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University of Michigan Consumer Confidence down in May to 90.7
Posted: May 29, 2015 at 10:00 AM (Friday)

Consumer optimism retreated in May as consumers adopted more modest prospects for a rebound following the economy’s dismal 1st quarter performance. The decline was widespread among all age and income subgroups as well as across all parts of the country. Despite the May decline, the Sentiment Index has averaged 94.6 during the first five months of 2015. The last year that the Sentiment Index was higher was 2004, when it averaged 95.2. Overall, the latest data are still consistent with a 3% annual growth rate in personal consumption expenditures during 2015.

Spring’s Economic Revival Falls Short
Consumers more frequently reported hearing unfavorable than favorable news about the economy in the May 2015 survey. Consumers judged the pace of growth to have remained sluggish and did not anticipate the same rapid revival in the economy as happened last year. Importantly, half of all consumers still thought the economic outlook was favorable. The main drawback to the slower pace of growth was that consumers anticipated only marginal future reductions in the rate of unemployment.

Personal Finances Still Expected to Improve There was a slight decline in the number of households who reported improved finances in the May survey, largely due to a slower pace of income gains. Nonetheless, consumers remained quite optimistic about their future financial situation as they anticipated income gains twice as large as they did in last May’s survey. Overall, 86% of all households anticipated their financial situation would be the same or improve during the year ahead, while just 12% of all households expected their finances to worsen.

The Consumer Sentiment Index was 90.7 in the May 2015 survey, down from April’s 95.9 but significantly above last May’s 81.9. The Current Conditions Index was 100.8 in May, between the 107.0 in April and last May’s 94.5. The Expectations Index fell to 84.2 in the May 2015 survey from 88.8 in April, but was still substantially above last May’s
73.7.

Price perceptions for a wide range of goods have grown less positive despite low overall inflation. This reflects a downward revision in what consumers judge to be affordable prices due to the lower income growth rates they now expect. While low interest rates continue to boost home and vehicle purchases, smaller retail purchases have not benefitted from low rates. The modest pace of income growth now expected by consumers will increase smaller retail purchases as long as consumers do not anticipate significant increases in interest rates that cause anticipatory buying of homes and vehicles which will act to limit other retail sales gains.”


Chicago Purchasing Managers Index fell 6.1 points to 46.2 in May
Posted: May 29, 2015 at 09:45 AM (Friday)

The Chicago Business Barometer fell sharply back into contraction in May, reversing all of April’s gain and casting doubt on the strength of the widely expected bounceback in the US economy in the second quarter.

The Barometer fell 6.1 points to 46.2 in May from 52.3 in April. All five components of the Barometer weakened with three dropping by more than 10% and all of them now below the 50 breakeven mark.

April’s positive move had suggested that the first quarter slowdown was transitory and had been impacted by the cold snap and port strikes. May’s weakness points to a more fundamental slowdown with the Barometer running only slightly above February’s 5½-year low of 45.8. The three month average, although little changed on the month at 48.3, is significantly down from 61.3 in Q4 2014 and barring a sharp rebound in June points to continued sluggish growth in the second quarter. The only positive that can be taken from the May results was that comments from the survey panel suggest weakness was not broad based across all sectors.

The decline was led by a 13.8% fall in New Orders to 47.5 from 55.1 in April, pushing it into contraction for the third time this year. In line with the lower order intake, both Production and Employment Indicators suffered double-digit losses in percentage terms between April and May, with the latter falling to the lowest since April 2013. Order Backlogs declined more moderately, remaining in contraction for the fourth consecutive month.

There was further evidence that the period of oil driven softer prices has run its course. Prices Paid jumped sharply back into expansion in May to the highest since December.

Inventory growth eased slightly in May, but remains high relative to other measures in the survey. Results from a special question asked this month show that a significant proportion of our panel see their current inventory level as too high, a potential weight on growth ahead and indicative of the current weak demand situation. 42% of companies said their current inventory level was too high compared with 12% in a comparable question asked in November 2014. 53.2% said stock levels were about right, with less than 5% reporting them as too low.

Chief Economist of MNI Indicators Philip Uglow said, “We had thought that the April bounce was consistent with a partial return to normal following the weather and port related slowdown in the first quarter. The latest data for May, however, suggest that this was a false dawn and that sluggish activity has carried through to the second quarter.”


1Q2015 GDP preliminary estimate dencreased 0.7%
Posted: May 29, 2015 at 08:30 AM (Friday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- decreased at an annual rate of 0.7 percent in the first quarter of 2015, according to the "second" 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 "advance" estimate issued last month. In the advance estimate, real GDP increased 0.2 percent. With the second estimate for the first quarter, imports increased more and private inventory investment increased less than previously estimated.

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 personal consumption expenditures (PCE), private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The second estimate of the first-quarter percent change in real GDP is 0.9 percentage point, or $40.7 billion, less than the advance estimate issued last month, primarily reflecting an upward revision to imports and downward revisions to private inventory investment and to personal consumption expenditures that were partly offset by an upward revision to residential fixed investment.


Pending Home Sales Index increased 3.4% in April
Posted: May 28, 2015 at 10:00 AM (Thursday)

Pending home sales rose in April for the fourth straight month and reached their highest level in nine years, according to the National Association of Realtors®. Led by the Northeast and Midwest, all four major regions saw increases in April.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 3.4 percent to 112.4 in April from a slight upward revision of 108.7 in March and is now 14.0 percent above April 2014 (98.6) — the largest annual increase since September 2012 (15.1 percent). The index has now increased year-over-year for eight consecutive months and is at its highest level since May 2006 (112.5).

The steady gains in contract activity each month this year highlight the fact that buyer demand is strong. Realtors® are saying foot traffic remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas. Homeowners looking to sell this spring appear to be in the driver's seat, as there are more buyers competing for a limited number of homes available for sale. As a result, home prices are up and accelerating in many markets.

Following April's decline in existing-home sales, Yun expects a rebound heading into the summer, but the likelihood of meaningful gains will depend on a much-needed boost in inventory and evidence of moderating price growth now that interest rates have started to rise.

The housing market can handle interest rates well above 4 percent as long as inventory improves to slow price growth and underwriting standards ease to normal levels so that qualified buyers — especially first-time buyers — are able to obtain a mortgage.

After falling four straight months, the PHSI in the Northeast bounced back solidly (10.1 percent) to 88.3 in April, and is now 9.4 percent above a year ago. In the Midwest the index increased 5.0 percent to 113.0 in April, and is 13.3 percent above April 2014.

Pending home sales in the South rose 2.3 percent to an index of 129.4 in April and are 14.8 percent above last April. The index in the West inched 0.1 percent in April to 103.8, and is 16.4 percent above a year ago.

Total existing-home sales in 2015 are forecast to be around 5.24 million, an increase of 6.1 percent from 2014. The national median existing-home price for all of this year is expected to increase around 6.7 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.


DJ-BTMU U.S. Business Barometer picked up by 0.1%
Posted: May 28, 2015 at 10:00 AM (Thursday)

For the week ending May 16 2015, the BTMU U.S. Business Barometer picked up by 0.1 percent to 98.6. This week’s barometer was driven by production indexes. Auto and truck production rose by 4.8 and 6.3 percent, respectively. Along similar lines, steel production and electric output increased by 2.0 and 2.4 percent respectively. As to the consumption side, chain store sales and MBA’s purchase index fell by 1.2 and 3.7 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 0.8 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, fell to 98.6. Its year-over-year growth rate was 0.7 percent.


Weekly Initial Unemployment Claims Increase 70,000 to 282,000
Posted: May 28, 2015 at 08:30 AM (Thursday)

In the week ending May 23, the advance figure for seasonally adjusted initial claims was 282,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 274,000 to 275,000. The 4-week moving average was 271,500, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 266,250 to 266,500. 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 May 16, 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 16 was 2,222,000, an increase of 11,000 from the previous week's unrevised level of 2,211,000. The 4-week moving average was 2,221,250, a decrease of 8,500 from the previous week's unrevised average of 2,229,750. This is the lowest level for this average since November 25, 2000 when it was 2,211,250.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 27, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 22, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index was essentially unchanged 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 51 percent of total applications from 52 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.4 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.07 percent from 4.04 percent, with points increasing to 0.35 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.06 percent from 4.04 percent, with points increasing to 0.29 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.83 percent from 3.80 percent, with points increasing to 0.16 from 0.06 (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 3.29 percent from 3.26 percent, with points decreasing to 0.24 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 5/1 ARMs increased to 3.04 percent from 2.99 percent, with points increasing to 0.48 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Texas Manufacturing Activity Declined again in May
Posted: May 26, 2015 at 10:30 AM (Tuesday)

Texas factory activity declined again in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell to -13.5, its lowest reading in six years.

