. The inventories index fell to -15.3, indicating that inventories were lower, and the employment index was zero, signaling that employment counts were unchanged. The prices paid index held steady at 18.4, suggesting that moderate input price increases were continuing, and the prices received index was near zero, indicating that selling prices were stable. Firms were more optimistic about the six-month outlook this month, and capital spending plans picked up.

Business Conditions Improve
Business activity expanded modestly for New York manufacturing firms, according to the June 2016 survey. After dipping below zero in May, the general business conditions index advanced fifteen points to 6.0. Twenty-eight percent of respondents reported that conditions had improved over the month, while 22 percent reported that conditions had worsened. The new orders index also rose above zero, its sixteen-point climb to 10.9 pointing to an increase in orders. Shipments were higher, with the shipments index rising to 9.3, while the unfilled orders index fell to -10.2. The delivery time index moved up to -2.0, and at -15.3, the inventories index indicated that firms drew down inventories in June.

Employment Remains Flat
The prices paid index was little changed at 18.4, an indication that input prices continued to increase at a moderate pace. The prices received index edged up to -1.0, suggesting that selling prices were largely stable. The employment index came in at a reading of zero, indicating that employment levels remained flat—a pattern evident since February. At -5.1, the average workweek index showed that hours worked declined this month.

Greater Optimism about the Six-Month Outlook
Indexes for the six-month outlook suggested that respondents were more sanguine about future conditions. The index for future business conditions rose six points to 34.8, reaching its highest level of 2016. Indexes for future new orders and shipments also increased, and firms expected employment levels and the average workweek to hold steady in the coming months. After a sharp decline last month, the capital expenditures index rose eight points to 11.2, and the technology spending index edged down to 4.1.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: June 15, 2016 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 10, 2016. The previous week's results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 21 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 17 percent compared with the previous week and was 16 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 55.3 percent of total applications from 53.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.3 percent of total applications.

The FHA share of total applications decreased to 11.8 percent from 13.0 percent the week prior. The VA share of total applications decreased to 11.1 percent from 11.5 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since January 2015, 3.79 percent, from 3.83 percent, with points decreasing to 0.32 from 0.33 (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 its lowest level since May 2016, 3.75 percent, from 3.81 percent, with points increasing to 0.26 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to its lowest level since May 2013, 3.61 percent, from 3.71 percent, with points increasing to 0.27 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 its lowest level since May 2016, 3.06 percent, from 3.11 percent, with points decreasing to 0.34 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to its lowest level since May 2015, 2.87 percent, from 2.96 percent, with points decreasing to 0.26 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Business Inventories up 0.1% in April
Posted: June 14, 2016 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,290.2 billion, up 0.9 percent (±0.2%) from March 2016, but was down 1.3 percent (±0.5%) from April 2015.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,807.1 billion, up 0.1 percent (±0.1%)* from March 2016 and were up 1.0 percent (±0.5%) from April 2015.

The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.40. The April 2015 ratio was 1.37.


U.S. Import Price Index increased 1.4% in May
Posted: June 14, 2016 at 08:30 AM (Tuesday)

Prices for U.S. imports increased 1.4 percent in May, following advances of 0.7 percent in April and 0.4
percent in March, the U.S. Bureau of Labor Statistics reported today. The May rise was primarily driven by higher fuel prices, although nonfuel prices also increased. U.S. export prices advanced 1.1 percent in May, after rising 0.5 percent the previous month.


U.S. Retail Sales for May Increase 0.5%, Ex-Auto up 0.4%
Posted: June 14, 2016 at 08:30 AM (Tuesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $455.6 billion, an increase of 0.5 percent (±0.5%)* from the previous month, and 2.5 percent (±0.7%) above May 2015. Total sales for the March 2016 through May 2016 period were up 2.4 percent (±0.5%) from the same period a year ago. The March 2016 to April 2016 percent change was unrevised at up 1.3 percent (±0.2%).

Retail trade sales were up 0.4 percent (±0.5%)* from April 2016, and up 2.0 percent (±0.5%) from last year. Nonstore retailers were up 12.2 percent (±1.2%) from May 2015, while Health and Personal Care Stores were up 8.3 percent (±2.1%) from last year.


