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Category: Research - Topic: Economics



University of Michigan Consumer Confidence increased in April to 97.0
Posted: April 28, 2017 at 10:00 AM (Friday)

Consumer sentiment has traveled on the high plateau established following Trump’s election, with only minor deviations from its five month average of 97.4. There is widespread agreement among consumers on their very positive assessments of the current state of the economy as well as widespread disagreement on future economic prospects. Although the partisan divide has narrowed in April, it still reflects a very pessimistic economic outlook among Democrats and a very optimistic outlook among Republicans. Partisanship has never had such a significant influence on expectations household incomes, inflation, and unemployment. The data indicate that spending will advance by 2.5% in 2017, but those gains will be uneven over time and across products.

Partisan Impact on Personal Finances
Improved finances were reported by half of all households in the past two months—the best record in more than fifteen years. Importantly, there was no partisan difference in how consumers viewed their current financial situation. In contrast, partisanship had a significant impact on how consumers judged their financial prospects: improving finances were anticipated in the year ahead by 48% of Republicans but just 31% of Democrats.

Partisan Economic Outlook
When consumers were asked about future prospects for the national economy, an improved economy was expected by 66% of Republicans but by just 18% of Democrats. This sharp partisan difference of 48 percentage points represented a significant improvement over last month’s 68 point difference. Unemployment expectations were the most favorable since 1984, primarily due to the 59% of Republicans who expected the unemployment rate would fall below its already low rate of 4.5%; just 15% of Democrats anticipated falling joblessness.

The Consumer Sentiment Index was 97.0 in the April 2017 survey, just above the 96.9 in March, and well above last April’s 89.0. The Current Conditions Index was 112.7 in April, nearly equal to March’s decade high of 113.2, and above last April’s 106.7. The Expectations Index was 87.0 in April, just ahead of the 86.5 in the prior two months, and well above last April’s 77.6.

Selective perception of economic news is the driving force behind the partisan divide. Favorable economic developments were cited by nearly every Republican in the April survey, while three-quarters of Democrats report-ed hearing negative news about the economy. The re-lease of 1st quarter GDP and assessments of Trump’s first 100 days are more likely to encourage continued selective perceptions rather than to reduce the preva-lence of extreme partisan views. Optimism among Inde-pendents, who may be less susceptible to the sway of political ideologies and account for 42% of all consumers, have posted strong gains in the past few months. While the partisan extremes will heighten uncertainty, Independents will help to stabilize the pace of growth.


Chicago Purchasing Managers Index up by 0.6 points to 58.3 in April
Posted: April 28, 2017 at 09:45 AM (Friday)

The MNI Chicago Business Barometer increased to 58.3 in April from 57.7 in March, the highest level since January 2015.

Optimism among firms about business conditions rose for the third month in a row. Three of the five Barometer components led April’s increase, with Production and Order Backlogs receding.

Demand continued to gain ground in April, rising for the third consecutive month. New orders rose by 5.5 points, to touch almost a three-year high. Off the back of two consecutive rises, the Production indicator fell 2.2 points to 59.5 from 61.7 in March. Order Backlogs contracted for the fifth consecutive month, although at a much faster rate than in recent months. Suppliers took longer to deliver key inputs, with the respective indicator 1.6 points higher at 56.0 in April.

Amid rising orders, demand for labor picked up. The Employment indicator leapt out of contraction territory after a brief dip below 50 last month. Although the indicator has expanded only seven times in last 24 months, it is showing tentative signs of a pick-up, sitting above 50 in two of the last three months.

April’s special question asked firms about the impact of an interest rate hike by the Federal Reserve in the next six months on their business. More than half of respondents expected to remain unaffected, 22% expected to be negatively impacted, 18% were unsure while only 6% expected to benefit from a rate hike. When a similar question was posed in April last year, 36% of respondents expected no impact and an equal proportion were unsure of the affect.

The Federal Reserve raised interest rates in March for only the third time in a decade and are projected to hike two more times this year. Firms in our panel were more confident about higher rates and appear to have already estimated the impact on their financing costs. Factory gate prices eased for the second consecutive month, though remain elevated. Prices Paid were up almost 14% on the year and continue to trend upwards, although the growth rate has eased recently.

“The April Chicago report showcased another impressive month, with firms reporting solid growth. Rising demand and firm production led to a pick-up in hiring by firms. Although the employment indicator has been bumpy, in and out of contraction, if the current month’s rise is sustained, it could provide a boost to the labor market,” said Shaily Mittal, senior economist at MNI Indicators.


1Q2017 GDP advance estimate increased 0.7%
Posted: April 28, 2017 at 08:30 AM (Friday)

Real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the first quarter of 2017, according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2016, real GDP increased 2.1 percent.

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

The deceleration in real GDP in the first quarter reflected a deceleration in PCE and downturns in private inventory investment and in state and local government spending that were partly offset by an upturn in exports and accelerations in both nonresidential and residential fixed investment.

Current-dollar GDP increased 3.0 percent, or $137.9 billion, in the first quarter to a level of $19,007.3 billion. In the fourth quarter, current-dollar GDP increased 4.2 percent, or $194.1 billion.

The price index for gross domestic purchases increased 2.6 percent in the first quarter, compared with an increase of 2.0 percent in the fourth quarter. The PCE price index increased 2.4 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 2.0 percent, compared with an increase of 1.3 percent.

Current-dollar personal income increased $161.9 billion in the first quarter, compared with an increase of $154.6 billion in the fourth. The acceleration in personal income primarily reflected an acceleration in government social benefits to persons that was partly offset by a downturn in personal dividend income.

Disposable personal income increased $121.0 billion, or 3.4 percent, in the first quarter, compared with an increase of $141.6 billion, or 4.1 percent, in the fourth. Real disposable personal income increased 1.0 percent, compared with an increase of 2.0 percent.

Personal saving was $814.2 billion in the first quarter, compared with $778.9 billion in the fourth. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.7 percent in the first quarter, compared with 5.5 percent in the fourth.


Employment Cost Index up 0.8% in 1Q2017
Posted: April 28, 2017 at 08:30 AM (Friday)

Compensation costs for civilian workers increased 0.8 percent, seasonally adjusted, for the 3-month period ending in March 2017, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.8 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.7 percent.

Civilian Workers
Compensation costs for civilian workers increased 2.4 percent for the 12-month period ending in March 2017. In March 2016, compensation costs increased 1.9 percent. Wages and salaries increased 2.5 percent for the current 12-month period and increased 2.0 percent for the 12-month period ending in March 2016. Benefit costs increased 2.2 percent for the 12-month period ending in March 2017. In March 2016, the increase was 1.7 percent.

Private Industry Workers
Compensation costs for private industry workers increased 2.3 percent over the year. In March 2016, the increase was 1.8 percent. Wages and salaries increased 2.6 percent for the current 12-month period. In March 2016, the increase was 2.0 percent. The cost of benefits rose 1.9 percent for the 12-month period ending in March 2017, higher than the 1.2 percent increase in March 2016.

Employer costs for health benefits increased 1.3 percent for the 12-month period ending in March 2017.

Among occupational groups, compensation cost increases for private industry workers for the 12-month period ending in March 2017 ranged from 2.0 percent for management, professional, and related occupations to 3.4 percent for service occupations.

Among industry supersectors, compensation cost increases for private industry workers for the current 12-month period ranged from 1.5 percent for professional and business services to 4.3 percent for leisure and hospitality.

State and Local Government Workers
Compensation costs for state and local government workers increased 2.6 percent for the 12-month period ending in March 2017. In March 2016, the increase was 2.4 percent. Wages and salaries increased 2.2 percent for the 12-month period ending in March 2017, higher than the March 2016 increase of 1.8 percent. Benefit costs increased 3.1 percent for the 12-month period ending in March 2017. The prior year’s increase was 3.5 percent.


Kansas City Fed Manufacturing Activity expanded at a somewhat slower pace in April
Posted: April 27, 2017 at 11:00 AM (Thursday)

Tenth District manufacturing activity expanded at a somewhat slower pace in April, and expectations for future activity eased but remained at solid levels. Price indexes were mixed, but recorded little change overall.

The month-over-month composite index was 7 in April, down from the very strong readings of 20 in March and 14 in February (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity in both durable and nondurable goods plants eased slightly, particularly for metals, machinery, food, and plastic products. Most month-over-month indexes expanded at a slower pace in April. The production, shipments, and new orders indexes fell but remained positive, and the employment index edged lower from 13 to 9. In contrast, the new orders for exports index increased from 2 to 4. Both inventory indexes fell moderately after rising the past two months.