Other measures of current manufacturing activity reflected continued contraction in May. The new orders index held steady at -14.1, and the growth rate of orders index held steady at -15.2, marking the fifth and seventh negative reading in a row for these indexes. The capacity utilization index edged down to -11.6. The shipments index fell nearly 8 points to -13.2, with more than 30 percent of firms noting lower shipment volumes in May than in April.

Perceptions of broader business conditions worsened further this month. The general business activity index fell to -20.8 in May, its lowest reading since June 2009. The company outlook index moved down to -10.5, also hitting a low not seen since summer 2009.

Labor market indicators reflected employment declines and shorter workweeks. The May employment index declined 10 points to -8.2, after rebounding slightly above zero last month. Twelve percent of firms reported net hiring, compared with 21 percent reporting net layoffs. The hours worked index fell from -5 to -11.6.

Changes in prices and wages were mixed in May. Downward pressure on input costs abated, as the raw materials prices index pushed up toward zero, coming in at -1.7. The finished goods prices index edged down to -8.7, its fifth negative reading in a row and suggestive of falling selling prices. Meanwhile, the wages and benefits index remained positive and little changed at 14.7.

Expectations regarding future business conditions improved in May. The index of future general business activity surged 11 points to 4.9, and the index of future company outlook jumped 10 points to 15.1. Indexes for future manufacturing activity also moved up markedly, pushing further into solid positive territory.


New Home Sales in April at annual rate of 517,000
Posted: May 26, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in April 2015 were at a seasonally adjusted annual rate of 517,000, 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 (±15.8%) above the revised March rate of 484,000 and is 26.1 percent (±15.4%) above the April 2014 estimate of 410,000.

The median sales price of new houses sold in April 2015 was $297,300; the average sales price was $341,500. The seasonally adjusted estimate of new houses for sale at the end of April was 205,000. This represents a supply of 4.8 months at the current sales rate.


Consumer Confidence increased moderately in May to 95.4
Posted: May 26, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined in April, increased moderately in May. The Index now stands at 95.4 (1985=100), up from 94.3 in April. The Present Situation Index increased from 105.1 last month to 108.1 in May. The Expectations Index edged down to 86.9 from 87.1 in April.

“Consumer confidence improved modestly in May, after declining sharply in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “After a three-month slide, the Present Situation Index increased, propelled by a more positive assessment of the labor market. Expectations, however, were relatively flat following a steep decline in April. While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.”

Consumers’ assessment of current-day conditions improved in May. Those saying business conditions are “good” edged down from 25.5 percent to 25.2 percent. However, those claiming business conditions are “bad” also decreased from 19.2 percent to 17.4 percent. Consumers were mixed in their assessment of the job market. Those stating jobs are “plentiful” increased from 19.0 percent to 20.7 percent, while those claiming jobs are “hard to get” rose from 25.9 percent to 27.3 percent.

Consumers’ optimism about the short-term outlook edged down in May. The percentage of consumers expecting business conditions to improve over the next six months inched up from 15.4 percent to 15.6 percent, while those expecting business conditions to worsen also increased, from 9.1 percent to 10.8 percent. Consumers’ outlook for the labor market, however, improved. Those anticipating more jobs in the months ahead increased from 13.8 percent to 14.6 percent, while those anticipating fewer jobs declined from 16.4 percent to 15.5 percent. The proportion of consumers expecting growth in their incomes was unchanged at 17.4 percent, while the proportion expecting a decline increased slightly from 10.8 percent to 11.1 percent.


Philadelphia Nonmanufacturing Activity improved in May
Posted: May 26, 2015 at 10:00 AM (Tuesday)

The pace of regional nonmanufacturing activity improved in May, according to firms responding to this month's Nonmanufacturing Business Outlook Survey. The survey's indicators for general activity and sales rose, while the indicator for new orders fell. Employment indicators were mixed, but future activity indicators were strong, as responding firms remain highly optimistic about activity over the next six months.

Nonmanufacturing Activity Continued to Expand
The diffusion index for current activity at the firm level increased 9 points in May, to 52.3. Sixty-eight percent of the respondents reported increasing activity at their own firms this month, up from 59 percent last month. Responding firms were positive about general activity in the region; the diffusion index for current activity for the region rose more than 13 points, to 54.5. Sixty-one percent of the respondents indicated increasing activity in the region compared with 7 percent that indicated decreasing activity.
New Orders and Sales or Revenues Remained Positive

The new orders index edged down almost 9 points, to 27.3, in May. The percentage of firms reporting increases in new orders fell from 46 percent last month to 43 percent this month, and 16 percent of the firms reported decreases in new orders, compared with 10 percent that reported decreases in new orders last month. The sales/revenues index increased 5 points to 43.2. The percentage of firms reporting increases in sales or revenues was more than three times greater than the percentage of firms reporting decreases (61 percent versus 18 percent).
Employment Conditions Holding Steady

Survey results suggest steady conditions for labor market demand in May. Although the full-time employment index fell more than 9 points in May, a majority of the respondents reported no change to full-time staff levels. The part-time employment index increased 4 points, from 23.1 in April to 27.3 in May. In addition, more firms reported increases in part-time staff this month compared with last month, and fewer firms reported decreases. The workweek index decreased less than 1 point to 22.7 in May, as almost 60 percent of the firms reported no change in their average workweek.
Firms Reported Higher Prices Received

Fewer firms reported increases in input prices this month, as the prices paid index dropped more than 6 points, to 11.4, in May (see Chart 2 below). The share of firms reporting no change in input prices stands at roughly 59 percent. The prices received index rose 31 points, to 36.4. The percentage of respondents reporting increases in prices received rose from 18 percent to 41 percent, and the percentage of respondents reporting decreases fell from 13 percent to 5 percent.

Firms Increased Spending on Equipment and Software
Roughly the same share of firms reported increases in capital expenditures for equipment and software this month (33 percent in April versus 32 percent in May), and the corresponding diffusion index was little changed at 25. The index for capital expenditures on physical plant rose 13 points, to 18.2, as the share of firms reporting increased capital expenditures on physical plant rose from 18 percent in April to 25 percent in May.
Future Indicators Remain Strong

Optimism about future activity over the next six months both at individual firms and in the region remained strong and widespread. None of the respondents expect activity six months from now to decrease at their own firms, and only 2 percent expect a decline in the region. With 77 percent of the respondents expecting activity to increase at their firms, the firm-level future general activity index increased 3 points, from 74.4 in April to 77.3 in May (see Chart 1 above). The future general activity index for the region fell 3 points but remains at a high level of 79.5.

In this month's Special Questions, firms were surveyed about plans for hiring over the next year and about recent trends in compensation and wages. A majority of firms are planning to increase employment over the next year, and many firms reported increasing wages to retain and attract qualified workers.

Summary
Results from the May 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 and sales and revenues improved from last month's readings. Firms remained optimistic about future growth.


Richmond Fed's Current Activity Index gained 4 points to a reading of 1
Posted: May 26, 2015 at 10:00 AM (Tuesday)

Manufacturing activity flattened in May, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders leveled off, while the backlog of orders declined further compared to last month. Hiring edged up, while the average workweek increased slightly. However, average wage growth accelerated this month.

Despite the soft conditions this month, manufacturers continued to look for improved business conditions in the next six months. Expectations were for solid growth in shipments and in the volume of new orders in the six months ahead. In addition, survey participants looked for increased capacity utilization and expected order backlogs to grow more quickly. However, producers looked for little change in vendor lead times.

Manufacturers' outlook for the months ahead included faster growth in the number of employees and average wages than in the current month. In addition, they expected modest growth in the length of the average workweek.

Prices of raw materials rose at a somewhat faster pace in May compared to last month. However, price growth slowed for finished goods. Manufacturers expected faster growth in prices paid and in prices received during the next six months.

Manufacturing activity remained soft this month, with several components flattening. The composite index for manufacturing moved to 1 following April's reading of −3, while the shipments index leveled off to −1 from −6. In addition, the index for new orders gained eight points, reaching a nearly flat reading of 2. Manufacturing hiring continued to grow at a modest pace this month. The May indicator slipped four points to a reading of 3.

Capacity utilization increased this month. The index moved up 11 points to a reading of 7. Backlogs decreased, pulling that index down two points to −10. Vendor lead time lengthened, pushing the index to 6 from a reading of −6. Finished goods inventories rose more quickly than a month ago. The index gained three points to finish at 21. Additionally, raw materials inventories rose at a slightly faster rate. That gauge also moved up three points, ending at 22.


S&P/Case-Shiller Home Price Indices increase 0.8% in February
Posted: May 26, 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 March 2015 show that home prices continued their rise across the country over the last 12 months.

Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year increases in March. The 10-City Composite gained 4.7% year-over-year, while the 20-City Composite gained 5.0% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 versus a 4.2% increase in February 2015.