NFIB Small Business Optimism Index increased 0.2 points in May to 93.8
Posted: June 14, 2016 at 07:00 AM (Tuesday)

The Index of Small Business Optimism increased 0.2 points to 93.8, positive but don’t start writing home about it. Four of the 10 Index components posted a gain, four declined and two were unchanged. The entire gain in the Index was accounted for by a 5 point gain in Expected Business Conditions which remains 9 percentage points below last year’s reading. The political climate continued to be the second most frequently cited reason (after weak sales) for why the current period is a bad time to expand. Although early signs of economic activity for Q2 are looking better, growth for Q1 was revised up to only 0.8 percent which is a very weak start for the year. Consumer spending looks like it might add some more energy with consumer sentiment improving a bit in May.

Federal Reserve Chair Yellen and her minions are now talking the financial markets into believing that a rate hike is in the offing. According to market indicators, there is a 40 percent probability for a June hike and a 60 percent probability for July, up from 4 percent before the campaign began. However, these estimates have likely changed in light of the most recent BLS numbers. But the message is the same, rates will go up a whole 25 basis points IF the economic data support it. Well, what does that tell us? Nothing. It’s obviously true, a tautology. What we never know is which data and how good, quantitatively, must it look? What exactly is “maximum employment”, what measures tell us we have arrived? Maybe the leading indicator is how many Fed officials are making speeches with the line “rates will go up soon IF the data support it”. Fed equivocating has been a major source of the growth-suppressing uncertainty that clouds private decision-making for the REAL economy, not financial markets. When it happens, don’t expect the “needle” to move much.

Second quarter GDP growth is looking better, then again, 0.8 percent is not much of a hurdle to get over. Preliminary forecasts from the NY and Atlanta Federal Reserve banks range from 2.9 to 2.2 percent growth from a weak Q1 base (Q4 was weak as well). That would be a return to the “normal” sluggish growth for this expansion. If this is the new “full employment”, it is easier to explain our weak real investment numbers, we still have excess capacity to deliver the goods and services consumers want (or can afford with slow pay growth), so a lot of potential new investment is not “profitable” to undertake. Capital spending on Main Street has been subpar throughout the entire expansion and remains so. There has been restrained borrowing and restrained capital spending. The big firms are just repurchasing shares (at record high prices!).

A year ago, only 16 percent of consumers thought the government was doing a good job with economic policy (University of Michigan). Now, 23 percent think so, an improvement of sorts, but nearly 40 percent characterize policy as poor, basically unchanged. Optimism improved, reaching its highest level since January of 2015, reversing an 11 month 9 point slide in Optimism through April. The percentage expecting their finances to improve reached its highest point in 10 years. Improved credit was supporting spending. Perhaps this will translate into improved consumer spending, but it has yet to show up on Main Street.

Bottom line, we can’t get “3%” growth without an empowered small business sector and right now we don’t have one. Obamacare, the avalanche of regulations (federal, state and local), taxes, and a management team in Washington that can’t get anything done insure mediocre growth which to a significant degree depends on population growth, not under the control of our politicians.


Wholesale Inventories up 0.6% in April
Posted: June 9, 2016 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that April 2016 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $434.2 billion, up 1.0 percent (+/-0.5%) from the revised March level, but were down 2.6 percent (+/-1.2%) from the April 2015 level. The March preliminary estimate was revised downward $0.7 billion or 0.2 percent. April sales of durable goods were up 0.4 percent (+/-0.7%)* from last month, but were down 1.4 percent (+/-1.8%)* from a year ago. Sales of motor vehicle and motor vehicle parts and supplies were up 1.6 percent from last month, while sales of electrical and electronic goods were down 2.7 percent. Sales of nondurable goods were up 1.5 percent (+/-0.5%) from March, but were down 3.8 percent (+/-1.6%) from last April. Sales of petroleum and petroleum products were up 9.0 percent from last month.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $587.9 billion at the end of April, up 0.6 percent (+/-0.4%) from the revised March level and were up 0.9 percent (+/-1.4%)* from the April 2015 level. The March preliminary estimate was revised upward $0.7 billion or 0.1 percent. April inventories of durable goods were up 0.2 percent (+/-0.4%)* from last month, but were down 1.8 percent (+/-1.4%) from a year ago. Inventories of lumber and other construction materials were up 1.3 percent from last month, while inventories of computer and computer peripheral equipment and software were down 3.0 percent. Inventories of nondurable goods were up 1.3 percent (+/-0.5%) from March and were up 5.5 percent (+/-1.9%) from last April. Inventories of farm product raw materials were up 7.5 percent from last month and inventories of drugs and druggists' sundries were up 2.2 percent.

