Research >> Economics

Category: Research - Topic: Economics



Richmond Fed's Current Activity Index moved down from 20 to 14
Posted: January 23, 2018 at 10:00 AM (Tuesday)

According to the latest survey by the Federal Reserve Bank of Richmond, Fifth District manufacturing firms saw slower growth in January, even as each of the expansion metrics remained positive. The composite index moved down from 20 to 14. This decrease resulted from a decline in the metrics for both shipments and employment. The third component, new orders, held steady. However, manufacturing firms saw an increase in backlogs in January, after a decrease in December, as the index rose from −4 to 5. Firms reported that they expect growth to strengthen in the coming months.

District manufacturing firms saw continued price increases in January. However, prices received grew at a slower rate than they had in December, while increases in prices paid was unchanged. Firms expect prices to rise at a faster rate in the next six months, although expectations of price growth were below their December values.


Philadelphia NonManufacturing Activity Suggest a Pickup in Growth in January
Posted: January 23, 2018 at 08:30 AM (Tuesday)

Respondents to the January Nonmanufacturing Business Outlook Survey reported that business activity continued to expand in the region. The firm-level general activity index rose for the second consecutive month, and the indicator for new orders also improved. The sales/revenues index decreased but remained positive. However, the full-time employment index fell to near zero. More firms reported increases in prices for their own products this month compared with last month, pushing up the prices received index. The diffusion index for future general activity at the firm level rose sharply.

Firm-Level Indicators Suggest a Pickup in Growth
The diffusion index for current general activity at the firm level increased for the second consecutive month, rising 9 points from a revised reading of 20.6 in December to 29.3 in January (see Chart).* More than 46 percent of the firms reported an increase in activity this month, while 17 percent reported a decrease. The new orders index also improved, but the sales/revenues index edged down. The diffusion index for new orders increased 9 points to 21.6, as the share of firms reporting an increase in new orders rose from 28 percent in December to 37 percent in January. Meanwhile, the share of firms that indicated an increase in sales/revenues (42 percent) exceeded the share that indicated a decrease (18 percent). Nonetheless, the sales/revenues index fell by 5 points to 23.9. The firms’ perceptions of activity in the region also weakened, as the regional activity index fell 10 points to 19.5.

Full-Time Employment Levels Hold Mostly Steady
Most firms (73 percent) reported no change in full-time employment. The share of firms that reported an increase in full-time employment (11 percent) was about the same as the share that reported a decrease (12 percent), and the full-time employment index fell 11 points to near zero. The part-time employment index edged up, however, from 12.1 in December to 15.5 in January. The average workweek index fell 4 points to 19.2, while the wages and benefits index fell 4 points to 29.9.

Firms Report Increases in Prices
The price indicators rose for the second consecutive month, as firms continued to report increases in both prices received and prices paid. The prices received index rose 7 points to 17.3. In January, 20 percent of the firms reported an increase in prices received for their products, and only 3 percent reported a decrease. With respect to prices paid by the firms, a higher share reported an increase in prices for inputs (32 percent). Nonetheless, the prices paid index increased less than a full point to 27.8.

Capital Expenditures Rise
The indexes for spending on equipment and software and on physical plant rose. The index for equipment and software spending increased 7 points to 27.8. The share of firms reporting increased spending on equipment and software (31 percent) exceeded the share reporting decreased spending (3 percent). The index for physical plant spending rose 5 points to 27.2.

Firms Report That Demand Rose in 2017
In this month’s special question, firms were asked to assess the underlying demand for their products and/or services over the course of the past year. Most firms (61 percent) reported an increase in underlying demand; 46 percent characterized the increase as modest. More than 20 percent reported no change, and 19 percent reported a modest decrease.

Firms Are More Optimistic About Future Growth
The respondents to this month’s survey expressed a high degree of optimism about activity over the next six months. The diffusion index for future activity at the firm level rose to 62.6, a 17 point improvement over the revised December reading (see Chart). More than 68 percent of the respondents expect an increase in activity at their firms, while 6 percent expect a decrease. The respondents’ views about overall growth in the region over the next six months also strengthened: The future regional activity index increased 7 points to 45.4.

Summary
The firms responding to this month’s Nonmanufacturing Business Outlook Survey reported a pickup in the pace of business activity at their companies. Although the index for sales/revenues fell, the indicators for current general activity at the firm level and new orders rose. The index for full-time employment fell to a near-zero reading, and the indicators for prices received and prices paid rose. The firm-level future activity index suggests a high degree of optimism.


Chicago Fed National Activity Points to a Pickup in Economic Growth in December
Posted: January 22, 2018 at 08:30 AM (Monday)

The CFNAI Diffusion Index, which is also a three-month moving average, edged down to +0.23 in December from +0.26 in November. Forty-three of the 85 individual indicators made positive contributions to the CFNAI in December, while 42 made negative contributions. Thirty-seven indicators improved from November to December, while 47 indicators deteriorated and one was unchanged. Of the indicators that improved, nine made negative contributions.

The contribution from production-related indicators to the CFNAI rose to +0.25 in December from –0.02 in November. Total industrial production increased 0.9 percent in December after moving down 0.1 percent in November. The sales, orders, and inventories category made a contribution of +0.08 to the CFNAI in December, up slightly from +0.04 in November.

Employment-related indicators contributed +0.01 to the CFNAI in December, down from +0.12 in November. Nonfarm payrolls increased by 148,000 in December after increasing by 252,000 in November. The contribution of the personal consumption and housing category to the CFNAI edged down to –0.07 in December from –0.03 in November. Housing starts decreased to 1,192,000 annualized units in December from 1,299,000 in November.

The CFNAI was constructed using data available as of January 18, 2018. At that time, December data for 49 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The November monthly index value was revised to +0.11 from an initial estimate of +0.15, and the October monthly index value was revised to +0.87 from last month’s estimate of +0.76. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences
between the estimates of previously unavailable data and subsequently published data. The revisions to both the November and October monthly index values were primarily due to the former.

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved up to +0.27 in December from +0.11 in November. Two of the four broad categories of indicators that make up the index increased from November, and three of the four categories made positive contributions to the index in December. The index’s three-month moving average, CFNAI-MA3, ticked down to +0.42 in December from +0.43 in November.


University of Michigan Consumer Confidence Preliminary January Results at 94.4
Posted: January 19, 2018 at 10:00 AM (Friday)

While the preliminary January reading for the Sentiment Index was largely unchanged from last month (-1.5%), consumers evaluated current economic conditions less favorably (-4.6%). This small decrease in current conditions produced a small overall decline. Importantly, the survey recorded persistent strength in personal finances and buying plans, while favorable levels of buying conditions for household durables have receded to preholiday levels in early January, largely due to less attractive pricing. The Expectations Index remained virtually unchanged at 84.8. Tax reform was spontaneously mentioned by 34% of all respondents; 70% of those who mentioned tax reform thought the impact would be positive, and 18% said it would be negative. The disconnect between the future outlook assessment and the largely positive view of the tax reform is due to uncertainties about the delayed impact of the tax reforms on the consumers. Some of the uncertainty is related to how much a cut or an increase people, especially high income households who live in high-tax states, face. Near and long term gas price expectations inched upward in early January but remained significantly below their peak. While long term inflation expectation remained at its 2017 average level and short term inflation expectation inched upward, consumers continued to remain very optimistic about the low national unemployment rate


December Housing Starts down 8.2%, Permits down 0.1%
Posted: January 18, 2018 at 08:30 AM (Thursday)

Building Permits
Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,302,000. This is 0.1 percent (±1.4 percent)* below the revised November rate of 1,303,000, but is 2.8 percent (±1.9 percent) above the December 2016 rate of 1,266,000. Single-family authorizations in December were at a rate of 881,000; this is 1.8 percent (±1.2 percent) above the revised November figure of 865,000. Authorizations of units in buildings with five units or more were at a rate of 382,000 in December.

An estimated 1,263,400 housing units were authorized by building permits in 2017. This is 4.7 percent (±0.6%) above the 2016 figure of 1,206,600.

Housing Starts
Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,192,000. This is 8.2 percent (±7.7 percent) below the revised November estimate of 1,299,000 and is 6.0 percent (±11.7 percent)* below the December 2016 rate of 1,268,000. Single-family housing starts in December were at a rate of 836,000; this is 11.8 percent (±6.5 percent) below the revised November figure of 948,000. The December rate for units in buildings with five units or more was 352,000.

An estimated 1,202,100 housing units were started in 2017. This is 2.4 percent (±2.3%) above the 2016 figure of 1,173,800.


Weekly Initial Unemployment Claims Decrease 41,000 to 220,000
Posted: January 18, 2018 at 08:30 AM (Thursday)

In the week ending January 13, the advance figure for seasonally adjusted initial claims was 220,000, a decrease of 41,000 from the previous week's unrevised level of 261,000. This is the lowest level for initial claims since February 24, 1973 when it was 218,000. The 4-week moving average was 244,500, a decrease of 6,250 from the previous week's unrevised average of 250,750. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending January 6, 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 January 6 was 1,952,000, an increase of 76,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 1,869,000 to 1,876,000. The 4-week moving average was 1,921,000, an increase of 4,000 from the previous week's revised average. The previous week's average was revised up by 1,750 from 1,915,250 to 1,917,000.


Philadelphia Fed Outlook Reported Activity Shows Continued Growth in January
Posted: January 18, 2018 at 08:30 AM (Thursday)

Economic growth continued in January, according to the firms responding to this month’s Manufacturing Business Outlook Survey. The broadest measures of current conditions remained positive this month, although indexes for general activity, new orders, and employment declined from their readings in December. The firms reported higher prices for both inputs and their own manufactured goods this month. The future indexes reflecting expected growth over the next six months remained at high levels, although the indexes fell from their readings in December.

Current Indicators Show Continued Growth
The index for current manufacturing activity in the region decreased from a revised reading of 27.9 in December to 22.2 this month.* Although now at its lowest reading in five months, the index has stayed within a relatively narrow range over the past eight months (see Chart 1). The other broad indicators continue to suggest overall growth. The shipments index remained at a high reading and increased 6 points. The index for current new orders, however, decreased 18 points. Nearly 36 percent of the firms reported an increase in new orders this month, but 26 percent reported declines. Both the delivery times and unfilled orders indexes decreased this month: The unfilled orders index was negative for the first time in 16 months, and the index of delivery times fell to its lowest reading in 10 months.

The firms reported an increase in manufacturing employment this month. The current employment index, while still positive, fell 3 points to 16.8. The percentage of firms reporting an increase in employment (24 percent) exceeded the percentage reporting a decrease (8 percent). The firms reported a slight increase in work hours this month: The average workweek index increased 4 points to 16.7.

Firms Report Price Increases
Price increases were more widespread this month. On the cost side, nearly 33 percent of the firms reported increases in the prices paid for inputs; no firms reported paying lower prices. The prices paid index edged 5 points higher (see Chart 2). With respect to prices received for firms’ own manufactured goods, 27 percent of the firms reported higher prices, while only 2 percent reported lower prices. The prices received index increased 13 points to its highest reading in 12 months.

Future Indexes Decline
The diffusion index for future general activity decreased from a revised reading of 52.7 in December to 42.2 this month (see Chart 1). Over 50 percent of the firms expect increases in activity over the next six months, but only 8 percent expect decreases. The indexes for future new orders and shipments also showed moderation this month, decreasing 13 points and 2 points, respectively. The firms’ forecasts for employment increases remained nearly steady. Over 40 percent of the firms expect increases in employment over the next six months, and the future employment diffusion index decreased just 1 point.

Firms Expect to Increase Production to Meet Rising Demand
In Special Questions, the firms were asked to characterize current demand and production of their manufactured products over the past few months and to forecast their production increases for the first quarter of the year. Most firms (72 percent) reported an increase in underlying demand; 12 percent characterized underlying demand as increasing significantly, while 60 percent characterized it as increasing modestly. Nearly 70 percent of the firms anticipate increasing production in the first quarter, although 22 percent expect decreases.

Summary
Responses to the January Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. The indexes for general activity, new orders, and employment all fell from their December levels but continued to indicate overall growth. The firms reported an increase in both input prices and prices for their own products this month. The firms remain optimistic about growth over the next six months, but all of the survey’s broad future indicators decreased this month.


Treasury International Capital Data for November 2017
Posted: January 17, 2018 at 04:00 PM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for November 2017. The sum total in November of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $33.8 billion. Of this, net foreign private inflows were $49.7 billion, and net foreign official outflows were $15.9 billion.

Foreign residents increased their holdings of long-term U.S. securities in November; net purchases were $34.8 billion. Net purchases by private foreign investors were $33.8 billion, while net purchases by foreign official institutions were $1.0 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $22.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $57.5 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $41.4 billion in November.