Most year-over-year factory indexes recorded little change from the previous month’s readings. The composite year-over-year index was basically unchanged at 13, and the production, shipments, and order backlog indexes also remained stable. The employment index eased from 17 to 14, and the new orders index fell moderately. The capital expenditures index edged lower from 12 to 5, while the new orders for exports index posted its highest reading in over five years. The raw materials inventory index increased from 1 to 3, while the finished goods inventory index decreased.

Expectations for future factory activity moderated slightly after posting historical highs last month. The future composite index fell from 32 to 17, and the future production, shipments, new orders, and order backlog indexes also decreased somewhat from their high readings last month. The future employment index dropped from 43 to 26, and the future capital expenditures index also fell moderately. The future raw materials inventory index decreased from 8 to 4, while the future finished goods index increased modestly.

Price indexes were mixed in April. The month-over-month finished goods price index eased from 9 to 5, while the raw materials price index edged higher. The year-over-year finished goods price index inched up from 26 to 29, and the raw materials price index also increased mildly. The future raw materials price index fell from 59 to 45, and the future finished goods price index also eased slightly.


Pending Home Sales Index declined 0.8% in March
Posted: April 27, 2017 at 10:00 AM (Thursday)

Pending home sales in March maintained their recent high level, but momentum slackened slightly in most of the country as dearth supply weighed on activity, according to the National Association of Realtors®. Only the South saw an uptick in contract signings last month.

The Pending Home Sales Index, www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, declined 0.8 percent to 111.4 in March from 112.3 in February. Despite last month's decrease, the index is 0.8 percent above a year ago.

Lawrence Yun, NAR chief economist, says sparse inventory levels caused a pullback in pending sales in March, but activity was still strong enough to be the third best in the past year. "Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range," he said. "In most areas, the lower the price of a home for sale, the more competition there is for it. That's the reason why first-time buyers have yet to make up a larger share of the market this year, despite there being more sales overall."

Pointing to revealing data from the March Realtors® Confidence Index, Yun worries that the painfully low supply levels this spring could heighten price growth — at 6.8 percent last month — even more in the months ahead. Homes in March came off the market at a near-record pace, and indicating an increase in the likelihood of listings receiving multiple offers, 42 percent of homes sold at or above list price (the second highest amount since NAR began tracking in December 2012).

"Sellers are in the driver's seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers," said Yun. "Buyers are showing resiliency given the challenging conditions. However, at some point — and the sooner the better — price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen."

Yun forecasts for existing-home sales to be around 5.64 million this year, an increase of 3.5 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast decreased 2.9 percent to 99.1 in March, but is still 1.8 percent above a year ago. In the Midwest the index declined 1.2 percent to 109.6 in March, and is now 2.4 percent lower than March 2016.

Pending home sales in the South rose 1.2 percent to an index of 129.4 in March and are now 3.9 percent above last March. The index in the West fell 2.9 percent in March to 94.5, and is now 2.7 percent below a year ago.


March New Orders for Durable Goods increased 0.7%, Ex-Trans down 0.2%
Posted: April 27, 2017 at 08:30 AM (Thursday)

New Orders
New orders for manufactured durable goods in March increased $1.6 billion or 0.7 percent to $238.7 billion, the U.S. Census Bureau announced today. This increase, up three consecutive months, followed a 2.3 percent February increase. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders increased 0.1 percent. Transportation equipment, also up three consecutive months, drove the increase, $2.0 billion or 2.4 percent to $83.3 billion.

Shipments
Shipments of manufactured durable goods in March, up four of the last five months, increased $0.6 billion or 0.2 percent to $239.8 billion. This followed a 0.2 percent February increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $0.4 billion or 0.5 percent to $81.7 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in March, up two consecutive months, increased $2.5 billion or 0.2 percent to $1,119.0 billion. This followed a 0.1 percent February increase. Transportation equipment, also up two consecutive months, led the increase, $1.6 billion or 0.2 percent to $755.5 billion.


Weekly Initial Unemployment Claims Increase 14,000 to 257,000
Posted: April 27, 2017 at 08:30 AM (Thursday)

In the week ending April 22, the advance figure for seasonally adjusted initial claims was 257,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 244,000 to 243,000. The 4-week moving average was 242,250, a decrease of 500 from the previous week's revised average. The previous week's average was revised down by 250 from 243,000 to 242,750.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending April 15, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 15 was 1,988,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 1,979,000 to 1,978,000. The 4-week moving average was 2,007,250, a decrease of 16,000 from the previous week's revised average. This is the lowest level for this average since June 10, 2000 when it was 2,006,000. The previous week's average was revised down by 250 from 2,023,500 to 2,023,250.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: April 26, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 21, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 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 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 0.1 percent compared with the previous week and was 0.4 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 44.0 percent of total applications from 42.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.7 percent of total applications. The average loan size for refinance applications increased to its highest level since September 2016, $266,900.

The FHA share of total applications decreased to 10.0 percent from 11.0 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.1 percent the week prior. The USDA share of total applications decreased to 0.8 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.20 percent, from 4.22 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) remained unchanged from 4.15 percent, with points increasing to 0.27 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.03 percent from 4.09 percent, with points decreasing to 0.34 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.46 percent, from 3.50 percent, with points increasing to 0.50 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to its lowest level since November 2016, 3.22 percent, from 3.27 percent, with points decreasing to 0.18 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New Home Sales in March at annual rate of 621,000
Posted: April 25, 2017 at 10:00 AM (Tuesday)

Sales of new single-family houses in March 2017 were at a seasonally adjusted annual rate of 621,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.8 percent (±15.5 percent)* above the revised February rate of 587,000 and is 15.6 percent (±15.0 percent) above the March 2016 estimate of 537,000.

The median sales price of new houses sold in March 2017 was $315,100. The average sales price was $388,200. The seasonally-adjusted estimate of new houses for sale at the end of March was 268,000. This represents a supply of 5.2 months at the current sales rate.


Consumer Confidence declined in April to 120.3
Posted: April 25, 2017 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in March, declined in April. The Index now stands at 120.3 (1985=100), down from 124.9 in March. The Present Situation Index decreased from 143.9 to 140.6 and the Expectations Index declined from 112.3 last month to 106.7.

“Consumer confidence declined in April after increasing sharply over the past two months, but still remains at strong levels,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers assessed current business conditions and, to a lesser extent, the labor market less favorably than in March. Looking ahead, consumers were somewhat less optimistic about the short-term outlook for business conditions, employment and income prospects. Despite April’s decline, consumers remain confident that the economy will continue to expand in the months ahead.”

Consumers’ assessment of current conditions eased in April. Those saying business conditions are “good” declined from 32.4 percent to 30.2 percent, while those saying business conditions are “bad” increased slightly, from 13.1 percent to 13.8 percent. Consumers’ assessment of the labor market was moderately less favorable. Those stating jobs are “plentiful” declined from 31.8 percent to 30.8 percent, while those claiming jobs are “hard to get” was virtually unchanged at 19.1 percent.

Consumers were less optimistic about the short-term outlook in April. The percentage of consumers expecting business conditions to improve over the next six months decreased from 26.9 percent to 24.8 percent, while those expecting business conditions to worsen rose from 8.5 percent to 10.9 percent.

Consumers’ outlook for the labor market was also less upbeat. The proportion expecting more jobs in the months ahead declined from 23.8 percent to 23.0 percent, while those anticipating fewer jobs increased from 12.7 percent to 13.1 percent. The percentage of consumers expecting their incomes to increase declined from 22.5 percent to 19.3 percent, while the proportion expecting a decrease held steady at 7.5 percent.


Richmond Fed's Current Activity Index lost 2 points to a reading of 20
Posted: April 25, 2017 at 10:00 AM (Tuesday)

Manufacturers in the Fifth District were upbeat again in April, according to the latest survey by the Federal Reserve Bank of Richmond. The index for shipments rose and the index for new orders remained very strong. Even though the index for employment fell, the composite index for manufacturing remained high, with a reading of 20 in April compared to 22 in March. This was the first time since 1994 that the composite index remained at or above 20 for two consecutive months. The majority of firms continued to report longer workweeks and increased wages.

Looking six months ahead, manufacturing executives remained generally optimistic, although many of the indexes fell slightly from their March readings. The only two indexes that increased were expected capacity utilization and expected capital expenditures. Nonetheless, the expected shipments index had a strong reading of 42 in April and the expected new orders index was 46.

