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University of Michigan Consumer Confidence down in July to 93.1
Posted: July 31, 2015 at 10:00 AM (Friday)

Consumer confidence slipped a bit in the July 2015 survey. Nonetheless, the data provide no indication of a break in the prevailing positive trend. Indeed, the Sentiment Index has averaged 94.5 since December 2014, the highest eight month average since 2004. Although one-in-ten consumers, when asked to identify any recent economic developments they had heard, referred negatively to Greece, the Chinese economy, and the Trans-Pacific Partnership on trade, it had virtually no impact on the Sentiment Index. The maintenance of confidence at high levels during the past eight months has been mainly due to modestly positive news on jobs and wages.

Strong Economic Growth Expected
A disappointing pace of economic growth was the main reason for the small decline in consumer confidence. Importantly, consumers still anticipate that the expansion will continue. While expected changes in unemployment have been trendless at positive levels in the past year, the July survey was the first since last September that consumers on balance expected no significant change in the rate of joblessness during the year ahead.

Personal Finances Improve
Slowly improving finances were anticipated for the year ahead, an expectation that has remained largely unchanged in the past six months. Across all households, a median income increase of 1.8% was expected, the highest level since January’s 1.9% and well above last July’s 0.6%. Inflation-adjusted income expectations improved slightly, although four-in-ten still expected real income declines. Just three-in-ten thought their chances were better than 50% for them to achieve inflation-adjusted income gains over the next five years.

The Consumer Sentiment Index was 93.1 in the July 2015 survey, down from 96.1 in June, but significantly above last July’s 81.8. During the past eight months, the average level of the Sentiment Index was higher for a longer period than any other time since 2004. The Current Conditions Index was 107.2 in July, just below June’s 108.9, but well above last July’s 97.4. While the Expectations Index slipped to 84.1 in July from June’s 87.8, it nonetheless remained significantly above last July’s reading of 71.8.

Who could be surprised by a September hike in interest rates? A decade ago, the last time the Fed began a long series of interest rate hikes, an all-time record number of consumers anticipated the Fed action a full month prior to the Fed’s hike. At present, only a bare majority anticipate a rate increase in the months ahead. Perhaps the repeated cries of the interest rate wolves have benumbed consumers to warnings of impending hikes. Surprise hikes are associated with larger initial impacts on spending, exactly what the Fed would like to avoid. More must be done to communicate that a rate hike is highly likely before the actual announcement.


Chicago Purchasing Managers Index increased 5.3 points to 54.7 in July
Posted: July 31, 2015 at 09:45 AM (Friday)

The Chicago Business Barometer made a positive start to the third quarter, jumping above 50 after two months in contraction, leaving economic activity expanding at the fastest pace since January.

The Chicago Business Barometer increased 5.3 points to 54.7 in July led by a double digit gain in Production and accompanied by gains in New Orders and the other three components. While all components that comprise the Barometer rose in July, three of them – Order Backlogs, Supplier Deliveries and Employment – remained in contraction, although these elements would be expected to lag.

Companies reported a strong revival in output in July after five months of relatively weak business activity. Production rose sharply by 12.0 points to 61.8 amid a bounceback in inventory growth to the highest since April underpinned by a solid gain in New Orders. Like the Barometer, both Production and New Orders expanded at the fastest pace since the beginning of the year.

In spite of the increased level of orders and output, Employment improved only modestly and remained below 50 for the third consecutive month with the indicator rising only slightly above June’s 5½-year low. Order Backlogs remained in contraction for the sixth consecutive month despite a healthy gain over last month’s near five-year low and the increased level of orders in July – the relative slack in recent months appears to have allowed firms to turnaround orders quickly. Supplier Deliveries were little changed and continued to hover just a shade above June‘s two-year low.

Prices Paid increased by 1.2 points to 54.5 in July, the highest since December and the third consecutive rise. It was, though, too early for the recent sharp fall in crude oil prices to be reflected in the survey results and the small increase in Prices Paid may well prove short-lived.

Most companies reported that wage growth was pegged at a low level. Responding to a special question asked in July, 40% of respondents said wages had grown by 1-2% over the past year while 19% said wages were up 3-4% and nearly a quarter of the panel said that wage growth over the year was unchanged.

Chief Economist of MNI Indicators Philip Uglow said, “The recent weakness in the Chicago Business Barometer had sounded a few alarm bells over the resilience of the US economic recovery. The positive start to the third quarter, however, suggests that activity bounced back firmly as firms saw orders and output increase sharply.“


Employment Cost Index up 0.2% in 2Q2015
Posted: July 31, 2015 at 08:30 AM (Friday)

Compensation costs for civilian workers was little changed at 0.2 percent, seasonally adjusted, for the 3-month period ending June 2015, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) was also little changed at 0.2 percent, and benefits (which make up the remaining 30 percent of compensation) was little changed at 0.1 percent.


BTMU U.S. Business Barometer increased by 0.2%
Posted: July 30, 2015 at 10:00 AM (Thursday)

For the week ending July 18 2015, the BTMU U.S. Business Barometer increased by 0.2 percent to 99.5, following a drop of 1.4 percent in the previous week. This week’s barometer was mainly driven by strong performances in consumption indexes, especially chain store sales, which rose by 0.4 percent, and MBA’s purchase index, which picked up by 1.0 percent. As to the production side, truck production and lumber production increased by 3.3 and 0.5 percent, respectively, but auto production dropped by 20.0 percent.

On a year-over-year basis, the barometer showed a gain of 1.0 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, decreased by 0.1 percent to 99.6. Its year-over-year growth rate was 0.9 percent.


2Q2015 GDP advance estimate increased 2.3%, 1Q2015 revised to 0.6%
Posted: July 30, 2015 at 08:30 AM (Thursday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 2.3 percent in the second quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 10). The "second" estimate for the second quarter, based on more complete data, will be released on August 27, 2015.

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

For the first quarter of 2015, real GDP is now estimated to have increased 0.6 percent; in the previously published estimates, first-quarter GDP was estimated to have decreased 0.2 percent. The 0.8 percentage point upward revision to the percent change in first-quarter real GDP primarily reflected upward revisions to nonresidential fixed investment, to private inventory investment, to residential fixed investment, and to federal government spending that were partly offset by a downward revision to PCE.


Weekly Initial Unemployment Claims Increase 12,000 to 267,000
Posted: July 30, 2015 at 08:30 AM (Thursday)

In the week ending July 25, the advance figure for seasonally adjusted initial claims was 267,000, an increase of 12,000 from the previous week's unrevised level of 255,000. The 4-week moving average was 274,750, a decrease of 3,750 from the previous week's unrevised average of 278,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending July 18, 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 July 18 was 2,262,000, an increase of 46,000 from the previous week's revised level. The previous week's level was revised up 9,000 from 2,207,000 to 2,216,000. The 4-week moving average was 2,255,250, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 2,250 from 2,253,750 to 2,256,000.


Pending Home Sales Index fell 1.8% in June
Posted: July 29, 2015 at 10:00 AM (Wednesday)

After five consecutive months of increases, pending home sales slipped in June but remained near May's level, which was the highest in over nine years, according to the National Association of Realtors®. Modest gains in the Northeast and West were offset by larger declines in the Midwest and South.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 1.8 percent to 110.3 in June but is still 8.2 percent above June 2014 (101.9). Despite last month's decline, the index is the third highest reading of 2015 and has now increased year-over-year for ten consecutive months.

Although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer. Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level. The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows.

Existing-home sales are up considerably compared to a year ago despite the share of first-time buyers only modestly improving. The reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years.

Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down. Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory. A combination of homebuilders ramping up construction and even more homeowners listing their properties on the market is needed to tame price growth and give all buyers more options.

The PHSI in the Northeast inched 0.4 percent to 94.3 in June, and is now 12.0 percent above a year ago. In the Midwest the index declined 3.0 percent to 108.1 in June, but is still 5.0 percent above June 2014.

Pending home sales in the South also decreased 3.0 percent to an index of 123.5 in June but are still 7.8 percent above last June. The index in the West increased 0.5 percent in June to 104.4, and is now 10.4 percent above a year ago.

The national median existing-home price for all housing types in 2015 is expected to increase around 6.5 percent to $221,900, which would match the record high set in 2006. Total existing-home sales this year are forecast to increase 6.6 percent to around 5.27 million, about 25 percent below the prior peak set in 2005 (7.08 million).


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: July 29, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 24, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 0.2 percent compared with the previous week and was 18 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 50.6 percent of total applications from 50.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.

The FHA share of total applications decreased to 13.7 percent from 14.0 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.17 percent, the lowest level since June 2015, from 4.23 percent, with points increasing to 0.36 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.12 percent, the lowest level since May 2015, from 4.16 percent, with points increasing to 0.35 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.98 percent, the lowest level since June 2015, from 4.00 percent, with points increasing to 0.26 from 0.17 (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 3.39 percent, the lowest level since June 2015, from 3.43 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.04 percent from 3.08 percent, with points decreasing to 0.37 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Confidence declined in July to 90.9
Posted: July 28, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had improved in June, declined in July. The Index now stands at 90.9 (1985=100), down from 99.8 in June. The Present Situation Index decreased moderately from 110.3 last month to 107.4 in July, while the Expectations Index declined sharply to 79.9 from 92.8 in June.

Consumer confidence declined sharply in July, following a gain in June. Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month. A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers’ confidence. Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer.

Consumers’ assessment of current conditions was somewhat less favorable in July. Those saying business conditions are “good” decreased from 26.1 percent to 24.2 percent. However, those claiming business conditions are “bad” was virtually unchanged at 17.9 percent. Consumers were slightly less positive about the job market. Those stating jobs are “plentiful” decreased from 21.3 percent to 20.7 percent, while those claiming jobs are “hard to get” increased marginally from 26.1 percent to 26.7 percent.

Consumers’ optimism about the short-term outlook decreased sharply in July. The percentage of consumers expecting business conditions to improve over the next six months declined from 17.9 percent to 14.7 percent, while those expecting business conditions to worsen rose slightly from 10.2 percent to 10.7 percent.

Consumers’ outlook for the labor market was less optimistic. Those anticipating more jobs in the months ahead decreased from 17.1 percent to 13.1 percent, while those anticipating fewer jobs increased from 15.2 percent to 20.0 percent. The proportion of consumers expecting growth in their incomes edged down from 17.6 percent to 17.0 percent, while the proportion expecting a decline increased slightly from 10.6 percent to 11.2 percent.


Richmond Fed's Current Activity Index gained 7 points to a reading of 13
Posted: July 28, 2015 at 10:00 AM (Tuesday)

Fifth District manufacturing activity increased moderately in July, according to the most recent survey by the Federal Reserve Bank of Richmond.* Shipments and new orders picked up this month, and order backlogs also strengthened. Manufacturing employment softened this month, and average wages continued to increase at a moderate pace. Prices of raw materials rose more quickly in July compared to last month, while prices of finished goods grew about on pace.

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

Survey participants anticipated an increase in hiring and solid growth in wages during the next six months. However, they expected modest growth in the average workweek. For the six months ahead, manufacturers expected little change in prices paid, although they looked for faster growth in prices received.

Overall, manufacturing conditions strengthened in July. The composite index moved to a reading of 13 from last month's reading of 7. Shipments advanced 11 points to end at 16, while the index for new orders added seven points to finish at a reading of 17. Manufacturing employment softened this month; the index settled at 1.

Backlogs rose at a faster pace this month; the index gained seven points, ending at 10. Additionally, capacity utilization grew at a faster pace, moving the index up three points to a reading of 9. Vendor lead time shortened slightly, with that index edging down one point to 4. Finished goods inventories rose at a slower pace compared to a month ago. The index lost six points to end at 24. Raw materials inventories also increased at a slower pace this month. That gauge declined seven points to 16.


S&P/Case-Shiller Home Price Indices unchanged% in May
Posted: July 28, 2015 at 09:00 AM (Tuesday)

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

Year-over-Year
The 10-City Composite and National indices showed slightly higher year-over-year gains while the 20-City Composite had marginally lower year-over-year gains when compared to last month. The 10-City Composite gained 4.7% year-over-year, while the 20-City Composite gained 4.9% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.4% annual increase in May 2015 versus a 4.3% increase in April 2015.

Denver, San Francisco, and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.0%, 9.7% and 8.4%, respectively. Ten cities reported greater price increases in the year ended May 2015 over the year ended April 2015. New York and Phoenix reported six consecutive months of increases in their year-over-year returns since November 2014. Year-over-year returns in New York increased from 1.3% in November 2014 to 3.0% in May 2015, and Phoenix climbed from 2.0% to 3.8% in the same period.

Month-over-Month
Before seasonal adjustment, in May the National index, 10-City Composite and 20-City Composite all posted a gain of 1.1% month-over-month. After seasonal adjustment, the National index was unchanged; the 10-City and 20-City Composites were both down 0.2% month-over-month. All 20 cities reported increases in May before seasonal adjustment; after seasonal adjustment, 10 were down, eight were up, and two were unchanged.

Analysis
As home prices continue rising, they are sending more upbeat signals than other housing market indicators. Nationally, single family home price increases have settled into a steady 4%-5% annual pace following the double-digit bubbly pattern of 2013. Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust. Housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes.

First time homebuyers are the weak spot in the market. First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory. Research at the Atlanta Federal Reserve Bank argues that one should not blame millennials for the absence of first time buyers. The age distribution of first time buyers has not changed much since 2000; if anything, the median age has dropped slightly. Other research at the New York Fed points to the size of mortgage down payments as a key factor. The difference between a 5% and 20% down payment, particularly for people who currently rent, has a huge impact on buyers’ willingness to buy a home. Mortgage rates are far less important to first time buyers than down payments.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.4% annual gain in May 2015. The 10- and 20-City Composites reported year-over-year increases of 4.7% and 4.9%.

As of May 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2005 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 13-15%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 32.5% and 33.5%.


Texas Manufacturing Activity Slump Moderates in June, Outlooks Improve
Posted: July 27, 2015 at 10:30 AM (Monday)

Texas factory activity declined slightly in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained negative but rose for a second month in a row to -1.9, suggesting further moderation in the decline in manufacturing output.

A similar pattern was seen among other measures of current manufacturing activity in July. The capacity utilization index edged up to -4.2, and the shipments index increased to -4.3. These negative index levels indicate contraction, but the upward movement again this month suggests the pace of decline continued to slow. The new orders index rebounded strongly in July and posted a reading of 0.7 after six months in negative territory. The growth rate of orders index jumped 11 points from -16.5 to -5.2.

Perceptions of broader business conditions were mixed. The general business activity index remained negative, but it rose for a second month in a row and reached -4.6 in July. Manufacturers expect improved conditions ahead. The company outlook index surged nearly nine points and posted its first positive reading in seven months, coming in at 1.2.

Labor market indicators reflected slight employment declines and shorter workweeks. The July employment index was negative for a third month in a row and edged down to -3.3. Eleven percent of firms reported net hiring, compared with 15 percent reporting net layoffs. The hours worked index rose from -10.7 to -6.3.

Price and wage pressures were mixed in July. The raw materials prices index has been rather volatile lately—moving from negative readings earlier this year to a positive 7.4 in June then falling to zero in July. The finished goods prices index remained negative for a seventh month in a row, coming in at -2.9. Meanwhile, the wages and benefits index remained positive and little changed at 14.4.