Foreign residents increased their holdings of U.S. Treasury bills by $1.4 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $4.6 billion. Banks' own net dollar-denominated liabilities to foreign residents decreased by $12.2 billion.


Beige Book: Economic Activity continued to expand at a modest to moderate pace
Posted: January 17, 2018 at 02:00 PM (Wednesday)

Reports from the 12 Federal Reserve Districts indicated that the economy continued to expand from late November through the end of the year, with 11 Districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic for a majority of contacts across the country. Most Districts reported that non-auto retail sales expanded since the last report and that auto sales were mixed. Some retailers highlighted that holiday sales were higher than expected. Residential real estate activity remained constrained across the country. Most Districts reported little growth in home sales due to limited housing inventory. Nonresidential activity continued to experience slight growth. Most manufacturers reported modest growth in overall business conditions. Reports indicated that some manufacturers increased capital expenditures over the reporting period. Most reporting Districts noted continued growth in transportation activity. Loan volumes in many Districts were steady. Among reporting Districts, agricultural conditions were mixed and energy contacts described a slight uptick in activity.

Employment and Wages
On balance, employment continued to grow at a modest pace since the previous report. Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth. Several Districts noted elevated demand for manufacturing and construction labor. Most Districts said that wages increased at a modest pace. A few Districts observed that firms were raising wages in a broader range of industries and positions since the previous report. Some Districts reported that firms expect wages to increase in the months ahead.

Prices
Most Districts reported modest to moderate price growth since the last report; exceptions were Chicago, which noted that prices increased only slightly while San Francisco noted price inflation was down slightly. Reports of pricing pressures were mixed across the country although several Districts noted increases in manufacturing, construction, or transportation input costs. Firms in some Districts noted an ability to increase selling prices. Retailers in some Districts reported modest price increases and there were reports of rising home prices across most of the country. Agriculture and energy commodity prices were mixed.
Highlights by Federal Reserve District

Boston
Economic activity expanded at a modest pace as 2017 ended, with the majority of contacts at manufacturing, retail, and software and information technology firms reporting revenue increases even as some saw flat or declining revenue. Employers cited tight labor markets as a constraint on expansion. Respondents' outlooks continued to be positive.

New York
Economic activity continued to expand moderately, while labor markets have remained tight. Input prices have increased at a somewhat faster pace, while selling prices continued to rise modestly. Housing markets and commercial real estate markets have been mixed but generally steady overall.

Philadelphia
Economic activity continued to grow at a modest pace, in particular for manufacturing, nonfinancial services, and tourism. Nonauto retail sales improved to a modest pace as auto sales slipped to a modest decline. The construction and real estate sectors changed little. On balance, employment, wages, and prices continued to grow modestly.

Cleveland
The economy continued to expand at a moderate pace. Labor markets tightened, with wage pressures coming primarily from workers in low- and middle-skills jobs. Retailers reported higher-than-expected revenues for the early part of the holiday shopping season. Homebuilders saw little evidence of a seasonal downturn in the housing market.

Richmond
The regional economy grew at a moderate pace in recent weeks. Robust growth was reported by trucking and tourism firms. Retailers generally reported better-than-expected holiday sales. Meanwhile, commercial real estate activity and commercial lending improved moderately. Labor markets tightened further and wage pressures broadened. Price growth remained modest.

Atlanta
Economic activity improved modestly since the previous report. The labor market remained tight and wage increases were stable. Non-labor input costs picked up slightly. Retailers were optimistic when reporting on holiday sales. Home sales were mixed and prices increased modestly. Commercial real estate contacts continued to indicate improving demand. Manufacturers noted an increase in new orders.

Chicago
Economic activity picked up to a moderate pace. Employment, consumer spending, and manufacturing production increased moderately, construction and real estate activity rose slightly, and business spending was unchanged. Wages increased modestly, prices rose slightly, and financial conditions improved some. Crop and dairy farmers continued to face challenging conditions.

St. Louis
Economic conditions continued to improve at a modest pace. In positive news, retailers' reports of holiday sales were generally upbeat, and real estate activity has picked up somewhat. However, auto dealers continued to report mixed sales results, and agriculture conditions in the District remain weak.

Minneapolis
Ninth District economic activity grew moderately. Although employment levels dipped, hiring demand appeared to remain strong. District manufacturers indicated that a solid 2017 would continue, with upbeat expectations for the year to come. Holiday retail spending was strong, but winter tourism got off to an uneven start. Commercial construction increased; homebuilding was mixed, but residential sales were up.

Kansas City
Economic activity and employment expanded modestly in late November and December. Retail sales increased sharply, and consumer spending remained well above year-ago levels. The manufacturing and energy sectors expanded further, and capital spending plans were positive. A majority of contacts in the services sector reported labor shortages, and strong wage growth was anticipated in the months ahead.

Dallas
Economic activity grew robustly, a pickup in pace from the more moderate expansion seen throughout most of 2017. The manufacturing sector remained a bright spot, although growth accelerated in most other sectors as well. Employment growth picked up, and wage and price pressures remained elevated. Labor shortages persisted, with several reports that difficulty hiring was impeding growth to some extent.

San Francisco
Economic activity in the Twelfth District continued to expand at a moderate pace. Sales of retail goods picked up noticeably, and growth in the consumer and business services sectors remained strong. Conditions in the manufacturing sector remained solid. Activity in residential real estate markets remained robust, while conditions in the commercial sector were strong. Lending activity grew at a modest pace.


Builder Confidence dropped 5 points to 72 in January
Posted: January 17, 2018 at 10:00 AM (Wednesday)

Builder confidence in the market for newly-built single-family homes dropped two points to a level of 72 in January on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after reaching an 18-year high in December 2017.

“Builders are confident that changes to the tax code will promote the small business sector and boost broader economic growth,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Our members are excited about the year ahead, even as they continue to face building material price increases and shortages of labor and lots.”

“The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018,” said NAHB Chief Economist Robert Dietz. “As the overall economy strengthens, owner-occupied household formation increases and the supply of existing home inventory tightens, we can expect the single-family housing market to make further gains this year.”

The three HMI components registered relatively minor losses in January. The index gauging current sales conditions dropped one point to 79, the component charting sales expectations in the next six months fell a single point to 78, and the index measuring buyer traffic fell four points to 54.

Looking at the three-month moving averages for regional HMI scores, the West rose two points to 81, the South increased one point to 73, the Midwest inched up a single point to 70 and Northeast climbed five points to 59.


Industrial Production rose 0.9%
Capacity Utilization increased to 77.9%

Posted: January 17, 2018 at 09:15 AM (Wednesday)

Industrial production rose 0.9 percent in December even though manufacturing output only edged up 0.1 percent. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2 percent at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5 percent of its 2012 average, the index has increased 3.6 percent since December 2016 for its largest calendar-year gain since 2010.

The gain in manufacturing output in December was its fourth consecutive monthly increase. The output of utilities advanced 5.6 percent for the month, while the index for mining moved up 1.6 percent. Capacity utilization for the industrial sector was 77.9 percent, a rate that is 2.0 percentage points below its long-run (1972–2016) average.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 17, 2018 at 07:00 AM (Wednesday)

Mortgage applications increased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 12, 2018.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 32 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 35 percent compared with the previous week and was 7 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 52.2 percent of total applications from 52.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent of total applications.

The FHA share of total applications increased to 11.7 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.7 percent from 11.4 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since March 2017, 4.33 percent, from 4.23 percent, with points increasing to 0.54 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since March 2017, 4.25 percent, from 4.16 percent, with points increasing to 0.36 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since March 2017, 4.30 percent, from 4.16 percent, with points increasing to 0.65 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since January 2014, 3.77 percent, from 3.66 percent, with points increasing to 0.44 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level since April 2011, 3.62 percent, from 3.50 percent, with points decreasing to 0.48 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Empire State Manufacturing Survey Conditions continued to expand strongly in January
Posted: January 16, 2018 at 08:30 AM (Tuesday)

Business activity continued to grow at a solid clip in New York State, according to firms responding to the January 2018 Empire State Manufacturing Survey. The headline general business conditions index, at 17.7, was little changed from last month’s level. The new orders index and the shipments index both showed ongoing growth, although at a slower pace than in December. Unfilled orders and delivery times increased slightly, and inventory levels were higher. Labor market conditions pointed to a modest increase in employment and steady workweeks. Both input prices and selling prices increased at a faster pace than last month. Firms remained very optimistic about future business conditions, and capital spending plans were robust.

Conditions Remain Favorable
Manufacturing firms in New York State reported that business activity continued to expand strongly. The general business conditions index was little changed at 17.7. Thirty-two percent of respondents reported that conditions had improved over the month, while 15 percent reported that conditions had worsened. The new orders index moved down seven points to 11.9, and the shipments index declined nine points to 14.4—readings that indicated ongoing growth in orders and shipments, although at a slower pace than last month. The unfilled orders index climbed into positive territory and, at 4.3, indicated a small increase in unfilled orders. The delivery time index was 3.6, indicating that delivery times lengthened somewhat, and the inventories index rose to 13.8, a sign that inventory levels grew moderately.

Price Increases Pick Up for a Second Consecutive Month
The index for number of employees fell nineteen points to 3.8, a level suggesting only a small increase in employment levels. The average workweek index fell to a level near zero, indicating that hours worked were unchanged. Price increases continued to pick up. The prices paid index climbed seven points to 36.2, and the prices received index moved up ten points to 21.7.

Firms Remain Optimistic about Future Conditions
Looking ahead, firms remained optimistic about the six-month outlook. The index for future business conditions edged up two points to 48.6. The index for future inventories rose to 20.3, a record high, indicating that firms expect to build up inventories significantly in the months ahead. The index for future number of employees rose three points to 26.9, a multiyear high. The capital expenditures index edged up to 34.8, also a multiyear high, suggesting capital spending plans were solid.


Business Inventories up 0.4% in November
Posted: January 12, 2018 at 10:00 AM (Friday)

The combined value of distributive trade sales and manufacturers’ shipments for November, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,420.1 billion, up 1.2 percent (±0.2 percent) from October 2017 and was up 7.9 percent (±0.3 percent) from November 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,895.4 billion, up 0.4 percent (±0.1 percent) from October 2017 and were up 3.2 percent (±0.3 percent) from November 2016.

The total business Inventories/Sales Ratio based on seasonally adjusted data at the end of November was 1.33. The November 2016 ratio was 1.40.


Consumer Price Index 0.1% in December, Ex Fd & Engy rose 0.3%
Posted: January 12, 2018 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.1 percent before seasonal adjustment.

An increase of 0.4 percent in the shelter index accounted for almost 80 percent of the 1-month all items increase. The food index rose in December, with the indexes for food at home and food away from home both increasing. The energy index, which rose sharply in November, declined in December as the gasoline index decreased.

The index for all items less food and energy increased 0.3 percent in December, its largest increase since January 2017. Along with the shelter index, the indexes for medical care, used cars and trucks, new vehicles, and motor vehicle insurance were among those that increased in December. The indexes for apparel, airline fares, and tobacco all declined over the month.

The all items index rose 2.1 percent for the 12 months ending December, compared to 2.2 percent for the 12 months ending November. The index for all items less food and energy increased 1.8 percent over the last year; the 12-month change has now been either 1.7 or 1.8 percent for eight consecutive months. The food index rose 1.6 percent over the past year; the index for energy increased 6.9 percent, with all of its major component indexes rising during 2017.

Food
The food index increased 0.2 percent in December. The index for food at home rose 0.1 percent, largely due to a 0.9-percent increase in the index for meats, poultry, fish, and eggs, its largest increase since June 2015. The index for cereals and bakery products also rose in December, increasing 0.2 percent after a 0.2-percent decline in November.

The remaining major grocery store food group indexes declined in December. The index for dairy and related products fell 0.4 percent in December after rising in November. The index for fruits and vegetables declined 0.2 percent, and the indexes for nonalcoholic beverages and other food at home both fell 0.1 percent.

The index for food away from home rose 0.2 percent in December, the same increase as in November. Over the last 12 months, the food at home index rose 0.9 percent, and the index for food away from home increased 2.5 percent.

Energy
The energy index declined 1.2 percent in December following a 3.9-percent increase in November. The gasoline index fell 2.7 percent in December after rising 7.3 percent in November. (Before seasonal adjustment, gasoline prices decreased 3.3 percent in December.) The electricity index increased 0.1 percent in December. The index for natural gas increased 1.2 percent, its largest increase since May 2017.

All the major energy component indexes increased over the past 12 months. The gasoline index rose 10.7 percent, the electricity index advanced 2.6 percent, and the index for natural gas increased 4.7 percent.

All items less food and energy
The index for all items less food and energy increased 0.3 percent in December and rose 1.8 percent over the last 12 months. The shelter index rose 0.4 percent in December following a 0.2-percent increase in November. The rent index increased 0.4 percent over the month, and the index for owners' equivalent rent advanced 0.3 percent. The index for lodging away from home increased 0.8 percent after falling in November.