Survey respondents reported that growth in prices paid rose somewhat while growth in prices received moderated slightly.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.2% in February
Posted: April 25, 2017 at 09:00 AM (Tuesday)

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

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in February, up from 5.6% last month and setting a 32-month high. The 10-City Composite posted a 5.2% annual increase, up from 5.0% the previous month. The 20-City Composite reported a year-over-year gain of 5.9%, up from 5.7% in January.
Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In February, Seattle led the way with a 12.2% year-over-year price increase, followed by Portland with 9.7%. Dallas replaced Denver in the top three with an 8.8% increase. Fifteen cities reported greater price increases in the year ending February 2017 versus the year ending January 2017.
The below charts compare year-over-year returns for Seattle and Portland with different ranges of housing prices (tiers). Tier level analysis from 2011 to present shows both Seattle and Portland’s year-over-year housing price returns in the high tier are the most stable, while housing prices in the low tier are the most volatile.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in February. The 10-City Composite posted a 0.3% increase, and the 20-City Composite reported a 0.4% increase in February. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase. The 10-City Composite posted a 0.6% increase and the 20-City Composite reported a 0.7% month-over-month increase. Sixteen of 20 cities reported increases in February before seasonal adjustment; after seasonal adjustment, 19 cities saw prices rise.

ANALYSIS
“Housing and home prices continue to advance,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P Corelogic Case-Shiller National Home Price Index and the two composite indices accelerated since the national index set a new high four months ago. Other housing indicators are also advancing, but not accelerating the way prices are. As per National Association of Realtors sales of existing homes were up 5.6% in the year ended in March. There are still relatively few existing homes listed for sale and the small 3.8 month supply is supporting the recent price increases. Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates.
“Housing’s strength and home building are important contributors to the economic recovery. Housing starts bottomed in March 2009 and, with a few bumps, have advanced over the last eight years. New home construction is now close to a normal pace of about 1.2 million units annually, of which around 800,000 are single family homes. Most housing rebounds following a recession only last for a year or so. The notable exception was the boom that set the stage for the bubble. Housing starts bottomed in 1991, drove through the 2000-2001 recession, and peaked in 2005 after a 14-year run.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.8% annual gain in February 2017. The 10-City and 20-City Composites reported year-over-year increases of 5.2% and 5.9%, respectively. As of February 2017, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


Philadelphia NonManufacturing Activity Indicators continued to expand in April
Posted: April 25, 2017 at 08:30 AM (Tuesday)

Firms responding to April’s Nonmanufacturing Business Outlook Survey reported that regional nonmanufacturing activity continued to expand. The index for current firm-level activity rose slightly, while the indexes for new orders, sales/revenues, and employment increased by greater amounts. Both the prices paid and prices received indexes also increased from the prior month. The respondents remained optimistic about activity over the next six months.

Growth Continues
The index for general activity at the firm level edged up from 32.5 in March to 34.9 in April (see Chart 1). This index has been above its historical average of 28.5 for four consecutive months. Nearly 48 percent of the firms reported increases in activity this month, compared with 13 percent that reported decreases. The regional activity index fell 5 points, to 30.1, but remains above its historical average of 23.0.

New Orders and Sales Pick Up
The indicators for new orders and sales/revenues showed improvement, as more firms reported increases in both categories this month compared with last month. The new orders index rose from 22.6 in March to 33.5 in April, its highest reading since February 2015. The sales/revenues index also improved, rising 14 points to 34.7. More than 50 percent of the firms indicated higher sales/revenues, up from 36 percent in March, while 15 percent of the firms reported a decrease.

Full-Time Employment Strengthens
The indicators for employment rose in April. The full-time employment index increased 9 points, to 26.4. Almost 31 percent of the firms reported an increase in full-time employment, up 6 points from March. Only 4 percent of the firms reported a decline. The part-time employment index rose 14 points, to 24.3. The increase in the part-time employment index was largely driven by a rise in the share of firms reporting an increase, from 20 percent in March to 30 percent in April. The wage and benefit costs indicator rose 17 points to 39.3 in April, as a higher percentage of firms reported increases this month (40 percent) than last month (27 percent). The average workweek index held relatively steady at 20.0.

Firms Report Higher Prices
Firms reported increases in the prices paid for inputs and their own products and services in April. The prices paid index increased 14 points to 31.6 (see Chart 2). Nearly 32 percent of the firms reported increases in prices paid, none of the firms reported decreases, and most of the firms (61 percent) reported no change. The prices received index returned to positive territory after registering negative readings for the past two months, increasing from -4.7 in March to 24.7 in April. Although most of the firms continued to report no change for prices received (57 percent), the percentage of firms that reported an increase (27 percent) exceeded the percentage of firms that reported a decrease (2 percent).

Capital Expenditures Rise
The indexes for spending on equipment and software and physical plant both rose for the first time in three months. The index for equipment and software spending increased 14 points, to 33.5. Nearly 39 percent of the respondents reported an increase in spending on equipment and software, while 5 percent reported a decrease. The index for physical plant spending rose 6 points, to 27.5; 29 percent of the firms reported an increase, while only 2 percent reported a decrease.

Firms Continue to Expect Future Growth
The respondents to this month’s survey remained optimistic in their outlook over the next six months, although the two indicators for future activity moved in opposite directions. The diffusion index for future activity at the firm level rose 5 points, to 59.1 (see Chart 1). More than 60 percent of the firms expect increases in activity at their firms over the next six months, and only 1 percent expect a decline. The future regional activity index decreased 5 points, to 47.8. Both future indexes have been above their historical averages for five consecutive months (49.7 for future activity at the firm level and 43.8 for future activity in the region)..

Summary
Results from this month’s Nonmanufacturing Business Outlook Survey suggest continued business expansion. The indicator for firm-level general activity edged up, and the indicators for new orders and sales/revenues rose as well. Firms also reported increases in employment and indicated higher prices. Forecasts for the next six months remain optimistic.


Texas Fed Manufacturing Activity Increased in April
Posted: April 24, 2017 at 10:30 AM (Monday)

Texas factory activity increased for the 10th consecutive month in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, moved down three points to 15.4, suggesting output growth continued but at a slightly slower pace this month.

Other measures of current manufacturing activity also indicated continued expansion in April. The survey’s demand indicators saw upward movement, with the new orders and growth rate of orders indexes edging up to 11.5 and 5.1, respectively. The shipments index also moved up, rising three points to 9.5. The capacity utilization index fell slightly but stayed positive for a 10th month in a row, coming in at 11.5.

Perceptions of broader business conditions improved again. The general business activity index held steady at 16.8, and the company outlook index inched down but remained positive at 15.1.

Labor market measures indicated employment gains and longer workweeks in April. The employment index posted a fourth consecutive positive reading and remained unchanged at 8.5. Eighteen percent of firms noted net hiring, compared with 9 percent noting net layoffs. The hours worked index fell three points to 5.9.

Prices and wages continued to rise in April. Upward pressure on input costs continued to recede slightly, with the raw materials prices index falling four points to 20.8. Meanwhile, upward pressure on selling prices increased. The finished goods prices index rose 4.5 points to 12.0, slightly lower than levels seen earlier this year but still well above average. The wages and benefits index held fairly steady at 18.8, indicating compensation costs continued to rise at roughly the same pace seen over the past several months.

Expectations regarding future business conditions continued to improve, although several six-month-ahead indexes retreated from their March levels. The indexes of future general business activity and future company outlook came in at 27.1 and 26.2, respectively, down from last month’s readings but still solidly in positive territory. Most other indexes for future manufacturing activity slipped but remained positive.


Chicago Fed National Activity Growth increased in March
Posted: April 24, 2017 at 08:30 AM (Monday)

The CFNAI Diffusion Index, which is also a three-month moving average, edged down to +0.11 in March from +0.15 in February. Forty-eight of the 85 individual indicators made positive contributions to the CFNAI in March, while 37 made negative contributions. Thirty-seven indicators improved from February to March, while 47 indicators deteriorated and one was unchanged. Of the indicators that improved, ten made negative contributions.

Employment-related indicators contributed +0.02 to the CFNAI in March, down from +0.20 in February. Nonfarm payrolls increased by 98,000 in March after rising by 219,000 in February. In contrast, the civilian unemployment rate declined to 4.5 percent in March from 4.7 percent in February.

The contribution from production-related indicators to the CFNAI was unchanged at +0.04 in March. Total industrial production rose 0.5 percent in March after edging up 0.1 percent in February, but manufacturing production declined 0.4 percent in March after increasing 0.3 percent in the previous month.

The sales, orders, and inventories category also made a positive contribution to the CFNAI in March, though this contribution ticked down to +0.07 from +0.09 in February. The Institute for Supply Management’s Manufacturing Purchasing Managers’ New Orders Index edged down to 64.5 in March from 65.1 in February.