Expectations regarding future business conditions improved notably in July. The indexes of future general business activity and future company outlook both posted double-digit increases. Indexes for future manufacturing activity pushed further into solid positive territory.


June New Orders for Durable Goods Increased 3.4%, Ex-Trans up 0.8%
Posted: July 27, 2015 at 08:30 AM (Monday)

New orders for manufactured durable goods in June increased $7.7 billion or 3.4 percent to $235.3 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 2.1 percent May decrease. Excluding transportation, new orders increased 0.8 percent. Excluding defense, new orders increased 3.8 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $6.4 billion or 8.9 percent to $78.4 billion.

Shipments of manufactured durable goods in June, up following two consecutive monthly decreases, increased $0.3 billion or 0.1 percent to $239.4 billion. This followed a 0.3 percent May decrease. Transportation equipment, also up following two consecutive monthly decreases, drove the increase, $0.4 billion or 0.5 percent to $77.5 billion.

Unfilled orders for manufactured durable goods in June, up following two consecutive monthly decreases, increased $1.0 billion or 0.1 percent to $1,195.8 billion. This followed a 0.5 percent May decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $0.8 billion or 0.1 percent to $799.5 billion.

Inventories of manufactured durable goods in June, up twenty-four of the last twenty-five months, increased $1.6 billion or 0.4 percent to $402.3 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent May decrease. Transportation equipment, up two of the last three months, led the increase, $0.7 billion or 0.5 percent to $130.8 billion.

Nondefense new orders for capital goods in June increased $6.9 billion or 9.4 percent to $80.8 billion. Shipments decreased $0.1 billion or 0.2 percent to $78.6 billion. Unfilled orders increased $2.2 billion or 0.3 percent to $759.2 billion. Inventories increased $1.0 billion or 0.6 percent to $177.5 billion. Defense new orders for capital goods in June decreased $0.2 billion or 2.5 percent to $8.8 billion. Shipments increased $0.4 billion or 3.8 percent to $9.9 billion. Unfilled orders decreased $1.1 billion or 0.7 percent to $149.6 billion. Inventories increased $0.1 billion or 0.3 percent to $21.9 billion.

Revised seasonally adjusted May figures for all manufacturing industries were: new orders, $470.1 billion (revised from $470.5 billion); shipments, $481.5 billion (revised from $482.1 billion); unfilled orders, $1,194.8 billion (revised from $1,194.6 billion); and total inventories, $649.7 billion (virtually unchanged).


New Home Sales in June at annual rate of 482,000
Posted: July 24, 2015 at 10:00 AM (Friday)

Sales of new single-family houses in June 2015 were at a seasonally adjusted annual rate of 482,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.8 percent (±12.5%)* below the revised May rate of 517,000, but is 18.1 percent (±18.1%) above the June 2014 estimate of 408,000.

The median sales price of new houses sold in June 2015 was $281,800; the average sales price was $328,700. The seasonally adjusted estimate of new houses for sale at the end of June was 215,000. This represents a supply of 5.4 months at the current sales rate.


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

Tenth District manufacturing activity declined again in July, but less so than in previous months. Producers’ remained slightly optimistic about future activity, although the majority of contacts indicated difficulties finding qualified labor. Most price indexes indicated continued rising prices, but the rate of increase slowed a bit for raw materials.

The month-over-month composite index was -7 in July, up from -9 in June and -13 in May (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slight improvement was mostly attributable to a rebound in nondurable goods manufacturing, led by an increase in food, beverage, and paper production. However, durable goods production fell further, particularly for metals, computer, and electronic products. Production indexes improved in nearly all District states, but activity was still negative in all states but Colorado. The majority of other month-over-month indexes posted mixed results. The production index jumped from -21 to -5, and the shipments and order backlog indexes also moved higher. On the other hand, the new orders index eased from -3 to -6, and the employment index dropped to its lowest level since April 2009, with many firms noting difficulties finding qualified workers. The raw materials inventory index fell from -10 to -7, while the finished goods inventory index was unchanged.

Year-over-year factory indexes were mixed. The composite year-over-year index inched eased somewhat from -9 to -10, and the employment index fell to a five-year low. The production index improved slightly from -21 to -20, and the shipments, new orders, and order backlog indexes also inched higher. The capital expenditures index increased markedly from 5 to 17. The raw materials inventory index rose from -4 to -1, while the finished goods inventory index fell into negative territory.

Most future factory indexes remained modestly positive in July. The future composite index was unchanged at 3, while the future production, shipments, and order backlog indexes eased slightly but remained above zero. The future new orders and employment indexes increased slightly, while the future capital expenditures index dropped from 13 to 1. Both future inventory indexes increased modestly but remained negative.

Most price indexes were flat to down, but still well above zero. The month-over-month raw materials price index eased from 13 to 8, while the finished goods price index moved into positive territory for the first time since last December. The year-over-year raw materials price index fell from 27 to 19, while the finished goods price index was unchanged. The future raw materials price index decreased from 33 to 23, while the future finished goods price index remained stable.


U.S. Leading Economic Index increased 0.6% in June
Posted: July 23, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in June to 123.6 (2010 = 100), following a 0.8 percent increase in May, and a 0.6 percent increase in April.

“The upward trend in the US LEI seems to be gaining more momentum with another large increase in June pointing to continued strength in the economic outlook for the remainder of the year,” said Ataman Ozyildirim, Director, Business Cycles and Growth Research, at The Conference Board. “Housing permits and the interest rate spread drove the latest gain in the LEI, while labor market indicators such as average workweek and initial claims remained unchanged.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in June to 112.5 (2010 = 100), following a 0.2 percent increase in May, and a 0.3 percent increase in April.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.7 percent in June to 117.6 (2010 = 100), following a 0.1 percent increase in May, and a 0.2 percent increase in April.


BTMU U.S. Business Barometer dropped by 1.4%
Posted: July 23, 2015 at 10:00 AM (Thursday)

For the week ending July 11 2015, the BTMU U.S. Business Barometer dropped by 1.4 percent to 99.3, following a rise of 1.2 percent in the previous week. This week’s barometer was driven by weak performances in both production and consumption indexes. Truck production and Lumber production plunged by 17.1 and 13.5 percent, respectively. Along similar lines, chain store sales and MBA’s purchase index decreased by 1.0 and 7.5 percent, respectively. On the other hand, electric output went up by 7.7 percent and coal production increased by 1.3 percent. They were more than offset by losses in other indexes.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.1 percent to 99.8. Its year-over-year growth rate was 1.0 percent.


Weekly Initial Unemployment Claims Decrease 26,000 to 255,000
Posted: July 23, 2015 at 08:30 AM (Thursday)

In the week ending July 18, the advance figure for seasonally adjusted initial claims was 255,000, a decrease of 26,000 from the previous week's unrevised level of 281,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 278,500, a decrease of 4,000 from the previous week's unrevised average of 282,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending July 11, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 11 was 2,207,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,215,000 to 2,216,000. The 4-week moving average was 2,253,750, a decrease of 10,500 from the previous week's revised average. The previous week's average was revised up by 250 from 2,264,000 to 2,264,250.


Chicago Fed National Activity picked up slightly in June
Posted: July 23, 2015 at 08:30 AM (Thursday)

The index’s three-month moving average, CFNAI-MA3, edged up to –0.01 in June from –0.07 in May. June’s CFNAI-MA3 suggests that growth in national economic activity was very close to its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.07 in June from –0.01 in May. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in June, while 37 made negative contributions. Forty-four indicators improved from May to June, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 13 made negative contributions.

The contribution from production-related indicators to the CFNAI rose to –0.01 in June from –0.08 in May. Industrial production was up 0.3 percent in June after decreasing 0.2 percent in May; however, manufacturing production was unchanged in June.

The contribution from employment-related indicators to the CFNAI increased to +0.12 in June from +0.06 in May. The unemployment rate decreased to 5.3 percent in June from 5.5 percent in May. The sales, orders, and inventories category also made a positive contribution to the CFNAI in June, edging up to +0.03 from –0.01 in May.

Personal consumption and housing-related indicators contributed –0.07 to the CFNAI in June, down slightly from –0.05 in May. Consumption indicators, on balance, deteriorated, pushing the category’s contribution lower. However, housing starts increased to 1,174,000 annualized units in June from 1,069,000 in May; and housing permits also moved up, to 1,343,000 annualized units in June from 1,250,000 in the previous month.

The CFNAI was constructed using data available as of July 20, 2015. At that time, June data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The May monthly index was revised to –0.08 from an initial estimate of –0.17, and the April monthly index was revised to –0.04 from last month’s estimate of –0.19. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the May monthly index was due primarily to the former, while the revision to the April monthly index was due primarily to the latter.


Existing-Home Sales rose 3.2% in June
Posted: July 22, 2015 at 10:17 AM (Wednesday)

Existing-home sales increased in June to their highest pace in over eight years, while the cumulative effect of rising demand and limited supply helped push the national median sales price to an all-time high, according to the National Association of Realtors®. All major regions experienced sales gains in June and have now risen above year-over-year levels for six consecutive months.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million in June from a downwardly revised 5.32 million in May. Sales are now at their highest pace since February 2007 (5.79 million), have increased year-over-year for nine consecutive months and are 9.6 percent above a year ago (5.01 million).

Backed by June's solid gain in closings, this year's spring buying season has been the strongest since the downturn. Buyers have come back in force, leading to the strongest past two months in sales since early 2007. This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy.

June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher.

The median existing-home price for all housing types in June was $236,400, which is 6.5 percent above June 2014 and surpasses the peak median sales price set in July 2006 ($230,400). June's price increase also marks the 40th consecutive month of year-over-year gains.

Total housing inventory at the end of June inched 0.9 percent to 2.30 million existing homes available for sale, and is 0.4 percent higher than a year ago (2.29 million). Unsold inventory is at a 5.0-month supply at the current sales pace, down from 5.1 months in May.

Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers. Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single-family homes.

The percent share of first-time buyers fell to 30 percent in June from 32 percent in May, but remained at or above 30 percent for the fourth consecutive month. A year ago, first-time buyers represented 28 percent of all buyers.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose in June to 3.98 from 3.84 percent in May, but remained just below 4.00 percent for the seventh straight month.

Properties typically stayed on the market for 34 days in June, down from May (40 days) and the shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 129 days in June, while foreclosures sold in 39 days and non-distressed homes took 33 days. Forty-seven percent of homes sold in June were on the market for less than a month — the highest percentage since June 2013 (also 47 percent).

Realtors® are reporting drastic imbalances of supply in relation to demand in many metro areas — especially in the West. The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price. Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they're not optimistic they'll have adequate time to find an affordable property to move into.

Matching the lowest share since December 2009, all-cash sales were 22 percent of transactions in June, down from 24 percent in May and 32 percent a year ago. Individual investors, who account for many cash sales, purchased 12 percent of homes in June (14 percent in May) — the lowest since August 2014 (also 12 percent) and down from 16 percent in June 2014. Sixty-six percent of investors paid cash in June.

Distressed sales — foreclosures and short sales — fell to 8 percent in June (matching an August 2014 low) from 10 percent in May, and are below the 11 percent share a year ago. Six percent of June sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in June (unchanged from May), while short sales were discounted 18 percent (16 percent in May).

Single-family and Condo/Co-op Sales
Single-family home sales increased 2.8 percent to a seasonally adjusted annual rate of 4.84 million in June from 4.71 million in May, and are now 9.8 percent above the 4.41 million pace a year ago. The median existing single-family home price was $237,700 in June, up 6.6 percent from June 2014 and surpassing the peak median sales price set in July 2006 ($230,900).

Existing condominium and co-op sales rose 6.6 percent to a seasonally adjusted annual rate of 650,000 units in June from 610,000 units in May, up 8.3 percent from June 2014 (600,000 units) and the highest pace since May 2007 (680,000 units). The median existing condo price was $226,500 in June, which is 5.5 percent above a year ago and the highest since August 2007 ($229,200).

Regional Breakdown
June existing-home sales in the Northeast climbed 4.3 percent to an annual rate of 720,000, and are now 12.5 percent above a year ago. The median price in the Northeast was $281,200, which is 3.9 percent higher than June 2014.

In the Midwest, existing-home sales rose 4.7 percent to an annual rate of 1.33 million in June, and are 12.7 percent above June 2014. The median price in the Midwest was $190,000, up 7.2 percent from a year ago.

Existing-home sales in the South increased 2.3 percent to an annual rate of 2.20 million in June, and are 7.3 percent above June 2014. The median price in the South was $205,000, up 7.2 percent from a year ago.

Existing-home sales in the West rose 2.5 percent to an annual rate of 1.24 million in June, and are 8.8 percent above a year ago. The median price in the West was $328,900, which is 9.9 percent above June 2014.


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

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 17, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 18 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 50.3 percent of total applications from 50.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.3 percent of total applications.

The FHA share of total applications increased to 14.0 percent from 13.8 percent the week prior. The VA share of total applications increased to 11.3 percent from 10.8 percent the week prior. The USDA share of total applications remained unchanged from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.23 percent, with points decreasing to 0.34 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.16 percent from 4.20 percent, with points increasing to 0.33 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.00 percent from 4.02 percent, with points decreasing to 0.17 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.43 percent, with points increasing to 0.34 from 0.33 (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 3.08 percent from 3.13 percent, with points decreasing to 0.41 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Philadelphia Nonmanufacturing Activity fell significantly in July
Posted: July 21, 2015 at 10:00 AM (Tuesday)

Firms responding to July's Nonmanufacturing Business Outlook Survey reported a deceleration in the pace of regional nonmanufacturing activity. While the survey’s diffusion index for current activity remains positive, it fell significantly from its June reading. Nonetheless, firms are highly optimistic about activity increasing in the region over the next six months. The employment indicators revealed that firms held their staff levels relatively fixed. Most of the other diffusion indexes that are related to current conditions were both negative and significantly lower than their prior month values. Because of the survey’s short history, the Philadelphia Fed does not currently adjust for seasonal factors, but preliminary seasonal analysis shows that lower-than-average responses about current conditions are common in July.

Nonmanufacturing Activity Fell
The diffusion index for current activity at the firm level fell 49 points to 2.7 in July (see Chart above). Forty percent of the respondents reported increasing activity at their own firms this month, down from almost 60 percent last month. The percentage of firms reporting decreasing activity rose — from 8 percent in June to 38 percent in July. The diffusion index for current activity for the region also fell — dropping 46 points to 8.1 in July, as the percentage of firms reporting decreasing activity for the region rose from 5 percent in June to 27 percent in July. These two indexes are significantly below their historical averages (31.0 for general activity at the firm level; 24.5 for general activity in the region), and this is the lowest reading for current activity at the firm level since early 2014. It is unlikely that the declines are a sign of sudden weakness in the regional economy but are instead partially related to normal seasonal patterns. The special questions for this month asked firms to provide an assessment of how seasonal patterns affect their businesses, and many reported that seasonal influences have a negative effect at this time of the year.

New Orders and Sales Indexes Are Negative
The new orders index fell from 27.0 in June to -5.4 in July, which is the first negative value for this index since late 2013. The sales/revenue index hit an even lower value of -21.6, falling 54 points from June. The unfilled orders and inventories indexes also fell into negative territory, with both recording a value of -2.7 in July. Some of these declines are surely related to seasonal influences on current activity.