San Francisco and Denver reported the highest year-over-year gains, with price increases of 10.3% and 10.0%, respectively, over the last 12 months. San Francisco’s 10.3% annual gain is its first double digit year-over-year increase since July 2014. Dallas reported a 9.3% year-over-year gain to round out the top three cities. Ten cities reported higher price increases in the year ended March 2015 over the year ended February 2015. Tampa led the way with a reported increase of 1.4%. Ten cities saw their prices decrease annually, led by Cleveland, down 1.2% in the year ending March 2015.

Month-over-Month
The National index increased again in March with a 0.8% increase for the month. Both the 10- and 20-City Composites increased significantly, reporting 0.8% and 0.9% month-over-month increases, respectively. Of the 19 cities reporting increases, San Francisco led all cities with an increase of 3.0%. Seattle followed next with a reported increase of 2.3%. Cleveland reported an increase of 0.4%, its first positive month-over-month increase since August 2014. New York was the only city to report a negative month-over-month change with a -0.1% decrease for March 2015.

Analysis
Home prices have enjoyed year-over-year gains for 35 consecutive months. The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices. The longest run of gains is in Detroit at 45 months, the shortest is New York with 27 months. However, the pace has moderated in the last year; from August 2013 to February 2014, the national index gained more than 10% year-over-year, compared to 4.1% in this release.

Given the long stretch of strong reports, it is no surprise that people are asking if we’re in a new home price bubble. The only way you can be sure of a bubble is looking back after it’s over. The average 12 month rise in inflation adjusted home prices since 1975 is about 1.0% per year compared to the current 4.1% pace, arguing for a bubble. However, the annual rate of increase halved in the last year, as shown in the first chart. Home prices are currently rising more quickly than either per capita personal income (3.1%) or wages (2.2%), narrowing the pool of future home-buyers. All of this suggests that some future moderation in home prices gains is likely. Moreover, consumer debt levels seem to be manageable. There is a rebound in home prices, not bubble and not a reason to be fearful.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015. The 10- and 20-City Composites reported year-over-year increases of 4.7% and 5.0%.

As of March 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 15-16%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 29.8% and 30.7%.


April New Orders for Durable Goods Decreased 0.5%, Ex-Trans up 0.5%
Posted: May 26, 2015 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in April decreased $1.2 billion or 0.5 percent to $235.5 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 5.1 percent March increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 0.2 percent. Transportation equipment, also down two of the last three months, drove the decrease, $2.0 billion or 2.5 percent to $77.9 billion.

Shipments of manufactured durable goods in April, down three of the last four months, decreased $0.1 billion or 0.1 percent to $240.5 billion. This followed a 1.5 percent March increase. Primary metals, down six of the last seven months, drove the decrease, $0.5 billion or 2.1 percent to $21.6 billion.

Unfilled orders for manufactured durable goods in April, down four of the last five months, decreased $0.3 billion, or virtually unchanged, to $1,203.1 billion. This followed a 0.1 percent March increase. Machinery, down six of the last seven months, drove the decrease, $0.9 billion or 0.7 percent to $115.7 billion.

Inventories of manufactured durable goods in April, up twenty-four of the last twenty-five months, increased $0.9 billion or 0.2 percent to $401.5 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a virtually unchanged March increase. Transportation equipment, up sixteen of the last seventeen months, led the increase, $0.6 billion or 0.5 percent to $130.3 billion.

Nondefense new orders for capital goods in April increased $0.3 billion or 0.3 percent to $81.2 billion. Shipments increased $1.3 billion or 1.6 percent to $80.2 billion. Unfilled orders increased $1.1 billion or 0.1 percent to $763.3 billion. Inventories increased $0.3 billion or 0.2 percent to $177.4 billion. Defense new orders for capital goods in April decreased $0.9 billion or 9.5 percent to $8.4 billion. Shipments decreased $0.3 billion or 2.8 percent to $9.5 billion. Unfilled orders decreased $1.0 billion or 0.7 percent to $151.4 billion. Inventories increased $0.5 billion or 2.5 percent to $21.7 billion.

Revised and recently benchmarked seasonally adjusted March figures for all manufacturing industries were: new orders, $478.5 billion (revised from $477.8 billion); shipments, $482.4 billion (revised from $482.7 billion); unfilled orders, $1,203.5 billion (revised from $1,202.6 billion); and total inventories, $647.8 billion (revised from $648.4 billion).


Consumer Price Index increased 0.1% in April, Ex Fd & Engy rose 0.3%
Posted: May 22, 2015 at 08:30 AM (Friday)

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

The index for all items less food and energy rose 0.3 percent in April and led to the slight increase in the seasonally adjusted all items index. The index for shelter rose, as did the indexes for medical care, household furnishings and operations, used cars and trucks, and new vehicles. In contrast, the indexes for apparel and airline fares declined in April.

The energy index declined in April, while the food index was unchanged. The indexes for gasoline, natural gas, and fuel oil all declined, while the electricity index was unchanged. The food at home index declined for the second month in a row, offsetting an increase in the index for food away from home. Major grocery store food group indexes were mixed.

The all items index declined 0.2 percent for the 12 months ending April. This represented a slightly larger decrease than the 0.1-percent decline for the 12 months ending March. The decline was driven by the energy index, which fell 19.4 percent over the last 12 months, with all the major components declining except electricity. The food index rose 2.0 percent over the last year, and the index for all items less food and energy rose 1.8 percent.


Real Average Hourly Earnings unchanged% in April
Posted: May 22, 2015 at 08:30 AM (Friday)

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

Real average weekly earnings were unchanged over the month due to no change in both real average hourly earnings and the average workweek.

Real average hourly earnings increased by 2.3 percent, seasonally adjusted, from April 2014 to April 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.


Kansas City Fed Manufacturing Activity declined more sharply in May
Posted: May 21, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined more sharply in May than in previous months and producers’ expectations also fell, with both reaching their lowest levels since mid-2009. However, most price indexes increased slightly, reversing a recent trend of decline. In a special question about hiring plans, the majority of firms indicated they were planning to either leave employment levels unchanged or increase them slightly over the next twelve months.

The month-over-month composite index was -13 in May, down from -7 in April and -4 in March. The last time the composite index was lower was in April 2009. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declines in durable goods manufacturing, including a continued decline in aircraft production and further weakness in metals and machinery. In addition, several nondurable goods plants also reported sluggish activity, particularly for plastics and food production. Production fell most sharply in energy-producing states like Oklahoma and New Mexico, but it was also down in most other District states. The majority of other month-over-month indexes also decreased from the previous month. The production index contracted from -2 to -13, and the shipments and new orders indexes also fell. The order backlog, employment, and new orders for exports indexes edged higher but still remained well below zero. The finished goods inventory index increased from -1 to 0, while the raw materials inventory index dropped into negative territory.

Year-over-year factory indexes were mixed but remained negative overall. The composite year-over-year index inched lower from -3 to -5, and the production, shipments, new orders, and order backlog indexes also became more negative. The employment index rose from -8 to 0, while the capital expenditures and new orders for exports indexes were basically unchanged. The finished goods inventory index increased from 4 to 6, but the raw materials inventory index eased slightly.

Most future factory indexes fell in May, with the notable exception of employment. The future composite index decreased from 6 to 0, and the future production, shipments, and capital expenditures indexes also edged lower. The future new orders index dropped from 21 to 2, its lowest level since May 2009, and the future order backlog index moved into negative territory. In contrast, the future employment index rebounded from -2 to 7, and the future new orders for exports indexes rose slightly from -6 to -2. The future finished goods inventory index eased from -2 to -5, while the future raw materials inventory index increased somewhat.

Most price indexes rose modestly in May, although month-over-month indexes were still negative. The month-over-month finished goods price index increased from -10 to -4, while the raw materials price index was basically unchanged. The year-over-year finished goods price index edged up from 12 to 14, while the raw materials price index was stable. The future raw materials price index rose from 8 to 15, and the future finished goods price index also increased moderately.


U.S. Leading Economic Index increased 0.7% in April
Posted: May 21, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index®(LEI) for the U.S. increased 0.7 percent in April to 122.3 (2010 = 100), following a 0.4 percent increase in March, and a 0.2 percent decline in February.

April’s sharp increase in the LEI seems to have helped stabilize its slowing trend, suggesting the paltry economic growth in the first quarter may be temporary. However, the growth of the LEI does not support a significant strengthening in the economic outlook at this time. The improvement in building permits helped to drive the index up this month, but gains in other components, in particular the financial indicators, have been somewhat more muted.

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

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in April to 116.6 (2010 = 100), following a 0.5 percent increase in March, and a 0.2 percent increase in February.