The contribution of the personal consumption and housing category to the CFNAI ticked up to –0.05 in March from –0.06 in February. Housing permits increased to 1,260,000 annualized units in March from 1,216,000 in February, while housing starts decreased to 1,215,000 annualized units in March from 1,303,000 in the previous month.

The CFNAI was constructed using data available as of April 20, 2017. At that time, March data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The February monthly index value was revised to +0.27 from an initial estimate of +0.34, and the January monthly index value was revised to –0.25 from last month’s estimate of –0.02. Revisions to the monthly index value can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the February and January monthly index values were primarily due to the former.


Existing-Home Sales ascended 4.4% in March
Posted: April 21, 2017 at 10:00 AM (Friday)

Existing-home sales took off in March to their highest pace in over 10 years, and severe supply shortages resulted in the typical home coming off the market significantly faster than in February and a year ago, according to the National Association of Realtors®. Only the West saw a decline in sales activity in March.

Total existing-home sales, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended 4.4 percent to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February. March's sales pace is 5.9 percent above a year ago and surpasses January as the strongest month of sales since February 2007 (5.79 million).

Lawrence Yun, NAR chief economist, says existing sales roared back in March and were led by hefty gains in the Northeast and Midwest. "The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month," he said. "Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does."

The median existing-home price for all housing types in March was $236,400, up 6.8 percent from March 2016 ($221,400). March's price increase marks the 61st consecutive month of year-over-year gains.

Total housing inventory at the end of March increased 5.8 percent to 1.83 million existing homes available for sale, but is still 6.6 percent lower than a year ago (1.96 million) and has fallen year-over-year for 22 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (unchanged from February).

Added Yun, "Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year."

Properties typically stayed on the market for 34 days in March, which is down significantly from 45 days in February and 47 days a year ago. Short sales were on the market the longest at a median of 90 days in March, while foreclosures sold in 52 days and non-distressed homes took 32 days (shortest since NAR began tracking in May 2011). Forty-eight percent of homes sold in March were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in March were San Jose-Sunnyvale-Santa Clara, Calif., 24 days; San Francisco-Oakland-Hayward, Calif., 25 days; Seattle-Tacoma-Bellevue, Wash., and Denver-Aurora-Lakewood, Colo., both at 28 days; and Vallejo-Fairfield, Calif., 31 days.

"Last month's swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry's struggle to meet the dire need for more new homes," said Yun. "A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy."

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage rose for the fifth straight month in March to 4.20 percent from 4.17 percent in February. The average commitment rate for all of 2016 was 3.65 percent.

First-time buyers were 32 percent of sales in March, which is unchanged from February and up from 30 percent a year ago. NAR's 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35 percent.

NAR President William E. Brown, a Realtor® from Alamo, California, says patience is virtue for prospective first-time buyers this spring. "Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range," he said. "The best advice is to lean on the guidance of a Realtor® throughout the home search and be careful about stretching the budget too far. Don't get frustrated by losing out on a home and know the right one will eventually come along in due time."

All-cash sales were 23 percent of transactions in March, down from 27 percent in February and 25 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in March, down from 17 percent in February but up from 14 percent a year ago. Sixty-three percent of investors paid in cash in March.

Distressed sales – foreclosures and short sales – were 6 percent of sales in March, down from 7 percent in February and 8 percent a year ago. Five percent of March sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in March (18 percent in February), while short sales were discounted 14 percent (17 percent in February).

Single-family and Condo/Co-op Sales
Single-family home sales climbed 4.3 percent to a seasonally adjusted annual rate of 5.08 million in March from 4.87 million in February, and are now 6.1 percent above the 4.79 million pace a year ago. The median existing single-family home price was $237,800 in March, up 6.6 percent from March 2016.

Existing condominium and co-op sales increased 5.0 percent to a seasonally adjusted annual rate of 630,000 units in March, and are now 5.0 percent higher than a year ago. The median existing condo price was $224,700 in March, which is 8.0 percent above a year ago.

March existing-home sales in the Northeast surged 10.1 percent to an annual rate of 760,000, and are now 4.1 percent above a year ago. The median price in the Northeast was $260,800, which is 2.8 percent above March 2016.

In the Midwest, existing-home sales jumped 9.2 percent to an annual rate of 1.31 million in March, and are now 3.1 percent above a year ago. The median price in the Midwest was $183,000, up 6.2 percent from a year ago.

Existing-home sales in the South in March rose 3.4 percent to an annual rate of 2.42 million, and are now 8.5 percent above March 2016. The median price in the South was $210,600, up 8.6 percent from a year ago.

Existing-home sales in the West decreased 1.6 percent to an annual rate of 1.22 million in March, but are still 5.2 percent above a year ago. The median price in the West was $347,500, up 8.0 percent from March 2016.


U.S. Leading Economic Index increased 0.4% in March
Posted: April 20, 2017 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for the U.S. increased 0.4 percent in March to 126.7 (2010 = 100), following a 0.5 percent increase in February, and a 0.6 percent increase in January.

“The March increase and upward trend in the U.S. LEI point to continued economic growth in 2017, with perhaps an acceleration later in the year if consumer spending and investment pick up,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The gains among the leading indicators were very widespread, with new orders in manufacturing and the interest rate spread more than offsetting declines in the labor market components in March.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in March to 114.9 (2010 = 100), following a 0.2 percent increase in February, and no change in January.

The Conference Board Lagging Economic Index® (LAG) for the U.S. was unchanged in March, remaining at 123.6 (2010 = 100), following a 0.2 percent increase in both February and January.


Weekly Initial Unemployment Claims Increase 10,000 to 244,000
Posted: April 20, 2017 at 09:00 AM (Thursday)

In the week ending April 15, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 10,000 from the previous week's unrevised level of 234,000. The 4-week moving average was 243,000, a decrease of 4,250 from the previous week's unrevised average of 247,250.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending April 8, 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 April 8 was 1,979,000, a decrease of 49,000 from the previous week's unrevised level of 2,028,000. This is the lowest level for insured unemployment since April 15, 2000 when it was 1,962,000. The 4-week moving average was 2,023,500, a decrease of 2,000 from the previous week's unrevised average of 2,025,500. This is the lowest level for this average since June 17, 2000 when it was 2,016,750.


Philadelphia Fed Outlook Reported Activity expanded at a slower pace in April
Posted: April 20, 2017 at 08:30 AM (Thursday)

Results from the April Manufacturing Business Outlook Survey suggest that regional manufacturing activity continued to expand, but at a slower pace than last month. The diffusion indexes for general activity, new orders, and shipments remained positive but fell from their readings in March. The current employment index, however, improved slightly and continues to suggest expanding employment in the manufacturing sector. The survey’s future indicators continued to reflect general optimism but retreated from their high readings in the first three months of the year.

Current Indicators Continue to Reflect Growth
The index for current manufacturing activity in the region decreased from a reading of 32.8 in March to 22.0 this month. The index has been positive for nine consecutive months and remains at a relatively high reading but has moved down the past two months (see Chart 1). Thirty-seven percent of the firms indicated increases in activity in April, while 15 percent reported decreases. The current new orders and shipments indexes remained at high readings but declined 11 points and 10 points, respectively. Both the delivery times and unfilled orders indexes were positive for the sixth consecutive month, suggesting longer delivery times and increases in unfilled orders.

Firms reported an increase in manufacturing employment and work hours this month. The percentage of firms reporting an increase in employment (27 percent) exceeded the percentage reporting a decrease (8 percent). The current employment index improved 2 points, its fifth consecutive positive reading (see Chart 2). Firms also reported an increase in work hours this month: The average workweek index was nearly unchanged at 18.9 and has registered a positive reading for six consecutive months.

Price Pressures Moderate
The survey’s diffusion indexes for prices remained positive but decreased from their readings in March. On the cost side, 36 percent of the firms reported increases in the prices paid for inputs, compared with 41 percent in March, and the prices paid index decreased 7 points to 33.7. With respect to prices received for firms’ own manufactured goods, 30 percent of the firms reported higher prices, and 13 percent reported lower prices. The prices received index decreased 4 points.

Firms Expect Growth but Optimism Lessens
Most of the survey’s six-month indicators decreased from the higher readings seen since the beginning of the year. The diffusion index for future general activity decreased from 59.5 in March to 45.4 this month (see Chart 1). Fifty-three percent of the manufacturers expect increases in activity over the next six months, while only 8 percent expect declines. The indexes for future new orders and shipments also fell, decreasing 5 points and 10 points, respectively. The future employment diffusion index, at 37.6, remained near its reading in March. Forty-six percent of the firms expect to increase employment over the next six months. Nearly 28 percent expect increases in work hours.