The medical care index increased 0.3 percent in December. The index for prescription drugs rose 1.0 percent in December after increasing 0.6 percent in November. The indexes for hospital services and physicians' services also increased, both rising 0.3 percent. The index for used cars and trucks also rose in December, increasing 1.4 percent. The new vehicles index rose 0.6 percent in December following a 0.3-percent increase in November; the index for motor vehicle insurance also increased 0.6 percent. The indexes for education, communication, and recreation all increased 0.1 percent in December.

In contrast, the apparel index fell 0.5 percent in December, its fourth consecutive decline. The tobacco index fell 0.6 percent in December after rising in each of the prior 3 months. The index for airline fares fell 0.5 percent after a 2.4-percent decrease the prior month. The indexes for household furnishings and operations and for personal care were both unchanged in December.

Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.1 percent over the last 12 months to an index level of 246.524 (1982-84=100). For the month, the index declined 0.1 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.2 percent over the last 12 months to an index level of 240.526 (1982-84=100). For the month, the index declined 0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.0 percent over the last 12 months. For the month, the index decreased 0.1 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

Year in Review (December to December)
The all items CPI rose 2.1 percent in 2017, the same increase as in 2016, but larger than the 2014 and 2015 increases. It was also larger than the 1.6-percent average annual increase over the past 10 years.

The food index, which declined 0.2 percent in 2016, increased 1.6 percent in 2017. The index for food at home rose 0.9 percent in 2017 after falling in 2015 and 2016.

The six major grocery store food group indexes were mixed in 2017, with three increases, two declines, and one unchanged. The index for meats, poultry, fish, and eggs increased 2.8 percent after declining in 2015 and 2016. The beef index rose 3.5 percent in 2017, and the index for eggs increased 11.6 percent. The index for fruits and vegetables rose 1.5 percent in 2017 after falling 2.4 percent in 2016. The index for other food at home also increased in 2017, rising 0.5 percent.

The index for cereals and bakery products fell 0.6 percent in 2017, similar to its 0.7-percent decline the prior year. The index for dairy and related products fell 0.5 percent in 2017, its third consecutive yearly decrease. The index for nonalcoholic beverages was unchanged in 2017 after falling in 2016.

The index for food away from home rose 2.5 percent in 2017 after a 2.3-percent increase the prior year. Over the last 10 years, the food index rose at an annual rate of 2.0 percent. The food at home index rose at a 1.5-percent rate, and the index for food away from home increased at a 2.6-percent rate since December 2007.

The energy index rose 6.9 percent in 2017 after a 5.4-percent increase in 2016. The gasoline index increased 10.7 percent in 2017 following a 9.1-percent increase in 2016. The index for natural gas also increased for the second straight year, rising 4.7 percent in 2017 after increasing 7.8 percent in 2016. The electricity index increased 2.6 percent in 2017 after rising 0.7 percent in 2016. Despite the recent increases, the energy index declined at a 0.5-percent annual rate over the past 10 years.

The index for all items less food and energy rose 1.8 percent in 2017, a smaller increase than its 2.2-percent rise in 2016. The shelter index rose 3.2 percent in 2017 following a 3.6-percent increase in 2016. The rent index rose 3.7 percent in 2017, while the index for owners' equivalent rent increased 3.2 percent.

The medical care index increased 1.8 percent in 2017, a substantial deceleration from its 4.1-percent increase in 2016. The index for prescription drugs rose 2.8 percent in 2017. The index for hospital services rose 5.1 percent, while the physicians' services index declined 1.8 percent.

The index for motor vehicle insurance rose 7.9 percent in 2017 following a 7.0-percent increase in 2016. The index for new vehicles fell 0.5 percent in 2017 after rising modestly in previous years; the index for used cars and trucks declined 1.0 percent after a 3.5-percent decline the prior year.

The education index increased 2.0 percent in 2017, the smallest annual increase in the history of the index, which dates to 1993. The index for communication declined 4.9 percent in 2017, its eighth consecutive yearly decline. The recreation index rose 1.5 percent, and the index for personal care increased 0.9 percent. The index for tobacco increased 6.5 percent, and the alcoholic beverages index rose 1.4 percent.

The index for airline fares decreased 4.0 percent in 2017, its fifth consecutive yearly decline. The apparel index fell 1.6 percent, its fourth straight annual decrease. The index for household furnishings and operations also continued to fall, declining 0.8 percent in 2017 after falling 1.1 percent the prior year.


Real Average Hourly Earnings increased 0.2% in December
Posted: January 12, 2018 at 08:30 AM (Friday)

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

Real average weekly earnings increased 0.2 percent over the month due to the increase in real average hourly earnings combined with no change in the average workweek.

Real average hourly earnings increased 0.4 percent, seasonally adjusted, from December 2016 to December 2017. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.7-percent increase in real average weekly earnings over this period.

Production and nonsupervisory employees
Real average hourly earnings for production and nonsupervisory employees increased 0.2 percent from November to December, seasonally adjusted. This result stems from a 0.3-percent increase in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Real average weekly earnings increased 0.2 percent over the month due to the increase in real average hourly earnings combined with no change in average weekly hours.

From December 2016 to December 2017, real average hourly earnings increased 0.1 percent, seasonally adjusted. The increase in real average hourly earnings combined with a 0.6-percent increase in the average workweek resulted in a 0.7-percent increase in real average weekly earnings over this period.


U.S. Retail Sales for December Increase 0.4%, Ex-Auto up 0.4%
Posted: January 12, 2018 at 08:30 AM (Friday)

Advance estimates of U.S. retail and food services sales for December 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $495.4 billion, an increase of 0.4 percent (±0.5 percent)* from the previous month, and 5.4 percent (±0.7 percent) above December 2016. Total sales for the 12 months of 2017 were up 4.2 percent (±0.4 percent) from 2016. Total sales for the October 2017 through December 2017 period were up 5.5 percent (±0.5 percent) from the same period a year ago. The October 2017 to November 2017 percent change was revised from up 0.8 percent (±0.5 percent) to up 0.9 percent (±0.2 percent).

Retail trade sales were up 0.3 percent (±0.5 percent)* from November 2017, and were up 5.6 percent (±0.7 percent) from last year. Nonstore Retailers were up 12.7 percent (±1.4 percent) from December 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 9.9 percent (±2.1 percent) from last year.


Weekly Initial Unemployment Claims Increase 11,000 to 261,000
Posted: January 11, 2018 at 08:30 AM (Thursday)

In the week ending January 6, the advance figure for seasonally adjusted initial claims was 261,000, an increase of 11,000 from the previous week's unrevised level of 250,000. The 4-week moving average was 250,750, an increase of 9,000 from the previous week's unrevised average of 241,750. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending December 30, 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 December 30 was 1,867,000, a decrease of 35,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 29, 1973 when it was 1,805,000. The previous week's level was revised down by 12,000 from 1,914,000 to 1,902,000. The 4-week moving average was 1,913,250, a decrease of 5,500 from the previous week's revised average. The previous week's average was revised down by 3,750 from 1,922,500 to 1,918,750.


Producer Price Index fell 0.1% in December, ex Fd & Engy up 0.1%
Posted: January 11, 2018 at 08:30 AM (Thursday)

The Producer Price Index for final demand fell 0.1 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.4 percent in both November and October. On an unadjusted basis, the final demand index climbed 2.6 percent in 2017 after a 1.7-percent rise in 2016.

Most of the December decline in the final demand index is attributable to a 0.2-percent decrease in prices for final demand services. The index for final demand goods was unchanged.

Prices for final demand less foods, energy, and trade services edged up 0.1 percent in December after rising 0.4 percent in November. In 2017, the index for final demand less foods, energy, and trade services climbed 2.3 percent following a 1.8-percent advance in 2016.

Final Demand
Final demand services: The index for final demand services moved down 0.2 percent in December following nine consecutive increases. Most of the decrease can be traced to a 0.6-percent decline in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services fell 0.4 percent. Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent.

Product detail: A major factor in the December decline in prices for final demand services was the index for automotive fuels and lubricants retailing, which fell 10.7 percent. The indexes for loan services (partial); airline passenger services; apparel, footwear, and accessories retailing; legal services; and health, beauty, and optical goods retailing also moved lower. In contrast, prices for inpatient care advanced 0.7 percent. The indexes for truck transportation of freight and apparel wholesaling also increased.

Final demand goods: Prices for final demand goods were unchanged in December following a 1.0 percent increase in November. The index for final demand less foods and energy advanced 0.2 percent. Conversely, prices for final demand foods declined 0.7 percent. The index for final demand energy was unchanged.

Product detail: In December, prices for basic organic chemicals advanced 3.9 percent. The indexes for jet fuel, diesel fuel, home heating oil, and processed young chickens also moved higher. In contrast, prices for beef and veal fell 6.3 percent. The indexes for gasoline, fresh and dry vegetables, liquefied petroleum gas, and turbines and turbine generator sets also moved lower.


Wholesale Inventories up 0.8% in November
Posted: January 10, 2018 at 10:00 AM (Wednesday)

November 2017 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 $492.4 billion, up 1.5 percent (±0.5 percent) from the revised October level and were up 9.8 percent (±0.9 percent) from the November 2016 level. The September 2017 to October 2017 percent change was revised from the preliminary estimate of up 0.7 percent (±0.5 percent) to up 0.8 percent (±0.5 percent).

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $611.0 billion at the end of November, up 0.8 percent (±0.4 percent) from the revised October level. Total inventories were up 4.0 percent (±0.7 percent) from the revised November 2016 level. The October 2017 to November 2017 percent change was revised from the advance estimate of up 0.7 percent (±0.4 percent) to up 0.8 percent (±0.4 percent).

The November inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.24. The November 2016 ratio was 1.31.


U.S. Import Price Index ticked up 0.1% in December
Posted: January 10, 2018 at 08:30 AM (Wednesday)

Prices for U.S. imports ticked up 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today, following a 0.8-percent rise the previous month. Higher fuel prices more than offset a decline in the price index for nonfuel prices in December. In contrast, U.S. export prices edged down 0.1 percent in December, after advancing 0.5 percent in November.

Imports
All Imports: Import prices rose 0.1 percent in December following 0.8-percent advances in 2 of the previous 3 months. The index has not recorded a monthly decline since falling 0.2 percent in July. Prices for U.S imports increased 3.0 percent in 2017, after advancing 1.9 percent the previous year. The advance in 2017 was the largest calendar-year increase since import prices rose 8.5 percent in 2011.

Fuel Imports: Import fuel prices increased 1.8 percent in December, after rising 8.4 percent in November. The price index for import fuel has not recorded a monthly decline since falling 1.0 percent in July. The December rise was driven by a 2.0-percent increase in petroleum prices which more than offset a 4.9 percent decline in natural gas prices. Import fuel prices rose 18.4 percent in 2017 following a 24.7-percent advance the previous year. Prior to 2016, import fuel prices had not recorded a calendar-year increase since 2011. In 2017, a 20.6-percent gain in petroleum prices more than offset a 15.7-percent drop in natural gas prices.

All Imports Excluding Fuel: In contrast, the price index for nonfuel imports edged down 0.1 percent in December, the first monthly decline since a 0.1 percent drop in July. The decline in December was led by lower prices for foods, feeds, and beverages; consumer goods; and nonfuel industrial supplies and materials. Despite the December downturn, nonfuel import prices increased 1.4 percent in 2017, after a 0.2-percent advance the previous year. The 2017 rise was the largest calendar-year increase since the index advanced 3.4 percent in 2011. In 2017, rising prices for nonfuel industrial supplies and materials; capital goods; consumer goods; and foods, feeds, and beverages all contributed to the advance in nonfuel prices. Of the major import areas, only prices for automotive vehicles decreased in 2017.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 10, 2018 at 07:00 AM (Wednesday)

Mortgage applications increased 8.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 5, 2018. This week's results included an adjustment for the New Year's holiday. Results for the previous week ending 12/29/17 were revised.

The Market Composite Index, a measure of mortgage loan application volume, increased 8.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 46 percent compared with the previous week. The Refinance Index increased 11 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 44 percent compared with the previous week and was 1 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 52.9 percent of total applications from 52.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.0 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.8 percent the week prior. The VA share of total applications remained unchanged from the week prior at 11.4 percent. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.23 percent from 4.22 percent, with points decreasing to 0.35 from 0.37 (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 $453,100) increased to 4.16 percent from 4.14 percent, with points increasing to 0.23 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.16 percent from 4.17 percent, with points increasing to 0.42 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 15-year fixed-rate mortgages increased to 3.66 percent from 3.64 percent, with points increasing to 0.42 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.50 percent from 3.53 percent, with points decreasing to 0.51 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings lower at 5.9 million in November
Posted: January 9, 2018 at 10:00 AM (Tuesday)

The number of job openings was little changed at 5.9 million on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.5 million and 5.2 million, respectively. Within separations, the quits rate was unchanged at 2.2 percent and the layoffs and discharges rate was little changed 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
On the last business day of November, there were 5.9 million job openings, little changed from October. The job openings rate was 3.8 percent in November. The number of job openings was little changed for total private and for government. Job openings increased in retail trade (+88,000) but decreased in other services (-64,000), transportation, warehousing, and utilities (-60,000), and real estate and rental and leasing (-39,000). The number of job openings was little changed in all four regions.