Existing-Home Sales declined 3.3% in April
Posted: May 21, 2015 at 10:00 AM (Thursday)

Despite properties typically selling faster than at any time since July 2013, existing–home sales slowed in April but remained above an annual sales pace of five million for the second straight month, according to the National Association of Realtors®. All major regions except for the Midwest experienced sales declines in April.

Total existing-home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, declined 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Despite the monthly decline, sales have increased year–over–year for seven consecutive months and are still 6.1 percent above a year ago.

Sales in April failed to keep pace with the robust gain seen in March. April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices. However, the overall data and feedback we're hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.

Total housing inventory at the end of April increased 10.0 percent to 2.21 million existing homes available for sale, but is still 0.9 percent below a year ago (2.23 million). Unsold inventory is at a 5.3–month supply at the current sales pace, up from 4.6 months in March.

The median existing–home price3 for all housing types in April was $219,400, which is 8.9 percent above April 2014. This marks the 38th consecutive month of year–over–year price gains and is the largest since January 2014 (10.1 percent).

With demand far exceeding supply, properties sold in April faster (39 days) than at any time since July 2013 (42 days) and the second shortest time (37 days in June 2013) since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 180 days in April, while foreclosures sold in 50 days and non–distressed homes took 38 days. Nearly half (46 percent) of homes sold in April were on the market for less than a month.

Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace. To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012.

The percent share of first–time buyers remained at 30 percent in April for the second consecutive month. First–time buyers represented 29 percent of all buyers in April 2014.

According to Freddie Mac, the average commitment rate for a 30–year, conventional, fixed–rate mortgage remained below 4.00 percent for the fifth straight month, falling in April to 3.67 percent from 3.77 percent in March.

Closings for some home sales could drag after August 1 and into the fall as lenders transition to the new closing procedures and documentation required by the Consumer Financial Protection Bureau's Real Estate Settlement and Procedures Act and Truth in Lending Act, or RESPA–TILA, integrated disclosure rule. There likely will be bumps in the closing process while all parties get used to the new requirements. We hope that the move away from the HUD–1 is smooth, but even if only 10 percent of transactions experience closing issues, that's as many as 40,000 transactions a month.

Polychron — testifying before Congress on May 14 — advocated for a grace period through the end of 2015, which would delay enforcement of the new rules to the slower winter months.

All–cash sales were 24 percent of transactions in April, unchanged from March and down considerably from a year ago (32 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in April, unchanged from last month and down from 18 percent in April 2014. Seventy–one percent of investors paid cash in April.

Distressed sales4 — foreclosures and short sales — were 10 percent of sales in April, unchanged from March and below the 15 percent share a year ago. Seven percent of April sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in April (16 percent in March), while short sales were also discounted 14 percent (16 percent in March).

Single–family and Condo/Co–op Sales
Single–family home sales declined 3.7 percent to a seasonally adjusted annual rate of 4.43 million in April from 4.60 million in March, but are still 6.5 percent above the 4.16 million pace a year ago. The median existing single–family home price was $221,200 in April, up 10.0 percent from April 2014.

Existing condominium and co–op sales were at a seasonally adjusted annual rate of 610,000 units in April (unchanged from March) and are 3.4 percent higher than April 2014 (590,000 units). The median existing condo price was $206,100 in April, which is 0.4 percent higher than a year ago.

Regional Breakdown
April existing–home sales in the Northeast declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. The median price in the Northeast was $253,200, which is 3.6 percent higher than April 2014.

In the Midwest, existing–home sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13.0 percent above April 2014. The median price in the Midwest was $173,700, up 11.4 percent from a year ago.

Existing–home sales in the South declined 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. The median price in the South was $189,400, up 8.5 percent from a year ago.

Existing–home sales in the West decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. The median price in the West was $318,700, which is 10.0 percent above April 2014.


Philadelphia Fed March Outlook Continues to Suggest Slight Growth
Posted: May 21, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased modestly in May, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments were positive but remain at low readings. Employment increased at the reporting firms, but the employment index moderated compared with April. Firms reported continued price reductions in May, with indicators for prices of inputs and the firms’ own products remaining negative. The survey’s indicators of future activity suggest that firms expect continuing growth in the manufacturing sector over the next six months.

Indicators Suggest Slight Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 7.5 in April to 6.7 in May. The index has remained in a single-digit range for the first five months of this year (see Chart 1). The demand for manufactured goods, as measured by the survey’s current new orders index, edged 3 points higher this month, with less than one-third of the firms reporting higher new orders in May compared with April. The current shipments index also increased 3 points to a reading of 1.

Firms’ responses suggest some weakening in labor market conditions this month compared with April. The percentage of firms reporting an increase in employees in May (19 percent) exceeded the percentage reporting a decrease (13 percent). The current employment index, however, fell 5 points, to 6.7. Firms reported an overall modest decrease in the workweek: The percentage of firms reporting a shorter workweek (25 percent) was greater than the percentage reporting a longer workweek (19 percent).

Notable Share of Firms Report Price Reductions
Input prices continued to fall for many of the reporting manufacturers: The prices paid index fell 7 points, to -14.2, its third consecutive negative reading and seventh consecutive monthly decline in the diffusion index (see Chart 2). Although 75 percent of the firms reported that input prices were unchanged, the percentage of firms reporting price reductions (19 percent) exceeded the percentage reporting price increases (5 percent). With respect to prices received for manufactured goods, the largest percentage of firms (76 percent) reported no change in prices. The percentage of firms reporting price reductions for their own products (15 percent) exceeded the percentage reporting price increases (9 percent) for the fifth consecutive month.
Future Indexes Remain Below Last Year’s Levels

Overall, firms remain optimistic about business and employment conditions over the next six months, although not at levels seen for most of last year. The diffusion index for future activity edged down slightly, from 35.5 in April to 33.9 in May, remaining well below the readings in 2014 (see Chart 1). Individual future indicators were little changed. The future index for shipments fell 2 points, while the future new orders index increased 1 point. About 32 percent of the firms expect expansion in their workforce over the next six months, while 11 percent expect a reduction. The future employment index edged slightly higher this month, to 21.5.

In this month’s special questions, firms were surveyed about plans for hiring over the next year and about recent trends in compensation and wages. Although more than half of the firms are planning to increase employment over the next year, many firms reported increasing wages to retain and attract qualified workers. Over one-fifth of the firms reported increasing difficulty in filling openings over the past 12 months (see Special Questions).
Summary

The Manufacturing Business Outlook Survey suggests modest expansion of the region’s manufacturing sector in May. The indicators for general activity and new orders both suggest expansion, but at a continued modest pace. Firms reported an increase in employment this month. A notable share of respondents continued to report downward price pressures for inputs. For their own manufactured products, more firms reported price decreases than reported price increases, although the majority reported steady prices. Indicators reflecting firms’ expectations for the next six months were near steady this month, and firms remained optimistic about future employment growth.


DJ-BTMU U.S. Business Barometer declined by 0.2%
Posted: May 21, 2015 at 10:00 AM (Thursday)

For the week ending May 9 2015, the BTMU U.S. Business Barometer declined by 0.3 percent to 98.5. This week’s barometer was driven by weak performance in chain stores sales, which slipped by 1.7 percent. Along similar lines, steel production and railroad freight car loadings fell by 2.5 and 2.1 percent, respectively. On the other hand, electric output and coal production rose by 4.4 and 2.3 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 0.4 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, fell to 98.7. Its year-over-year growth rate was 0.7 percent.


Weekly Initial Unemployment Claims Increase 10,000 to 274,000
Posted: May 21, 2015 at 08:30 AM (Thursday)

In the week ending May 16, the advance figure for seasonally adjusted initial claims was 274,000, an increase of 10,000 from the previous week's unrevised level of 264,000. The 4-week moving average was 266,250, a decrease of 5,500 from the previous week's unrevised average of 271,750. This is the lowest level for this average since April 15, 2000 when it was 266,250. 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 May 9, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 9 was 2,211,000, a decrease of 12,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 11, 2000 when it was 2,161,000. The previous week's level was revised down by 6,000 from 2,229,000 to 2,223,000. The 4-week moving average was 2,229,750, a decrease of 29,000 from the previous week's revised average. This is the lowest level for this average since November 25, 2000 when it was 2,211,250. The previous week's average was revised down by 1,500 from 2,260,250 to 2,258,750.


Chicago Fed National Activity increased slightly in April
Posted: May 21, 2015 at 08:30 AM (Thursday)

The index’s three-month moving average, CFNAI-MA3, increased slightly to –0.23 in April from –0.27 in March. April’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 –0.12 in April. Thirty-eight of the 85 individual indicators made positive contributions to the CFNAI in April, while 47 made negative contributions. Forty-six indicators improved from March to April, while 37 indicators deteriorated and two were unchanged. Of the indicators that improved, 19 made negative contributions.