Capital Spending Is Expected to Increase
In special questions this month, firms were surveyed about their capital spending plans for 2017 compared with actual spending levels in 2016 (see Special Questions). Nearly 52 percent of the firms indicated that total capital spending would increase this year compared with 2016, while 17 percent indicated that spending would decrease. Expected high sales growth and the need to replace capital goods were the most cited reasons for the increase. Among the firms that indicated that capital spending would increase, 63 percent indicated that the majority of the spending would occur in the second half of the year. Among the firms that do not plan to increase capital spending, the most cited reasons were limited need to replace capital goods and low capacity utilization.

Summary
Responses to the April Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. Most of the broad indicators remained at positive readings but fell from their March readings. The survey’s employment indexes, which continued to show improvement, were an exception. Indicators reflecting firms’ expectations for the next six months remained at high levels but moderated from recent highs.


Beige Book: Economic Activity expanded equally between modest and moderate
Posted: April 19, 2017 at 02:00 PM (Wednesday)

Overall Economic Activity: Economic activity increased in each of the twelve Federal Reserve Districts between mid-February and the end of March, with the pace of expansion equally split between modest and moderate. In addition, the pickup was evident to varying degrees across economic sectors. Manufacturing continued to expand at a modest to moderate pace, although growth in freight shipments slowed slightly. Consumer spending varied as reports of stronger light vehicle sales were accompanied by somewhat softer readings in non-auto retail spending. Tourism and travel activity generally picked up. On balance, reports suggested that residential construction growth accelerated somewhat even as growth in home sales slowed, in part due to a lack of inventory. Nonresidential construction remained strong, but became more mixed in some regions; leasing activity generally improved at a more modest pace. More than half of the reports suggested that loan volumes increased, while only one said they were down modestly. Non-financial services generally continued to expand steadily. Energy-related businesses noted improved conditions while agricultural conditions varied.

Employment and Wages
Employment expanded across the nation and increases ranged from modest to moderate during this period. Labor markets remained tight, and employers in most Districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage increases broadened, and reports noted bigger increases for workers with skills that are in short supply. A larger number of firms mentioned higher turnover rates and more difficulty retaining workers. A couple of Districts reported that worker shortages and increased labor costs were restraining growth in some sectors, including manufacturing, transportation, and construction. Businesses generally expected labor demand to increase moderately in the next six months, and looked for modest wage growth.

Prices
On balance, prices rose modestly since the previous report. Input prices generally increased at a modest rate and outpaced gains in selling prices, which rose only slightly. Price increases were noted for some building materials, such as lumber and concrete, whereas metal prices remained fairly stable. Retail prices rose moderately, on the whole. Energy prices were flat to slightly lower. Reports on agriculture prices varied, with increases in cotton, peanuts, chickens, and hogs, and declines for corn and wheat. Home prices generally moved slightly higher. Businesses mostly expected mild to moderate price growth to persist in the next several months.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 19, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 14, 2017. This week's results do not include an adjustment for the Good Friday holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.8 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 0.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 1 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 42.4 percent of total applications from 41.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.4 percent of total applications.

The FHA share of total applications increased to 11.0 percent from 10.7 percent the week prior. The VA share of total applications decreased to 11.1 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged at 1.0 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to its lowest level since November 2016, 4.22 percent, from 4.28 percent, with points decreasing to 0.35 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 $424,100) decreased to its lowest level since November 2016, 4.15 percent, from 4.24 percent, with points decreasing to 0.23 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.09 percent from 4.14 percent, with points increasing to 0.36 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 15-year fixed-rate mortgages decreased to its lowest level since November 2016, 3.50 percent, from 3.51 percent, with points increasing to 0.41 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to its lowest level since November 2016, 3.27 percent, from 3.33 percent, with points increasing to 0.26 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Industrial Production increased 0.5%
Capacity Utilization rose to 76.1%

Posted: April 18, 2017 at 09:15 AM (Tuesday)

Industrial production increased 0.5 percent in March after moving up 0.1 percent in February. The increase in March was more than accounted for by a jump of 8.6 percent in the output of utilities—the largest in the history of the index—as the demand for heating returned to seasonal norms after being suppressed by unusually warm weather in February. Manufacturing output fell 0.4 percent in March, led by a large step-down in the production of motor vehicles and parts; factory output aside from motor vehicles and parts moved down 0.2 percent. The production at mines edged up 0.1 percent. For the first quarter as a whole, industrial production rose at an annual rate of 1.5 percent. At 104.1 percent of its 2012 average, total industrial production in March was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.4 percentage point in March to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.


March Housing Starts down 6.8%, Permits up 3.6%
Posted: April 18, 2017 at 08:30 AM (Tuesday)

Building Permits
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,260,000. This is 3.6 percent (±2.8 percent) above the revised February rate of 1,216,000 and is 17.0 percent (±1.2 percent) above the March 2016 rate of 1,077,000. Single-family authorizations in March were at a rate of 823,000; this is 1.1 percent (±1.9 percent) below the revised February figure of 832,000. Authorizations of units in buildings with five units or more were at a rate of 401,000 in March.

Housing Starts
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,215,000. This is 6.8 percent (±12.5 percent) below the revised February estimate of 1,303,000, but is 9.2 percent (±9.1 percent) above the March 2016 rate of 1,113,000. Single-family housing starts in March were at a rate of 821,000; this is 6.2 percent (±10.0 percent) below the revised February figure of 875,000. The March rate for units in buildings with five units or more was 385,000.

Housing Completions
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 1,205,000. This is 3.2 percent (±13.5 percent) above the revised February estimate of 1,168,000 and is 13.4 percent (±16.2 percent) above the March 2016 rate of 1,063,000. Single-family housing completions in March were at a rate of 819,000; this is 7.9 percent (±12.9 percent) above the revised February rate of 759,000. The March rate for units in buildings with five units or more was 374,000.


Treasury International Capital Data for February 2017
Posted: April 17, 2017 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2017. 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 $19.3 billion. Of this, net foreign private inflows were $30.9 billion, and net foreign official outflows were $11.6 billion.

Foreign residents increased their holdings of long-term U.S. securities in February; net purchases were $35.9 billion. Net purchases by private foreign investors were $41.1 billion, while net sales by foreign official institutions were $5.2 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $17.5 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $53.4 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 $14.8 billion in February.

Foreign residents decreased their holdings of U.S. Treasury bills by $20.2 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $13.5 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $18.0 billion.


Builder Confidence fell 3 points to 68 in April
Posted: April 17, 2017 at 10:00 AM (Monday)

Builder confidence in the market for newly-built single-family homes remained solid in April, falling three points to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after an unusually high March reading.

“Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“The fact that the HMI measure of current sales conditions has been over 70 for five consecutive months shows that there is continued demand for new construction,” said NAHB Chief Economist Robert Dietz. “However, builders are facing several challenges, such as hefty regulatory costs and ongoing increases in building material prices."

All three HMI components posted losses in April but remain at healthy levels. The components gauging current sales conditions fell three points to 74 while the index charting sales expectations in the next six months dropped three points to 75. Meanwhile, the component measuring buyer traffic edged one point down to 52.

Looking at the three-month moving averages for regional HMI scores, the West and Midwest both rose one point to 77 and 68, respectively. The South held steady at 68, and the Northeast fell two points to 46.


Empire State Manufacturing Survey Conditions expanded at a slower pace in April
Posted: April 17, 2017 at 08:30 AM (Monday)

Business activity grew at a more subdued pace in New York State, according to firms responding to the April 2017 Empire State Manufacturing Survey. The headline general business conditions index fell eleven points to 5.2. The new orders index, which had climbed to a multiyear high in March, retreated sharply to 7.0 in April, suggesting more modest growth. The shipments index edged up to 13.7, indicating that shipments continued to increase moderately. The unfilled orders index edged down to 12.4, after reaching its highest level in more than a decade in March; however, delivery times lengthened further, with that index climbing to a record high of 16.1. Labor market indicators pointed to further sturdy increases in both employment and hours worked. Input prices and selling prices rose at a modest pace again this month. Indexes assessing the six-month outlook continued to convey a fairly high degree of optimism about future conditions.