Hires
The number of hires was little changed at 5.5 million in November. The hires rate was 3.7 percent. The number of hires was little changed for total private and increased for government (+43,000). Hires increased in state and local government, excluding education (+29,000) and state and local government education (+18,000). The number of hires decreased in the Northeast region.

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

The number of total separations was little changed at 5.2 million in November. The total separations rate was 3.5 percent. The number of total separations was little changed for total private and for government. Total separations increased in state and local government, excluding education (+21,000) but decreased in other services (-69,000) and real estate and rental and leasing (-27,000). The number of total separations was little changed in all four regions.

The number of quits was little changed at 3.2 million in November. The quits rate was 2.2 percent. The number of quits was little changed for total private and increased for government (+25,000). Quits increased in transportation, warehousing, and utilities (+25,000) and state and local government, excluding education (+15,000). Quits decreased in other services (-49,000), real estate and rental and leasing (-21,000), and mining and logging (-6,000). The number of quits was little changed in all four regions.

There were 1.7 million layoffs and discharges in November, little changed from October. The layoffs and discharges rate was 1.1 percent in November. The number of layoffs and discharges was little changed for total private, for government, and in all industries. The number of layoffs and discharges decreased in the Midwest region.

The number of other separations was little changed in November at 341,000. The number of other separations was little changed for total private and for government. Other separations increased in state and local government, excluding education (+8,000) and arts, entertainment, and recreation (+4,000). Other separations decreased in accommodation and food services (-15,000) and federal government (-6,000). The number of other separations was little changed in all four regions.

Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in November, hires totaled 64.6 million and separations totaled 62.4 million, yielding a net employment gain of 2.1 million. These totals include workers who may have been hired and separated more than once during the year.


NFIB Small Business Optimism Index lost 2.6 points to 104.9 in December
Posted: January 9, 2018 at 07:00 AM (Tuesday)

The Index of Small Business Optimism lost 2.6 points in December, falling to 104.9, still one of the strongest readings in the 45-year history of the NFIB surveys. The highest reading of 108.0 was reached in July 1983, only slightly above November’s 107.5. The lowest reading of 79.7 occurred in April 1980. Two of the 10 Index components posted a gain, five declined, and three were unchanged. The decline left the Index historically strong and maintained a string of exceptional readings that started the day after the 2016 election results were announced. Following the election announcement, the Index rose from 95.0 (a below average reading) for October and pre-election November, to 102.0 in the November weeks after the election, and then to 105.0 in January. This surge in optimism has led to 2017 achieving the highest yearly average Index reading in the survey’s history. The average monthly Index for 2017 was 104.8. The previous record was 104.6, set in 2004.

LABOR MARKETS
Job creation was slow in the small-business sector as owners reported a seasonally adjusted average employment change per firm of 0.01 workers. Clearly, a lack of “qualified” workers is impeding the growth in employment. Thirteen percent (unchanged) reported increasing employment an average of 2.0 workers per firm and 10 percent (unchanged) reported reducing employment an average of 4.1 workers per firm (seasonally adjusted). Fifty-nine percent reported hiring or trying to hire (up 7 points), but 54 percent (92 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill, a record high. Nineteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 1 point), second only to taxes. This is the top ranked problem for those in construction (30 percent) and manufacturing (27 percent). Thirty-one percent of all owners reported job openings they could not fill in the current period, up 1 point from November. Twelve percent reported using temporary workers, up 1 point. A seasonally adjusted net 20 percent plan to create new jobs, down 4 points from a record high reading and the second highest reading since October 1999.

CREDIT MARKETS
Three percent of owners reported that all their borrowing needs were not satisfied, down 1 point and historically low. Thirty-two percent reported all credit needs met (unchanged) and 52 percent said they were not interested in a loan, up 4 points. Only 1 percent reported that financing was their top business problem compared to 21 percent citing taxes. Three percent reported loans “harder to get’, down 1 point at historic lows. Thirty-four percent of all owners reported borrowing on a regular basis (up 4 points). The average rate paid on short maturity loans was up 40 basis points at 6.1 percent after the Federal Reserve raised rates.

SALES AND INVENTORIES
The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months compared to the prior three months was a net 9 percent, a 14-point improvement from November. Tentative customers in November became aggressive spenders across the board in December, closing out the year with very strong reports of sales gains, the best levels since 2006. After a strong surge in November, the net percent of owners expecting higher real sales volumes fell 6 points, falling to a net 28 percent of owners, still one of the best readings since 2007. The net percent of owners reporting inventory increases was unchanged at a net negative 2 percent (seasonally adjusted). Strong sales resulted in a drawdown in inventories, setting the stage for additional inventory investment in 2018. The net percent of owners viewing current inventory stocks as “too low” was unchanged at a net negative 2 percent, a positive view of current stocks. The net percent of owners planning to add to inventory fell 8 points to a net negative 1 percent, reversing surprisingly strong November investment plans.

COMPENSATION AND EARNINGS
Reports of higher worker compensation were unchanged at a net 27 percent, historically very strong all last year. Tight labor markets are historically associated with high percentages of owners raising worker compensation. Owners complain at record rates of labor quality issues, with 92 percent of those hiring or trying to hire reporting few or no qualified applicants for their open positions. Nineteen percent selected “finding qualified labor” as their top business problem, far more than cited weak sales or the cost of regulations as their top challenge. Plans to raise compensation jumped 6 points in frequency to a net 23 percent in response to tighter labor markets. The frequency of reports of positive profit trends fell 3 points to a net negative 15 percent reporting quarter on quarter profit improvements, a solid reading historically but not exceptional.

CAPITAL SPENDING
Sixty-one percent reported capital outlays, up 2 points. This anticipates a substantial increase in capital spending. Of those making expenditures, 43 percent reported spending on new equipment (up 3 points), 23 percent acquired vehicles (down 6 points), and 16 percent improved or expanded facilities (unchanged). Six percent acquired new buildings or land for expansion (unchanged) and 15 percent spent money for new fixtures and furniture (up 2 points). Twenty-seven percent plan capital outlays in the next few months, up 1 point from November.

INFLATION
The net percent of owners raising average selling prices fell 2 points to a net 8 percent seasonally adjusted, ending a steady but modest uptrend in the frequency of reported price increases. Clearly, inflation is not “breaking out” across the country as the Federal Reserve hoped. Seasonally adjusted, a net 23 percent plan price hikes (up 1 point), although far fewer will report actually doing so in the following months.

COMMENTARY
The Tax Cuts and Jobs Act was signed into law by the President on December 22, 2017. Compared to the Reagan cuts, this law is more heavily weighted toward “business” because the marginal tax rates for individuals were already quite low compared to pre-1986. More significantly though, the new law recognizes the importance of tax cuts for “pass through” businesses, most of which are small businesses.

The tax bill has its opponent who claim that the bill is “regressive”, assuming little or no economic growth (which drives tax revenues) and no employment benefits (more jobs and higher wages). But despite the critics, the U.S. economy is on track to have 12 months of growth in excess of 3 percent by the end of the first quarter of 2018.

The NFIB indicators clearly anticipate further upticks in economic growth, perhaps pushing up toward 4 percent for the fourth quarter of 2017. This is a dramatically different picture than owners presented during the 2009-16 recovery under President Obama. The change in the management team in Washington dramatically improved expectations, and that began to translate into increased sales and hiring. Owners did not know exactly what the tax bill would look like, but believed that whatever it looked like, it would be a significant improvement over what was currently in force. That was enough to “bet on”.

As proof, the stock market was up $7 trillion last year, over two million new jobs were created, capital spending lifted off (good for productivity), and housing is running at full tilt. All of this started as soon as the new management team in Washington was elected. Small business owners had it right, their optimism (and subsequent sales and hiring) rose the day after the election results were announced. By the second quarter, 3 percent growth had been restored as the small business sector (and others) shook off the shackles of pessimism as the new government began eliminating the impediments to growth put in place by the prior administration. The private sector can make good things happen once the heavy hand of government management of the economy is lifted.


Consumer Credit Increased at an annual rate of 8.75%
Posted: January 8, 2018 at 03:00 PM (Monday)

In November, consumer credit increased at a seasonally adjusted annual rate of 8-3/4 percent. Revolving credit increased at an annual rate of 13-1/4 percent, while nonrevolving credit increased at an annual rate of 7-1/4 percent.


Employment Trends Index Increased in December to 107.10 with benchmark revision
Posted: January 8, 2018 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in December, after virtually no change in November. The index now stands at 107.10, up from 106.36 (revised) in November. The change represents a 5.2 percent gain in the ETI compared to a year ago.

“The rapid improvement in the Employment Trends Index in recent months suggests that job growth is unlikely to slow down in the months ahead,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The US economy has been significantly accelerating in recent quarters and the tax cuts passed by Congress will provide an additional boost to the US economy in 2018. In such an environment, job growth will remain solid and the unemployment rate will reach lower than any rate since the 1960s.”

December’s increase in the ETI was fueled by positive contributions from six out of the eight components. From the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Industrial Production, Real Manufacturing and Trade Sales, Percentage of Firms with Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, and Job Openings.

This month’s release incorporates annual revisions of standardization factors to the Employment Trends Index, which bring it up to date with revisions in the source data. Also, with this benchmark revision, the base year of the composite index was changed to 2016 = 100 from 2010 = 100. These revisions do not change the cyclical properties of the index. The standardization factors, known as volatility adjustment factors, are done by calculating the standard deviation of the monthly percent change in each component. The period used for calculating the standardization factors begins in November 1973 and ends at December 2016. The standardization factors are then used to construct the index from November 1973 to present. As a result, the revised index, in levels and month-on-month changes, will not be directly comparable to those issued prior to this annual revision.


ISM Non-Manufacturing Index decreased to 55.9% in December
Posted: January 5, 2018 at 10:00 AM (Friday)

Economic activity in the non-manufacturing sector grew in December for the 96th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 55.9 percent, which is 1.5 percentage points lower than the November reading of 57.4 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 57.3 percent, 4.1 percentage points lower than the November reading of 61.4 percent, reflecting growth for the 101st consecutive month, at a slower rate in December. The New Orders Index registered 54.3 percent, 4.4 percentage points lower than the reading of 58.7 percent in November. The Employment Index increased 1 percentage point in December to 56.3 percent from the November reading of 55.3 percent. The Prices Index increased by 0.1 percentage point from the November reading of 60.7 percent to 60.8 percent, indicating that prices increased in December for the seventh consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth. There has been a second consecutive month of pullback in the rate of growth. Overall, the majority of respondents’ comments indicate that they finished the year on a positive note. They also indicate optimism for business conditions and the economic outlook going forward.

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


New orders for manufactured goods increased 1.3% in November
Posted: January 5, 2018 at 09:00 AM (Friday)

New orders for manufactured goods in November, up five of the last six months, increased $6.5 billion or 1.3 percent to $488.1 billion, the U.S. Census Bureau reported today. This followed a 0.4 percent October increase. Shipments, up eleven of the last twelve months, increased $5.7 billion or 1.2 percent to $491.2 billion. This followed a 0.8 percent October increase. Unfilled orders, up three consecutive months, increased $1.2 billion or 0.1 percent to $1,137.1 billion. This followed a 0.1 percent October increase. The unfilled orders-to-shipments ratio was 6.60, down from 6.68 in October. Inventories, up twelve of the last thirteen months, increased $2.5 billion or 0.4 percent to $665.1 billion. This followed a 0.3 percent October increase. The inventories-to-shipments ratio was 1.35, down from 1.36 in October.

New Orders
New orders for manufactured durable goods in November, up three of the last four months, increased $3.0 billion or 1.3 percent to $241.4 billion, unchanged from the previously published increase. This followed a 0.4 percent October decrease. Transportation equipment, also up three of the last four months, drove the increase, $3.2 billion or 4.1 percent to $80.8 billion. New orders for manufactured nondurable goods increased $3.4 billion or 1.4 percent to $246.7 billion.