Most Firms Held Employment at Last Month's Levels
The full-time employment index fell 19 points to 5.4 in July. Only 16 percent of the respondents reported an increase in full-time staff, compared with 35 percent reporting an increase last month. A strong majority, 73 percent, reported no change this month. The part-time employment index also decreased, from 32.4 in June to -2.7 in July. Sixty-two percent of the respondents reported no change in part-time staff levels this month. The workweek index decreased from 18.9 in June to zero in July, as 70 percent of the respondents reported no change in the average employee workweek.

Price Pressures Moderated
The prices paid index fell 16 points to 18.9, which is close to its historical average of 20.9. The percentage of respondents reporting increases in prices paid fell from 38 percent in June to 22 percent in July, and the percentage of respondents reporting decreases held at 3 percent. The prices received index dropped 27 points to 5.4 in July. The share of firms reporting no change in prices received rose from 51 percent to 57 percent.

Spending on Equipment and Software Decreased
The diffusion index for capital expenditures for equipment and software fell for the third consecutive month and currently stands at 5.4. The index for capital expenditures for physical plant fell over 5 points, to 10.8. The share of firms reporting no change in capital expenditures for equipment and software was 57 percent, and the share of firms reporting no change in capital expenditures for physical plant was 51 percent.

Optimism for the Region Unchanged
The future activity diffusion index for the region held steady at 81.1, which is 5 points above its historical average. None of the respondents foresee a decline in regional activity over the next six months. Seasonal patterns are not evident in this indicator of future activity. There was a decline in the future activity diffusion index at the individual firm level in both June and July, and the July level of 62.2 is 12 points below its historical average.

Seasonal Factors Matter for Many
In this month’s special questions, firms were asked to assess the importance of seasonal factors in their firm’s activity level. They were also asked to identify months with higher- or lower-than-normal activity and whether these seasonal factors have changed in importance over time. Forty-six percent of the responding firms reported that seasonal factors are important, and 47 percent of these respondents felt that the seasonal factors have not changed. Analysis of seasonal patterns in the current indicators confirms reports of seasonal increases in activity in the spring, decreases in activity in mid-summer (July and August, in particular), increases in the fall, and declines during the winter months. Nonetheless, preliminary seasonal analysis shows that the readings from the current indicators this July were lower than the declines that would be expected based solely on prior seasonal patterns. Unfortunately, the survey’s short history prevents Philadelphia Fed researchers from making a complete set of seasonal adjustments to the diffusion indexes at this time.

Summary
Results from the Nonmanufacturing Business Outlook Survey show a deceleration in current activity in July, which is probably a temporary change that is partially driven by seasonal patterns. Firms are optimistic about future growth, as index readings for future activity at both the company and regional levels remain in clearly positive territory.


June Housing Starts up 9.8%, Permits up 7.4%
Posted: July 17, 2015 at 09:17 AM (Friday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,343,000. This is 7.4 percent (±1.2%) above the revised May rate of 1,250,000 and is 30.0 percent (±2.3%) above the June 2014 estimate of 1,033,000. Single-family authorizations in June were at a rate of 687,000; this is 0.9 percent (±1.1%)* above the revised May figure of 681,000. Authorizations of units in buildings with five units or more were at a rate of 621,000 in June.

HOUSING STARTS
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,174,000. This is 9.8 percent (±19.9%)* above the revised May estimate of 1,069,000 and is 26.6 percent (±19.6%) above the June 2014 rate of 927,000. Single-family housing starts in June were at a rate of 685,000; this is 0.9 percent (±11.5%)* below the revised May figure of 691,000. The June rate for units in buildings with five units or more was 476,000.

HOUSING COMPLETIONS
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 972,000. This is 6.7 percent (±11.8%)* below the revised May estimate of 1,042,000, but is 22.0 percent (±14.8%) above the June 2014 rate of 797,000. Single-family housing completions in June were at a rate of 647,000; this is 0.3 percent (±9.3%)* below the revised May rate of 649,000. The June rate for units in buildings with five units or more was 317,000.


Consumer Price Index increased 0.3% in June, Ex Fd & Engy rose 0.2%
Posted: July 17, 2015 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 0.1 percent before seasonal adjustment.

The seasonally adjusted all items increase was broad-based, with advances in the indexes for gasoline, shelter, and food all contributing. The energy index rose for the second straight month as the indexes for gasoline, electricity, and natural gas all increased. The food index posted its largest increase since September 2014, partly due to a sharp increase in the eggs index.

The index for all items less food and energy rose 0.2 percent in June. In addition to the rise in the shelter index, the indexes for recreation, airline fares, personal care, tobacco, and new vehicles were among the indexes that increased in June. These advances more than offset declines in the indexes for medical care, household furnishings and operations, used cars and trucks, and apparel.

The all items index showed a 12-month increase for the first time since December, rising 0.1 percent for the 12 months ending June. Despite rising in May and June, the energy index has still declined 15.0 percent over the past year. However, the indexes for food and for all items less food and energy have both risen 1.8 percent over the past 12 months.


Real Average Hourly Earnings decreased 0.4% in June
Posted: July 17, 2015 at 08:30 AM (Friday)

Real average hourly earnings for all employees decreased 0.4 percent from May to June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from no change in average hourly earnings being combined with a 0.3-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased 0.3 percent over the month due to the decrease in real average hourly earnings and no change in the average workweek.

Real average hourly earnings increased 1.7 percent, seasonally adjusted, from June 2014 to June 2015. This increase in real average hourly earnings, combined with no change in the average workweek, resulted in a 1.8-percent increase in real average weekly earnings over this period.


Treasury International Capital Data for May 2015
Posted: July 16, 2015 at 04:00 PM (Thursday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for May 2015. The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $115.0 billion. Of this, net foreign private inflows were $120.8 billion, and net foreign official outflows were $5.9 billion.

Foreign residents increased their holdings of long-term U.S. securities in May; net purchases were $77.8 billion. Net purchases by private foreign investors were $74.2 billion, while net purchases by foreign official institutions were $3.7 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $15.2 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $93.0 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 $76.5 billion in May.

Foreign residents increased their holdings of U.S. Treasury bills by $11.3 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $1.8 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $36.7 billion.


Philadelphia July Outlook Suggest Modest Growth
Posted: July 16, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased modestly in July, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments remained positive, although they declined from their readings in June. Employment was essentially flat at the reporting firms this month. Firms reported higher prices for raw materials and other inputs in July, but prices of manufactured goods were reported as mostly steady. The survey’s index of future activity improved slightly, however, indicating that firms expect continuing growth in the manufacturing sector over the next six months.

Indicators Suggest Modest Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 15.2 in June to 5.7 this month. With the exception of June’s reading, the diffusion index has remained in the single-digit range since the beginning of this year (see Chart 1). The demand for manufactured goods, as measured by the survey’s current new orders index, also expanded modestly. The new orders index remained positive but fell 8 points. The current shipments index decreased 10 points from its six-month high reading in June. Both unfilled orders and delivery time indexes were negative this month, suggesting a decline in the backlog of orders and faster delivery times.

Firms’ responses suggest steady employment in July. The percentage of firms reporting an increase in employees in July was equal to the percentage reporting a decrease (12 percent). The current employment index fell for the third consecutive month, from a reading of 3.8 in June to -0.4. Firms reported a modest overall increase in the workweek: The workweek index was positive but little changed at 4.0.

Firms Continue to Report Input Prices Increases
Over 25 percent of the firms reported higher input prices this month, up from the 21 percent that reported higher prices last month. The prices paid index has increased for two consecutive months and is now at its highest reading since October (see Chart 2). The prices received index, which reflects firms’ own final goods prices, also increased from -5.4 to 4.8, the first positive reading in six months. The percent of firms reporting higher prices received (14 percent) exceeded the percentage reporting lower prices (10 percent), although 76 percent reported steady prices.

Future Indexes Show Continued Improvement
Most of the survey’s broad indicators of future growth edged slightly higher this month. The future general activity index increased 2 points to its highest reading since January (see Chart 1). The future index for new orders increased 1 point, while the future shipments index fell 6 points, after reaching a 10-month high in June. The future employment index was essentially unchanged compared with last month. More than 31 percent of the firms expect expansion in their workforce over the next six months, while 9 percent expect a reduction.

Significant Share Cite Seasonal Factors in Monthly Production Change
In this month’s special questions, firms were asked to assess the importance of seasonal factors in monthly production, seasonal changes in their production by month, and whether these seasonal factors have changed in importance over time. Firms reported seasonal increases in production in the spring and during the fall as well as a decrease in activity in mid-summer and during the winter months.

Summary
The Manufacturing Business Outlook Survey suggests modest expansion of the region’s manufacturing sector in July. The survey’s indicators for general activity, new orders, and shipments all remained positive but moderated from their readings in June. Firms reported near-steady employment this month. A notable share of respondents reported higher prices of inputs again this month. For their own manufactured products, firms reported that prices were steady this month. Indicators reflecting firms’ expectations for the next six months showed some improvement.


Builder Confidence unchanged in July to 60
Posted: July 16, 2015 at 10:00 AM (Thursday)

Builder confidence in the market for newly built, single-family homes in July hit a level of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today while the June reading was revised upward one point to 60 as well. The last time the HMI reached this level was in November 2005.

The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace. As we head into the second half of 2015, we should expect a continued recovery of the housing market.

This month’s reading is in line with recent data showing stronger sales in both the new and existing home markets as well as continued job growth. However, builders still face a number of challenges, including shortages of lots and labor.

Two of the three HMI components posted gains in July. The component gauging current sales conditions rose one point to 66 and the index charting sales expectations in the next six months increased two points to 71. Meanwhile, the component measuring buyer traffic dropped a single point to 43.

Looking at the three-month moving averages for regional HMI scores, the West and Northeast each rose three points to 60 and 47, respectively. The South and Midwest posted respective one-point gains to 61 and 55.


BTMU U.S. Business Barometer increased by 1.2%
Posted: July 16, 2015 at 10:00 AM (Thursday)

For the week ending July 4 2015, the BTMU U.S. Business Barometer increased by a solid 1.2 percent to 100.7. This week’s barometer was driven by strong performances in auto and truck production, which increased by 38.1 and 12.1 percent respectively. Along smilar lines, chain store sales and MBA’s purchase index rose by 2.1 and 6.6 percent, respectively. On the other hand, electric output went down by 7.2 percent and coal bituminous and lignite production decreased by 5.8 percent.

On a year-over-year basis, the barometer showed a gain of 1.3 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.3 percent to 99.8. Its year-over-year growth rate was 1.0 percent.


Weekly Initial Unemployment Claims Decrease 15,000 to 281,000
Posted: July 16, 2015 at 08:30 AM (Thursday)

In the week ending July 11, the advance figure for seasonally adjusted initial claims was 281,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 297,000 to 296,000. The 4-week moving average was 282,500, an increase of 3,250 from the previous week's revised average. The previous week's average was revised down by 250 from 279,500 to 279,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending July 4, 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 July 4 was 2,215,000, a decrease of 112,000 from the previous week's revised level. The previous week's level was revised down by 7,000 from 2,334,000 to 2,327,000. The 4-week moving average was 2,264,000, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised down by 1,750 from 2,268,250 to 2,266,500.


Beige Book: Economic Activity continues at modest or moderate pace
Posted: July 15, 2015 at 02:00 PM (Wednesday)

All twelve Federal Reserve Districts indicated that economic activity expanded from mid-May through June. Activity in New York, Philadelphia, and Kansas City grew at a modest pace, while Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco saw moderate growth. Compared with the previous report, growth remained steady in Cleveland, and Boston reported conditions were stable or improving. Boston, Philadelphia, Atlanta, Kansas City, and Dallas reported that contacts were optimistic about future growth, while Chicago and San Francisco cited optimism coming from specific sectors.

Improvements in consumer spending varied by District. Some Districts indicated that low energy prices helped boost spending, while some border Districts noted weakness tied to the rising dollar. Automobile sales increased in almost all Districts. Tourism expanded in most regions, except New York where activity slowed.

Nonfinancial services experienced moderate growth since the previous report. Boston, Richmond, St. Louis, Minneapolis, and Dallas noted strength in professional and business services. Boston and Richmond saw growth increase for healthcare services.

Transportation activity was mixed across the country. Trucking was weak in Philadelphia but volumes held steady in Dallas. Ports in Richmond cited record volumes in freight. Reports on manufacturing activity were uneven across the country, but positive in Boston, Philadelphia, Richmond, Atlanta, Chicago, and St. Louis.

Reports on residential and commercial real estate markets were positive. Home sales increased for most Districts, although Philadelphia and Dallas reported sales were mixed, and New York reported a decline in sales volume. Most Districts noted home price appreciation. Residential construction activity varied across most of the country. Commercial real estate activity increased at a modest pace for several Districts, while non-residential construction, especially multifamily, was strong in many Districts.

Lending activity increased since the last report. Real estate lending was up in half of the Districts. Consumer lending, particularly auto loans, rose in several Districts. Districts that reported on delinquency rates indicated that they were low. Credit quality and credit standards were mostly unchanged since the previous report.

Among Districts reporting on agriculture, rainfall damaged crops in Chicago and St. Louis but helped improve growing conditions in Dallas. Oil and natural gas drilling declined in Cleveland, Minneapolis, Kansas City, and Dallas. Coal production was flat in Cleveland and down in Richmond. Energy related capital expenditures were down in some Districts.

Across Districts, employment levels increased or were steady in most sectors, although there were some reports of layoffs in manufacturing and energy industries. Labor market tightness was reported in Boston, Atlanta, Minneapolis, and Dallas.

Most Districts cited only modest wage pressures aside from positions that required specialized skills or were in high-demand. Prices for inputs and finished goods remained steady since the previous report.


Industrial Production increased 0.3%
Capacity Utilization increased to 78.4%

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

Industrial production increased 0.3 percent in June but fell at an annual rate of 1.4 percent for the second quarter of 2015. In June, manufacturing output was unchanged: The output of motor vehicles and parts fell 3.7 percent, but production elsewhere in manufacturing rose 0.3 percent. The indexes for mining and utilities advanced 1.0 percent and 1.5 percent, respectively. At 105.7 percent of its 2007 average, total industrial production in June was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.2 percentage point in June to 78.4 percent, a rate that is 1.7 percentage points below its long-run (1972–2014) average.


Producer Price Index advanced 0.4% in June, ex Fd & Engy up 0.4%
Posted: July 15, 2015 at 08:30 AM (Wednesday)

The Producer Price Index for final demand advanced 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in May and declined 0.4 percent in April. On an unadjusted basis, the final demand index moved down 0.7 percent for the 12 months ended in June, the fifth straight 12-month decrease.

In June, nearly two-thirds of the increase in the final demand index can be attributed to prices for final demand goods, which rose 0.7 percent. The index for final demand services advanced 0.3 percent.

Within intermediate demand, prices for processed goods climbed 0.7 percent, the index for unprocessed goods jumped 1.2 percent, and prices for services moved up 0.4 percent.