Business Expansion Slows
Responses from New York State manufacturers suggested that business activity expanded at a considerably slower pace than in the prior two months. Although the general business conditions index remained above the levels seen through most of 2016, it slipped eleven points to 5.2. Thirty-five percent of respondents reported that conditions had improved over the month, while 30 percent reported that they had worsened. The new orders index retreated fourteen points to 7.0, indicating that orders continued to expand but at a much more subdued pace. The shipments index, up slightly at 13.7, suggested that shipments continued to increase at a moderate pace. The unfilled orders index, which had reached an eleven-year high in March, declined only marginally to 12.4 in April. The delivery time index continued its ascent, climbing six points to 16.1—its highest level in the survey’s sixteen-year history and a sign of markedly longer delivery times. The inventories index moved back above zero but only slightly, indicating that inventory levels were little changed.

Employment Indexes Signal Strong Labor Market
Employment indexes continued to signal strength in the labor market. The index for number of employees climbed another five points to 13.9—its highest level in just over two years. The average workweek index retreated six points to 8.8, but remained well above the levels that prevailed for most of the past five years. Price increases were about the same as in March. The prices paid index edged up two points to 32.8, and the prices received index rose four points to 12.4.

Firms Remain Optimistic
Forward-looking indexes were mixed but generally at high levels, suggesting fairly widespread optimism about future conditions. The index for future business conditions rose three points to 39.9, while the future new orders and shipments indexes declined modestly. Employment and hours worked were expected to increase fairly briskly in the months ahead. The index for planned capital expenditures climbed four points to 27.7—its highest level in more than two years—and the technology spending index jumped seven points to 15.3.


Business Inventories up 0.3% in February
Posted: April 14, 2017 at 10:00 AM (Friday)

The U.S. Census Bureau announced the following new manufacturing and trade statistics for February 2017. 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 $1,360.7 billion, up 0.2 percent (±0.2 percent)* from January 2017 and was up 7.1 percent (±0.4 percent) from February 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,839.9 billion, up 0.3 percent (±0.1 percent) from January 2017 and were up 2.8 percent (±0.3 percent) from February 2016.

The total business inventories/sales ratio based on seasonally adjusted data at the end of February was 1.35. The February 2016 ratio was 1.41.


Consumer Price Index decreased 0.3% in February, Ex Fd & Engy fell 0.1%
Posted: April 14, 2017 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.3 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 rose 2.4 percent before seasonal adjustment.

The March decline was the first 1-month decrease in the seasonally adjusted all items index since February 2016. A decline in the gasoline index was the largest factor, with a decrease in the index for wireless telephone services also contributing. The energy index declined 3.2 percent, with the gasoline index falling 6.2 percent, and other major energy component indexes decreasing as well. The food index rose 0.3 percent, with the index for food at home increasing 0.5 percent, its largest increase since May 2014.

The index for all items less food and energy fell 0.1 percent in March, its first decline since January 2010. The shelter index rose 0.1 percent, and the indexes for motor vehicle insurance, medical care, tobacco, airline fares, and alcoholic beverages also increased in March. These increases were more than offset by declines in several indexes, including those for wireless telephone services, used cars and trucks, new vehicles, and apparel.

The all items index rose 2.4 percent for the 12 months ending March, a smaller increase than the 2.7-percent rise for the period ending February. The index for all items less food and energy rose 2.0 percent over the last 12 months, the smallest 12-month increase since November 2015. The energy index rose 10.9 percent over the last year, while the food index increased 0.5 percent.


Real Average Hourly Earnings increased 0.5% in March
Posted: April 14, 2017 at 08:30 AM (Friday)

Real average hourly earnings for all employees increased 0.5 percent from February to March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.2-percent increase in average hourly earnings combined with a 0.3-percent decrease in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.5 percent over the month due to the increase in real average hourly earnings combined with no change in the average workweek.

Real average hourly earnings increased 0.3 percent, seasonally adjusted, from March 2016 to March 2017. The increase in real average hourly earnings combined with a 0.3-percent decrease in the average workweek resulted in no change in real average weekly earnings over this period.


U.S. Retail Sales for March Decrease 0.2%, Ex-Auto unch%
Posted: April 14, 2017 at 08:30 AM (Friday)

The U.S. Census Bureau announced the following advance estimates of U.S. retail and food services sales for March 2017. Advance estimates of U.S. retail and food services sales for March 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $470.8 billion, a decrease of 0.2 percent (±0.5 percent) from the previous month, and 5.2 percent (±0.9 percent) above March 2016. Total sales for the January 2017 through March 2017 period were up 5.4 percent (±0.7 percent) from the same period a year ago. The January 2017 to February 2017 percent change was revised from up 0.1 percent (±0.5 percent) to down 0.3 percent (±0.2 percent).

Retail trade sales were down 0.2 percent (±0.5 percent) from February 2017, and up 5.5 percent (±0.9 percent) from last year. Gasoline Stations sales were up 14.3 percent (±1.4 percent) from March 2016, while Nonstore Retailers were up 11.9 percent (±1.8 percent) from last year.


University of Michigan Consumer Confidence Preliminary April Results at 98.0
Posted: April 13, 2017 at 10:00 AM (Thursday)

Consumer sentiment inched upward in early April mainly due to more favorable views of current economic conditions. The Current Economic Conditions Index rose to its highest level since 2000 and nearly reached its all-time peak of 121.1 set in 1999. The Expectations Index improved only slightly, remaining largely unchanged at favorable levels for the past three months. While partisanship had no impact on the Current Conditions Index (Democrats and Republicans differed by just 0.4 points), the data suggest the beginning of a convergence on the Expectations Index, with the figure for Democrats rising 7% and falling for Republicans by 7%, although the gap still remained an astonishing 50.5 Index points. Much more progress on shrinking the partisan gap is needed to bring economic expectations in line with reality. A slow pace of convergence will make it more difficult to disentangle political fervor from what appears to be a growing sense among consumers that the economy will experience fundamental changes in the years ahead. It can be anticipated that optimism will commingle with uncertainty, causing uneven spending patterns across months. Moreover, differential price trends for assets, products, and imports will cause uneven trends in incomes, wealth, and spending across products as well as economic subgroups.


Weekly Initial Unemployment Claims Decrease 1,000 to 234,000
Posted: April 13, 2017 at 08:30 AM (Thursday)

In the week ending April 8, the advance figure for seasonally adjusted initial claims was 234,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 247,250, a decrease of 3,000 from the previous week's revised average. The previous week's average was revised up by 250 from 250,000 to 250,250.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending April 1, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 1 was 2,028,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,028,000 to 2,035,000. The 4-week moving average was 2,025,500, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 1,750 from 2,023,000 to 2,024,750.


Producer Price Index declined 0.1% in March ex Fd & Engy up 0.1%
Posted: April 13, 2017 at 08:30 AM (Thursday)

The Producer Price Index for final demand declined 0.1 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in February and 0.6 percent in January. On an unadjusted basis, the final demand index rose 2.3 percent for the 12 months ended March 2017, the largest increase since moving up 2.4 percent for the 12 months ended March 2012.

In March 2017, three-fourths of the decrease in the final demand index is attributable to prices for final demand services, which fell 0.1 percent. The index for final demand goods also inched down 0.1 percent.

Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March, the tenth straight advance. For the 12 months ended in March, the index for final demand less foods, energy, and trade services climbed 1.7 percent.


U.S. Import Price Index declined 0.2% in March
Posted: April 12, 2017 at 08:30 AM (Wednesday)

U.S. import prices declined 0.2 percent in March, the U.S. Bureau of Labor Statistics reported today, following increases in each of the 3 previous months. The March downturn was driven by lower fuel import prices which more than offset rising nonfuel prices. In contrast, the price index for U.S. exports increased 0.2 percent in March, after advancing 0.3 percent in February.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: April 12, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 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 April 7, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.5 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 remained unchanged from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 41.6 percent of total applications, the lowest level since September 2008, from 42.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.5 percent of total applications. The average loan size for purchase applications reached a survey high at $318,700.

The FHA share of total applications decreased to 10.7 percent from 11.1 percent the week prior. The VA share of total applications increased to 11.3 percent from 11.1 percent the week prior. The USDA share of total applications remained unchanged at 1.0 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.28 percent from 4.34 percent, with points increasing to 0.38 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) remained unchanged at 4.24 percent, with points increasing to 0.28 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 decreased to 4.14 percent from 4.15 percent, with points decreasing to 0.29 from 0.32 (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 3.51 percent from 3.57 percent, with points decreasing to 0.35 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 3.33 percent, with points increasing to 0.17 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings was little changed at 5.7 million in February
Posted: April 11, 2017 at 10:00 AM (Tuesday)

The number of job openings was little changed at 5.7 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5.3 million and 5.1 million, respectively. Within separations, the quits rate was little changed at 2.1 percent, and the layoffs and discharges rate was unchanged at 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.