The April inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.35. The April 2015 ratio was 1.31.


Weekly Initial Unemployment Claims Decrease 4,000 to 264,000
Posted: June 9, 2016 at 08:30 AM (Thursday)

In the week ending June 4, the advance figure for seasonally adjusted initial claims was 264,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 267,000 to 268,000. The 4-week moving average was 269,500, a decrease of 7,500 from the previous week's revised average. The previous week's average was revised up by 250 from 276,750 to 277,000. There were no special factors impacting this week's initial claims. This marks 66 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending May 28, 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 May 28 was 2,095,000, a decrease of 77,000 from the previous week's unrevised level of 2,172,000. This is the lowest level for insured unemployment since October 21, 2000 when it was 2,082,000. The 4-week moving average was 2,145,000, a decrease of 17,500 from the previous week's unrevised average of 2,162,500.


Job Openings little changed again at 5.8 million in April
Posted: June 8, 2016 at 10:00 AM (Wednesday)

The number of job openings was little changed at 5.8 million on the last business day of April, the U.S. Bureau of Labor Statistics reported today. Hires edged down to 5.1 million while separations were little changed at 5.0 million. Within separations, the quits rate was 2.0 percent, and the layoffs and discharges rate was 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings were little changed at 5.8 million in April. The job openings rate was 3.9 percent. The number of job openings was little changed in April for total private and for government. Job openings increased in a number of industries, with the largest changes occurring in wholesale trade (+65,000), transportation, warehousing, and utilities (+58,000), durable goods manufacturing (+46,000), and real estate and rental and leasing (+41,000). Job openings decreased in professional and business services (-274,000). The number of job openings was little changed in all four regions.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 8, 2016 at 07:00 AM (Wednesday)

Mortgage applications increased 9.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 3, 2016. This week's results include an adjustment to account for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 6 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 53.8 percent of total applications from 54.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.0 percent of total applications.

The FHA share of total applications increased to 13.0 percent from 12.5 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent from 3.85 percent, with points decreasing to 0.33 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) remained unchanged at 3.81 percent, with points decreasing to 0.25 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 increased to 3.71 percent from 3.65 percent, with points decreasing to 0.23 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 15-year fixed-rate mortgages decreased to 3.11 percent from 3.12 percent, with points decreasing to 0.35 from 0.40 (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 2.96 percent from 3.00 percent, with points decreasing to 0.29 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Credit Increased at an annual rate of 4.50%
Posted: June 7, 2016 at 04:00 PM (Tuesday)

In April, consumer credit increased at a seasonally adjusted annual rate of 4-1/2 percent. Revolving credit increased at an annual rate of 2 percent, while nonrevolving credit increased at an annual rate of 5-1/2 percent.


1Q2016 Productivity Growth Decreased 0.6%
Posted: June 7, 2016 at 08:30 AM (Tuesday)

Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 0.9 percent and hours worked increased 1.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2015 to the first quarter of 2016, productivity increased 0.7 percent.

Unit labor costs in the nonfarm business sector increased 4.5 percent in the first quarter of 2016, reflecting a 3.9-percent increase in hourly compensation and a 0.6-percent decline in productivity. Unit labor costs increased 3.0 percent over the last four quarters.

Manufacturing sector labor productivity increased 1.3 percent in the first quarter of 2016, as output increased 0.6 percent and hours worked decreased 0.7 percent. Productivity decreased 0.6 percent in the durable goods manufacturing sector and increased 4.2 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.3 percent, as output increased 0.6 percent and hours declined 0.7 percent. Unit labor costs in manufacturing increased 1.1 percent in the first quarter of 2016 and rose 3.6 percent from the same quarter a year ago. Hourly compensation increased 2.5 percent in the first quarter of 2016, and 5.0 percent since the same quarter a year ago--the largest four-quarter gain since a 5.8-percent increase from the first quarter of 2004 to the first quarter of 2005.

reliminary first quarter 2016 measures were announced today for the nonfinancial corporate sector. Productivity increased 2.5 percent in the first quarter of 2016 and increased 0.8 percent over the last four quarters. Unit profits of nonfinancial corporations grew at a 13.4 percent annual rate in the first quarter of 2016, but fell 8.0 percent over the last four quarters.