Empire State Manufacturing Survey Conditions Improved Slightly in July
Posted: July 15, 2015 at 08:30 AM (Wednesday)

The July 2015 Empire State Manufacturing Survey indicates that business conditions improved slightly for New York manufacturers. The headline general business conditions index climbed six points to 3.9. The new orders index was little changed at -3.5, a sign that orders continued to decline, and the shipments index fell four points to 7.9. Labor market indicators signaled a small increase in employment levels and the average workweek. Price indexes pointed to modest increases in both input prices and selling prices, with the prices paid index reaching its lowest level in three years. Indexes for the six-month outlook suggested that optimism about future business conditions was slightly higher than in June, but in line with the trend over the past six months, expectations for improvement remained subdued.

Business Conditions Somewhat Better
Business conditions were somewhat better for New York manufacturers, according to the July 2015 survey. After a slightly negative reading last month, the general business conditions index rose six points to 3.9. This index has moved in a see-saw pattern around zero for the past four months, indicating that business activity remains subdued. Thirty-one percent of respondents reported that conditions had improved, while 27 percent reported that conditions had worsened. The new orders index remained negative and, at -3.5, indicated a small decline in orders for a second consecutive month. The shipments index came in at 7.9, pointing to a modest increase in shipments. The unfilled orders index retreated three points to -7.5, signaling a decline in unfilled orders. The delivery time index came in at zero, indicating that delivery times were unchanged, and the inventories index fell 10 points to -8.5, a sign that inventory levels dropped.

Prices Increase Modestly
Price increases remained modest. The prices paid index fell to 7.5, its lowest level in three years, indicating only a modest increase in input prices. The prices received index rose four points to 5.3. Labor market conditions pointed to a small increase in employment and hours worked. The index for number of employees fell five points to 3.2, and the average workweek index was little changed at 4.3.

Optimism Somewhat Higher, but Remains Subdued
Many of the indexes for future activity inched higher, but in line with the trend over the past several months, remained subdued compared with the levels recorded throughout 2014. The index for future business activity edged up a point to 27.0. The index for future new orders increased six points to 32.2, and the index for future shipments rose three points to 25.4. Indexes for future prices paid and received were little changed. The index for future employment declined for a fourth consecutive month to 9.6, but it still suggested that manufacturers expected employment levels to rise. The capital expenditures index climbed ten points to 21.3, and the technology spending index moved up to 10.6.


Purchase Apps down, Refi's up in Latest MBA Weekly Survey
Posted: July 15, 2015 at 07:30 AM (Wednesday)

Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 10, 2015. The prior week's results included an adjustment for the July 4th holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 9 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 8 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 17 percent higher than the same week one year ago. Comparing volume over the past two weeks, seasonally adjusted purchase applications decreased by 1.4 percent while the refinance index has increased 6.5 percent.

The refinance share of mortgage activity increased to 50.8 percent of total applications from 48.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.4 percent of total applications.

The FHA share of total applications increased to 13.8 percent from 13.7 percent the week prior. The VA share of total applications remained unchanged from 10.8 percent the week prior. The USDA share of total applications remained unchanged 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged from 4.23 percent, with points increasing to 0.39 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.20 percent from 4.18 percent, with points decreasing to 0.28 from 0.30 (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 4.02 percent from 4.01 percent, with points increasing to 0.26 from 0.18 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.43 percent from 3.41 percent, with points increasing to 0.33 from 0.31 (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 3.13 percent from 3.03 percent, with points increasing to 0.42 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


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

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for May, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,323.6 billion, up 0.4 percent (±0.2%) from April 2015, but was down 2.2 percent (±0.4%) from May 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,797.8 billion, up 0.3 percent (±0.1%) from April 2015 and were up 2.4 percent (±0.5%) from May 2014.

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


U.S. Retail Sales for June decrease 0.3%, Ex-Auto down 0.1%
Posted: July 14, 2015 at 08:30 AM (Tuesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.0 billion, a decrease of 0.3 percent (±0.5%) from the previous month, but up 1.4 percent (±0.9%) above June 2014. Total sales for the April 2015 through June 2015 period were up 1.7 percent (±0.7%) from the same period a year ago. The April 2015 to May 2015 percent change was revised from +1.2 percent (±0.5%) to +1.0 percent (±0.3%).

Retail trade sales were down 0.3 percent (±0.5%) from May 2015, but up 0.6 percent (±0.7%) above last year. Food services and drinking places were up 7.7 percent (±3.3%) from June 2014 and sporting goods, hobby, books and music were up 6.6 percent (±1.9%) from last year. Gasoline stations were down 17.1% (±1.4%) from the previous year.


U.S. Import Price Index edged down 0.1% in June
Posted: July 14, 2015 at 08:30 AM (Tuesday)

The price index for U.S. imports edged down 0.1 percent in June following a 1.2-percent increase the previous month, the U.S. Bureau of Labor Statistics reported today. The June drop was led by lower nonfuel prices, which more than offset an increase in fuel prices. U.S. export prices fell 0.2 percent in June, after rising 0.6 percent in May.


NFIB Small Business Optimism Index fell 4.2 points to 94.
Posted: July 14, 2015 at 07:30 AM (Tuesday)

The Small Business Optimism Index fell 4.2 points to 94.1, likely in response to five months of lousy growth. The 42 year Index average is 98.0, while the pre-recession average is 99.5 (1974-2007). This leaves the current reading 4 points below the overall average, a deficiency of 40 net positive percentage point responses to the Index’s 10 component questions. While this is not a recession signal, it is a clear sign that economic growth on Main Street is not set for a strong second half. Nine of the 10 Index components fell and 1 was unchanged from last month. Declines in spending plans accounted for 30 percent of the Index decline, and weaker expectations for real sales and business conditions another 20 percent. The deterioration in earnings trends accounted for about a quarter of the decline.

The President continues to push regulations to pay people more in higher wages, more overtime, health insurance, etc. However, he does not pursue policies that help increase productivity. Higher pay with the same output means inflation or unemployment or both, neither being good for workers or businesses.

Benefits are rising, increasing the cost of employment but the President doesn’t mention this. We are becoming very French, trying to create new jobs by reducing the hours worked by current workers, and replacing those hours with new workers. The French 35 hour work week (for 40 hour pay) didn’t work and the President’s version won’t work here. Instead, his plan will continue to eliminate opportunities for the young and unskilled to enter the labor force and become productive citizens. Hey, $25 an hour would put everyone above the median income….hmmm, liberal math works, but only on paper.

Two “legislative bodies”, SCOTUS and POTUS (not Congress) have been very busy turning things up-side-down for many business owners, although the reigning in of the EPA provided a celebratory moment. Greece and Puerto Rico are sending dire forecasts for governments that fail to undertake sensible fiscal policies. Chicago and Illinois, maybe New Jersey will add nearer-term punctuation as will other “debt events”. Regardless of the party in charge, Congress continues to run deficits (the Gingrich Congress a recent exception) and larger threats to the economy be more plausible. That’s not helpful for reducing uncertainties. An economy where “doom” becomes reality, just not the timing or shape, is not conductive to investment and growth.

The Index decline is not a disaster, just a big disappointment and another failed attempt to reach a solid growth path. The weakness was substantial and across the board, showing no signs of a growth spurt in our near future.


BTMU U.S. Business Barometer increased by 0.5%
Posted: July 9, 2015 at 10:00 AM (Thursday)

For the week ending June 27 2015, the BTMU U.S. Business Barometer increased by 0.5 percent to 99.5, following a gain of 0.5 percent in the previous week. This week’s barometer was driven by strong performances in both consumption and production indexes. Chain store sales rose by 2.2 percent, extending the positive trend for three consecutive weeks. As to the production side, electric output went up by 5.0 percent, and coal bituminous and lignite production picked up by 5.1 percent versus a decrease of 5.4 percent in the previous week. Although those gains were somewhat offset by losses in lumber and auto production.

On a year-over-year basis, the barometer showed a gain of 1.0 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.2 percent to 99.1. Its year-over-year growth rate was 0.5 percent.


Weekly Initial Unemployment Claims Increase 15,000 to 297,000
Posted: July 9, 2015 at 08:30 AM (Thursday)

In the week ending July 4, the advance figure for seasonally adjusted initial claims was 297,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 281,000 to 282,000. The 4-week moving average was 279,500, an increase of 4,500 from the previous week's revised average. The previous week's average was revised up by 250 from 274,750 to 275,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 27, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 27 was 2,334,000, an increase of 69,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,264,000 to 2,265,000. The 4-week moving average was 2,268,250, an increase of 15,500 from the previous week's revised average. The previous week's average was revised up by 250 from 2,252,500 to 2,252,750.


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

Mortgage applications increased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 3, 2015. This week's results included an adjustment for the July 4th holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 32 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 48.0 percent of total applications, its lowest level since June 2009, from 48.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.1 percent of total applications.

The FHA share of total applications decreased to 13.7 percent from 14.0 percent the week prior. The VA share of total applications remained unchanged at 10.8 percent from the week prior. The USDA share of total applications decreased to 0.9 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.23 percent from 4.26 percent, with points increasing to 0.37 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.18 percent from 4.21 percent, with points decreasing to 0.30 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.01 percent from 4.04 percent, with points remaining unchanged from 0.18 (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 3.41 percent from 3.44 percent, with points remaining unchanged from 0.31 (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 3.03 percent from 3.09 percent, with points decreasing to 0.37 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings was little changed at 5.4 million in May
Posted: July 7, 2015 at 10:00 AM (Tuesday)

The number of job openings was little changed at 5.4 million on the last business day of May, the highest since the series began in December 2000, the U.S. Bureau of Labor Statistics reported today. The number of hires was unchanged at 5.0 million in May and the number of separations was little changed at 4.7 million. Within separations, the quits rate was unchanged at 1.9 percent and the layoffs and discharges rate was little changed at 1.2 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings were little changed at 5.4 million on the last business day of May, remaining at a historically high level. The job openings rate for May 2015 was 3.6 percent. The number of job openings was little changed for total private and government. Job openings increased in nondurable goods manufacturing and in state and local government. Job openings were little changed in all four regions.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in May for total nonfarm, total private, and government. Job openings rose over the year for many industries with the largest increases occurring in retail trade, professional and business services, and health care and social assistance. Job openings decreased over the year in mining and logging and in arts, entertainment, and recreation. The number of job openings increased over the year in the South, Midwest, and West regions.


Goods and Services Deficit Increased in May 2015
Posted: July 7, 2015 at 08:30 AM (Tuesday)

The Nation's international trade deficit in goods and services increased to $41.9 billion in May from $40.7 billion in April (revised), as exports decreased more than imports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $41.9 billion in May, up $1.2 billion from $40.7 billion in April, revised. May exports were $188.6 billion, $1.5 billion less than April exports. May imports were $230.5 billion, $0.3 billion less than April imports.

The May increase in the goods and services deficit reflected an increase in the goods deficit of $1.2 billion to $61.5 billion and an increase in the services surplus of less than $0.1 billion to $19.6 billion.

Year-to-date, the goods and services deficit increased $1.1 billion, or 0.5 percent, from the same period in 2014. Exports decreased $26.5 billion or 2.7 percent. Imports decreased $25.4 billion or 2.2 percent.


ISM Non-Manufacturing Index continued growth at 56.0% in Jun
Posted: July 6, 2015 at 10:00 AM (Monday)

Economic activity in the non-manufacturing sector grew in June for the 65th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee. "The NMI® registered 56 percent in June, 0.3 percentage point higher than the May reading of 55.7 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 61.5 percent, which is 2 percentage points higher than the May reading of 59.5 percent, reflecting growth for the 71st consecutive month at a faster rate. The New Orders Index registered 58.3 percent, 0.4 percentage point higher than the reading of 57.9 percent registered in May. The Employment Index decreased 2.6 percentage points to 52.7 percent from the May reading of 55.3 percent and indicates growth for the 16th consecutive month. The Prices Index decreased 2.9 percentage points from the May reading of 55.9 percent to 53 percent, indicating prices increased in June for the fourth consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth in June. The majority of respondents’ comments are positive about business conditions and the economy."
INDUSTRY PERFORMANCE

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


Employment Trends Index Increased in June to 129.11
Posted: July 6, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in June. The index now stands at 129.11, up from 128.47 (a downward revision) in May. The change represents a 4.8 percent gain in the ETI compared to a year ago.

The growth in the Employment Trends Index accelerated in Q2, suggesting strong job growth through the summer. The combination of solid job growth and nearly flat labor force growth should lower the unemployment rate to 5 percent by year end.

June’s increase in the ETI was driven by positive contributions from seven of the eight components. In order from the largest positive contributor to the smallest, these were: Ratio of Involuntarily Part-time to All Part-time Workers, Consumer Confidence “Jobs Hard to Get,” Industrial Production, Real Manufacturing and Trade Sales, Number of Employees Hired by the Temporary-Help Industry, Job Openings, and Initial Claims for Unemployment Insurance.


New orders for manufactured goods decreased 1.0% in May
Posted: July 2, 2015 at 10:00 AM (Thursday)

New orders for manufactured goods in May, down nine of the last ten months, decreased $4.5 billion or 1.0 percent to $470.5 billion, the U.S. Census Bureau reported today. This followed a 0.7 percent April decrease.

Shipments, down two consecutive months, decreased 0.3 billion or 0.1 percent to $482.1 billion. This followed a virtually unchanged April decrease. Unfilled orders, down five of the last six months, decreased $6.4 billion or 0.5 percent to $1,194.6 billion. This followed a 0.2 percent April decrease. The unfilled orders-to-shipments ratio was 6.98, unchanged from April.

Inventories, up three of the last four months, increased $0.1 billion or virtually unchanged to $649.7 billion. This followed a 0.2 percent April increase. The inventories-to-shipments ratio was 1.35, unchanged from April.


BTMU U.S. Business Barometer increased by 0.5%
Posted: July 2, 2015 at 10:00 AM (Thursday)

For the week ending June 20 2015, the BTMU U.S. Business Barometer increased by 0.5 percent to 99.0, following an increase of 0.1 percent in the previous week. This week’s barometer was mainly driven by strong performances in consumer indexes. The largest contribution to this week’s recovery came from chain store sales, which rose by 1.6 percent. Also MBA’s purchase index picked up by 1.2 percent. As to the production side, lumber production went up by 3.7 percent, while electric output increased only by 1.0 percent versus an increase of 10.1 percent in the previous week. However, those gains were offset by losses in steel and coal production.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.1 percent to 98.7. Its year-over-year growth rate was 0.4 percent.


New York Purchasing Managers Business Activity accelerated to 63.1 in June
Posted: July 2, 2015 at 10:00 AM (Thursday)

New York City business activity accelerated, according to the survey taken by the Institute for Supply Management-New York (ISM-NY). Gains were broad based: seven of eight indices were up on the month.

Current Business Conditions rose to a four-month high of 63.1 in June, matching February’s reading.

Future optimism vaulted to a five-year high, suggesting the potential for more near-term gains in Current Conditions. The Six-Month Outlook increased to 78.0 in June, the highest since October 2010.

Job growth improved to an eight-month high. Employment advanced to 63.4 in June.

Purchase volume expanded at the fastest pace in five months. Quantity of Purchases improved to 62.5 in June, the first back-to-back readings above 60 in three years.

The top line rose more quickly, while forward guidance cooled from hotter levels the last two months. Current Revenues came in at 71.4 in June, and Expected Revenues was 76.9 in June.

Price pressures picked up. Prices Paid rose to 56.3 in June, and Prices Received bounced to 57.1 in June.