The contribution from production-related indicators to the CFNAI was unchanged at –0.16 in April. Industrial production decreased 0.3 percent in April for the second straight month. The sales, orders, and inventories category made a neutral contribution to the CFNAI in April, down slightly from +0.01 in March.

Employment-related indicators contributed +0.08 to the CFNAI in April, up from –0.08 in March. Nonfarm payrolls increased by 223,000 in April, following a gain of 85,000 in the previous month; and the unemployment rate edged down to 5.4 percent in April from 5.5 percent in March.

The contribution of the personal consumption and housing category to the CFNAI increased to –0.06 in April from –0.12 in March. Housing starts moved up to 1,135,000 annualized units in April from 944,000 in March. In addition, housing permits increased to 1,143,000 annualized units in April from 1,038,000 in the previous month.

The CFNAI was constructed using data available as of May 19, 2015. At that time, April data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index was revised to –0.36 from an initial estimate of –0.42. 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 March monthly index was due primarily to the former.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 20, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 15, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier, to the lowest level since April. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 11 percent higher than the same week one year ago.

"Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week. Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11 percent higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity increased to 52 percent of total applications from 51 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.04 percent, its highest level since December 2014, from 4.00 percent, with points decreasing to 0.32 from 0.36 (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 4.04 percent from 3.99 percent, with points decreasing to 0.25 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 30-year fixed-rate mortgages backed by the FHA increased to 3.80 percent from 3.76 percent, with points decreasing to 0.06 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 3.26 percent from 3.23 percent, with points decreasing to 0.30 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.99 percent from 3.00 percent, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


April Housing Starts up 20.2%, Permits up 10.1%
Posted: May 19, 2015 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,143,000. This is 10.1 percent (±2.2%) above the revised March rate of 1,038,000 and is 6.4 percent (±2.1%) above the April 2014 estimate of Single-family authorizations in April were at a rate of 666,000; this is 3.7 percent (±0.9%) above the revised March figure of 642,000. Authorizations of units in buildings with five units or more were at a rate of 444,000 in April.

HOUSING STARTS
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,135,000. This is 20.2 percent (±14.4%) above the revised March estimate of 944,000 and is 9.2 percent (±10.6%)* above the April 2014 rate of 1,039,000. Single-family housing starts in April were at a rate of 733,000; this is 16.7 percent (±10.6%) above the revised March figure of 628,000. The April rate for units in buildings with five units or more was 389,000.

HOUSING COMPLETIONS
Privately-owned housing completions in April were at a seasonally adjusted annual rate of 986,000. This is 20.4 percent (±14.1%) above the revised March estimate of 819,000 and is 19.4 percent (±15.2%) above the April 2014 rate of 826,000. Single-family housing completions in April were at a rate of 688,000; this is 14.5 percent (±12.4%) above the revised March rate of 601,000. The April rate for units in buildings with five units or more was 288,000.


Builder Confidence Falls 2 Points in May to 54
Posted: May 18, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in May dropped two points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. It is a nine-point increase from the May 2014 reading of 45.

Despite this month’s slight dip, builder confidence in the new home market remains above the 50-point benchmark. Overall, the second quarter of 2015 is shaping up to be very solid.

Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home. On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.

The index’s components were mixed in May. The component charting sales expectations in the next six months rose one point to 64, the index measuring buyer traffic dropped a single point to 39, and the component gauging current sales conditions decreased two points to 59.

Looking at the three-month moving averages for regional HMI scores, the South and Midwest each rose one point to 57 and 55, respectively. The Northeast fell by one point to 41 and the West dropped three points to 55.


Treasury International Capital Data for March 2015
Posted: May 15, 2015 at 04:00 PM (Friday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2015. The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $100.9 billion. Of this, net foreign private outflows were $90.5 billion, and net foreign official outflows were $10.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in March; net purchases were $31.2 billion. Net purchases by private foreign investors were $49.1 billion, while net sales by foreign official institutions were $17.8 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $13.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $17.6 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 $1.6 billion in March.

Foreign residents increased their holdings of U.S. Treasury bills by $21.4 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $13.1 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $115.6 billion.


Forecasters See Stronger Quarterly Growth This Year Accompanied by Lower Unemployment
Posted: May 15, 2015 at 10:00 AM (Friday)

The outlook for growth over the next three quarters looks stronger now than it did three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia. Growth this quarter will be 3.3 percent at an annual rate, up from the previous estimate of 3.0 percent. Third-quarter growth will be 2.9 percent, an upward revision from the previous projection of 2.8 percent, while fourth-quarter growth will be 3.2 percent, up from 2.7 percent in the last survey. At the same time, surprisingly weak historical first-quarter growth is pulling down the survey’s current projection for growth in the annual-average level of real GDP in 2014, from 2.8 percent in the last survey to 2.4 percent in this survey.

The forecasters see an improved outlook for the unemployment rate over the next three years. The forecasters predict that the unemployment rate will be an annual average of 6.4 percent in 2014, before falling to 5.9 percent in 2015, 5.6 percent in 2016, and 5.5 percent in 2017. The projections for 2014, 2015, and 2016 are below those of the last survey.

On the jobs front, the forecasters have revised upward their estimates for job gains in 2014. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 196,500 in 2014, up from the previous estimate of 187,700, and 202,700 in 2015, as the table below shows.


Industrial Production decreased 0.3%
Capacity Utilization decreased to 78.2%

Posted: May 15, 2015 at 09:15 AM (Friday)

Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Show A Slight Expansion
Posted: May 15, 2015 at 08:30 AM (Friday)

The May 2015 Empire State Manufacturing Survey indicates that business conditions improved slightly for New York manufacturers. The headline general business conditions index climbed four points to 3.1. The new orders index rose ten points to 3.9, and the shipments index was little changed at 14.9. Labor market indicators pointed to a small increase in employment levels but a slight decline in the average workweek. The prices paid index fell ten points to 9.4, its lowest level in nearly three years, and the prices received index edged down to 1.0, indicating that selling prices were flat. The index for future general business conditions fell noticeably, reflecting a positive but less favorable outlook than in April.

A Slight Expansion in Business Activity
The May general business conditions index advanced four points but, at 3.1, indicated that business conditions were only slightly better over the month. Thirty percent of respondents reported that conditions had improved, while 27 percent reported that conditions had worsened. The new orders index, positive for the first time since February, rose ten points to 3.9, indicating a small increase in orders. The shipments index was little changed at 14.9, suggesting that shipments continued to grow at a solid clip. The unfilled orders index, at -11.5, also remained close to last month’s level. The delivery time index fell to -10.4—a sign that delivery times shortened—and the inventories index rose to 7.3, pointing to an increase in inventory levels.

Price Indexes Fall
The indexes for both prices paid and prices received were lower this month. The prices paid index dropped ten points to 9.4, its lowest level in nearly three years, indicating that input price increases slowed. The prices received index retreated three points to 1.0, suggesting that selling prices were flat. Labor market conditions pointed to a small increase in employment but a slight dip in the length of the average workweek: the index for number of employees fell four points to 5.2, while the average workweek index, though up two points, remained negative at -2.1.

Optimism Wanes
The index for future general business conditions fell seven points to 29.8, suggesting a positive but less favorable outlook than last month. The future new orders index held steady at 33.9, and the index for future shipments was little changed at 31.8. All three of these indexes remain well below the levels seen throughout most of 2014. Both indexes for future prices fell, indicating that price increases were expected to be somewhat less widespread in the months ahead. The index for future employment fell six points, but at 16.7, it still suggested that employment levels were expected to rise. The capital expenditures index declined nine points to 15.6, and the technology spending index fell to 1.0.


DJ-BTMU U.S. Business Barometer declined by 0.2%
Posted: May 14, 2015 at 10:00 AM (Thursday)

For the week ending May 2 2015, the BTMU U.S. Business Barometer declined by 0.2 percent to 98.8. This week’s barometer was largely dragged down by weak performance in chain stores sales, which slipped by 1.0 percent after posting a gain of 0.8 percent in the previous week. Along similar lines, coal production and electric output fell by 5.8 and 0.6 percent, respectively. Other indexes, however, reported minor gains. For example, lumber production and railroad freight car loadings rose by 2.9 and 1.1 percent, respectively; although those gains were not enough to offset the losses.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.9. Its year-over-year growth rate was 0.8 percent.


Producer Price Index fell 0.4% in April, ex Fd & Engy down 0.1%
Posted: May 14, 2015 at 08:30 AM (Thursday)

The Producer Price Index for final demand fell 0.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.2 percent in March and decreased 0.5 percent in February. On an unadjusted basis, the index for final demand declined 1.3 percent for the 12 months ended in April.

In April, more than 70 percent of the decrease in final demand prices can be attributed to a 0.7 percent decline in the index for final demand goods. Prices for final demand services edged down 0.1 percent.