NFIB Small Business Optimism Index slipped 0.6 in March to 104.7
Posted: April 11, 2017 at 07:00 AM (Tuesday)

The Index of Small Business Optimism fell 0.6 points to 104.7, sustaining the remarkable surge in optimism that started November 9, 2016, the day after the election. Three of the 10 Index components posted a gain, five declined, all by just a few points, and two were unchanged. It is encouraging that the Index has held at historically high levels for five months. Optimism has not faded much and there is growing evidence that this optimism is being translated into more spending and hiring, although not at explosive rates. Consumer confidence is hitting new high levels and small business owners have not given up hope that their optimism will be rewarded with performance.

The surge in small business owner optimism was maintained in March, the fifth month of historically “off-the-charts” readings. Unfortunately, the expectation for economic growth is not off the charts. Official forecasts from the New York and Atlanta Federal Reserve Banks put first quarter growth at 0.9 percent or 2.9 percent as of March 31, hugely disparate estimates. Domestic spending, which excludes exports but includes imports will be a more important measure for small business owners. That should look better with consumer confidence surging, supported by solid job growth.

On the job side, the NFIB indicators are consistent with another low 200k job month. Hiring plans are strong and reports of past hiring solid. However, the inability of owners to find applicants that can satisfactorily fill open positions will become more of a headwind to job growth. Rising wages will attract some new participants into the workforce, but owners will also have to undertake more training to fill specialized positions. For example, the skill mismatch is restricting growth in housing construction which, in turn, is producing rising home prices. A “manufacturing renaissance” will also require solutions to the skill shortage.

The Federal Reserve is indicating that it will raise rates several more times this year. Given the poor economic performance of 2016 prior to the last rate hike, one might wonder what, exactly, does “data dependent” mean. That said, expect the Federal Reserve to persist with a few more hikes, which will have little impact on lending activity and may enhance availability: loan committees are still troubled making longer term loans at rates we used to pay to depositors. Higher rates make it more comfortable.

In the meantime, we wait for the “fiscal policy shoe” to drop. But actual spending won’t show up until 2018, if all goes well. Retroactive tax rate changes might help later this year. In the meantime, the only engine for growth is going to be the private sector and its confidence in Washington, D.C’s new management team. Hopefully, it won’t be shaken too badly by political antics.


Employment Trends Index increased in March to 131.43
Posted: April 10, 2017 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in March, after a sharp increase in February. The index now stands at 131.43, up from 131.09 (a downward revision) in February. The change represents a 4.3 percent gain in the ETI compared to a year ago.

“The Employment Trends Index continued to expand in March, suggesting that solid job growth will continue through the spring,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The surprisingly weak job growth in March is mostly noise in an otherwise healthy and tight labor market.”

March’s increase in the ETI was fueled by positive contributions from six of the eight components. In order from the largest positive contributor to the smallest, these were: Real Manufacturing and Trade Sales, Ratio of Involuntarily Part-time to All Part-time Workers, Industrial Production, Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Number of Employees Hired by the Temporary-Help Industry, and Job Openings.

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


Consumer Credit Increased at an annual rate of 4.75%
Posted: April 7, 2017 at 03:00 PM (Friday)

In February, consumer credit increased at a seasonally adjusted annual rate of 4-3/4 percent. Revolving credit increased at an annual rate of 3-1/2 percent, while nonrevolving credit increased at an annual rate of 5-1/4 percent.


Wholesale Inventories up 0.4% in February
Posted: April 7, 2017 at 10:00 AM (Friday)

February 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $464.9 billion, up 0.6 percent (±0.4 percent) from the revised January level and were up 9.9 percent (±1.1 percent) from the February 2016 level. The December 2016 to January 2017 percent change was revised1 from down 0.1 percent (±0.5 percent)* to up 0.3 percent (±0.7 percent)*.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $594.2 billion at the end of February, up 0.4 percent (±0.2 percent) from the revised January level. Total inventories are up 3.2 percent (±0.7 percent) from the revised February 2016 level. The January 2017 to February 2017 percent change was unrevised from the advance estimate of up 0.4 percent (±0.2 percent).

The February inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.28. The February 2016 ratio was 1.36.


February Employment increased by 98,000
Unemployment Rate dipped to 4.5%

Posted: April 7, 2017 at 08:30 AM (Friday)

The unemployment rate declined to 4.5 percent in March, and total nonfarm payroll employment edged up by 98,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in mining, while retail trade lost jobs.

Household Survey Data
The unemployment rate decreased by 0.2 percentage point to 4.5 percent in March, and the number of unemployed persons declined by 326,000 to 7.2 million. Both measures were down over the year.

Among the major worker groups, the unemployment rates for adult women (4.0 percent), Whites (3.9 percent), and Hispanics (5.1 percent) declined in March. The jobless rates for adult men (4.3 percent), teenagers (13.7 percent), Blacks (8.0 percent), and Asians (3.3 percent) showed little or no change.

In March, the number of persons unemployed less than 5 weeks declined by 232,000 to 2.3 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed over the month at 1.7 million and accounted for 23.3 percent of the unemployed. Over the past 12 months, the number of long-term unemployed was down by 526,000.

The labor force participation rate remained at 63.0 percent in March, and the employment-population ratio, at 60.1 percent, changed little. The employment-population ratio has edged up over the year, while the labor force participation rate has shown no clear trend.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.6 million, was little changed in March but was down by 567,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

In March, 1.6 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 460,000 discouraged workers in March, down by 125,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in March had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment edged up by 98,000 in March, following gains of 219,000 in February and 216,000 in January. Over the month, employment growth occurred in professional and business services (+56,000) and in mining (+11,000), while retail trade lost jobs (-30,000).

In March, employment in professional and business services rose by 56,000, about in line with the average monthly gain over the prior 12 months. Over the month, job gains occurred in services to buildings and dwellings (+17,000) and in architectural and engineering services (+7,000).

Mining added 11,000 jobs in March, with most of the gain occurring in support activities for mining (+9,000). Mining employment has risen by 35,000 since reaching a recent low in October 2016.

In March, employment continued to trend up in health care (+14,000), with job gains in hospitals (+9,000) and outpatient care centers (+6,000). In the first 3 months of this year, health care added an average of 20,000 jobs per month, compared with an average monthly gain of 32,000 in 2016.

Employment in financial activities continued to trend up in March (+9,000) and has increased by 178,000 over the past 12 months.

Construction employment changed little in March (+6,000), following a gain of 59,000 in February. Employment in construction has been trending up since late last summer, largely among specialty trade contractors and in residential building.

Retail trade lost 30,000 jobs in March. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016.

Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, information, leisure and hospitality, and government, showed little or no change over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in March. In manufacturing, the workweek edged down by 0.2 hour to 40.6 hours, and overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.5 hours.

In March, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents to $26.14, following a 7-cent increase in February. Over the year, average hourly earnings have risen by 68 cents, or 2.7 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.90.

The change in total nonfarm payroll employment for January was revised down from +238,000 to +216,000, and the change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January and February combined were 38,000 less than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 178,000 per month.


Weekly Initial Unemployment Claims Decrease 25,000 to 234,000
Posted: April 6, 2017 at 08:30 AM (Thursday)

In the week ending April 1, the advance figure for seasonally adjusted initial claims was 234,000, a decrease of 25,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 258,000 to 259,000. The 4-week moving average was 250,000, a decrease of 4,500 from the previous week's revised average. The previous week's average was revised up by 250 from 254,250 to 254,500.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending March 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 25 was 2,028,000, a decrease of 24,000 from the previous week's unrevised level of 2,052,000. The 4-week moving average was 2,023,000, a decrease of 7,750 from the previous week's unrevised average of 2,030,750. This is the lowest level for this average since June 17, 2000 when it was 2,016,750.


Challenger Layoffs rose to 43,310 jobs in March
Posted: April 6, 2017 at 07:30 AM (Thursday)

Job cuts announced by US-based employers rose 17 percent from the February total of 36,957 to 43,310 in March, according to the latest report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

March announcements are 2 percent lower than the same month last year, when employers announced plans to eliminate 44,207 jobs from their ranks. Last month’s total is the third consecutive month of lower job cuts than the corresponding month a year earlier.

So far this year, employers have announced 126,201 job cuts. Last quarter’s total was 38 percent higher than the 91,303 cuts announced in the fourth quarter of 2016, and 30 percent lower than the same period last year when 180,920 cuts were announced.