Potential Business Opportunities/Impediments: Technology and skilled labor tied for top opportunity. Interest rates, banking, domestic demand and working capital tied for second. Cost of benefits remained the top impediment. Inflation was second.


June Employment increased by 223,000
Unemployment Rate declined to 5.3%

Posted: July 2, 2015 at 08:30 AM (Thursday)

Total nonfarm payroll employment increased by 223,000 in June, and the unemployment rate declined to 5.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, retail trade, financial activities, and in transportation and warehousing.

The unemployment rate declined by 0.2 percentage point to 5.3 percent in June, and the number of unemployed persons declined by 375,000 to 8.3 million.

Among the major worker groups, the unemployment rates for adult men (4.8 percent), adult women (4.8 percent), and blacks (9.5 percent) edged down in June, while the rates for teenagers (18.1 percent), whites (4.6 percent), Asians (3.8 percent), and Hispanics (6.6 percent) showed little change.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 381,000 to 2.1 million in June. These individuals accounted for 25.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 955,000.

The civilian labor force declined by 432,000 in June, following an increase of similar magnitude in May. The labor force participation rate declined by 0.3 percentage point to 62.6 percent in June. The employment-population ratio, at 59.3 percent, was essentially unchanged in June and has shown little movement thus far this year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 6.5 million, changed little in June. 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 June, 1.9 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 653,000 discouraged workers in June, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in June had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 223,000 in June, compared with an average monthly gain of 250,000 over the prior 12 months. In June, job gains occurred in professional and business services, health care, retail trade, financial activities, and in transportation and warehousing.

The average workweek for all employees on private nonfarm payrolls was 34.5 hours in June for the fourth month in a row. The manufacturing workweek for all employees edged down by 0.1 hour to 40.7 hours, and factory overtime edged up by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

In June, average hourly earnings for all employees on private nonfarm payrolls were unchanged at $24.95. Over the year, average hourly earnings have risen by 2.0 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $20.99 in June.

The change in total nonfarm payroll employment for April was revised from +221,000 to +187,000, and the change for May was revised from +280,000 to +254,000. With these revisions, employment gains in April and May combined were 60,000 lower than previously reported. Over the past 3 months, job gains have averaged 221,000 per month.


Weekly Initial Unemployment Claims Increase 10,000 to 281,000
Posted: July 2, 2015 at 08:30 AM (Thursday)

In the week ending June 27, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. The 4-week moving average was 274,750, an increase of 1,000 from the previous week's unrevised average of 273,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 20, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 20 was 2,264,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up 2,000 from 2,247,000 to 2,249,000. The 4-week moving average was 2,252,500, an increase of 15,000 from the previous week's revised average. The previous week's average was revised up by 500 from 2,237,000 to 2,237,500.


June Manufacturing ISM expanded at 53.5
Posted: July 1, 2015 at 10:00 AM (Wednesday)

Economic activity in the manufacturing sector expanded in June for the 30th consecutive month, and the overall economy grew for the 73rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The June PMI® registered 53.5 percent, an increase of 0.7 percentage point over the May reading of 52.8 percent. The New Orders Index registered 56 percent, an increase of 0.2 percentage point from the reading of 55.8 percent in May. The Production Index registered 54 percent, 0.5 percentage point below the May reading of 54.5 percent. The Employment Index registered 55.5 percent, 3.8 percentage points above the May reading of 51.7 percent, reflecting growing employment levels from May at a faster rate. Inventories of raw materials registered 53 percent, an increase of 1.5 percentage points from the May reading of 51.5 percent. The Prices Index registered 49.5 percent, the same reading as in May, indicating lower raw materials prices for the eighth consecutive month. Comments from the panel indicate mostly stable to improving business conditions, with the notable exception relating to the oil and gas markets. Also noted is the negative effect on egg prices and availability due to the avian flu outbreak."

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


Construction Spending increased 0.8% in April
Posted: July 1, 2015 at 10:00 AM (Wednesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during May 2015 was estimated at a seasonally adjusted annual rate of $1,035.8 billion, 0.8 percent (±1.5%)* above the revised April estimate of $1,027.0 billion. The May figure is 8.2 percent (±2.0%) above the May 2014 estimate of $957.6 billion.

During the first 5 months of this year, construction spending amounted to $382.1 billion, 5.9 percent (±1.5%) above the $360.8 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $752.4 billion, 0.9 percent (±0.8%) above the revised April estimate of $745.6 billion. Residential construction was at a seasonally adjusted annual rate of $359.5 billion in May, 0.3 percent (±1.3%)* above the revised April estimate of $358.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $392.8 billion in May, 1.5 percent (±0.8%) above the revised April estimate of $387.1 billion.

PUBLIC CONSTRUCTION
In May, the estimated seasonally adjusted annual rate of public construction spending was $283.4 billion, 0.7 percent (±2.5%)* above the revised April estimate of $281.5 billion. Educational construction was at a seasonally adjusted annual rate of $65.3 billion, 0.7 percent (±3.9%)* below the revised April estimate of $65.8 billion. Highway construction was at a seasonally adjusted annual rate of $85.1 billion, 2.1 percent (±6.9%)* above the revised April estimate of $83.3 billion.


Help Wanted OnLine Labor Demand fell 144,300 to 5,300,700 in June
Posted: July 1, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies fell 144,300 to 5,300,700 in June, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The May Supply/Demand rate stands at 1.59 unemployed for each advertised vacancy with a total of 3.2 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.7 million in May.

“The first half of 2015 shows moderate growth with a strong first quarter partially offset by a weak second quarter,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “Overall employer demand for labor still continues at a very high level.”

In June, the Services/Production category saw large losses in Office/Admin (−32,100), Sales (−21,000), Installation/ Maintenance (−14,000), Construction (−12,700), and Food (−10,200) with only a small increase in Transportation (+6,800). While the Professional category also saw losses, it was much smaller than those in Services/Production with Healthcare showing a small gain (+1,600).


ADP National Employment Report increased by 237,000 in June
Posted: July 1, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 237,000 jobs from May to June according to the June ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 120,000 jobs in June, the same as May. Employment among companies with 50-499 employees increased by 86,000 jobs, up from 63,000 the previous month. Employment gains at large companies – those with 500 or more employees – increased from May, adding 32,000 jobs in June, up from 19,000. Companies with 500-999 employees bounced back to 27,000 jobs added after shedding 1,000 jobs in May. Companies with over 1,000 employees added 5,000 jobs, down from 21,000 the previous month.

Goods-producing employment rose by 12,000 jobs in June, after adding 11,000 in May. The construction industry had another solid month in June adding 19,000 jobs, down from 28,000 last month. Meanwhile, manufacturing added 7,000 jobs in June, after losing 2,000 in May.

Service-providing employment rose by 225,000 jobs in June, a strong rise from 192,000 in May. The ADP National Employment Report indicates that professional/business services contributed 61,000 jobs in June, almost double May’s 32,000. Trade/transportation/utilities grew by 50,000, the same as the previous month. The 19,000 new jobs added in financial activities was an increase from last month’s 12,000.

June job numbers came in at their highest level since December 2014. Small businesses continue to lead the way adding over half of the total jobs this month.

The U.S. job machine remains in high gear. The current robust pace of job growth is double that needed to absorb the growth in the working age population. The only blemish in the job market is the loss of jobs in the energy sector. Most encouraging is the healthy rate of job growth among the nation’s smallest companies.


Challenger Layoffs Jumped to 44,842 in June
Posted: July 1, 2015 at 07:30 AM (Wednesday)

Job cuts increased by about 10 percent in June, as employers announced plans to reduce payrolls by 44,842 workers during the month. Meanwhile, heavier-than-expected downsizing throughout the first half of 2015 pushed the midyear total to its highest level since 2010, according to a report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

June job cuts were 9.3 percent higher than the 41,034 planned layoffs announced in May. They were 43 percent higher than June 2014, when job cuts totaled just 31,434. This marks the fifth year-over-year increase in job cuts in the first six months of 2015.

Overall, employers announced 287,672 job cuts during the first half of the year. That was up 17 percent from 2014, when the six-month total was 246,034. The midyear total is the highest since 297,677 job cuts were recorded in the first half of 2010.

The pace of job cutting was virtually unchanged between the first and second quarter of year. The 147,458 job cuts announced between April and the end of June was just 5.0 percent more than the 140,214 planned layoffs in the first three months of 2015. The second-quarter total was up 18 percent from a year earlier (124,693).

The first-half surge was due largely to the decline in oil prices, which rippled through the energy and industrial goods sectors. All told, the drop in oil prices was blamed for 69,582 job cuts in the first half of 2015. That is second only to the 86,978 job cuts attributed to “restructuring.”

The energy sector has taken the heaviest hit, cutting its workforce by 60,500 between January and June. Nearly 95 percent (57,168) of those were due to the drop in oil prices. At this point last year, the energy sector had announced just 3,908 job cuts.

Energy is not the only area experiencing increased job cuts. Unexpectedly, the retail sector ranks second in job cuts for the year, having announced 45,230 planned layoffs to date. That is up 68 percent from a year ago (26,863).

Retailers should be enjoying the benefits of falling oil prices, as consumers have the money they are saving at the gas pump to spend elsewhere. However, it appears that consumers were hording that cash, at least through the first half of the year. The most recent data suggests that consumers are finally starting to loosen up the purse strings.

Last week, the United States Commerce Department reported that consumer spending increased 0.9 percent in May, up from a 0.1 percent increase the previous month. The May surge was the biggest monthly increase in nearly six years.

Even if consumers start spending consistently, retailers are always vulnerable to changing consumer trends, technology and operational factors. Retail was the leading job cutting sector in June with 17,947 job cuts. Most of those were related to the closure of all Canadian stores by Minnesota-based Target.

Not all retail cuts are due to frugal consumers. In Target’s case, the retail chain simply made significant missteps when entering Canada two years ago and never gained traction among Canadian shoppers. The store closures, which resulted in 17,000 job cuts for the American-based employer, was among the first decisions by new CEO Brian Cornell, who is determined to revitalize the store here in America.

With consumers starting to spend more, we should see job cuts in retail start to decline in the second half of the year. We have already started to see a decline in oil-related job cuts as prices have begun to stabilize. Over the past two months, oil prices were blamed for just 1,297 job cuts. In contrast, oil prices caused 20,675 job cuts in April.

Overall, we expect the pace of downsizing to slow in the final six months of 2015. The factors that were contributing to increased cuts in the first half of the year appear to subsiding,” he concluded.


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

Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 26, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week to its lowest level since December 2014. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 14 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 48.9 percent of total applications from 49.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.0 percent of total applications.

The FHA share of total applications increased to 14.0 percent from 13.9 percent the week prior. The VA share of total applications decreased to 10.8 percent from 10.9 percent the week prior. The USDA share of total applications increased to 1.0 percent from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.26 percent, its highest level since October 2014, from 4.19 percent, with points decreasing to 0.33 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.21 percent, its highest level since October 2014, from 4.14 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.04 percent, its highest level since September 2014, from 3.96 percent, with points increasing to 0.18 from 0.14 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.44 percent, its highest level since October 2014, from 3.38 percent, with points decreasing to 0.31 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 5/1 ARMs increased to 3.09 percent from 3.04 percent, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence increased in June to 101.4
Posted: June 30, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had improved moderately in May, increased further in June. The Index now stands at 101.4 (1985=100), up from 94.6 in May. The Present Situation Index increased from 107.1 last month to 111.6 in June, while the Expectations Index advanced to 94.6 from 86.2 in May.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was June 18.

Consumer confidence improved further in June, following a modest gain in May. Over the past two months, consumers have grown more confident about the current state of business and employment conditions. In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed. Overall, consumers are in considerably better spirits and their renewed optimism could lead to a greater willingness to spend in the near-term.

Consumers’ assessment of current conditions improved again in June. Those saying business conditions are “good” increased from 24.7 percent to 26.4 percent, while those claiming business conditions are “bad” was virtually unchanged at 17.8 percent. Consumers were also more positive about the job market. Those stating jobs are “plentiful” increased from 20.6 percent to 21.4 percent, while those claiming jobs are “hard to get” declined from 27.2 percent to 25.7 percent.

Consumers’ optimism about the short-term outlook also increased in June. The percentage of consumers expecting business conditions to improve over the next six months rose from 16.0 percent to 18.5 percent, while those expecting business conditions to worsen decreased from 11.3 percent to 9.8 percent.

Consumers’ outlook for the labor market was also more upbeat. Those anticipating more jobs in the months ahead increased from 14.7 percent to 17.8 percent, while those anticipating fewer jobs declined from 16.6 percent to 15.1 percent. The proportion of consumers expecting growth in their incomes was virtually unchanged at 17.5 percent, while the proportion expecting a decline edged down slightly from 10.7 percent to 10.2 percent.


Chicago Purchasing Managers Index increased 3.2 points to 49.4 in June
Posted: June 30, 2015 at 09:45 AM (Tuesday)

The Chicago Business Barometer recovered half of May’s loss in June but stayed in contraction for the second consecutive month, with activity weakening further in Q2 from an already depressed Q1.

The Barometer increased 3.2 points to 49.4 in June from 46.2 in May, up from February’s 5½-year low but spending the fourth month below 50 since the start of the year. Despite the modest improvement in June, the Barometer declined to 49.3 in Q2 from 50.5 in the previous quarter, the lowest since Q3 2009, a signal that the bounceback in economic growth in Q2 may be weaker than expected.

The increase in the Barometer between May and June was led by an 8.8% expansion in New Orders to 51.7 in June, pulling the indicator out of contraction. Production contracted at a slower pace, rising 8.7% in June but failing to jump above 50. Despite the rises, both measures remain at relatively low levels.

Aside from higher orders and output, there were few positives in the June Chicago Report. Amid weak demand in recent months, the Employment Indicator fell to the lowest since November 2009, standing below 50 for the second month in a row and pointing to a slowdown in the pace of hiring. Order Backlogs contracted at the fastest pace since September 2009 and was below 50 for the fifth month in a row, while Supplier Deliveries decreased more moderately but recorded a two-year low.

Companies continued to reduce their inventory levels that last month were viewed by many panellists as too high, an indication of weak demand. Inventories of finished goods fell 12% between May and June, marking the third consecutive decline and standing below 50 for the first time in four months.

Disinflationary pressures eased further in June following the rebound in oil prices, with Prices Paid rising for the second consecutive month to the highest since December.

In spite of the continued softness in the data, most companies in our panel were optimistic about the short-term outlook. Results from a special question asked this month showed 56.5% anticipated higher New Orders in Q3 compared with Q2, while 37.7% said they expected the same level of orders. Only 5.8% of respondents forecast a decline.

Chief Economist of MNI Indicators Philip Uglow said, “While the latest increase in New Orders is a tentative sign of a pick-up in demand over the coming months, there is no getting away from the general softness in the data. The Barometer hit a 5½ year low in Q2 and the weakness is having a detrimental impact on the level of hiring.”


S&P/Case-Shiller Home Price Indices unchanged% in April
Posted: June 30, 2015 at 09:00 AM (Tuesday)

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

Year-over-Year
Both Composites and the National index showed slightly lower year-over-year gains compared to last month. The 10-City Composite gained 4.6% year-over-year, while the 20-City Composite gained 4.9% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015 versus a 4.3% increase in March 2015.