Shipments
Shipments of manufactured durable goods in November, up six of the last seven months, increased $2.3 billion or 0.9 percent to $244.4 billion, down from the previously published 1.0 percent increase. This followed a 0.5 percent October increase. Transportation equipment, up two of the last three months, led the increase, $2.0 billion or 2.6 percent to $81.3 billion. Shipments of manufactured nondurable goods, up seven of the last eight months, increased $3.4 billion or 1.4 percent to $246.7 billion. This followed a 1.1 percent October increase. Petroleum and coal products, up five consecutive months, led the increase, $2.8 billion or 6.0 percent to $49.6 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in November, up three consecutive months, increased $1.2 billion or 0.1 percent to $1,137.1 billion, unchanged from the previously published increase. This followed a 0.1 percent October increase. Fabricated metal products, up ten of the last eleven months, led the increase, $0.5 billion or 0.6 percent to $81.3 billion.

Inventories
Inventories of manufactured durable goods in November, up sixteen of the last seventeen months, increased $0.9 billion or 0.2 percent to $405.3 billion, unchanged from the previously published increase. This followed a 0.2 percent October increase. Primary metals, also up sixteen of the last seventeen months, led the increase, $0.3 billion or 0.8 percent to $34.4 billion. Inventories of manufactured nondurable goods, up six consecutive months, increased $1.6 billion or 0.6 percent to $259.8 billion. This followed a 0.6 percent October increase. Petroleum and coal products, up five consecutive months, led the increase, $1.1 billion or 2.7 percent to $40.0 billion. By stage of fabrication, November materials and supplies increased 0.1 percent in durable goods and increased 1.0 percent in nondurable goods. Work in process increased 0.5 percent in durable goods and increased 1.5 percent in nondurable goods. Finished goods were virtually unchanged in durable goods and decreased 0.1 percent in nondurable goods.


December Employment rose by 148,000
Unemployment Rate unchanged at 4.1%

Posted: January 5, 2018 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 148,000 in December, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in health care, construction, and manufacturing.

In December, the unemployment rate was 4.1 percent for the third consecutive month. The number of unemployed persons, at 6.6 million, was essentially unchanged over the month. Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 926,000, respectively.

Among the major worker groups, the unemployment rate for teenagers declined to 13.6 percent in December, offsetting an increase in November. In December, the unemployment rates for adult men (3.8 percent), adult women (3.7 percent), Whites (3.7 percent), Blacks (6.8 percent), Asians (2.5 percent), and Hispanics (4.9 percent) showed little or no change.

Among the unemployed, the number of new entrants decreased by 116,000 in December. New entrants are unemployed persons who never previously worked.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.5 million in December and accounted for 22.9 percent of the unemployed. Over the year, the number of long-term unemployed declined by 354,000.

The labor force participation rate, at 62.7 percent, was unchanged over the month and over the year. The employment-population ratio was unchanged at 60.1 percent in December but was up by 0.3 percentage point over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 4.9 million in December but was down by 639,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In December, 1.6 million persons were marginally attached to the labor force, about unchanged 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 474,000 discouraged workers in December, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment rose by 148,000 in December. Job gains occurred in health care, construction, and manufacturing. In 2017, payroll employment growth totaled 2.1 million, compared with a gain of 2.2 million in 2016.

Employment in health care increased by 31,000 in December. Employment continued to trend up in ambulatory health care services (+15,000) and hospitals (+12,000). Health care added 300,000 jobs in 2017, compared with a gain of 379,000 jobs in 2016.

Construction added 30,000 jobs in December, with most of the increase among specialty trade contractors (+24,000). In 2017, construction employment increased by 210,000, compared with a gain of 155,000 in 2016.

In December, manufacturing employment rose by 25,000, largely reflecting a gain in durable goods industries (+21,000). Manufacturing added 196,000 jobs in 2017, following little net change in 2016 (-16,000).

Employment in food services and drinking places changed little in December (+25,000). Over the year, the industry added 249,000 jobs, about in line with an increase of 276,000 in 2016.

In December, employment changed little in professional and business services (+19,000). In 2017, the industry added an average of 44,000 jobs per month, in line with its average monthly gain in 2016.

Employment in retail trade was about unchanged in December (-20,000). Within the industry, employment in general merchandise stores declined by 27,000 over the month. Retail trade employment edged down in 2017 (-67,000), after increasing by 203,000 in 2016.

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

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in December. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, while overtime remained at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.

In December, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.63. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.30 in December.

The change in total nonfarm payroll employment for October was revised down from +244,000 to +211,000, and the change for November was revised up from +228,000 to +252,000. With these revisions, employment gains in October and November combined were 9,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 204,000 over the last 3 months.


Goods and Services Deficit Increased in November 2017
Posted: January 5, 2018 at 08:30 AM (Friday)

The nation's international trade deficit in goods and services increased to $50.5 billion in November from $48.9 billion in October (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 $50.5 billion in November, up $1.6 billion from $48.9 billion in October, revised. November exports were $200.2 billion, $4.4 billion more than October exports. November imports were $250.7 billion, $6.0 billion more than October imports.

The November increase in the goods and services deficit reflected an increase in the goods deficit of $1.7 billion to $70.9 billion and an increase in the services surplus of $0.1 billion to $20.4 billion.

Year-to-date, the goods and services deficit increased $53.4 billion, or 11.6 percent, from the same period in 2016. Exports increased $112.7 billion or 5.6 percent. Imports increased $166.1 billion or 6.7 percent.


Weekly Initial Unemployment Claims Increase 3,000 to 250,000
Posted: January 4, 2018 at 08:30 AM (Thursday)

In the week ending December 30, the advance figure for seasonally adjusted initial claims was 250,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 245,000 to 247,000. The 4-week moving average was 241,750, an increase of 3,500 from the previous week's revised average. The previous week's average was revised up by 500 from 237,750 to 238,250.Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending December 23, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 23 was 1,914,000, a decrease of 37,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 1,943,000 to 1,951,000. The 4-week moving average was 1,922,500, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 2,000 from 1,919,750 to 1,921,750.


ADP National Employment Report increased by 250,000 jobs in December
Posted: January 4, 2018 at 08:15 AM (Thursday)

Private sector employment increased by 250,000 jobs from November to December according to the December ADP National Employment Report®.

“We’ve seen yet another month where the labor market has shown no signs of slowing,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Throughout the year there was significant growth in services except for an overall loss of jobs in the shrinking information sector. Looking at company size, small businesses finished out 2017 on a high note adding more than double their monthly average for the past six months.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.”


Challenger Layoffs Decreased to 32,423 in November
Posted: January 4, 2018 at 07:30 AM (Thursday)

U.S.-based employers announced 32,423 job cuts in the last month of the year, bringing the year-end total to 418,770. That is the lowest annual total since 1990*, when 316,047 cuts were recorded, according to a report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

“The retail pivot that caused thousands of store closures and job cuts was not seen in any other industry this year,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

“While companies in the Pharmaceutical, Health Care, Construction, and Food industries did announce more job cuts than last year, it was nothing like the Energy cuts seen in the last two years or the Financial cuts seen during the recession,” added Challenger.

Employers announced 20.5 percent fewer cuts than the previous year, when 526,915 cuts were announced. Last month saw a 7.4 percent decrease from November’s total of 35,038, and a 3.6 percent decrease from the 33,627 cuts announced in the same month last year.

“The tight labor market, coupled with uncertainty surrounding health care and tax legislation, possibly kept employers from making any long-term staffing decisions this year. However, 2018 may see an increase in job cut announcements, as companies realign with consumer demand,” said Challenger.

Retail’s restructuring led to 76,084 job cuts this year, a 28.2 percent increase from 2016, when 59,324 job cuts were announced. The move from brick-and-mortar to online shopping has caused over 7,400 store closures, according to Challenger tracking.

The Health Care sector announced 40,732 job cuts, 118 percent more than last year’s annual total for the industry of 18,725. The Services sector announced 36,174 cuts this year, nearly quadrupling the total from last year, which was 9,917.

Meanwhile, announced hiring plans are the highest on record, according to Challenger tracking. Employers announced plans to hire over 1,100,000 new hires, 27 percent more than the 868,702 announced last year.

“While we may see more job cuts in the first quarter of 2018, some companies have announced wage increases and bonuses for employees due to the passing of the tax bill,” said Challenger.

AT&T, Comcast NBCUniversal, and Fifth Third Bancorp all announced $1,000 bonuses to their eligible employees. Meanwhile, Fifth Third Bank and Wells Fargo will increase their minimum wage to $15/hour. Boeing announced $300,000,000 in new investments.

*Challenger began tracking job cuts in 1993. Prior years’ job cuts were calculated by a newsletter no longer in circulation.


December Manufacturing ISM expanded faster to 59.7
Posted: January 3, 2018 at 10:00 AM (Wednesday)

Economic activity in the manufacturing sector expanded in December, and the overall economy grew for the 103rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report on Business®.

The December PMI® registered 59.7 percent, an increase of 1.5 percentage points from the November reading of 58.2 percent. The New Orders Index registered 69.4 percent, an increase of 5.4 percentage points from the November reading of 64 percent. The Production Index registered 65.8 percent, a 1.9 percentage point increase compared to the November reading of 63.9 percent. The Employment Index registered 57 percent, a decrease of 2.7 percentage points from the November reading of 59.7 percent. The Supplier Deliveries Index registered 57.9 percent, a 1.4 percentage point increase from the November reading of 56.5 percent. The Inventories Index registered 48.5 percent, an increase of 1.5 percentage points from the November reading of 47 percent. The Prices Index registered 69 percent in December, a 3.5 percentage point increase from the November reading of 65.5 percent, indicating higher raw materials prices for the 22nd consecutive month. Comments from the panel reflect expanding business conditions, with new orders and production leading gains; employment expanding at a slower rate; order backlogs expanding at a faster rate; and export orders and imports continuing to grow in December. Supplier deliveries continued to slow (improving) at a faster rate, and inventories continued to contract at a slower rate during the period. Price increases continued at a faster rate. The Customers’ Inventories Index declined and remains at low levels.

Of the 18 manufacturing industries, 16 reported growth in December in the following order: Machinery; Computer & Electronic Products; Paper Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Primary Metals; Nonmetallic Mineral Products; Petroleum & Coal Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Furniture & Related Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. Two industries reported contraction during the period: Wood Products; and Textile Mills.


Construction Spending increased 0.8% in November
Posted: January 3, 2018 at 10:00 AM (Wednesday)

Construction spending during November 2017 was estimated at a seasonally adjusted annual rate of $1,257.0 billion, 0.8 percent (±1.2 percent)* above the revised October estimate of $1,247.1 billion. The November figure is 2.4 percent (±1.5 percent) above the November 2016 estimate of $1,227.0 billion. During the first eleven months of this year, construction spending amounted to $1,138.3 billion, 4.2 percent (±1.0 percent) above the $1,091.9 billion for the same period in 2016.

Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $964.3 billion, 1.0 percent (± 1.0 percent)* above the revised October estimate of $955.1 billion. Residential construction was at a seasonally adjusted annual rate of $530.8 billion in November, 1.0 percent (±1.3 percent)* above the revised October estimate of $525.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $433.5 billion in November, 0.9 percent (± 1.0 percent)* above the revised October estimate of $429.7 billion.

Public Construction
In November, the estimated seasonally adjusted annual rate of public construction spending was $292.7 billion, 0.2 percent (±2.0 percent)* above the revised October estimate of $292.0 billion. Educational construction was at a seasonally adjusted annual rate of $78.8 billion, 3.8 percent (±2.5 percent) above the revised October estimate of $75.9 billion. Highway construction was at a seasonally adjusted annual rate of $88.0 billion, 0.8 percent (±4.6 percent)* below the revised October estimate of $88.7 billion.


New York Purchasing Managers Business Activity decreased to 56.3 in December
Posted: January 3, 2018 at 09:55 AM (Wednesday)

New York City purchasing managers reported the highest 6-month outlook in over a decade according to the survey taken by the Institute for Supply Management-New York.

New York Metro
Current Business Conditions were at 56.3 in December, down from 58.1 in November. In 2017, current business conditions ranged from a low of 46.7 in May to a high of 62.8 in July. With the December report, the year ends above the 12-month average of 54.9. The Six-Month Outlook made a huge move to 85.7 in December, up from 69.7 in November. This is the highest result we have seen in this index since July of 2006 (89.7), 11 years and 5 months ago. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, was 42.9 in December, ending three consecutive months of increases, but remaining higher than December 2016 (42.0). Quantity of Purchases dropped slightly to 55.0, ending two consecutive months of increases. In December, the top line and forward revenue guidance pulled back from the significant one-month increase seen in November. Current Revenues came in at 55.0 in December after reaching an eight-month high of 64.3 in November. Expected Revenues were at 63.6 in December, down from November’s 15 month high of 71.4. Prices Paid increased for the fourth month in a row, coming in at 66.7 in December, up from 62.5 in November.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: January 3, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.8 percent from two weeks earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 29, 2017. The results include adjustments to account for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.8 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 42 percent compared with two weeks ago. The Refinance Index decreased 7 percent from two weeks ago. The seasonally adjusted Purchase Index increased 1 percent from two weeks earlier. The unadjusted Purchase Index decreased 40 percent compared with two weeks ago and was 3 percent higher than the same week one year ago.

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity increased to 52.0 percent of total applications from 51.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent of total applications.

The FHA share of total applications increased to 10.4 percent from 10.3 percent the week prior. The VA share of total applications increased to 11.2 percent from 10.6 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.25 percent, with points increasing to 0.36 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.13 percent from 4.21 percent, with points increasing to 0.21 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.17 percent from 4.15 percent, with points increasing to 0.40 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.65 percent from 3.66 percent, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.40 percent from 3.56 percent, with points increasing to 0.73 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Paychex-IHS Small Business Jobs Index Declined to 99.70 in December
Posted: January 2, 2018 at 08:30 AM (Tuesday)

The Paychex | IHS Markit Small Business Employment Watch closed the year with a decline in small business job growth and wages up over the previous year. The Small Business Jobs Index stands at 99.70 in December, down 0.16 percent for the month and 0.78 percent for the year. At $26.14, hourly earnings in December gained 2.76 percent ($0.70) YOY and averaged a growth rate of 2.85 percent for 2017, up from the 2016 average of 2.75 percent.

“Small business job growth has slowed in 2017, even as the rest of the economy accelerated,” said James Diffley, chief regional economist at IHS Markit.

“While small business jobs growth slowed this year, it’s important to recall that small businesses led the hiring surge coming out of the recession and maintained high levels of growth for quite some time,” said Martin Mucci, Paychex president and CEO. “It will be interesting to see the impact tax reform makes on job and wage growth in the months ahead.”


The Small Business Jobs Index declined 0.16 percent in December, closing the year at 99.70.
Hourly earnings in December were $26.14, up 2.76 percent YOY and averaged an increase of 2.85 percent for 2017.
South leads regions in employment growth; West ranks highest for wage growth.
Tennessee continues to lead job growth; Arizona ranks first in annual hourly earnings growth.
Seattle is top metro for small business jobs; Phoenix leads in small business wage growth.
Growth rates for small business jobs in Manufacturing are on the rise; Weekly earnings for Construction climb.


Chicago Purchasing Managers Index rose to 67.6 in December
Posted: December 29, 2017 at 10:00 AM (Friday)

The MNI Chicago Business Barometer rose to 67.6 in December, up from 63.9 in November, closing the year at the highest level since March 2011.

On a calendar quarter basis, the Barometer rose to 65.9 in Q4 from 61.0 in Q3, the best quarterly performance since Q1 2011, only the second time in the last decade there have been three consecutive above-60 readings in the Oct-Dec period.

Both output and demand showed strong gains in December, with each rising to multi-year highs. The Production indicator rose to a level last seen higher 34 years ago, while the New Orders Indicator hit a three-and-a-half year high. As for the other three indicators that comprise the Barometer, Order Backlogs also grew, but Employment and Supplier Deliveries fell on the month.

Firms’ unfulfilled orders edged slightly higher in December, but remained below the levels recorded in October, when businesses grappled with the worst of the recent, challenging weather conditions. Also reflecting the better logistical environment, supplier delivery times shortened in December. The associated indicator fell to the lowest level since April but remained comfortably above the 50-neutral mark.

Companies did, however, keep increased quantities of stock at hand. After hitting an eight-month high in November, the Inventories indicator rose to fresh 3-year high in December. There was evidence of firms carrying a larger level of stock to support stretched lead times and in preparation for product launches scheduled for the New Year.

Despite decreasing in December, the Employment indicator remained in expansionary territory. On a 12-month average basis, 2017 was the best year the indicator has had since 2014, slipping below the 50 on only four occasions.

This month’s special question asked firms to predict how both their businesses and the US economy would fare in the upcoming new year. Just over 50% saw their company growing somewhere between 0-5%, with 37% forecasting growth between 5-10% and the remaining 12% expecting growth above 10%. Regarding the bigger picture, 61% of firms thought the US economy would grow somewhere in the region of 2 to 5% over 2018, while 29% put growth at between 0 and 2%. Just under 6% of businesses saw the US economy contracting in 2018 while the remaining 4% saw economic growth running above 5%.

Inflationary pressures at the factory gate remained high in December, though did edge down to the lowest level since August. The upswing in global demand, along with input shortages induced by this year’s hurricanes, saw prices elevated throughout the year.

“Sentiment among businesses started 2017 in good shape and only impressed more as the year progressed. December’s result secured the MNI Chicago Business Barometer’s first full year of expansion since 2014 and with New Orders ending the quarter in fine shape there is every chance this form could be carried over into 2018,” said Jamie Satchi, Economist at MNI Indicators.


Weekly Initial Unemployment Claims unch at 245,000
Posted: December 28, 2017 at 08:30 AM (Thursday)

In the week ending December 23, the advance figure for seasonally adjusted initial claims was 245,000, unchanged from the previous week's unrevised level of 245,000. The 4-week moving average was 237,750, an increase of 1,750 from the previous week's unrevised average of 236,000. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending December 16, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 16 was 1,943,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 1,932,000 to 1,936,000. The 4-week moving average was 1,919,750, a decrease of 4,250 from the previous week's revised average. The previous week's average was revised up by 1,000 from 1,923,000 to 1,924,000.


Consumer Confidence decreased in December to 122.1
Posted: December 27, 2017 at 10:00 AM (Wednesday)

The Conference Board Consumer Confidence Index® decreased in December, following a modest improvement in November. The Index now stands at 122.1 (1985=100), down from 128.6 in November. The Present Situation Index increased from 154.9 to 156.6, while the Expectations Index declined from 111.0 last month to 99.1 this month.

“Consumer confidence retreated in December after reaching a 17-year high in November,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “The decline in confidence was fueled by a somewhat less optimistic outlook for business and job prospects in the coming months. Consumers’ assessment of current conditions, however, improved moderately. Despite the decline in confidence, consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018.”

Consumers’ appraisal of present-day conditions was slightly more positive in December. The percentage saying business conditions are “good” increased marginally from 35.0 percent to 35.2 percent, while those saying business conditions are “bad” decreased marginally, from 12.3 percent to 12.1 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” decreased from 37.5 percent to 35.7 percent, while those claiming jobs are “hard to get” also decreased, from 16.8 percent to 15.2 percent (a 16-year low).

Consumers’ optimism about the short-term outlook declined sharply in December. The percentage of consumers anticipating business conditions to improve over the next six months declined from 23.1 percent to 20.2 percent, while those expecting business conditions to worsen increased from 6.7 percent to 9.2 percent.

Consumers’ outlook for the job market was also less upbeat than in November. The proportion expecting more jobs in the months ahead decreased from 21.3 percent to 18.4 percent, while those anticipating fewer jobs rose from 12.1 percent to 16.3 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased from 20.3 percent to 22.3 percent, while the proportion expecting a decrease also rose, from 7.6 percent to 8.9 percent.


Pending Home Sales Index rose 0.2% in November
Posted: December 27, 2017 at 10:00 AM (Wednesday)

Pending home sales were mostly unmoved in November, but did squeak out a minor gain both on a monthly and annualized basis, according to the National Association of Realtors®. Heading into 2018, existing-home sales and price growth are forecast to slow, primarily because of the altered tax benefits of homeownership affecting some high-cost areas.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.2 percent to 109.5 in November from 109.3 in October. With last month’s modest increase, the index remains at its highest reading since June (110.0), and is now 0.8 percent above a year ago.

Lawrence Yun, NAR chief economist, says contract signings mustered a small gain in November and were up annually for the first time since June. “The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” he said. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors® say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”

One of the biggest questions heading into 2018, according to Yun, is if the depressed levels of available supply can improve enough to slow price growth and make buying a home more affordable. While last month’s significant boost in existing sales was noteworthy, it did come with some concerns. Sales prices were up 5.8 percent – more than double wage growth – and the 3.4-month supply of homes on the market was the lowest since NAR began tracking in 1999.

“The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability,” said Yun. “Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home.”

Yun forecasts for existing-home sales to finish 2017 at around 5.54 million, which is an increase of 1.7 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 6 percent. In 2018, Yun anticipates essentially no change (a decline of 0.4 percent) in existing sales (5.52 million), and price growth to moderate to around 2 percent.

The PHSI in the Northeast jumped 4.1 percent to 98.9 in November, and is now 1.1 percent above a year ago. In the Midwest the index rose 0.4 percent to 105.8 in November, and is now 0.8 percent higher than November 2016.

Pending home sales in the South decreased 0.4 percent to an index of 123.1 in November but are still 2.5 percent higher than last November. The index in the West declined 1.8 percent in November to 100.4, and is now 2.3 percent below a year ago.


Texas Fed Manufacturing Activity Shows Robust Growth in December
Posted: December 26, 2017 at 10:30 AM (Tuesday)

Texas factory activity expanded strongly in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, spiked 18 points to 32.8, reaching its highest level in more than 11 years.

Other measures of manufacturing activity also pointed to more rapid growth in December. The new orders index jumped 10 points to 30.1, another 11-year high, and the growth rate of orders index moved up to 21.4. The capacity utilization index increased nine points to 26.3, and the shipments index rose from 16.7 to 21.5 this month.

Perceptions of broader business conditions were markedly more positive in December. The general business activity index and the company outlook index posted double-digit increases, coming in at 29.7 and 31.5, respectively. Both represent highs last seen in 2006.

Labor market measures suggested more rapid employment growth and longer workweeks this month. The employment index came in at 20.4, up 14 points from November. More than 30 percent of firms noted net hiring, compared with 11 percent noting net layoffs. The hours worked index shot up to 23.3, a 12-year high.

Upward pressure on prices continued in December, and wage pressures escalated. The raw materials prices index held steady at 32.5 and the finished goods prices index edged up to 17.9. Meanwhile the wages and benefits index jumped up 11 points to 25.1. Looking ahead, price expectations increased notably for a second month in a row. The index of future finished goods prices rose to 42.7, up from 18.9 in October and 35.8 in November, and more than 20 points above its series average.

Expectations regarding future business conditions remained highly optimistic. The index of future general business activity inched up to 40.9, while the index of future company outlook held steady at 40.1. Other indexes for future manufacturing activity showed mixed movements but remained solidly in positive territory.


Richmond Fed's Current Activity Index moved down to 20 from 30
Posted: December 26, 2017 at 10:00 AM (Tuesday)

According to the latest survey by the Federal Reserve Bank of Richmond, Fifth District manufacturing firms saw moderate growth in December. The composite index moved down from its record high November reading of 30 to 20 but remained positive, indicating continued growth. The decrease in the composite index resulted from declines in the indexes for shipments and new orders; but the third component, employment, increased in December. Indicators of wages and inventories also rose. While most other indicators of current conditions moved lower, they remained positive with the exception of the index for backlog of orders, which fell from 21 to −4.

Manufacturing firms remained optimistic, as all expectations indicators increased except for vendor lead time, which dipped from 10 to 7.

District manufacturing firms reported continued price growth in December, although this growth slowed in both prices paid and prices received. However, firms expected an increase in price growth in the coming six months.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.7% in October
Posted: December 26, 2017 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for October 2017 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in October, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.0%, up from 5.7% the previous month. The 20-City Composite posted a 6.4% year-over-year gain, up from 6.2% the previous month.

Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In October, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with a 10.2% increase, and San Diego with an 8.1% increase. Nine cities reported greater price increases in the year ending October 2017 versus the year ending September 2017.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index, 10-City and 20-City Composites all posted a month-over-month gain of 0.2% in October. After seasonal adjustment, the National Index, 10-City and 20-City Composites all recorded a 0.7% month-over-month increase in October. Eleven of 20 cities reported increases in October before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.

ANALYSIS
“Home prices continue their climb supported by low inventories and increasing sales,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “Nationally, home prices are up 6.2% in the 12 months to October, three times the rate of inflation. Sales of existing homes dropped 6.1% from March through September; they have since rebounded 8.4% in November. Inventories measured by months-supply of homes for sale dropped from the tight level of 4.2 months last summer to only 3.4 months in November.

“Underlying the rising prices for both new and existing homes are low interest rates, low unemployment and continuing economic growth. Some of these favorable factors may shift in 2018. The Fed is widely expected to raise the Fed funds rate three more times to reach 2% by the end of the New Year. Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential home buyers compelled to look at renting. Data published by the Urban Institute suggests that in some West coast cities with rapidly rising home prices, renting is more attractive than buying.”


New Home Sales in November at annual rate of 733,000
Posted: December 22, 2017 at 10:00 AM (Friday)

New Home Sales
Sales of new single-family houses in November 2017 were at a seasonally adjusted annual rate of 733,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 17.5 percent (±10.4 percent) above the revised October rate of 624,000 and is 26.6 percent (±16.6 percent) above the November 2016 estimate of 579,000.

Sales Price
The median sales price of new houses sold in November 2017 was $318,700. The average sales price was $377,100.

For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of November was 283,000. This represents a supply of 4.6 months at the current sales rate.


University of Michigan Consumer Confidence down in December to 95.9
Posted: December 22, 2017 at 10:00 AM (Friday)

Consumer confidence continued to slowly sink in December, with most of the decline among lower income households, according to the University of Michigan Surveys of Consumers.

The extent of the decline was minor, with the December figure just below the average for 2017 (95.9 versus 96.8), said U-M economist Richard Curtin, director of the surveys. Indeed, the average in 2017 was the highest since 2000, and only the long expansions of the 1960s and 1990s were significantly higher.

The strength was due to assessments of current economic conditions that were the second highest since 2000, offset by a slight increase in uncertainty about future prospects, Curtin said. Overall, the data indicate that real personal consumption expenditures will expand by 2.6 percent in 2018.

"Tax reform was spontaneously mentioned by 29 percent of all consumers when they were asked about recent economic developments," Curtin said. "There was nearly an equal split between those that anticipated positive as negative impacts on their future economic prospects. Party affiliation was the dominant correlate of people's assessments of the tax legislation, with the long term economic outlook most negatively affected.

"Most consumers will know more about the revised tax code when the new paycheck withholding amounts take effect in early 2018. While the mostly small gains in take-home pay may not spark an uptick in optimism, those gains would act to dampen any renewed pessimism."

Favorable Personal Finances
Consumers reported the most favorable assessments of their current finances in 17 years. In the December survey, and for 2017 as a whole, 50 percent of all consumers reported that their finances had improved.

Improved financial prospects for the year ahead was expected by 40 percent of all consumers in December, and also equal to the average 2017 reading. This was only marginally below the yearly peak since 1960 of 43 percent recorded in 2000.

Consumers were somewhat more concerned about real income advances as they anticipated slightly lower income gains and a slightly higher inflation rate, Curtin said.

Continued Strength in Discretionary Purchases
The continued strength in buying plans for household durables has been due to more frequent price reductions, which are expected to continue following the holidays, according to Curtin. The vehicle market has benefited equally from price discounts as well as low interest rates.

Home-buying conditions drew as many positive as negative references to prices, although higher prices will cause an increase in the supply of available homes for sale, Curtin said. Changes in tax laws are not expected to have much impact on the overall market, although it will have some negative impact on homes with large mortgages in locales with high tax rates.

Consumer Sentiment Index
The Consumer Sentiment Index was 95.9 in December 2017, down from 98.5 in November and last December 98.2. The Current Conditions Index was 113.8 in December, above last month's 113.5 and last year's 111.9. The Expectations Index was 84.3 in December, down from 88.9 in November and 89.5 in last December's survey.

Consumer confidence continued to slowly sink in December, with most of the decline among lower income households. The extent of the decline was minor, with the December figure just below the average for 2017 (95.9 versus 96.8). Indeed, the average in 2017 was the highest since 2000, and only during the long expansions of the 1960's and 1990's was confidence significantly higher. The recent strength was due to the second highest assessments of current economic conditions since 2000. This strength was offset by a slight increase in uncertainty about future economic prospects. Tax reform was spontaneously mentioned by 29% of all respondents, with nearly an equal split between positive and negative impacts on economic prospects. Party affiliation was the dominant correlate of people's assessments of the tax legislation, with the long term economic outlook the most negatively affected. Buying plans for durables and vehicles remained unchanged at favorable levels. Most consumers will know more about the revised tax code when the new paycheck withholding amounts take effect in early 2018. While the mostly small gains in take-home pay may not spark an uptick in optimism, those gains would act to dampen any renewed pessimism. Overall, the data indicate that real personal consumption expenditures will expand by 2.6% in 2018.


Kansas City Fed Manufacturing Activity continued at a solid pace in December
Posted: December 22, 2017 at 10:00 AM (Friday)

Growth in Tenth District manufacturing activity continued at a solid pace, and optimism remained high for future activity. Price indexes were mixed, but posted little change overall.

The month-over-month composite index was 14 in December, lower than 16 in November and 23 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Growth in factory activity moderated slightly at both durable and non-durable goods plants, particularly for chemicals and plastics products. Month-over-month indexes were mixed but remained generally solid. The shipments, new orders, and order backlog indexes all decreased somewhat. However, the production index edged up from 15 to 21, and the employment and new orders for exports indexes also rose. The finished goods inventory index dropped from 2 to -11, and the raw materials inventory index also decreased.

Most year-over-year factory indexes were slightly lower in December. The composite index eased from 37 to 30, and the production, shipments, new orders, and order backlog indexes also fell. In contrast, the capital expenditures index jumped from 19 to 39, and the employment index inched higher. The new orders for exports index was mostly unchanged. The raw materials inventory index fell from 45 to 15, and the finished goods inventory index also decreased.

Future factory activity expectations eased slightly but remained favorable. The future composite index eased from 27 to 22, and the future production, shipments, new orders, and order backlog also slowed slightly. The future employment index edged lower from 35 to 33, while the future capital expenditures index was mostly unchanged. The future raw materials inventory index decreased from 13 to 6, while the future finished goods inventory index increased modestly.

Price indexes were mixed in December, but posted little change overall. The month-over-month finished goods price index edged up from 12 to 15, while the raw materials price index eased slightly. The year-over-year finished goods price index inched higher from 35 to 37, while the year-over-year raw materials price index fell somewhat. The future finished goods price index slipped from 37 to 33, and the future raw materials price index also moved slightly lower.


Personal Income increased 0.3%, Spending increased 0.6%
Posted: December 22, 2017 at 08:30 AM (Friday)

Personal income increased $54.0 billion (0.3 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $50.9 billion (0.4 percent) and personal consumption expenditures (PCE) increased $87.1 billion (0.6 percent).

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

The increase in personal income in November primarily reflected increases in wages and salaries and personal interest income (table 3).

The $49.1 billion increase in real PCE in November reflected an increase of $22.3 billion in spending for goods and a $27.6 billion increase in spending for services (table 7). Within goods, recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for electricity and gas. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $91.7 billion in November (table 3). Personal saving was $426.2 billion in November and the personal saving rate, personal saving as a percentage of disposable personal income, was 2.9 percent (table 1).

The recent estimates of personal income and outlays reflect the effects of Hurricanes Harvey and Irma. BEA cannot separately quantify the total impact of the storms on personal income and outlays because most of the source data used to estimate the components of personal income and outlays do not separately identify storm impacts. BEA made adjustments to estimates where source data were not yet available or did not fully reflect the effects of the storms.


Philadelphia NonManufacturing Activity continued to grow in December
Posted: December 22, 2017 at 08:30 AM (Friday)

Responses to the December Nonmanufacturing Business Outlook Survey suggested that business activity in the region continued to grow. The index for firm-level general activity edged up, and the index for sales/revenues rose by a greater amount. The indicators for new orders and full-time employment fell but remained positive. The respondents also reported higher prices for inputs and prices received for their own goods and services. Expectations for growth over the next six months remained positive.

Activity Indicators Suggest Modest Growth
The survey’s broad indicators suggested a steady, modest pace of expansion in regional nonmanufacturing activity. The diffusion index for general activity at the firm level increased slightly, rising from 16.4 in November to 18.1 in December (see Chart 1). Nearly 40 percent of the firms reported higher activity, while 22 percent reported lower activity. The indicators for new orders and sales/revenues were mixed, however. The new orders index fell 8 points to 8.7, its lowest reading since July. In contrast, the sales/revenues index rose 11 points to 26.7. Almost 48 percent of the firms reported higher sales/revenues this month, compared with 38 percent that reported higher sales/revenues last month. Firms also perceived increases in regional economic activity: The business activity index for the region improved 6 points to 25.3.

Firms Report Expansion of Employment
The firms continued to report overall increases in full-time employment, although the pace of job growth in the region may have declined from last month. The full-time employment index remained positive but fell 14 points to 8.0 in December. The share of firms reporting increases (22 percent) exceeded the share reporting decreases (14 percent). The part-time employment index rose 2 points to 12.7, suggesting relatively steady demand for part-time, temporary, and contract workers in the region. The workweek index also rose. The wage and benefit cost index fell, however, from 43.4 in November to 33.6 in December.

Firms Report Higher Prices Received and Paid
The firms reported an improvement in prices received for their own goods and services after reporting little change last month. The prices received index rose 12 points to 11.8 in December, nearly identical to the index’s historical average of 11.6 (see Chart 2). Almost 18 percent of the firms reported higher prices for their own goods and services this month, compared with 8 percent that reported higher prices in November. The prices paid index also increased, rising 4 points to 27.5. This index has been above its historical average of 20.2 for three consecutive months. Although the largest percentage of firms (62 percent) reported steady input prices this month, 28 percent of the firms reported paying higher prices, and almost no firms reported paying lower prices.

Equipment and Software Expenditures Soften
Both indexes for capital spending fell. The index for equipment and software spending decreased 5 points to 18.4, falling below its historical average of 22.4. In December, 27 percent of the firms reported an increase in equipment and software spending, while 50 percent reported no change and 9 percent reported a decline. The index for plant spending edged down from 22.5 in November to 21.5 in December.

Expectations for the First Half of the New Year Are Positive
The respondents to this month’s survey remained optimistic about activity during the first half of 2018. The diffusion index for future activity at the individual firm level increased 3 points to 45.6 (see Chart 1). More than 56 percent of the firms anticipated higher activity over the next six months, compared with 11 percent that anticipated a decline. The future regional activity index also rose, from 31.3 in November to 39.2 in December. Nonetheless, both future indexes remained below their historical averages (49.2 for the firm-level index and 43.5 for the regional index).

Summary
Results from the December Nonmanufacturing Business Outlook Survey suggest continued expansion among nonmanufacturing firms in the region. Although the survey's current indicators for sales/revenues and new orders showed mixed signals, the general activity indexes at the firm level and for the region rose. The firms also reported growth in employment and an increase in price pressures this month. Forecasts for the next six months remain positive.


U.S. Leading Economic Index increased 0.4% in November
Posted: December 21, 2017 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for the U.S. increased 0.4 percent in November to 130.9 (2010 = 100), following a 1.2 percent increase in October, and a 0.1 percent increase in September.

“The U.S. LEI rose again in November, suggesting that solid economic growth will continue into the first half of 2018,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “In recent months, unemployment insurance claims have returned to pre-hurricane levels. In addition, improving financial indicators, new orders in manufacturing and historically high consumer sentiment have propelled the U.S. LEI even higher.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in November to 116.5 (2010 = 100), following a 0.3 percent increase in October, and a 0.1 percent increase in September.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in November to 125.6 (2010 = 100), following a 0.3 percent increase in October and a 0.1 percent decline in September.


3Q2017 GDP final estimate increased 3.2%
Posted: December 21, 2017 at 08:30 AM (Thursday)

Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the third quarter of 2017, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.3 percent. With this third estimate for the third quarter, personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the same.

Real gross domestic income (GDI) increased 2.0 percent in the third quarter, compared with an increase of 2.3 percent in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.6 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter.

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

The slight acceleration in real GDP in the third quarter primarily reflected an acceleration in private inventory investment and an upturn in state and local government spending that were partly offset by decelerations in PCE, nonresidential fixed investment, and exports.

Current-dollar GDP increased 5.3 percent, or $250.6 billion, in the third quarter to a level of $19,500.6 billion. In the second quarter, current-dollar GDP increased 4.1 percent, or $192.3 billion.

The price index for gross domestic purchases increased 1.7 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter (table 4). The PCE price index increased 1.5 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 0.9 percent.

Updates to GDP
The downward revision to the percent change in real GDP primarily reflected a downward revision to PCE that was partly offset by an upward revision to state and local government spending.

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $90.2 billion in the third quarter, compared with an increase of $14.4 billion in the second quarter.

Profits of domestic financial corporations increased $47.8 billion in the third quarter, in contrast to a decrease of $33.8 billion in the second. Profits of domestic nonfinancial corporations increased $10.4 billion, compared with an increase of $59.1 billion. Rest-of-the-world profits increased $32.0 billion, in contrast to a decrease of $10.8 billion. In the third quarter, receipts increased $26.9 billion, and payments decreased $5.2 billion.


Chicago Fed National Activity Points to a Moderation in Economic Growth in November
Posted: December 21, 2017 at 08:30 AM (Thursday)

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.28 in November from +0.18 in October. Forty-two of the 85 individual indicators made positive contributions to the CFNAI in November, while 43 made negative contributions. Thirty-six indicators improved from October to November, while 49 indicators deteriorated. Of the indicators that improved, 13 made negative contributions.

The contribution from production-related indicators to the CFNAI declined to +0.05 in November from +0.66 in October. Industrial production increased 0.2 percent in November after moving up 1.2 percent in October.

The sales, orders, and inventories category also contributed +0.05 to the CFNAI in November, up slightly from +0.04 in October. The Institute for Supply Management’s Manufacturing New Orders Index increased to 64.0 in November from 63.4 in October.

The contribution from employment-related indicators to the CFNAI was unchanged at +0.11 in November. The civilian unemployment rate remained at 4.1 percent in November.

The contribution of the personal consumption and housing category to the CFNAI edged down to –0.06 in November from –0.04 in October. Housing permits decreased to 1,298,000 annualized units in November from 1,316,000 in the previous month.

The CFNAI was constructed using data available as of December 19, 2017. At that time, November data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The October monthly index value was revised to +0.76 from an initial estimate of +0.65, and the September monthly index value was revised to +0.31 from last month’s estimate of +0.36. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the October and September monthly index values were primarily due to the former.

Led by slower growth in production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.15 in November from +0.76 in October. Two of the four broad categories of indicators that make up the index decreased from October, but three of the four categories made positive contributions to the index in November. The index’s three-month moving average, CFNAI-MA3, increased to +0.41 in November from +0.31 in October.


Philadelphia Fed Outlook Reported Activity growth continues to improve in December
Posted: December 21, 2017 at 08:30 AM (Thursday)

Results from the December Manufacturing Business Outlook Survey suggest that regional manufacturing conditions continued to improve. Indexes for general activity, new orders, and shipments were all positive this month and increased from their readings last month. The firms also reported continued expansion of employment. Most indicators reflecting expectations for the next six months suggest continued optimism.

Current Indicators Suggest Solid Growth
The diffusion index for current general activity increased from a reading of 22.7 in November to 26.2 this month (see Chart 1). Nearly 41 percent of the firms indicated increases in activity this month, up from 35 percent in November. Both the current new orders and shipments indexes also improved this month, increasing 8 points and 2 points, respectively. Although they moderated slightly, both the delivery times and unfilled orders indexes remained positive, suggesting longer delivery times and increases in unfilled orders. Inventories were, on balance, nearly steady this month: The percentage of firms reporting lower inventories (19 percent) was slightly higher than the percentage reporting higher inventories (17 percent).

The firms continued to report increases in employment. The current employment index fell 5 points but remained in positive territory, where it has been for 13 consecutive months. More than 29 percent of the responding firms reported increases in employment, while 11 percent of the firms reported decreases this month. The average workweek index declined 3 points after being in positive territory for 14 consecutive months.

Cost Pressures Moderate
The survey’s prices paid indicator suggested moderated cost pressures this month. Nearly 26 percent of the firms reported higher input prices this month, down from 39 percent in November. The current prices paid index fell 14 points this month (see Chart 2). The prices received index, however, increased modestly from 8.6 to 11.3. Nearly 16 percent of the firms reported higher prices for their own manufactured goods this month, up slightly from 14 percent last month. The largest percentage of firms (78 percent) reported steady prices.

Firms Expect Highest Cost Increases for Health Benefits
In this month’s special questions, the firms were asked about their expectations for changes in various input and labor costs for the coming year (see Special Questions). The responses indicate that the largest average annual increase is expected to be for health benefits (7.1 percent). Wages are expected to increase by an average of 2.7 percent, while nonhealth benefits are expected to rise 2.2 percent. The costs of raw materials and energy are expected to increase by an average of 3.3 percent and 1.3 percent, respectively. The firms were also asked how the expected cost increases for 2018 will compare with this year’s cost changes. For all categories of expenses, the firms forecast, on balance, increases greater than in 2017.

Firms Remain Optimistic
The diffusion index for future general activity increased from 50.1 in November to 53.5 this month (see Chart 1). The indexes for future new orders and shipments also improved, both increasing 3 points. The firms remained optimistic about expansion of employment over the next six months, although the future employment diffusion index fell 8 points. Forty-two percent of the firms expect increases in employment over the next six months; 9 percent expect decreases. The future capital spending index remained at a relatively high reading and edged 1 point higher, with 42 percent of the firms expecting capital spending increases over the next six months.
Summary

Responses to the December Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. The indexes for general activity, new orders, shipments, and employment all indicated expansion this month. The firms reported lessened input price pressures compared with last month, but slightly more firms reported price increases for their own manufactured goods. Most broad indicators reflecting firms’ expectations for the next six months improved modestly this month.


Weekly Initial Unemployment Claims Increase 20,000 to 245,000
Posted: December 21, 2017 at 08:30 AM (Thursday)

In the week ending December 16, the advance figure for seasonally adjusted initial claims was 245,000, an increase of 20,000 from the previous week's unrevised level of 225,000. The 4-week moving average was 236,000, an increase of 1,250 from the previous week's unrevised average of 234,750. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending December 9, 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 December 9 was 1,932,000, an increase of 43,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 1,886,000 to 1,889,000. The 4-week moving average was 1,923,000, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 250 from 1,918,500 to 1,918,750.


Existing-Home Sales increased 5.6% in November
Posted: December 20, 2017 at 10:00 AM (Wednesday)

Existing-home sales surged for the third straight month in November and reached their strongest pace in almost 11 years, according to the National Association of Realtors®. All major regions except for the West saw a significant hike in sales activity last month.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 5.6 percent to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.50 million in October. After last month’s increase, sales are 3.8 percent higher than a year ago and are at their strongest pace since December 2006 (6.42 million).

Lawrence Yun, NAR chief economist, says home sales in most of the country expanded at a tremendous clip in November. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month. The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”

The median existing-home price for all housing types in November was $248,000, up 5.8 percent from November 2016 ($234,400). November’s price increase marks the 69th straight month of year-over-year gains.

Total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.

“The anticipated rise in mortgage rates next year could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”

First-time buyers were 29 percent of sales in November, which is down from 32 percent both in October and a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released earlier this year – revealed that the annual share of first-time buyers was 34 percent.

Matching the highest share since May, all-cash sales were 22 percent of transactions in November, which is up from 20 percent in October and 21 percent a year ago. Individual investors, who account for many cash sales, purchased 14 percent of homes in November, up from 13 percent last month and unchanged from a year ago.

“The elevated presence of investors paying in cash continues to add a layer of frustration to the supply and affordability headwinds aspiring first-time buyers are experiencing,” said Yun. “The healthy labor market and higher wage gains are expected to further strengthen buyer demand from young adults next year. Their prospects for becoming homeowners will only improve if more lower-priced and smaller-sized homes come onto the market.”

Properties typically stayed on the market for 40 days in November, which is up from 34 days in October but down from 43 days a year ago. Forty-four percent of homes sold in November were on the market for less than a month.

Realtor.com®’s Market Hotness Index, measuring time on the market data and listings views per property, revealed that the hottest metro areas in November were San Jose-Sunnyvale-Santa Clara, Calif.; Vallejo-Fairfield, Calif.; San Francisco-Oakland-Hayward, Calif.; San Diego-Carlsbad, Calif.; and Stockton-Lodi, Calif.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage increased for the second straight month to 3.92 percent in November from 3.90 percent in October. The average commitment rate for all of 2016 was 3.65 percent.

On the topic of tax reform, NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says it’s good news homeowners can continue to count on tax incentives such as the mortgage interest deduction and the state and local tax deduction.

“Only 6 percent of homeowners have mortgages exceeding $750,000, and only 5 percent pay more than $10,000 in property taxes, but most homeowners won’t itemize under the new regime,” she said. “While we’re pleased that important homeownership incentives such as the capital gains exclusion survived in conference, additional changes are required to truly incentivize homeownership in the tax code.”

Distressed sales – foreclosures and short sales – were 4 percent of sales for the fourth straight month in November, and are down from 6 percent a year ago. Three percent of November sales were foreclosures and 1 percent were short sales.
Single-family and Condo/Co-op Sales

Single-family home sales grew 4.5 percent to a seasonally adjusted annual rate of 5.09 million in November from 4.87 million in October, and are now 3.2 percent above the 4.93 million pace a year ago. The median existing single-family home price was $248,800 in November, up 5.4 percent from November 2016.

Existing condominium and co-op sales increased 14.3 percent to a seasonally adjusted annual rate of 720,000 units in November, and are now 7.5 percent above a year ago. The median existing condo price was $242,500 in November, which is 8.8 percent above a year ago.

Regional Breakdown
November existing-home sales in the Northeast leaped 6.7 percent to an annual rate of 800,000, (unchanged from a year ago). The median price in the Northeast was $273,600, which is 4.0 percent above November 2016.

In the Midwest, existing-home sales jumped 8.4 percent to an annual rate of 1.42 million in November, and are now 6.8 percent above a year ago. The median price in the Midwest was $196,100, up 8.8 percent from a year ago.

Existing-home sales in the South expanded 8.3 percent to an annual rate of 2.34 million in November, and are now 4.0 percent higher than a year ago. The median price in the South was $216,200, up 4.8 percent from a year ago.

Existing-home sales in the West declined 2.3 percent to an annual rate of 1.25 million in November, but are still 2.5 percent above a year ago. The median price in the West was $375,100, up 8.2 percent from November 2016.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: December 20, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 15, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 9 percent compared with the previous week and was 1 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 53.9 percent of total applications, its highest level since December 2016, from 52.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.6 percent of total applications.

The FHA share of total applications decreased to 11.3 percent from 11.8 percent the week prior. The VA share of total applications increased to 10.9 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.16 percent from 4.20 percent, with points decreasing to 0.35 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.14 percent from 4.11 percent, with points increasing to 0.30 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 decreased to 4.11 percent from 4.13 percent, with points increasing to 0.41 from 0.39 (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 3.60 percent from 3.61 percent, with points decreasing to 0.39 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.49 percent from 3.42 percent, with points increasing to 0.52 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The MBA announced that, due to the Christmas holiday, it will not release apps next week, and that it will release the next two weeks of data on January 3, 2018.


3Q2017 Current Account Deficit Decreased
Posted: December 19, 2017 at 08:30 AM (Tuesday)

The U.S. current-account deficit decreased to $100.6 billion (preliminary) in the third quarter of 2017 from $124.4 billion (revised) in the second quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit decreased to 2.1 percent of current dollar gross domestic product (GDP) from 2.6 percent in the second quarter.

The $23.8 billion decrease in the current-account deficit reflected decreases in the deficits on secondary income and goods and increases in the surpluses on primary income and service.


November Housing Starts up 3.3%, Permits down 1.4%
Posted: December 19, 2017 at 08:30 AM (Tuesday)

Building Permits
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,298,000. This is 1.4 percent (±1.7 percent) below the revised October rate of 1,316,000, but is 3.4 percent (±2.3 percent) above the November 2016 rate of 1,255,000. Single-family authorizations in November were at a rate of 862,000; this is 1.4 percent (±1.6 percent) above the revised October figure of 850,000. Authorizations of units in buildings with five units or more were at a rate of 395,000 in November.

Housing Starts
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,297,000. This is 3.3 percent (±9.1 percent) above the revised October estimate of 1,256,000 and is 12.9 percent (±11.7 percent) above the November 2016 rate of 1,149,000. Single-family housing starts in November were at a rate of 930,000; this is 5.3 percent (±10.2 percent) above the revised October figure of 883,000. The November rate for units in buildings with five units or more was 359,000.

Housing Completions
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 1,116,000. This is 6.1 percent (±10.4 percent) below the revised October estimate of 1,189,000 and is 7.2 percent (±12.5 percent) below the November 2016 rate of 1,203,000. Single-family housing completions in November were at a rate of 752,000; this is 4.6 percent (±12.0 percent) below the revised October rate of 788,000. The November rate for units in buildings with five units or more was 353,000.


Builder Confidence Rose 5 points to 74 in December
Posted: December 18, 2017 at 10:00 AM (Monday)

Builder confidence in the market for newly-built single-family homes increased five points to a level of 74 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after a downwardly revised November reading. This was the highest report since July 1999, over 18 years ago.

“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” said NAHB Chief Economist Robert Dietz. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”

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

All three HMI components registered gains in December. The component measuring buyer traffic jumped eight points to 58, the index gauging current sales conditions rose four points to 81 and the index charting sales expectations in the next six months increased three points to 79.

Looking at the three-month moving averages for regional HMI scores, the Midwest climbed six points to 69, the South rose three points to 72, the West increased two points to 79 and Northeast inched up a single point to 54.


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
Jan 2018
Dec 2017
Nov 2017
Oct 2017
Sep 2017
Aug 2017
Jul 2017
Jun 2017
May 2017
Apr 2017
Mar 2017
Feb 2017
Jan 2017
Dec 2016
Nov 2016
Oct 2016
Sep 2016
Aug 2016
Jul 2016
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