In the first quarter of 2016, nonfarm business productivity fell 0.6 percent, a smaller decline than the preliminary estimate, due to a 0.5-percentage point upward revision to output. Unit labor costs were revised up as a 0.9-percentage point upward revision to hourly compensation was partially offset by the 0.4-percentage point upward revision to productivity. In the manufacturing sector, productivity increased 1.3 percent in the first quarter of 2016--less than the preliminary estimate--reflecting an upward revision to hours worked and a slight downward revision to output. Unit labor costs increased 1.1 percent rather than declining 1.2 percent, due primarily to a 1.9-percentage point upward revision to hourly compensation.


Employment Trends Index declined in May to 126.81
Posted: June 6, 2016 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) decreased in May, after rebounding in April. The index now stands at 126.81, down from an upwardly revised 128.53 in April. The change represents a modest 0.7 percent gain in the ETI compared to a year ago.

“The Employment Trends Index decreased in May. Its continued weakness suggests that job growth will remain modest in the coming months,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “Despite softening in the ETI, its recent decline is not nearly as large as those that have preceded past employment contractions.”

May’s decrease in the ETI was fueled by negative contributions from six out of eight components. In order from the largest negative contributor to the smallest, these were: Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Percentage of Firms With Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, and Job Openings.

The Employment Trends Index aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.


ISM Non-Manufacturing Index slower growth at 52.9% in May
Posted: June 3, 2016 at 10:00 AM (Friday)

Economic activity in the non-manufacturing sector grew in May for the 76th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 52.9 percent in May, 2.8 percentage points lower than the April reading of 55.7 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 55.1 percent, 3.7 percentage points lower than the April reading of 58.8 percent, reflecting growth for the 82nd consecutive month, at a slower rate in May. The New Orders Index registered 54.2 percent, 5.7 percentage points lower than the reading of 59.9 percent in April. The Employment Index decreased 3.3 percentage points to 49.7 percent from the April reading of 53 percent and indicates contraction after two consecutive months of growth. The Prices Index increased 2.2 percentage points from the April reading of 53.4 percent to 55.6 percent, indicating prices increased in May for the second consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth in May. Respondents’ comments are mixed and vary by industry and company. Overall, the report reflects a cooling-off and slowing in momentum from the previous months of growth for the non-manufacturing sector."

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


May Employment increased by 38,000
Unemployment Rate fell to 4.7%

Posted: June 3, 2016 at 08:30 AM (Friday)

The unemployment rate declined by 0.3 percentage point to 4.7 percent in May, and nonfarm payroll employment changed little (+38,000), the U.S. Bureau of Labor Statistics reported today. Employment increased in health care. Mining continued to lose jobs, and employment in information decreased due to a strike.

In May, the unemployment rate declined by 0.3 percentage point to 4.7 percent, and the number of unemployed persons declined by 484,000 to 7.4 million. Both measures had shown little movement from August to April.

Among the major worker groups, the unemployment rates for adult men (4.3 percent), adult women (4.2 percent), Whites (4.1 percent), and Hispanics (5.6 percent) declined in May. The rates for teenagers (16.0 percent), Blacks (8.2 percent), and Asians (4.1 percent) showed little or no change.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 178,000 to 1.9 million in May. These individuals accounted for 25.1 percent of the unemployed. The number of persons unemployed less than 5 weeks decreased by 338,000 to 2.2 million.

The number of job losers and persons who completed temporary jobs declined by 282,000 over the month to 3.6 million.

In May, the civilian labor force participation rate decreased by 0.2 percentage point to 62.6 percent. The rate has declined by 0.4 percentage point over the past 2 months, offsetting gains in the first quarter. The employment-population ratio, at 59.7 percent, was unchanged in May.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) increased by 468,000 to 6.4 million in May, after showing little movement since November. 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 May, 1.7 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 538,000 discouraged workers in May, essentially unchanged 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 1.2 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment changed little in May (+38,000). Job growth occurred in health care. Mining continued to lose jobs, and a strike resulted in job losses in information.