Denver and San Francisco reported the highest year-over-year gains with price increases of 10.3% and 10.0%, respectively, over the last 12 months. Dallas reported an 8.8% year-over-year gain to round out the top three cities. Nine cities reported faster price increases in the year ended April 2015 over the year ended March 2015. Las Vegas prices rose 6.3% in the year to April versus 5.7% in the year to March 2015. In 11 cities, however, the rate of annual price gains slowed. Boston home prices were up 1.8% in the 12 months ending in April compared to a 4.6% gain in the 12 months ending in March 2015.

Month-over-Month
Before seasonal adjustment, the National index increased 1.1% in April and the 10-City and 20-City Composites posted gains of 1.0% and 1.1% month-over-month. After seasonal adjustment, the National index was unchanged; the 10- and 20-city composites were up 0.3% and 0.4%. All 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 12 were up and eight were down.

Analysis
Home prices continue to rise across the country, but the pace is not accelerating. Moreover, consumer expectations are consistent with the current pace of price increases. A recent national survey published by the New York Fed showed the average expected price increase among both owners and renters is 4.1%. Both the current rate of home price increases and the consumers’ expectations are a bit lower than the long term annual price change of 4.9% since 1975. These figures, however, do not adjust for inflation. The real, or inflation adjusted, price change since 1975 is one percent per year. Given the current inflation rate of under two percent, real home prices today are rising more quickly than is typical. The three out of five consumers in the survey who see home ownership as a good or somewhat good investment may be thinking in real terms.

Recent housing data is positive. Sales of new and existing homes are rising in recent reports and construction of new homes enjoyed strong gains in May. At the same time, the proportion of new construction that is apartments rather than single family homes remains high. In the past year, 34% of housing starts were apartments, compared to 22% on average since 1975. One aspect of this may be condominiums. Separately, S&P Dow Jones Indices reports the S&P/Case-Shiller Condo Price indices for Los Angeles, San Francisco, Chicago, Boston and New York. In all but LA, condo prices are rising faster than single family homes.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015. The 10- and 20-City Composites reported year-over-year increases of 4.6% and 4.9%.

As of April 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 14-16%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 31.0% and 32.0%.


Paychex-IHS Small Business Jobs Index dipped to 100.63 in June
Posted: June 30, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index was relatively unchanged in June, declining just 0.03 percent, bringing the national index to 100.63. Year-over-year the index decreased 0.44 percent. After increasing 0.23 percent during the first quarter of 2015, the pace of employment growth slowed 0.16 percent in the second quarter. With a national index level above 100, employment growth conditions remain stronger than during the index’s base year of 2004. The East North Central region maintained its position as the highest-ranked regional index. Washington regained the lead among states once again. Dallas continued its streak of strong employment growth and was the top-ranked metro area for the ninth straight month.

At 100.63, the Paychex | IHS Small Business Jobs Index was almost unchanged in June as it remains below the level set throughout much of 2014. Among industries, employment conditions strengthened most in leisure and hospitality, while construction declined sharply.

Even though the pace of employment growth slowed slightly from the first quarter to the second, the past 12 months have shown the index consistently over 100, indicating a slow but steady continuation of job gains.


Texas Manufacturing Activity Still Contracting in June
Posted: June 29, 2015 at 10:30 AM (Monday)

Texas factory activity declined again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose to -6.5 but remained in negative territory, suggesting a fourth consecutive month of contracting output.

A similar pattern was seen among other measures of current manufacturing activity in June. The capacity utilization index increased to -6.1 and the shipments index increased to -8.8. These negative index levels indicate continued contraction, but the upward movement this month suggests the pace of decline slowed. The new orders index moved up to -10.3, while the growth rate of orders index edged down to -16.5.

Perceptions of broader business conditions worsened further, although not as sharply in June as in prior months. The general business activity index jumped nearly 14 points to -7, its highest reading since January. The company outlook index moved to -7.4, up from -10.5 last month.

Labor market indicators reflected slight employment declines and shorter workweeks. The June employment index was negative for a second month in a row but pushed up 7 points to -1.2. Fourteen percent of firms reported net hiring, compared with 15 percent reporting net layoffs. The hours worked index inched up from -11.6 to -10.7.

There was upward pressure on input prices and wages in June, and downward pressure on selling prices eased. The raw materials prices index jumped 9 points to 7.4 after five months of negative readings. The finished goods prices index remained negative for a sixth month but moved up to -1.9, suggesting an abatement of downward pressure. Meanwhile, the wages and benefits index remained positive and little changed at 16.4.

Expectations regarding future business conditions improved in June. The index of future general business activity edged up to 8.1 and the index of future company outlook came in at 13.4. Indexes of future manufacturing activity moved down slightly but remained in solid positive territory.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected June 16–24, and 115 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.


Pending Home Sales Index increased 0.9% in May
Posted: June 29, 2015 at 10:00 AM (Monday)

Pending home sales continued to rise in May and are now at their highest level in over nine years, according to the National Association of Realtors®. Gains in the Northeast and West were offset by small decreases in the Midwest and South.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April and is now 10.4 percent above May 2014 (101.9). The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006 (113.7).

Contract activity rose again in May for the fifth straight month, increasing the likelihood that home sales are off to their best year since the downturn. The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring. It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.

They warn that this year's stronger sales amidst similar housing supply levels from a year ago have caused home prices to rise to an unhealthy and unsustainable pace.

Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there's no question the goalpost will move further away for many renters wanting to become homeowners.

The PHSI in the Northeast increased 6.3 percent to 93.9 in May, and is now 10.6 percent above a year ago. In the Midwest the index declined 0.6 percent to 111.4 in May, but is still 7.8 percent above May 2014.

Pending home sales in the South decreased 0.8 percent to an index of 127.8 in May but are still 10.6 percent above last May. The index in the West rose 2.2 percent in May to 104.5, and is 13.0 percent above a year ago.


University of Michigan Consumer Confidence up in June to 96.1
Posted: June 26, 2015 at 10:00 AM (Friday)

Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004. Just as important, that same record was set by households in the top third of the income distribution as well as by the middle third and those in the bottom third of the income distribution. Moreover, the recent surveys recorded those same records when consumers were asked to evaluate prospects for the national economy, their personal finances, and buying conditions. Consumer spending will remain the driving force of economic growth in 2015. Overall, the data indicate growth in consumer spending of 3.0% in 2015.

Strong Economic Growth Expected
The economic slowdown has ended according to consumers. The fewest consumers thought the economy had worsened in the June 2015 survey than anytime since August of 2000. Consumers reported hearing of fewer recent job losses in June, and the majority of consumers anticipated good times in the economy as a whole during the year ahead. When averaged over the first half of 2015, consumers were more likely to expect good times in the economy than in the first half of any other year since 2000.

Personal Finances Improve
During the first six months of 2015, consumers more favorably assessed their current finances as well as their future financial prospects than in the first half of any other year since 2007. These very favorable expectations were driven by remarkably low income expectations: across all households during the first half of 2015, an income increase of 1.5% was expected, down from 2.5% in the first half of 2007. A lower prevailing inflation rate, however, made real income gains higher in the first half of 2015 than anytime since the first half of 2007.

The Consumer Sentiment Index was 96.1 in the June 2015 survey, up from 90.7 in May and significantly above last June’s 82.5. Other than January’s 98.1, the June reading is the highest since 2007. The Current Conditions Index was 108.9 in June, up from 100.8 in May and last June’s 96.6. The Expectations Index rose to 87.8 in the June 2015 survey, up from 84.2 in the May and substantially above last June’s 73.5.

The remarkably favorable economic assessments documented in the recent surveys were due to two factors. An improving economy was the most important component. But the gains were so outsized that they probably reflected the acceptance of a new lower comparison standard that was based on diminished expectations for long-term economic prospects. Parsing just how much has been due to an improving economy and how much to an acceptance of diminished economic standards will be revealed by their subsequent consumption behavior. Needless to say, the answer to this question has critical implications for appropriate economic policies.


Kansas City Fed Manufacturing Activity declined at a slightly slower pace in June
Posted: June 25, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined at a slightly slower pace than the previous month, and producers’ expectations improved modestly. Most price indexes continued to rise, particularly for raw materials.

The month-over-month composite index was -9 in June, up from -13 in May but down from -7 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods manufacturing improved slightly, although still negative, particularly for aircraft products and parts. However, nondurable goods production fell further broadly across all types of plants. Production fell in all District states except for Colorado, but continued to be most negative in energy-concentrated Oklahoma. The majority of other month-over-month indexes also remained negative. The production index contracted further from -13 to -21, its lowest level since February 2009, and the shipments index also decreased. On the other hand, although still negative, the new orders, order backlog, employment, and new orders for export indexes edged higher. The finished goods inventory index fell from 0 to -6, while the raw materials inventory index was basically unchanged.

Year-over-year factory indexes decreased from the previous month. The composite year-over-year index eased from -5 to -9, and the production, shipments, new orders, and order backlog indexes all fell to their lowest levels since late 2009. The employment index fell back into negative territory after increasing last month, and the capital expenditures index inched lower while remaining positive. Both inventory indexes decreased from the previous month.

Most future factory indexes improved slightly in June. The future composite index edged up from 0 to 3, and the future production, new orders, and order backlog indexes also showed positive gains. The future capital expenditures index jumped from 0 to 13, its highest level in 5 months. In contrast, the future employment index decreased from 7 to 0, and the future shipments index also eased somewhat. The future finished goods inventory index fell from -5 to -11, while the future raw materials inventory index was basically unchanged.

Most price indexes continued to rise in June, although monthly selling prices were still negative. The month-over-month finished goods price index inched higher from -4 to -2, and the raw materials price index jumped from -6 to 13. The year-over-year raw materials price index increased from 6 to 27, and the finished goods price index edged up slightly. The future raw materials price index rose from 19 to 33, while the future finished goods price index was basically unchanged.


BTMU U.S. Business Barometer increased by 0.2%
Posted: June 25, 2015 at 10:00 AM (Thursday)

For the week ending June 13 2015, the BTMU U.S. Business Barometer increased by 0.2 percent to 98.6, following a decline of 0.3 percent in the previous week. This week’s barometer was mainly driven by strong performance in most production indexes. The largest contribution to this week’s recovery came from electric output, which rose by 10.1 percent. For the others, truck production went up by 4.5 percent, while auto production went down by 5.9 percent. Also steel production increased by 1.0 percent. As to the consumption side, chain store sales recovered by 0.3 percent, but MBA’s purchase index fell by 4.2 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 0.4 percent.


Personal Income increased 0.5%, Spending increased 0.9%
Posted: June 25, 2015 at 08:30 AM (Thursday)

Personal income increased $79.0 billion, or 0.5 percent, and disposable personal income (DPI) increased $65.5 billion, or 0.5 percent, in May, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $105.9 billion, or 0.9 percent. In April, personal income increased $69.6 billion, or 0.5 percent, DPI increased $57.0 billion, or 0.4 percent, and PCE increased $8.5 billion, or 0.1 percent, based on revised estimates.

Real DPI increased 0.2 percent in May, compared with an increase of 0.4 percent in April. Real PCE increased 0.6 percent, compared with an increase of less than 0.1 percent


Weekly Initial Unemployment Claims Increase 3,000 to 271,000
Posted: June 25, 2015 at 08:30 AM (Thursday)

In the week ending June 20, the advance figure for seasonally adjusted initial claims was 271,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 267,000 to 268,000. The 4-week moving average was 273,750, a decrease of 3,250 from the previous week's revised average. The previous week's average was revised up by 250 from 276,750 to 277,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 13, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 13 was 2,247,000, an increase of 22,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,222,000 to 2,225,000. The 4-week moving average was 2,237,000, an increase of 5,250 from the previous week's revised average. The previous week's average was revised up by 750 from 2,231,000 to 2,231,750.


1Q2015 GDP Final estimate decreased 0.2%
Posted: June 24, 2015 at 08:30 AM (Wednesday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- decreased at an annual rate of 0.2 percent in the first quarter of 2015, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.2 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 decrease in real GDP was 0.7 percent. With the third estimate for the first quarter, exports decreased less than previously estimated,and personal consumption expenditures (PCE) and imports increased more.

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

The "third" estimate of the first-quarter percent change in GDP is 0.5 percentage point, or $23.6 billion, more than the second estimate issued last month, primarily reflecting upward revisions to exports, to personal consumption expenditures, to private inventory investment, to nonresidential fixed investment, and to state and local government spending that were partly offset by an upward revision to imports.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 24, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 1.6% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 19, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1% compared with the previous week. The Refinance Index increased 2% from the previous week.

The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index was unchanged compared with the previous week and was 18% higher than the same week one year ago.

The refinance share of mortgage activity increased to 49.0% of total applications from 48.5% the previous week. The adjustable-rate mortgage share of activity increased to 7.0% of total applications, the highest level since December 2014.

The FHA share of total applications decreased to 13.9% from 14.2% the week prior. The VA share of total applications decreased to 10.9% from 11.5% the week prior. The USDA share of total applications remained unchanged at 0.9% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.19% from 4.22%, with points decreasing to 0.38 from 0.46 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.14% from 4.18%, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.96% from 4.00%, with points decreasing to 0.14 from 0.20 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.38% from 3.43%, with points increasing to 0.37 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.04% from 3.15%, with points decreasing to 0.46 from 0.52 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.


New Home Sales in May at annual rate of 546,000
Posted: June 23, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in May 2015 were at a seasonally adjusted annual rate of 546,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±16.7%) above the revised April rate of 534,000 and is 19.5 percent (±19.7%)* above the May 2014 estimate of 457,000.

The median sales price of new houses sold in May 2015 was $282,800; the average sales price was $337,000. The seasonally adjusted estimate of new houses for sale at the end of May was 206,000. This represents a supply of 4.5 months at the current sales rate.


Richmond Fed's Current Activity Index gained 5 points to a reading of 6
Posted: June 23, 2015 at 10:00 AM (Tuesday)

Fifth District manufacturing activity grew modestly in June, according to the most recent survey by the Federal Reserve Bank of Richmond. The volume of new orders picked up, while order backlogs increased. However, shipments remained flat in June. Manufacturing employment continued to rise at a modest pace, while average wages grew moderately. Prices of raw materials and prices of finished goods rose at a faster pace in June.

Manufacturing executives anticipated positive business conditions during the next six months. Manufacturers expected faster growth in shipments and in the volume of new orders. Additionally, producers expected order backlogs to grow more quickly and looked for increased capacity utilization. Survey participants anticipated unchanged vendor lead times.

Manufacturers expected faster growth in the number of employees and looked for average wages to accelerate in the six months ahead. They expected a modest rise in the length of the average workweek. In addition, producers expected faster growth in prices paid and in prices received during the next six months.

Manufacturing activity increased modestly this month, with the composite index moving to a reading of 6 from last month's reading of 1. Shipments remained flat, while the index for new orders advanced nine points, reaching a reading of 11. Manufacturing hiring continued to grow at a modest pace this month. The indicator gained one point to finish at a reading of 4 in June.

Capacity utilization rose nearly on pace with last month. The index slipped one point to a reading of 6. Backlogs increased, moving the index to 6 from a reading of −10 a month ago. Vendor lead time lengthened slightly, with that index edging up one point to 7. Finished goods inventories rose more quickly than a month ago. The index gained 10 points to end at 31. However, raw materials inventories rose only slightly faster. That gauge moved up one point to 23.