“Cuts in the energy sector, which started en masse in mid-2014, were still occurring in the first quarter of 2016. The energy industry is no longer bleeding jobs, which is partly why job cut announcements have trended down,” said John A. Challenger, chief executive officer of global outplacement and executive coaching consultancy Challenger, Gray & Christmas, Inc.

Through the first quarter of the year, the energy sector has announced 7,880 job cuts, 84 percent lower than the 48,901 cuts announced in the first quarter of last year. Since January 2014, the energy sector has announced 224,265 cuts, with 107,714 occurring in 2016.

Retail leads all sectors this year with 38,464 announced cuts, 4,084 of which occurred last month. While retailers have cut over 53,000 jobs in the last seven months, the industry has announced over 121,000 new jobs so far this year.

“Retail is typically an industry in flux, but we’ve seen long established companies close stores and cut workers. The industry, though, is creating openings just as quickly as they are cutting,” said Challenger.

First quarter retail cuts are 19 percent higher than the 31,832 cuts announced in the same period last year.

Telecommunications companies follow retailers with 9,782 job cuts through March, 184 percent more than the 3,439 job cuts announced through Q1 2016.

“Telecommunications providers, like other tech companies, are undergoing restructuring, losing jobs to automation, and pivoting to new projects,” said Challenger.

Companies in the healthcare space announced 8,116 job cuts last quarter, 3,935 of which occurred in March. Healthcare announced 50 percent more layoffs in March than the 1,931 announced in February.

Hiring announcements continue to break records according to Challenger tracking. For the quarter, companies announced 289,272 new positions, the bulk of which were announced by retailers. Home Depot announced 80,000 new seasonal jobs in March. Last quarter’s total is the highest first quarter total on record, and the highest quarterly total except for third quarter totals when holiday hiring plans are typically announced.


ISM Non-Manufacturing Index decreased to 55.2% in March
Posted: April 5, 2017 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in March for the 87th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 55.2 percent, which is 2.4 percentage points lower than the February reading of 57.6 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 58.9 percent, 4.7 percentage points lower than the February reading of 63.6 percent, reflecting growth for the 92nd consecutive month, at a slower rate in March. The New Orders Index registered 58.9 percent, 2.3 percentage points lower than the reading of 61.2 percent in February. The Employment Index decreased 3.6 percentage points in March to 51.6 percent from the February reading of 55.2 percent. The Prices Index decreased 4.2 percentage points from the February reading of 57.7 percent to 53.5 percent, indicating prices increased for the 12th consecutive month, at a slower rate in March. According to the NMI®, 15 non-manufacturing industries reported growth in March. The sector continues to reflect growth; however, the rate of growth has declined since last month. The majority of respondents’ comments indicate a positive outlook on business conditions and the overall economy. There were several comments about the uncertainty of future government policies on health care, trade and immigration, and the potential impact on business.

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


Help Wanted OnLine Labor Demand increased 102,000 to 4,639,700 in March
Posted: April 5, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies increased 102,000 to 4,639,700 in March, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The February Supply/Demand rate stands at 1.66 unemployed for each advertised vacancy with a total of 2.9 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.5 million in February.

The Professional occupational category saw gains in Computer/Math (16.9), Business and Finance (12.4), and Healthcare Practitioners (7.7). The Services/Production occupational category saw gains in Sales (21.7), and losses in Transportation (-9.3)


ADP National Employment Report increased by 263,000 jobs in March
Posted: April 5, 2017 at 08:15 AM (Wednesday)

Private sector employment increased by 263,000 jobs from February to March according to the March ADP National Employment Report®.

“The U.S. labor market finished the first quarter on a strong note,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Consumer dependent industries including healthcare, leisure and hospitality, and trade had strong growth during the month.”

Mark Zandi, chief economist of Moody’s Analytics said, “Job growth is off to a strong start in 2017. The gains are broad based but most notable in the goods producing side of the economy including construction, manufacturing and mining.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 5, 2017 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 March 31, 2017.

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 1 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 increased 1 percent compared with the previous week and was 8 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 42.6 percent of total applications from 44.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.5 percent of total applications. The average loan size for purchase applications reached a survey high at $318,200.

The FHA share of total applications increased to 11.1 percent from 10.8 percent the week prior. The VA share of total applications increased to 11.1 percent from 11.0 percent the week prior. The USDA share of total applications remained unchanged at 1.0 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.34 percent from 4.33 percent, with points decreasing to 0.31 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.24 percent from 4.26 percent, with points decreasing to 0.24 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.15 percent from 4.24 percent, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.57 percent, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.33 percent from 3.30 percent, with points decreasing to 0.13 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New orders for manufactured goods increased 1.0% in February
Posted: April 4, 2017 at 10:00 AM (Tuesday)

New orders for manufactured goods in February, up seven of the last eight months, increased $4.8 billion or 1.0 percent to $476.5 billion, the U.S. Census Bureau reported today. This followed a 1.5 percent January increase. Shipments, up eleven of the last twelve months, increased $1.4 billion or 0.3 percent to $480.0 billion. This followed a 0.3 percent January increase. Unfilled orders, up following three consecutive monthly decreases, increased $0.1 billion or virtually unchanged to $1,115.3 billion. This followed a 0.3 percent January decrease. The unfilled orders-to-shipments ratio was 6.53, down from 6.57 in January. Inventories, up seven of the last eight months, increased $1.2 billion or 0.2 percent to $630.0 billion. This followed a 0.3 percent January increase. The inventories-to-shipments ratio was 1.31, unchanged from January.

New Orders
New orders for manufactured durable goods in February, up two consecutive months, increased $4.2 billion or 1.8 percent to $236.0 billion, up from the previously published 1.7 percent increase. This followed a 2.4 percent January increase. Transportation equipment, also up two consecutive months, led the increase, $3.4 billion or 4.4 percent to $80.5 billion. New orders for manufactured nondurable goods increased $0.6 billion or 0.2 percent to $240.5 billion.

Shipments
Shipments of manufactured durable goods in February, up three of the last four months, increased $0.8 billion or 0.3 percent to $239.4 billion, unchanged from the previously published increase. This followed a virtually unchanged January decrease. Machinery, also up three of the last four months, led the increase, $0.3 billion or 1.1 percent to $31.2 billion. Shipments of manufactured nondurable goods, up eleven of the last twelve months, increased $0.6 billion or 0.2 percent to $240.5 billion. This followed a 0.6 percent January increase. Chemical Products, up three of the last four months, drove the increase, $0.7 billion or 1.1 percent to $68.7 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in February, up following three consecutive monthly decreases, increased $0.1 billion or virtually unchanged to $1,115.3 billion, up from the previously published virtually unchanged decrease. This followed a 0.3 percent January decrease. Computers and electronic products, up twenty-six consecutive months, drove the increase, $0.5 billion or 0.4 percent to $132.2 billion.

Inventories
Inventories of manufactured durable goods in February, up three of the last four months, increased $0.8 billion or 0.2 percent to $385.2 billion, unchanged from the previously published increase. This followed a 0.1 percent January increase. Primary metals, up four consecutive months, led the increase, $0.2 billion or 0.7 percent to $32.0 billion. Inventories of manufactured nondurable goods, up six of the last seven months, increased $0.3 billion or 0.1 percent to $244.8 billion. This followed a 0.6 percent January increase. Petroleum and coal products, also up six of the last seven months, drove the increase, $0.5 billion or 1.6 percent to $30.9 billion. By stage of fabrication, February materials and supplies decreased 0.1 percent in durable goods and increased 0.5 percent in nondurable goods. Work in process increased 0.6 percent in durable goods and 0.1 percent in nondurable goods. Finished goods increased 0.1 percent in durable goods and decreased 0.1 percent in nondurable goods.


Goods and Services Deficit Decreased in February 2017
Posted: April 4, 2017 at 08:30 AM (Tuesday)

The Nation's international trade deficit in goods and services decreased to $43.6 billion in February from $48.2 billion in January (revised), as exports increased and imports decreased.

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 $43.6 billion in February, down $4.6 billion from $48.2 billion in January, revised. February exports were $192.9 billion, $0.4 billion more than January exports. February imports were $236.4 billion, $4.3 billion less than January imports.

The February decrease in the goods and services deficit reflected a decrease in the goods deficit of $4.6 billion to $65.0 billion and an increase in the services surplus of less than $0.1 billion to $21.4 billion.

Year-to-date, the goods and services deficit increased $2.8 billion, or 3.1 percent, from the same period in 2016. Exports increased $25.8 billion or 7.2 percent. Imports increased $28.6 billion or 6.4 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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