Health care added 46,000 jobs in May, with increases occurring in ambulatory health care services (+24,000), hospitals (+17,000), and nursing care facilities (+5,000). Over the year, health care employment has increased by 487,000.

In May, mining employment continued to decline (-10,000). Since reaching a peak in September 2014, mining has lost 207,000 jobs. Support activities for mining accounted for three-fourths of the jobs lost during this period, including 6,000 in May.

Employment in information declined by 34,000 in May. About 35,000 workers in the elecommunications industry were on strike and not on company payrolls during the survey reference period.

Within manufacturing, employment in durable goods declined by 18,000 in May, with job losses of 7,000 in machinery and 3,000 in furniture and related products.

Employment in professional and business services changed little in May (+10,000), after increasing by 55,000 in April. Within the industry, professional and technical services added 26,000 jobs in May, in line with average monthly gains over the prior 12 months. Employment in temporary help services was little changed over the month (-21,000) but is down by 64,000 thus far this year.

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

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in May. The manufacturing workweek increased by 0.1 hour to 40.8 hours, and manufacturing overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

In May, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents to $25.59, following an increase of 9 cents in April. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $21.49 in May.

The change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for April was revised from +160,000 to +123,000. With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 116,000 per month.


Goods and Services Deficit Increased in April 2016
Posted: June 3, 2016 at 08:30 AM (Friday)

The Nation's international trade deficit in goods and services increased to $37.4 billion in April from $35.5 billion in March (revised), as imports increased 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 $37.4 billion in April, up $1.9 billion from $35.5 billion in March, revised. April exports were $182.8 billion, $2.6 billion more than March exports. April imports were $220.2 billion, $4.5 billion more than March imports.

The April increase in the goods and services deficit reflected an increase in the goods deficit of $1.4 billion to $58.8 billion and a decrease in the services surplus of $0.5 billion to $21.4 billion.

Year-to-date, the goods and services deficit decreased $8.1 billion, or 4.8 percent, from the same period in 2015. Exports decreased $39.0 billion or 5.1 percent. Imports decreased $47.1 billion or 5.1 percent.


New York Purchasing Managers Business Activity fell to 37.2 in May
Posted: June 2, 2016 at 08:30 AM (Thursday)

New York City business activity contracted at the fastest pace in seven years, according to the survey taken by the Institute for Supply Management-New York.

New York Metro
Current Business Conditions fell nearly 20 points to 37.2 in May, the weakest reading since April 2009 during the Great Recession. The Six-Month Outlook stabilized in May at 53.6 after falling to a seven-year low in April.

On the one hand, there has been a clear downshift in future optimism, as the forward-looking index remained below the 60-80 range that it traveled in for most of the current economic expansion.

On the other hand, the loss of confidence in the outlook was not large enough to indicate outright pessimism, below the breakeven 50 mark.

Company Specific
Labor contracted for the eighth time in the last nine months, while purchase volume declined by the most in seven years. Employment fell to 44.6 in May. Quantity of Purchases dropped to 37.5 in May, the weakest outturn since July 2009.

Persistent weakness in the Employment index has coincided with a rising NYC unemployment rate. The losing streak for the Employment index began in September 2015. The NYC unemployment rate reached a cycle low the next month, October 2015 (5.1%). Since then, it stopped improving and has risen to 5.4% through April 2016.

News was better for the top line and forward guidance. Current Revenues improved to a five-month high of 60.0 in May. Expected Revenues increased to a six-month high of 68.0 in May.

Cost pressures contracted for three straight months, the longest losing streak in six years. Prices Paid came in at 45.7 in May.


Weekly Initial Unemployment Claims Decrease 1,000 to 267,000
Posted: June 2, 2016 at 08:30 AM (Thursday)

In the week ending May 28, the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 1,000 from the previous week's unrevised level of 268,000. The 4-week moving average was 276,750, a decrease of 1,750 from the previous week's unrevised average of 278,500. There were no special factors impacting this week's initial claims. This marks 65 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 21, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 21 was 2,172,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised down by 3,000 from 2,163,000 to 2,160,000. The 4-week moving average was 2,162,500, an increase of 12,000 from the previous week's revised average. The previous week's average was revised down by 750 from 2,151,250 to 2,150,500.