Philadelphia Nonmanufacturing Activity unchanged in June
Posted: June 23, 2015 at 10:00 AM (Tuesday)

According to firms responding to this month's Nonmanufacturing Business Outlook Survey, the pace of regional nonmanufacturing activity in June was effectively unchanged from the prior month. The survey's indicators for employment rose, while the indicators for new orders were effectively unchanged, and indicators for sales fell. The future activity indicators were also relatively steady and show that the responding firms remain highly optimistic about activity increasing in the region over the next six months.

Nonmanufacturing Activity Remains High
The diffusion index for current activity at the firm level stands at 51.4 in June, falling less than a full point from its May reading (see Chart 1 above). Almost 60 percent of the respondents reported increasing activity at their own firms this month, down from 68 percent last month, but the percentage reporting decreasing activity also fell — from 16 percent in May to 8 percent in June. The diffusion index for current activity for the region was effectively unchanged at 54.1, as a majority of the responding firms continued to report increasing general activity in the region. Both indexes are significantly above their historical averages (31.6 for general activity at the firm level; 24.8 for general activity in the region).

New Orders and Sales Are Mixed But Remain High
The new orders index was almost unchanged and stands at 27.0 in June (see Chart 2 below). Nearly 41 percent of the firms reported increases in new orders. The sales/revenues index fell 11 points to 32.4, however. For this indicator, the percentage of firms reporting increases in sales or revenues declined from 61 percent in May to 54 percent in June. Nonetheless, both the new orders and sales/revenue indexes are above their historical averages (21.5 for new orders; 24.8 for sales/revenue).

Employment Conditions Strengthen
Responses to the survey indicate strengthening conditions for labor market demand in June. The full-time employment index rose 11 points, to 24.3, in June, as the percentage of respondents reporting increases to full-time staff levels rose from 27 percent last month to 35 percent this month. The part-time employment index also increased, from 27.3 in May to 32.4 in June. The workweek index decreased 4 points, however, to 18.9 in June.

Firms Report Higher Prices Paid
The prices paid index rose 24 points, to 35.1. This index is above its historical average of 20.9 but is also highly volatile. The percentage of respondents reporting increases in prices paid rose from 20 percent in May to 38 percent in June, and the percentage of respondents reporting decreases fell from 9 percent to 3 percent. Fewer firms reported decreases in prices received this month, as the prices paid index dropped 4 points, to 32.4, in June. The share of firms reporting no change in prices received stands at roughly 51 percent.

Spending on Equipment and Software Decreased
The share of firms reporting increases in capital expenditures for equipment and software fell this month, and the corresponding diffusion index declined 6 points to 18.9. The index for capital expenditures on physical plant fell 2 points, to 16.2, but the share of firms reporting increased capital expenditures held relatively steady at 24 percent.

Optimism About the Future Is High
Respondents to the survey remain highly optimistic about future activity over the next six months. At the individual firm level, there was a 7-point decline in the future activity diffusion index to 70.3, but a large majority (76 percent) of the respondents expect higher activity for their firms over the next six months, and only 5 percent expect lower activity. Nearly 84 percent of the respondents foresee increasing activity in the region, and the corresponding future activity index for the region rose 2 points to 81.1.

Summary
Results from the June Nonmanufacturing Business Outlook Survey suggest continued expansion in the region among nonmanufacturing firms. Index readings for general activity at both the company and regional levels remain high, and firms are optimistic about future growth.


May New Orders for Durable Goods Decreased 1.8%, Ex-Trans up 0.5%
Posted: June 23, 2015 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in May decreased $4.1 billion or 1.8 percent to $228.9 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 1.5 percent April decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 2.1 percent. Transportation equipment, also down three of the last four months, drove the decrease, $4.9 billion or 6.4 percent to $71.7 billion.

Shipments of manufactured durable goods in May, down four of the last five months, decreased $0.2 billion or 0.1 percent to $239.9 billion. This followed a 0.2 percent April decrease. Transportation equipment, also down four of the last five months, drove the decrease, $0.7 billion or 0.9 percent to $76.7 billion.

Unfilled orders for manufactured durable goods in May, down five of the last six months, decreased $5.7 billion or 0.5 percent to $1,195.5 billion. This followed a 0.2 percent April decrease. Transportation equipment, also down five of the last six months, led the decrease, $5.1 billion or 0.6 percent to $798.8 billion.

Inventories of manufactured durable goods in May, down following twenty-three consecutive monthly increases, decreased $0.8 billion or 0.2 percent to $400.6 billion. This followed a 0.2 percent April increase. Transportation equipment, down two of the last three months, led the decrease, $0.3 billion or 0.2 percent to $129.9 billion.

Nondefense new orders for capital goods in May decreased $5.2 billion or 6.6 percent to $74.3 billion. Shipments decreased $0.5 billion or 0.6 percent to $79.3 billion. Unfilled orders decreased $5.0 billion or 0.7 percent to $757.1 billion. Inventories decreased $1.1 billion or 0.6 percent to $176.2 billion. Defense new orders for capital goods in May increased $0.7 billion or 8.2 percent to $8.8 billion. Shipments increased less than $0.1 billion or 0.3 percent to $9.5 billion. Unfilled orders decreased $0.7 billion or 0.5 percent to $150.6 billion. Inventories decreased less than $0.1 billion or virtually unchanged to $21.6 billion.

Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $474.5 billion (revised from $476.7 billion); shipments, $481.5 billion (revised from $482.4 billion); unfilled orders, $1,201.2 billion (revised from $1,202.4 billion); and total inventories, $649.0 billion (virtually unchanged).


Existing-Home Sales rose 5.1% in May
Posted: June 22, 2015 at 10:00 AM (Monday)

Fueled partly by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years, according to the National Association of Realtors®. Led by the Northeast, all major regions experienced sales increases in May.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now increased year-over-year for eight consecutive months and are 9.2 percent above a year ago (4.90 million).

May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009 (5.44 million). Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers. However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.

Total housing inventory at the end of May increased 3.2 percent to 2.29 million existing homes available for sale, and is 1.8 percent higher than a year ago (2.25 million). Unsold inventory is at a 5.1-month supply at the current sales pace, down from 5.2 months in April.

The median existing-home price for all housing types in May was $228,700, which is 7.9 percent above May 2014. This marks the 39th consecutive month of year-over-year price gains.

The percent share of first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers.

The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs. More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed in May to 3.84 percent from 3.67 percent in April but remained below 4.00 percent for the sixth straight month.

Realtors® overwhelmingly support the Consumer Financial Protection Bureau's proposal of a two-month delay for the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation. NAR has long advocated the need to avoid implementing the new regulation during the peak buying season. With interest rates on the rise, many families wanting to buy are looking to lock-in at current rates and move into their new home before the school year starts. Holding off on TRID implementation through the summer helps these buyers avoid any disruption or delays in closings that could develop once the regulation goes into effect.

With demand continuing to far exceed supply, properties typically stayed on the market for 40 days in May, up from April (39 days) but the third shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 131 days in May, while foreclosures sold in 56 days and non-distressed homes took 38 days. Forty-five percent of homes sold in May were on the market for less than a month.

All-cash sales were 24 percent of transactions in May for the third straight month and are down considerably from a year ago (32 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in May, unchanged from last month and down from 16 percent in May 2014. Sixty-seven percent of investors paid cash in May.

Distressed sales — foreclosures and short sales — remained at 10 percent for the third consecutive month in May and are below the 11 percent share a year ago. Seven percent of May sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in May (20 percent in April), while short sales were also discounted 16 percent (14 percent in April).

Single-family and Condo/Co-op Sales
Single-family home sales jumped 5.6 percent to a seasonally adjusted annual rate of 4.73 million in May from 4.48 million in April, and are and now 9.7 percent above the 4.31 million pace a year ago. The median existing single-family home price was $230,300 in May, up 8.6 percent from May 2014.

Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 620,000 units in May from 610,000 units in April, and are 5.1 percent higher than May 2014 (590,000 units). The median existing condo price was $216,400 in May, which is 1.9 percent higher than a year ago.

Regional Breakdown
May existing-home sales in the Northeast jumped 11.3 percent to an annual rate of 690,000, and are now 11.3 percent above a year ago. The median price in the Northeast was $269,000, which is 4.8 percent higher than May 2014.

In the Midwest, existing-home sales rose 4.1 percent to an annual rate of 1.27 million in May, and are 12.4 percent above May 2014. The median price in the Midwest was $181,900, up 9.4 percent from a year ago.

Existing-home sales in the South increased 4.3 percent to an annual rate of 2.18 million in May, and are 6.9 percent above May 2014. The median price in the South was $198,300, up 8.2 percent from a year ago.

Existing-home sales in the West climbed 4.3 percent to an annual rate of 1.21 million in May, and are 9.0 percent above a year ago. The median price in the West was $324,000, which is 10.2 percent above May 2014.


Chicago Fed National Activity slightly below average in May
Posted: June 22, 2015 at 08:30 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, increased slightly to –0.16 in May from –0.20 in April. May’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at –0.13 in May. Thirty-five of the 85 individual indicators made positive contributions to the CFNAI in May, while 50 made negative contributions. Forty-three indicators improved from April to May, while 41 indicators deteriorated and one was unchanged. Of the indicators that improved, 21 made negative contributions.

The contribution from production-related indicators to the CFNAI ticked up to –0.17 in May from –0.19 in April. Industrial production was down 0.2 percent in May after decreasing 0.5 percent in April. The sales, orders, and inventories category made a neutral contribution to the CFNAI in May, up slightly from –0.01 in April.

The contribution from employment-related indicators to the CFNAI remained at +0.10 in May. Nonfarm payrolls increased by 280,000 in May, following a gain of 221,000 in the previous month; however, the unemployment rate edged up to 5.5 percent in May from 5.4 percent in April.

The contribution of the personal consumption and housing category to the CFNAI was steady at –0.09 in May. Housing starts decreased to 1,036,000 annualized units in May from 1,165,000 in April. However, housing permits increased to 1,275,000 annualized units in May from 1,140,000 in the previous month.

The CFNAI was constructed using data available as of June 18, 2015. At that time, May data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The April monthly index was revised to –0.19 from an initial estimate of –0.15. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the April monthly index was due primarily to the former.


U.S. Leading Economic Index increased 0.7% in May
Posted: June 18, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.7 percent in May to 123.1 (2010 = 100), following a 0.7 percent increase in April, and a 0.4 percent increase in March.

The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half. While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in May to 112.1 (2010 = 100), following a 0.2 percent increase in April, and no change in March.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in May to 117.0 (2010 = 100), following a 0.2 percent increase in April, and a 0.5 percent increase in March.


Philadelphia June Outlook Suggest Continued Growth
Posted: June 18, 2015 at 10:00 AM (Thursday)

Manufacturing conditions in the region improved in June, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments remained positive and increased over their readings in May. Employment and average work hours increased, on balance, at the reporting firms. Firms reported higher prices for raw materials and other inputs in June compared with reported price decreases in recent months. The survey’s indicators of future activity suggest that firms expect continuing growth in the manufacturing sector over the next six months.

Indicators Suggest Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 6.7 in May to 15.2 this month. This is the highest reading for the index since December. The demand for manufactured goods, as measured by the survey’s current new orders index, picked up this month. The new orders index increased 11 points to its highest reading since November. The current shipments index increased 13 points, also the highest reading since November.

Firms’ responses suggest modest expansion in employment in June. The percentage of firms reporting an increase in employees in June (22 percent) exceeded the percentage reporting a decrease (18 percent). The current employment index, however, fell nearly 3 points, to 3.8. Firms reported an overall modest increase in the workweek compared with a decrease last month: The workweek index increased from -5.6 to 4.7.

More Firms Report Input Prices Increases
Over 21 percent of the firms reported higher input prices this month, up significantly from the 5 percent that reported higher prices last month. The prices paid index increased 31 points to its highest reading in 8 months. The prices received index, which reflects firms’ own final goods prices, also increased from -5.4 to 4.8, the first positive reading in six months. The percent of firms reporting higher prices received (14 percent) exceeded the percentage reporting lower prices (10 percent), although 76 percent reported steady prices.

Most Future Indexes Move Higher
Most of the survey’s broad indicators of future growth showed marked improvement this month. The future general activity index increased 6 points to its highest reading since January (see Chart 1). The future index for shipments increased 24 points, while the future new orders index increased 13 points. About 31 percent of the firms expect expansion in their workforce over the next six months, while 9 percent expect a reduction. The future employment index was essentially flat, edging just 1 point higher this month. The future capital expenditures index weakened this month, falling 9 points to its lowest reading since March 2013.

Most Firms Expect to Increase Production in the Second Half of 2015
In this month’s special questions, firms were asked to appraise the underlying demand for their products as well as expected production growth for the second half of the year compared with the first half. Firms were also asked to evaluate how production increases would be achieved, by either increases in employment, work hours, or productivity gains.

Summary
The Manufacturing Business Outlook Survey suggests expansion of the region’s manufacturing sector in June. The survey’s indicators for general activity, new orders, and shipments all improved from their readings in May. Firms reported a modest increase in employment this month. A notable share of respondents reported higher prices of inputs this month. For their own manufactured products, more firms reported price increases than reported price decreases. Indicators reflecting firms’ expectations for the next six months improved this month, most notably for future new orders and shipments.


BTMU U.S. Business Barometer dropped by 0.3%
Posted: June 18, 2015 at 10:00 AM (Thursday)

For the week ending June 6 2015, the BTMU U.S. Business Barometer dropped by 0.3 percent to 98.4, following a rise of 0.5 percent in the previous week. This week’s barometer was chiefly driven by weak performances in consumption indexes. Chain store sales plunged by 2.8 percent, the largest drop since the beginning of the year; although it was partially offset by strong performance in MBA’s purchase index, which increased by 9.7 percent. As to the production side, electric output, steel and lumber production reported minor losses, but they were entirely offset by gains in auto and truck production.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 0.5 percent.


Weekly Initial Unemployment Claims Decrease 12,000 to 267,000
Posted: June 18, 2015 at 08:30 AM (Thursday)

In the week ending June 13, the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 12,000 from the previous week's unrevised level of 279,000. The 4-week moving average was 276,750, a decrease of 2,000 from the previous week's unrevised average of 278,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 6, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 6 was 2,222,000, a decrease of 50,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,265,000 to 2,272,000. The 4-week moving average was 2,231,000, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 1,750 from 2,226,750 to 2,228,500.


1Q2015 Current Account Deficit Increased
Posted: June 18, 2015 at 08:30 AM (Thursday)

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)—increased to $113.3 billion (preliminary) in the first quarter of 2015 from $103.1 billion (revised) in the fourth quarter of 2014. The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.3 percent in the fourth quarter. The increase in the current-account deficit was largely accounted for by a decrease in the surplus on primary income. In addition, the deficit on goods increased. These changes were partly offset by an increase in the surplus on services and a decrease in the deficit on secondary income.