Within intermediate demand, prices for processed goods fell 1.1 percent, the index for unprocessed goods moved up 0.9 percent, and prices for services advanced 0.5 percent.


Weekly Initial Unemployment Claims Decrease 1,000 to 264,000
Posted: May 14, 2015 at 08:30 AM (Thursday)

In the week ending May 9, the advance figure for seasonally adjusted initial claims was 264,000, a decrease of 1,000 from the previous week's unrevised level of 265,000. The 4-week moving average was 271,750, a decrease of 7,750 from the previous week's unrevised average of 279,500. This is the lowest level for this average since April 22, 2000 when it was 266,750. 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 May 2, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 2 was 2,229,000, unchanged from the previous week's revised level. The previous week's level was revised up 1,000 from 2,228,000 to 2,229,000. The 4-week moving average was 2,260,250, a decrease of 11,500 from the previous week's revised average. This is the lowest level for this average since December 2, 2000 when it was 2,241,000. The previous week's average was revised up by 250 from 2,271,500 to 2,271,750.


Business Inventories up 0.1% in March
Posted: May 13, 2015 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,309.7 billion, up 0.4 percent (±0.2%) from February 2015, but was down 2.1 percent (±0.5%) from March 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,786.2 billion, up 0.1 percent (±0.1%)* from February 2015 and were up 2.9 percent (±0.5%) from March 2014.

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


U.S. Import Price Index declined 0.3% in April
Posted: May 13, 2015 at 08:30 AM (Wednesday)

U.S. import prices declined 0.3 percent in April, after decreasing 0.2 percent in March and 0.4 percent in February, the U.S. Bureau of Labor Statistics reported today. Falling nonfuel prices in April more than offset higher fuel prices. Prices for U.S. exports fell 0.7 percent in April following a 0.1-percent rise the previous month.


U.S. Retail Sales for April virtually unchanged%, Ex-Auto up 0.1%
Posted: May 13, 2015 at 08:30 AM (Wednesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $436.8 billion, virtually unchanged (±0.5%) from the previous month, but 0.9 percent (±0.9%) above April 2014. Total sales for the February 2015 through April 2015 period were up 1.5 percent (±0.7%) from the same period a year ago. The February 2015 to March 2015 percent change was revised from +0.9 percent (±0.5%) to +1.1 percent (±0.2%).

Retail trade sales were down 0.1 (±0.5%) from March 2015, and 0.1 percent (±0.7%) below last year. Food services and drinking places were up 8.5 percent (±3.3%) from April 2014 and nonstore retailers were up 6.3 percent (±1.9%) from last year.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 13, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 3.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 8, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. The unadjusted Purchase Index increased 0.1 percent compared with the previous week and was 12 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 51 percent of total applications, its lowest level since May 2014, from 52 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.3 percent of total applications. The average loan size for purchase applications rose to a survey high of $298,500.

The FHA share of total applications decreased to 13.8 percent from 14.0 percent the week prior. The VA share of total applications remained unchanged at 11.9 percent. The USDA share of total applications increased to 0.9 percent from 0.8 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 4.00 percent, its highest level since March 2015, from 3.93 percent, with points increasing to 0.36 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.99 percent, its highest level since March 2015, from 3.91 percent, with points increasing to 0.33 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.76 percent, its highest level since March 2015, from 3.70 percent, with points decreasing to 0.14 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 3.23 percent, its highest level since March 2015, from 3.19 percent, with points increasing to 0.40 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 5/1 ARMs increased to 3.00 percent, its highest level since March 2015, from 2.87 percent, with points increasing to 0.46 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings were 5.0 million in March
Posted: May 12, 2015 at 10:00 AM (Tuesday)

There were 5.0 million job openings on the last business day of March, little changed from 5.1 million in February, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 5.1 million in March and separations were little changed at 5.0 million. Within separations, the quits rate was 2.0 percent and the layoffs and discharges rate was 1.3 percent; both rates were little different from the previous month. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 5.0 million job openings on the last business day of March, little changed from February. The job openings rate for March was 3.4 percent. The job openings level was little changed for total private and government. Job openings decreased in health care and social assistance but increased in arts, entertainment, and recreation. The number of job openings was little changed in all four regions.

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


NFIB Small Business Optimism Index increased 1.7 points to 96.9
Posted: May 12, 2015 at 07:30 AM (Tuesday)

The Small Business Optimism Index increased 1.7 points from March to 96.9, this in spite of a quarter of virtually no economic growth. Unfortunately, the Index remained below the January reading. Nine of the 10 Index components gained or were unchanged, only real sales expectations were weaker. But this still leaves the Index below its historical average, oscillating between 95 and 98 but never breaking out except for December, when the Index just tipped past 100, only to fall again.

So 2015 got off to a slow start with GDP increasing only 0.2 percent at first “guess”. Trade data will apparently depress that further, perhaps producing a negative print, although more consumer spending may be found to keep growth above the 0 line. For a different perspective, GDP has grown 3 percent from the end of Q1 2014 to the end of Q1 2015, reflecting the volatility in growth that has occurred. Growth for the year will improve, but this was not a good start.

Job growth certainly hit a major speed bump. Weather, sure, but not in major GDP states like Texas, Florida, and California. The plunge in oil prices certainly adversely impacted job growth in the shale states. The West Coast dock strike? Maybe. But hard to figure out how many jobs might have been lost due to delays, certainly temporary losses that will be recovered when the goods flow. NFIB indicators have small business job growth fairly solid and the job openings numbers continue to signal a decline in the unemployment rate.

Financial markets remain on edge for signs of a Federal Reserve rate hike. A zero rate is looking even more absurd with 3 percent growth for the past 12 months. The Fed could argue that growth would have been worse if rates were higher, but more and more observers doubt the validity of that proposition. Low rates (and lower rates) won’t drive more spending, everyone has their “cheap loan”. Rather, it will require an improvement in economic and political prospects to induce economic agents to pick up the pace of hiring and investment spending. Meantime, investors (Gamblers? Are there any investors?) will continue to play the Fed’s waiting/guessing game. The most recent murmurs from the Fed suggest they are recognizing the distortions in asset prices that buying trillions of dollars of risk-free assets (and hoarding them) have created.

The small business growth engine appears to be accounting for more of the real growth (what little there is) as economic activity among the larger firms fades. Solid growth (over 3 percent) will require good performances from both sectors and that will be elusive this year.


Employment Trends Index Ticks Up in April to 128.22
Posted: May 11, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in April. The index now stands at 128.22, up from 127.15 (a downward revision) in March. The change represents a 5.8 percent gain in the ETI compared to a year ago.

April’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: Percentage of Firms with Positions Not Able to Fill Right Now, Ratio of Involuntarily Part-time to All Part-time Workers, Real Manufacturing and Trade Sales, Number of Employees Hired by the Temporary-Help Industry, Initial Claims for Unemployment Insurance, Job Openings, and Industrial Production.


April Employment increased by 223,000
Unemployment Rate dipped to 5.4%

Posted: May 8, 2015 at 02:52 PM (Friday)

Total nonfarm payroll employment increased by 223,000 in April, and the unemployment rate was essentially unchanged at 5.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, and construction. Mining employment continued to decline.

In April, both the unemployment rate (5.4 percent) and the number of unemployed persons (8.5 million) were essentially unchanged. Over the year, the unemployment rate and the number of unemployed persons were down by 0.8 percentage point and 1.1 million, respectively.

Among the major worker groups, the unemployment rate for Asians increased to 4.4 percent. The rates for adult men (5.0 percent), adult women (4.9 percent), teenagers (17.1 percent), whites (4.7 percent), blacks (9.6 percent), and Hispanics (6.9 percent) showed little or no change in April.

The number of persons unemployed for less than 5 weeks increased by 241,000 to 2.7 million in April. The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 2.5 million, accounting for 29.0 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has decreased by 888,000.

In April, the civilian labor force participation rate (62.8 percent) changed little. Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent. The employment-population ratio held at 59.3 percent in April and has been at this level since January.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.6 million in April, but is down by 880,000 from a year earlier. 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 April, 2.1 million persons were marginally attached to the labor force, little changed over the year. (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 756,000 discouraged workers in April, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in April had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 223,000 in April, after edging up in March (+85,000). In April, employment increased in professional and business services, health care, and construction, while employment in mining continued to decline.

The average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in April. The manufacturing workweek for all employees edged down by 0.1 hour to 40.8 hours, and factory overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $24.87. Over the past 12 months, average hourly earnings have increased by 2.2 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $20.90 in April.

The change in total nonfarm payroll employment for February was revised from +264,000 to +266,000, and the change for March was revised from +126,000 to +85,000. With these revisions, employment gains in February and March combined were 39,000 lower than previously reported. Over the past 3 months, job gains have averaged 191,000 per month.


Wholesale Inventories up 0.1% in March
Posted: May 8, 2015 at 10:00 AM (Friday)

The U.S. Census Bureau announced today that March 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 $441.6 billion, down 0.2 percent (+/-0.7)* from the revised February level and were down 4.0 percent (+/-1.4%) from the March 2014 level. The February preliminary estimate was revised downward $1.8 billion or 0.4 percent. March sales of durable goods were up 1.3 percent (+/-1.1%) from last month and were up 2.5 percent (+/-1.9%) 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 2.5 percent. Sales of nondurable goods were down 1.5 percent (+/-0.7%) from February and were down 9.6 percent (+/-1.4%) from last March. Sales of farm product raw materials were down 7.0 percent from last month and sales of petroleum and petroleum products were down 5.1 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $574.5 billion at the end of March, up 0.1 percent (+/-0.4%)* from the revised February level and were up 5.1 percent (+/-1.2%) from the March 2014 level. The February preliminary estimate was revised downward $0.3 billion or 0.1 percent. March inventories of durable goods were up 0.5 percent (+/-0.2%) from last month and were up 7.4 percent (+/-1.6%) from a year ago. Inventories of furniture and home furnishings were up 2.2 percent from last month and inventories of computer and computer peripheral equipment and software were up 1.7 percent. Inventories of nondurable goods were down 0.4% (+/-0.5%)* from February, but were up 1.5 percent (+/-1.6%)* from last March. Inventories of petroleum and petroleum products were down 4.3 percent from last month.

The March inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.30. The March 2014 ratio was 1.19.


Consumer Credit Increased at an annual rate of 7.50%
Posted: May 7, 2015 at 03:00 PM (Thursday)

Consumer credit increased at a seasonally adjusted annual rate of 5-1/2 percent during the first quarter. Revolving credit decreased at an annual rate of 1/4 percent, while nonrevolving credit increased at an annual rate of 7-1/2 percent. In March, consumer credit increased at an annual rate of 7-1/2 percent.


DJ-BTMU U.S. Business Barometer bounced back by 0.2%
Posted: May 7, 2015 at 10:00 AM (Thursday)

For the week ending April 25 2015, the BTMU U.S. Business Barometer bounced back by 0.2 percent to 99.0. This week’s recovery was chiefly driven by strong performance in chain store sales, which, fuelled by strong business gains at office-supply stores, posted a robust gain of 0.8 percent. As to the production side, gains in some indexes were entirely cancelled out by losses in others. For instance, steel production and electric output rose by 2.4 and 0.6 percent, respectively, after declining last week. But those gains were completely offset by weak performances in auto and truck production, which dipped by 8.6 and 2.6 percent, respectively.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.9. Its year-over-year growth rate was 0.7 percent.


Weekly Initial Unemployment Claims Increase 3,000 to 265,000
Posted: May 7, 2015 at 08:30 AM (Thursday)

In the week ending May 2, the advance figure for seasonally adjusted initial claims was 265,000, an increase of 3,000 from the previous week's unrevised level of 262,000. The 4-week moving average was 279,500, a decrease of 4,250 from the previous week's unrevised average of 283,750. This is the lowest level for this average since May 6, 2000 when it was 279,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending April 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 25 was 2,228,000, a decrease of 28,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 11, 2000 when it was 2,161,000. The previous week's level was revised up 3,000 from 2,253,000 to 2,256,000. The 4-week moving average was 2,271,500, a decrease of 20,000 from the previous week's revised average. This is the lowest level for this average since December 9, 2000 when it was 2,266,500. The previous week's average was revised up by 750 from 2,290,750 to 2,291,500.


Challenger Layoffs Surge to 61,582 in April
Posted: May 7, 2015 at 08:00 AM (Thursday)

Falling oil prices contributed to a 68 percent surge in job cuts last month, as US-based employers announced workforce reductions totaling 61,582 in April, up from 36,594 in March, according to the latest report on monthly layoffs released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The April total was 53 percent higher than the same month a year ago, when 40,298 planned job cuts were recorded. It represents the highest monthly total since May 2012 (61,887) and the highest April total since 2009 (132,590).

Year to date, employers have announced 201,796 planned job cuts, which marks a 25 percent increase from the 161,639 layoffs tracked in the first four months of 2014. This is the largest four-month total since 2010.

Driving the increased pace of job cutting in April and for the year is the dramatic decline in oil prices, which is forcing producers and suppliers to cut production. Of the 61,582 job cut announced last month, 20,675 or 34 percent were directly attributed to oil prices.

For the year, oil prices were blamed for 68,285 job cuts, or about 34 percent of the 201,796 planned layoffs announced between January 1 and April 30.

Schlumberger, Baker Hughes and Halliburton have all announced multiple rounds of job cuts in recent months, including April. The largest job cut of the month came from Schlumberger, which announced that it will shed 11,000 workers, in addition to the 9,000 laid off in January.

The jobs that are most vulnerable are those in the field – engineers, oil rig operators, drill operators, refinery operators, etc. Managers and executives in the corporate offices are more secure, but the drop in oil prices is leading to increased merger activity, which could put more executives at risk of job loss.

Most of the oil-related layoffs have occurred in the energy sector, which is the top job-cutting industry to date, with 57,556 planned cuts. That is more than double the second-ranked retail sector, which has announced 26,096 job cuts this year.

The pace of retail sector job cuts is slightly higher than a year ago, when these employers announced 25,224 job cuts through the first four months.

Low oil prices should be helping retailers. However, the extra money in Americans’ wallets do not appear to be making it into the nation’s cash registers. Retail sales have been lackluster, at best. Furthermore, consumer products giant Procter & Gamble announced in April that it would reduce its headcount by as many as 6,000 workers over the next two years, following a poor earnings report.

We could be witnessing the after-effect of the severe and protracted recession. Much like the generation that lived through the Great Depression, those who scraped by during the recession are being extra careful with their money. Another factor is that not everyone’s boat is rising with the tide. Many Americans are still struggling to find work and those that do are not earning as much they once did.


Help Wanted OnLine Labor Demand decreased 104,500 to 5,361,900 in April
Posted: May 6, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 104,500 to 5,361,900 in April, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The March Supply/Demand rate stands at 1.57 unemployed for each advertised vacancy, with a total of 3.1 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.6 million in March.

“After 8 years, the US Supply/Demand (S/D) rate is now back to its pre-recession best in March 2007,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “The Great Recession had taken the US S/D rate to a high of about 5.0 in April 2009 (nearly 5 unemployed competing for each ad). This month’s S/D rate shows a little over 1.5 unemployed competing for each ad.” The S/D recession/recovery impacts by occupational groups are profiled in Table D. (See p. 7.)

The significant drop in the US S/D rate has been helped by very strong employer demand, ranging from 4 to 5 million ads each month over the past 4 years, making it easier for the recession’s 15 million unemployed to find employment opportunities. With the recession’s unemployment numbers finally down significantly, the continued high employer demand at 5 million ads per month will make the job search for new entrants into the labor market much easier.


1Q2015 Productivity Growth Decreased 1.9%
Posted: May 6, 2015 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity decreased at a 1.9 percent annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 0.2 percent and hours worked increased 1.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decline in productivity follows a decline of 2.1 percent in the fourth quarter of 2014. From the first quarter of 2014 to the first quarter of 2015, productivity increased 0.6 percent, reflecting increases in output and hours worked of 3.5 percent and 2.9 percent, respectively.

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

Unit labor costs in the nonfarm business sector increased 5.0 percent in the first quarter of 2015, reflecting a 3.1 percent increase in hourly compensation and a 1.9 percent decline in productivity. Unit labor costs increased 1.1 percent over the last four quarters.

Manufacturing sector productivity decreased 1.1 percent in the first quarter of 2015, as output decreased 1.2 percent and hours worked edged down 0.1 percent. Productivity decreased 2.3 percent in the durable manufacturing sector and was unchanged in the nondurable manufacturing sector. Over the last four quarters, manufacturing productivity increased 1.4 percent, as output increased 3.8 percent and hours increased 2.3 percent. Unit labor costs in manufacturing increased 2.7 percent in the first quarter of 2015 and decreased 0.7 percent from the same quarter a year ago.

The concepts, sources, and methods used for the manufacturing output series differ from those used in the business and nonfarm business output series; these output measures are not directly comparable. See Technical Notes for a more detailed explanation.

Preliminary fourth quarter and annual 2014 measures were announced today for the nonfinancial corporate sector. Productivity increased 2.5 percent in the fourth quarter of 2014 and increased 1.5 percent over the last four quarters. Annual average productivity increased 0.4 percent from 2013 to 2014.

Revised measures
In the fourth quarter of 2014, nonfarm business sector productivity decreased 2.1 percent, a slightly smaller decline than reported March 5. Unit labor costs increased 4.2 percent in the fourth quarter of 2014, a slightly larger increase than previously reported. Total manufacturing sector productivity and unit labor costs were unrevised in the fourth quarter. There were revisions to measures for the durable and nondurable manufacturing sectors.

2014 Annual Average measures for productivity and unit labor costs were unrevised in the nonfarm business sector and total manufacturing sector.


ADP National Employment Report increased by 169,000 in April
Posted: May 6, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 169,000 jobs from March to April according to the April 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 94,000 jobs in April, down from 105,000 in March. Employment among companies with 50-499 employees increased by 70,000 jobs, up from 64,000 the previous month. Employment gains at large companies – those with 500 or more employees – decreased slightly from March, adding 5,000 jobs in April, down from 6,000. Companies with 500-999 employees added no jobs, after adding just 2,000 in March. Companies with over 1,000 employees added 5,000 jobs, a small improvement from 4,000 the previous month.

Goods-producing employment declined by 1,000 jobs in April, down from 3,000 jobs gained in March. The construction industry added 23,000 jobs, up from 21,000 last month. Meanwhile, manufacturing lost 10,000 jobs in April, after losing 3,000 in March.

Service-providing employment rose by 170,000 jobs in April, down slightly from 172,000 in March. The ADP National Employment Report indicates that professional/business services contributed 34,000 jobs in April, up from March’s 28,000. Expansion in trade/transportation/utilities grew by 44,000, up from March’s 41,000. The 7,000 new jobs added in financial activities is a drop from last month’s 12,000.

April job gains came in under 200,000 for the second straight month. Companies with 500 or more employees had the slowest growth.

Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation. Employment in the energy sector and manufacturing is declining. However, this should prove temporary and job growth will reaccelerate this summer.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 6, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 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 May 1, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week to the lowest level since January 2015. The seasonally adjusted Purchase Index increased 1 percent from one week earlier to its highest level since June 2013. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 12 percent higher than the same week one year ago.

"Refinance volume dropped last week as rates in the US increased sharply towards the end of the week, with signs of recovery in Europe lifting rates across the globe. Purchase activity increased slightly over the week, and the average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity decreased to 53 percent of total applications from 55 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.1 percent of total applications. The average loan size for purchase applications rose to a survey high of $297,400.

The FHA share of total applications increased to 14.0 percent from 13.7 percent the week prior. The VA share of total applications increased to 11.9 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.93 percent from 3.85 percent, with points remaining unchanged from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.91 percent from 3.82 percent, with points decreasing to 0.24 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 30-year fixed-rate mortgages backed by the FHA increased to 3.70 percent from 3.66 percent, with points increasing to 0.21 from 0.16 (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 3.19 percent from 3.14 percent, with points decreasing to 0.30 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 decreased to 2.87 percent from 2.88 percent, with points increasing to 0.33 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


ISM Non-Manufacturing Index grew at 57.8%
Posted: May 5, 2015 at 06:22 PM (Tuesday)

Economic activity in the non-manufacturing sector grew in April for the 63rd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 57.8 percent in April, 1.3 percentage points higher than the March reading of 56.5 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased substantially to 61.6 percent, which is 4.1 percentage points higher than the March reading of 57.5 percent, reflecting growth for the 69th consecutive month at a faster rate. The New Orders Index registered 59.2 percent, 1.4 percentage points higher than the reading of 57.8 percent registered in March. The Employment Index increased 0.1 percentage point to 56.7 percent from the March reading of 56.6 percent and indicates growth for the 14th consecutive month. The Prices Index decreased 2.3 percentage points from the March reading of 52.4 percent to 50.1 percent, indicating prices increased in April for the second consecutive month, but at a slower rate. According to the NMI®, 14 non-manufacturing industries reported growth in April. The majority of respondents indicate that there has been an uptick in business activity due to the improved economic climate and prevailing stability in business conditions.

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


Goods and Services Deficit Increased in March 2015
Posted: May 5, 2015 at 08:30 AM (Tuesday)

The Nation's international trade deficit in goods and services increased to $51.4 billion in March from $35.9 billion in February (revised), as imports increased more than exports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $51.4 billion in March, up $15.5 billion from $35.9 billion in February, revised. Marchexports were $187.8 billion, $1.6 billion more than February exports. March imports were $239.2 billion, $17.1 billion more than February imports.

The March increase in the goods and services deficit reflected an increase in the goods deficit of $14.9 billion to $70.6 billion and a decrease in the services surplus of $0.6billion to $19.2 billion.

Year-to-date, the goods and services deficit increased $6.4 billion, or 5.2 percent, from the same period in 2014. Exports decreased $11.7 billion or 2.0 percent. Imports decreased $5.3 billion or 0.8 percent.


Paychex-IHS Small Business Jobs Index up slightly to 100.82 in April
Posted: May 5, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index increased 0.04 percent during the past month, bringing the national index to 100.82 in April. Year over year, however, the national index declined 0.43 percent. Holding steady in March and April, the national index indicates small businesses are able to maintain the increased rate of employment growth set in January and February. While the West North Central region decreased slightly in April, it continued its hold on the top index spot among regions. Washington regained the lead among states tracked by the index, with Maryland showing the best one-month gain in April. Dallas continued its streak as the top-ranked metropolitan area for the seventh month in a row.

"The Paychex | IHS Small Business Jobs Index saw a slight uptick, increasing to 100.82 in April, as small business hiring remains stable, maintaining the pace set in February," said James Diffley, chief regional economist at IHS.

"The fact that small business employment growth has been able to hold steady since the early months of this year and throughout the spring is welcome news," said Martin Mucci, president and CEO of Paychex.


New orders for manufactured goods increased 4.0%
Posted: May 4, 2015 at 10:00 AM (Monday)

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

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

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

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

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

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


New York Purchasing Managers Business Activity rose to 58.1 in April
Posted: May 4, 2015 at 08:30 AM (Monday)

New York City business activity accelerated, according to the survey taken by the Institute for Supply Management-New York (ISM-NY). Noticeably, the headline index and every subcomponent registered improvement in April.

Current Business Conditions rose to 58.1 in April. This followed the most uneven stretch in six years.

Future optimism rose to a 14-month high, signaling further improvement in current conditions in coming months. The Six-Month Outlook increased to 73.4 in April.

Job growth advanced to a six-month high. Employment rose to 60.0 in April.

Purchase volume expanded at a slightly quicker pace. Quantity of Purchases registered 55.3 in April.

The top line and forward guidance both improved markedly. Current Revenues jumped to 68.8 in April, and Expected Revenues vaulted to 81.3 in April.

There were higher price pressures. Prices Paid hit a three-month high of 66.7 in April, and Prices Received reached an eight-month high of 60.0 in April.

Potential Business Opportunities/Impediments: A more favorable composition for near-term prospects. Domestic and foreign demand tied for top opportunity, and other notable opportunities were regulations, energy costs and inflation. Usual suspects for impediments – cost of benefits and cost of labor – have diminished so far this year from worse readings last year.


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

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

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

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


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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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


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

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

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

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


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

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

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


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

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


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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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

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


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

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

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

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

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


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

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 24, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 21 percent higher than the same week one year ago.

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

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

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

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

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

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

The average contract interest rate for 5/1 ARMs decreased to 2.88 percent from 2.89 percent, with points decreasing to 0.27 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Richmond Fed's Current Activity Index gained 5 points to a reading of -3
Posted: April 28, 2015 at 10:00 AM (Tuesday)

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

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

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

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

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

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

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


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

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

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was April 17.

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

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

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

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


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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


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

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

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


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

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

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

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


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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

Mortgage applications increased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 17, 2015.

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

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

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

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

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.83 percent, its lowest level since January 2015, from 3.87 percent, with points decreasing to 0.32 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.83 percent from 3.84 percent, with points decreasing to 0.22 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.65 percent, its lowest level since May 2013, from 3.67 percent, with points decreasing to 0.12 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.11 percent, its lowest level since January 2015, from 3.16 percent, with points decreasing to 0.24 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

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


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

The CFNAI was constructed using data available as of April 16, 2015. At that time, March data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The February monthly index was revised to –0.18 from an initial estimate of –0.11. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the February monthly index was due primarily to the former.


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

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

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

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

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


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

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

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

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

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


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

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

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

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


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

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

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

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

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

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

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

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


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

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

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

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


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

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

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

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


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

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

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


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

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

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

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $9.8 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $10.6 billion in February.

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


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

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

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

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


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

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

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

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

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

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


Industrial Production decreased 0.6%
Capacity Utilization decreased to 78.4%

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

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


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

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

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

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

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


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 15, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 10, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 7 percent higher than the same week one year ago.

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

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

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

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

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

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.16 percent from 3.15 percent, with points remaining unchanged from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

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


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

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

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

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


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

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

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

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


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

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

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


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

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

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

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

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

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


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

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


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

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

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

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


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

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

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

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

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

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

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