ADP National Employment Report increased by 173,000 jobs in May
Posted: June 2, 2016 at 08:15 AM (Thursday)

Private sector employment increased by 173,000 jobs from April to May according to the May ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP® 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 76,000 jobs in May, down from an upwardly revised 101,000 in April. Employment at companies with 50-499 employees increased by 63,000 jobs, up from last month’s 39,000. Employment at large companies – those with 500 or more employees – increased by 34,000, up from April’s 25,000. Companies with 500-999 employees added 11,000 and companies with over 1,000 employees added 24,000 this month.

Goods-producing employment dropped by 1,000 jobs in May after losing a 7,000 (revised) in April. The construction industry added 13,000 jobs, in line with the previous month. Meanwhile, manufacturing lost 3,000 jobs after losing 10,000 the previous month.

Service-providing employment rose by 175,000 jobs in May, a slight increase over April’s upwardly revised 173,000. The ADP National Employment Report indicates that professional/business services contributed 43,000 jobs, up from April’s upwardly revised 38,000. Trade/transportation/utilities grew by 28,000, up a bit from the 24,000 jobs added the previous month. Financial activities added 13,000.

"Job creation appears to have slowed as we move further into 2016,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Challenging global conditions affecting hiring at large companies and a tightening labor market for skilled workers are among the factors that may be contributing to the slowdown.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth has moderated this spring as energy companies and manufacturers shed jobs. Retailers are also more circumspect in their hiring. Despite the recent slowdown, job growth remains strong enough to reduce underemployment.”


Challenger Layoffs fell to 30,157 in May
Posted: June 2, 2016 at 07:30 AM (Thursday)

The number of job cuts announced by U.S.-based employers fell sharply in May, with a total of 30,157 planned workforce reductions recorded during the month, according to the latest report released Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The May total was 53 percent lower than the 64,141 job cuts announced in April. It represents the lowest monthly total since last December, when 23,622 job cuts were recorded.

Last month saw 27 percent fewer cuts than the same month a year ago, when employers reported plans to shed 41,034 workers from their payrolls.

To date, employers have announced 275,218* job cuts in 2016, 13 percent more than the 242,830 job cuts announced during the first five months of 2015.

Once again, monthly job cuts were led by the energy sector, though the May total was significantly lower than previous months. Firms in the sector announced another 7,572 layoffs in May, 60 percent fewer than the 18,759 cuts in April.

Energy firms have now announced 75,232 job cuts in 2016, 25 percent more than the 60,210 cuts announced in the sector from January through April a year ago.

“May could be the start of a summer slowdown in the pace of job cutting as companies take a pause following the period of heavy downsizing that started the year. In general, oil prices have improved somewhat since the beginning of the year, though they are still less than half of what they were at oil’s recent peak. However, the recent gains may be enough to at least temporarily slow job cuts in the sector,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“Outside of the energy sector, summer can be a time when major business decisions are set aside as companies take stock of strategies initiated in the first quarter. This is also a time when the general pace of business can slow as many employees, including key decision makers, take vacations and enjoy the fruits of their labor,” said Challenger.

Most industries saw job cuts decline in May. Among the most significant declines was in the computer industry, where job cuts plunged 83 percent from 17,015 in April to 2,836 in May.

Job cuts in the financial sector fell 68 percent to 901 announced job cuts in May, after reaching a four-month high of 2,847 in April. Meanwhile, retailers announced 75 percent fewer cuts in May, as layoffs went from 5,145 in April to 1,287, last month.

“Of course, not every summer brings a slowdown in job cuts. Last July saw announced layoffs soar to a four-year high of 105,696. However, last year’s spike was due primarily to massive troop and civilian cuts in the military. Being an election year, it is unlikely that we will see any major workforce changes at the federal level of the government,” said Challenger.

“In other areas of the economy, the latest news is mixed as we head into the summer. Construction spending and auto sales dipped, but manufacturing activity is up. Consumers are less confident in the most recent reading, yet travel plans and spending are expected to increase significantly this summer. The mixed signals provide even more reasoning for companies to take a wait-and-see approach to their summer business strategy,” he said.