Consumer Price Index increased 0.4% in May, Ex Fd & Engy rose 0.1%
Posted: June 18, 2015 at 08:30 AM (Thursday)

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

The gasoline index increased sharply in May, rising 10.4 percent and accounting for most of the seasonally adjusted all items increase. Other energy indexes were mixed, with the fuel oil index rising but the electricity index declining and the index for natural gas unchanged. The food index was unchanged for the second month in a row, as a decline in the food at home index offset an increase in the index for food away from home.

The index for all items less food and energy rose 0.1 percent in May, its smallest increase since December. The indexes for shelter, airline fares, and medical care all increased, as did the indexes for personal care, recreation, new vehicles, alcoholic beverages, and tobacco. In contrast, the indexes for apparel, for household furnishings and operations, and for used cars and trucks all declined in May.

The all items index was unchanged for the 12 months ending May after showing a 0.2-percent decline for the 12 months ending April. The energy index fell 16.3 percent over the last 12 months, with the gasoline index down 25.0 percent despite rising in May. The food index increased 1.6 percent over the last year, and the index for all items less food and energy rose 1.7 percent.


Real Average Hourly Earnings decreased 0.1% in May
Posted: June 18, 2015 at 08:30 AM (Thursday)

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

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

Real average hourly earnings increased by 2.2 percent, seasonally adjusted, from May 2014 to May 2015. This increase in real average hourly earnings, combined with no change in the average workweek, resulted in a 2.3-percent increase in real average weekly earnings over this period.


Federal Open Market Committee Press Conference
Posted: June 17, 2015 at 02:30 PM (Wednesday)


FOMC target funds rate reaffirmed at 0 - 1/4%
Posted: June 17, 2015 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter. The pace of job gains picked up while the unemployment rate remained steady. On balance, a range of labor market indicators suggests that under-utilization of labor resources diminished somewhat. Growth in household spending has been moderate and the housing sector has shown some improvement; however, business fixed investment and net exports stayed soft. Inflation continued to run below the Committee's longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports; energy prices appear to have stabilized. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have remained stable.

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

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

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

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

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


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: June 17, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 5.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 12, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.5 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 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 15 percent higher than the same week one year ago.

"Rising rates continue to create volatility in weekly mortgage applications activity. The 10-year Treasury hit 2.5 percent last week and our survey's 30-year fixed rate of 4.22 percent is at its highest level since October 2014. The refinance index dropped to the lowest level since January 2015 as rates continued to increase," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity decreased to 48.5 percent of total applications from previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications.

The FHA share of total applications decreased to 14.2 percent from 14.3 percent the week prior. The VA share of total applications remained unchanged at 11.5 percent. The USDA share of total applications decreased to 0.9 percent from 1.1 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.22 percent from 4.17 percent, with points increasing to 0.46 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.18 percent from 4.15 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.00 percent from 3.90 percent, with points increasing to 0.20 from 0.19 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.43 percent from 3.37 percent, with points increasing to 0.33 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.15 percent from 3.06 percent, with points increasing to 0.52 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


May Housing Starts down 11.1%, Permits up 11.8%
Posted: June 16, 2015 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,275,000. This is 11.8 percent (±1.8%) above the revised April rate of 1,140,000 and is 25.4 percent (±2.1%) above the May 2014 estimate of 1,017,000. Single-family authorizations in May were at a rate of 683,000; this is 2.6 percent (±1.2%) above the revised April figure of 666,000. Authorizations of units in buildings with five units or more were at a rate of 557,000 in May.

HOUSING STARTS
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,036,000. This is 11.1 percent (±10.4%) below the revised April estimate of 1,165,000, but is 5.1 percent (±11.2%) above the May 2014 rate of 986,000. Single-family housing starts in May were at a rate of 680,000; this is 5.4 percent (±7.0%) below the revised April figure of 719,000. The May rate for units in buildings with five units or more was 349,000.

HOUSING COMPLETIONS
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 1,034,000. This is 4.7 percent (±13.8%) above the revised April estimate of 988,000 and is 14.5 percent (±14.4%) above the May 2014 rate of 903,000. Single-family housing completions in May were at a rate of 635,000; this is 5.2 percent (±11.4%) below the revised April rate of 670,000. The May rate for units in buildings with five units or more was 392,000.


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

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for April 2015. The sum total in April of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $106.6 billion. Of this, net foreign private inflows were $119.9 billion, and net foreign official outflows were $13.3 billion.

Foreign residents increased their holdings of long-term U.S. securities in April; net purchases were $41.2 billion. Net purchases by private foreign investors were $58.3 billion, while net sales by foreign official institutions were $17.1 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $12.8 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $53.9 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 $38.1 billion in April.

Foreign residents decreased their holdings of U.S. Treasury bills by $12.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $2.0 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $70.6 billion.


Builder Confidence Rose 5 Points in June to 59
Posted: June 15, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in June rose five points to a level of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. This is the highest reading since September 2014.

“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe. “At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

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 posted healthy gains in June. The component gauging current sales conditions jumped seven points to 65, the index charting sales expectations in the next six months increased six points to 69, and the component measuring buyer traffic rose five points to 44.

Looking at the three-month moving averages for regional HMI scores, the South and Northeast each rose three points to 60 and 44, respectively. The West posted a two-point gain to 57 while the Midwest dropped by one point to 54.


Industrial Production decreased 0.2%
Capacity Utilization decreased to 78.1%

Posted: June 15, 2015 at 09:15 AM (Monday)

Industrial production decreased 0.2 percent in May after falling 0.5 percent in April. The decline in April was larger than previously reported, but the rates of change for previous months were generally revised higher, leaving the level of the index in April slightly above its initial estimate. Manufacturing output decreased 0.2 percent in May and was little changed, on net, from its level in January. In May, the index for mining moved down 0.3 percent after declining more than 1 percent per month, on average, in the previous four months. The slower rate of decrease for mining output last month was due in part to a reduced pace of decline in the index for oil and gas well drilling and servicing. The output of utilities increased 0.2 percent in May. At 105.1 percent of its 2007 average, total industrial production in May was 1.4 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 78.1 percent, a rate that is 2.0 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Worsened Slightly in June
Posted: June 15, 2015 at 08:30 AM (Monday)

The June 2015 Empire State Manufacturing Survey indicates that business conditions worsened slightly for New York manufacturers. The headline general business conditions index fell five points to -2.0, its second negative reading in the past three months. The new orders index fell six points to -2.1, and the shipments index edged down to 12.0. Labor market indicators pointed to a small increase in employment levels and the average workweek. Price indexes were little changed. At 9.6, the prices paid index remained near last month’s multiyear low, and the prices received index held steady at 1.0, indicating that selling prices were flat for a second consecutive month. The index for future general business conditions retreated in June, suggesting that optimism about future business conditions waned.

Business Conditions Decline Slightly
Business conditions worsened marginally for New York manufacturers, according to the June 2015 survey. The general business conditions index dropped five points to -2.0. This index has been hovering near zero for the past three months, suggesting that activity has remained flat since April. Twenty-six percent of respondents reported that conditions had improved, while 28 percent reported that conditions had worsened. After a brief foray into positive territory last month, the new orders index fell back below zero: at -2.1, it indicated a small decline in orders. The shipments index was little changed at 12.0, suggesting that shipments continued to grow steadily. The unfilled orders index advanced seven points but, at -4.8, it pointed to a small decline in unfilled orders. The delivery time index climbed to -1.9, and the inventories index fell to 1.9, suggesting little change in delivery times and inventory levels.

Price Increases Remain Subdued
Price increases continued to be restrained. After reaching a multiyear low last month, the prices paid index was little changed at 9.6, indicating a modest increase in input prices. The prices received index held steady at 1.0—a sign that selling prices remained flat. Labor market conditions pointed to a modest increase in employment and a small increase in hours worked. The index for number of employees edged up three points to 8.7, and the average workweek index climbed six points to 3.9.

Optimism Wanes Further in June
The index for future general business conditions fell for a second consecutive month. The four-point drop, to 25.8, signaled that optimism about the six-month outlook ebbed further in June. The future new orders index fell eight points to 26.1, and the index for future shipments fell ten points to 22.1. The future inventories index plunged twenty points to -17.3, suggesting a widespread belief that inventory levels would decline in the months ahead. Indexes for future prices paid and received were little changed. The index for future employment declined for a third consecutive month but, at 13.5, it still suggested that manufacturers expected employment levels to rise. The capital expenditures index moved down four points to 11.5, and the technology spending index fell to -1.0.


Producer Price Index rose 0.5% in May, ex Fd & Engy up 0.2%
Posted: June 12, 2015 at 08:30 AM (Friday)

The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.4 percent in April and advanced 0.2 percent in March. On an unadjusted basis, the final demand index declined 1.1 percent for the 12 months ended in May, the fourth straight 12-month decrease.

In May, the increase in the final demand index can be traced to prices for final demand goods, which rose 1.3 percent. The index for final demand services was unchanged.

Within intermediate demand, prices for processed goods climbed 1.0 percent, the index for unprocessed goods jumped 3.3 percent, and prices for services fell 0.5 percent.


Business Inventories up 0.6% in April
Posted: June 11, 2015 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,318.8 billion, up 0.6 percent (±0.2%) from March 2015, but was down 2.3 percent (±0.5%) from April 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,793.2 billion, up 0.4 percent (±0.1%) from March 2015 and were up 2.6 percent (±0.5%) from April 2014.

The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.36. The April 2014 ratio was 1.29.


BTMU U.S. Business Barometer picked up by 0.5%
Posted: June 11, 2015 at 10:00 AM (Thursday)

For the week ending May 30 2015, the BTMU U.S. Business Barometer picked up by a solid 0.5 percent to 98.7, after declining by 0.4 percent in the prior week. This week’s recovery stemmed from strong performances in both consumption and production indexes. Chain store sales rose by 1.9 percent after four consecutive weeks of decline. Electric output as well climbed by a sharp 10.3 percent following a 2.4 percent drop in the previous week. However, indexes such as truck and coal production reported losses, although they were not large enough to offset the gains.

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

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


U.S. Import Price Index increased 1.3% in May
Posted: June 11, 2015 at 08:30 AM (Thursday)

U.S. import prices increased 1.3 percent in May following declines in each of the previous 10 months, the U.S. Bureau of Labor Statistics reported today. The May advance was driven by an increase in fuel prices. The price index for U.S. exports rose 0.6 percent in May, after a 0.7-percent decrease in April.


U.S. Retail Sales for May increase 1.2%, Ex-Auto up 0.4%
Posted: June 11, 2015 at 08:30 AM (Thursday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $444.9 billion, an increase of 1.2 percent (±0.5%) from the previous month, and 2.7 percent (±0.9%) above May 2014. Total sales for the March 2015 through May 2015 period were up 2.1 percent (±0.7%) from the same period a year ago. The March 2015 to April 2015 percent change was revised from virtually unchanged (±0.5%) to +0.2 percent (±0.2%).

Retail trade sales were up 1.4 percent (±0.5%) from April 2015, and 2.0 percent (±0.7%) above last year. Motor vehicle and parts dealers were up 8.2 percent (±3.0%) from May 2014 and food services and drinking places were up 8.2 percent (±3.3%) from last year.


Weekly Initial Unemployment Claims Increase 2,000 to 279,000
Posted: June 11, 2015 at 08:30 AM (Thursday)

In the week ending June 6, the advance figure for seasonally adjusted initial claims was 279,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 276,000 to 277,000. The 4-week moving average was 278,750, an increase of 3,750 from the previous week's revised average. The previous week's average was revised up by 250 from 274,750 to 275,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending May 30, 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 May 30 was 2,265,000, an increase of 61,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 2,196,000 to 2,204,000. The 4-week moving average was 2,226,750, an increase of 10,500 from the previous week's revised average. The previous week's average was revised up by 2,000 from 2,214,250 to 2,216,250.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 10, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 8.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 5, 2015. The previous week's results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 8.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 10 percent from one week earlier. The unadjusted Purchase Index increased 20 percent compared with the previous week and was 15 percent higher than the same week one year ago.

"Mortgage application volume rebounded strongly in the week following the Memorial Day holiday, indicating that the holiday had a larger impact on business activity than originally assumed. Comparing volume over the past two weeks, purchase activity is up over 6 percent, while refinance activity is down 5 percent. Strong job gains in May and initial signs of wage growth are supporting the purchase market," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity remained unchanged at 49 percent of total applications from previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.3 percent of total applications.

The FHA share of total applications decreased to 14.3 percent from 14.9 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.0 percent the week prior. The USDA share of total applications increased to 1.1 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.17 percent, its highest level since November 2014, from 4.02 percent, with points increasing to 0.38 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.15 percent, its highest level since October 2014, from 4.01 percent, with points increasing to 0.37 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.90 percent, its highest level since November 2014, from 3.77 percent, with points decreasing to 0.19 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.37 percent, its highest level since November 2014, from 3.27 percent, with points decreasing to 0.32 from 0.33 (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 3.06 percent from 2.97 percent, with points remaining unchanged from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings were 5.4 million in April
Posted: June 9, 2015 at 10:00 AM (Tuesday)

The number of job openings rose to 5.4 million on the last business day of April, the highest since the series began in December 2000, the U.S. Bureau of Labor Statistics reported today. The number of hires was little changed at 5.0 million in April and the number of separations was little changed at 4.9 million. Within separations, the quits rate was 1.9 percent and the layoffs and discharges rate was 1.3 percent, both little different from the previous month. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings rose to 5.4 million on the last business day of April, the highest point since the series began in December 2000. The job openings rate for April 2015 was 3.7 percent. The number of job openings increased for total private and was essentially unchanged for government. At the industry level, job openings rose over the month in health care and social assistance but fell in arts, entertainment, and recreation. In the regions, job openings increased in the West.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in April for total nonfarm, total private, and government. Job openings increased over the year for many industries with the largest changes occurring in professional and business services and in health care and social assistance. Job openings decreased over the year in mining and logging and in arts, entertainment, and recreation. The number of job openings increased over the year in all four regions.


Wholesale Inventories up 0.4% in April
Posted: June 9, 2015 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that April 2015 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $448.3 billion, up 1.6 percent (+/-0.7) from the revised March level, but were down 3.3 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised downward $0.6 billion or 0.1 percent. April sales of durable goods were up 1.2 percent (+/-0.7%) from last month and were up 2.4 percent (+/-1.6%) from a year ago. Sales of electrical and electronic goods were up 3.2 percent from last month and sales of motor vehicle and motor vehicle parts and supplies were up 3.2 percent. Sales of nondurable goods were up 2.0 percent (+/-0.7%) from March, but were down 8.2 percent (+/-1.6%) from last April. Sales of farm product raw materials were up 7.4 percent from last month and sales of petroleum and petroleum products were up 4.9 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $576.9 billion at the end of April, up 0.4 percent (+/-0.4%) from the revised March level and were up 4.5 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised upward $0.2 billion. April inventories of durable goods were up 0.1 percent (+/-0.4%) from last month and were up 6.6 percent (+/-1.6%) from a year ago. Inventories of lumber and other construction materials were up 3.4 percent from last month, while inventories of computer and computer peripheral equipment and software were down 3.1 percent. Inventories of nondurable goods were up 0.8% (+/-0.5%) from March and were up 1.1 percent (+/-1.6%) from last April. Inventories of paper and paper products were up 3.9 percent from last month and inventories of apparel, piece goods, and notions were up 2.7 percent.

The April inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.29. The April 2014 ratio was 1.19.


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