*The year-to-date total of 275,218 reflects a downward adjustment of 5,000 related to a correction of previously reported data for the energy sector. The correction is also reflected in the latest industry totals.


Tags - Research
ADP EMPLOYMENT
BEIGE BOOK
BUSINESS BAROMETER
BUSINESS INVENTORIES
CASE-SHILLER
CHALLENGER LAYOFFS
CHICAGO FED MIDWEST MFG
CHICAGO FED NATL ACTIVITY
CHICAGO PMI
CONSTRUCTION SPENDING
CONSUMER CONFIDENCE
CONSUMER CREDIT
CPI
CURRENT ACCOUNT
DURABLE GOODS
EMPLOYMENT COST INDEX
EMPLOYMENT TRENDS INDEX
EXISTING HOME SALES
FACTORY ORDERS
FOMC STMT
FOMC
GDP
HELP WANTED HWOL
HOUSING STARTS
ICSC CHAIN STORE
IMPORT PRICE INDEX
INDUSTRIAL PRODUCTION
INTERNATIONAL TRADE
ISM MFG
ISM NON-MFG
JOB OPENINGS
JOBLESS CLAIMS
KANSAS CITY FED MFG
LEADING INDEX
MASS LAYOFFS
MICH CONSUMER CONFIDENCE
MORTGAGE APPS
NAHB INDEX
NAPM-NY
NBER
NEW HOME SALES
NEW YORK FED MFG
NFIB OPTIMISM INDEX
NONFARM EMPLOYMENT
PAYCHEX-IHS SMALL JOBS
PENDING HOME SALES
PERSONAL INCOME
PHILA FED FORECASTERS
PHILA FED MFG
PHILA FED NON-MFG
PPI
PRODUCTIVITY GROWTH
REAL HOURLY EARNINGS
RETAIL SALES
RICHMOND FED MFG
TEXAS FED MFG
TREASURY INTL CAPITAL
WHOLESALE INVENTORIES
Archives
Jun 2016
May 2016
Apr 2016
Mar 2016
Feb 2016
Jan 2016
Dec 2015
Nov 2015
Oct 2015
Sep 2015
Aug 2015
Jul 2015
Jun 2015
May 2015
Apr 2015
Mar 2015
Feb 2015
Jan 2015
Dec 2014
Nov 2014
Oct 2014
Sep 2014
Aug 2014
Jul 2014
Jun 2014
May 2014
Apr 2014
Mar 2014
Feb 2014
Jan 2014
Dec 2013
Nov 2013
Oct 2013
Sep 2013
Aug 2013
Jul 2013
Jun 2013
May 2013
Apr 2013
Mar 2013
Feb 2013
Jan 2013
Dec 2012
Nov 2012
Oct 2012
Sep 2012
Aug 2012
Jul 2012
Jun 2012
May 2012
Apr 2012
Mar 2012
Feb 2012
Jan 2012
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Dec 2009
Nov 2009
Oct 2009
Sep 2009
Aug 2009
Jul 2009
Jun 2009
May 2009
Apr 2009
Mar 2009
Feb 2009
Jan 2009
Dec 2008
Nov 2008
Oct 2008
Sep 2008
Aug 2008




Buy Economic Books at

The OneWall.com Book Shop

Quick Links
Barron's Online
Bloomberg
CNBC
CNBC TV Live
CNet Investor
Financial Times (UK)
Forbes
Kudlow Podcast
MSNBC TV Live
NBC News
NY Times
The Economist
TheStreet.com
Wall St Journal
Dismal Scientist
Dr. Ed Yardeni
FRED Graph
Lawrence Kudlow
Stone McCarthy
GDPNow
NABE
ABC News
CNNfn
Institutional Investor
MarketWatch
Cash Prices - WSJ.com
Dr. Jeremy Siegel
Market Map
NY RBOB Gas
Shadow Fed - SOMC
BankStocks.com
Dow Jones Indices
Morningstar
SP Indices
Mt Washington Observatory
Weather.com
Yahoo!!


National Association for Business Economics
NABE

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.

CFA Institute

The Financial Crisis Inquiry Commission was created to examine the causes, domestic and global, of the current financial and economic crisis in the United States.

The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform