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August Employment increased by 173,000
Unemployment Rate dipped to 5.1%

Posted: September 4, 2015 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 173,000 in August, and the unemployment rate edged down to 5.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and social assistance and in financial activities. Manufacturing and mining lost jobs.

In August, the unemployment rate edged down to 5.1 percent, and the number of unemployed persons edged down to 8.0 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.0 percentage point and 1.5 million, respectively.

Among the major worker groups, the unemployment rate for whites declined to 4.4 percent in August. The rates for adult men (4.7 percent), adult women (4.7 percent), teenagers (16.9 percent), blacks (9.5 percent), Asians (3.5 percent), and Hispanics (6.6 percent) showed little change in August.

The number of persons unemployed for less than 5 weeks decreased by 393,000 to 2.1 million in August. The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.2 million in August and accounted for 27.7 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 779,000.

In August, the civilian labor force participation rate was 62.6 percent for the third consecutive month. The employment-population ratio, at 59.4 percent, was about unchanged in August and has shown little movement thus far this year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in August at 6.5 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In August, 1.8 million persons were marginally attached to the labor force, down by 329,000 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 624,000 discouraged workers in August, down by 151,000 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 1.2 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 173,000 in August. Over the prior 12 months, employment growth had averaged 247,000 per month. In August, job gains occurred in health care and social assistance and in financial activities. Employment in manufacturing and mining declined.

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.6 hours in August. The manufacturing workweek was unchanged at 40.8 hours, and factory overtime edged down by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $25.09, following a 6-cent gain in July. Hourly earnings have risen by 2.2 percent over the year. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $21.07 in August.

The change in total nonfarm payroll employment for June was revised from +231,000 to +245,000, and the change for July was revised from +215,000 to +245,000. With these revisions, employment gains in June and July combined were 44,000 more than previously reported. Over the past 3 months, job gains have averaged 221,000 per month.


ISM Non-Manufacturing Index grew at a slower rate of 59.0% in August
Posted: September 3, 2015 at 10:00 AM (Thursday)

Economic activity in the non-manufacturing sector grew in August for the 67th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 59 percent in August, 1.3 percentage points lower than the July reading of 60.3 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 63.9 percent, which is 1 percentage point lower than the July reading of 64.9 percent, reflecting growth for the 73rd consecutive month at a slower rate. The New Orders Index registered 63.4 percent, 0.4 percentage point lower than the reading of 63.8 percent in July. The Employment Index decreased 3.6 percentage points to 56 percent from the July reading of 59.6 percent and indicates growth for the 18th consecutive month. The Prices Index decreased 2.9 percentage points from the July reading of 53.7 percent to 50.8 percent, indicating prices increased in August for the sixth consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth in August. Overall, respondents continue to be optimistic about business conditions and the economy. This is reflected by indexes that are again strong; however, lower than what was seen in July.

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


BTMU U.S. Business Barometer dropped by 0.1%
Posted: September 3, 2015 at 10:00 AM (Thursday)

For the week ending August 22 2015, the BTMU U.S. Business Barometer decreased by 0.1 percent to 99.0, extending the fall for three weeks in a row. On the consumption side, railroad freight carloardings slipped by 2.1 percent, although it was somewhat offset by gains in MBA’s purchase index. As to the production side, steel production dipped by 1.3 percent following a gain of 0.4 percent in the previous week. Lumber production also declined by 0.1 percent, prolonging the decline for four consecutive weeks.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 99.2. Its year-over-year growth rate was 0.6 percent.


Goods and Services Deficit Decreased in July 2015
Posted: September 3, 2015 at 08:30 AM (Thursday)

The Nation's international trade deficit in goods and services decreased to $41.9 billion in July from $45.2 billion in June (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 $41.9 billion in July, down $3.3 billion from $45.2 billion in June, revised. July exports were $188.5 billion, $0.8billion more than June exports. July imports were $230.4 billion, $2.5 billion less than June imports.

The July decrease in the goods and services deficit reflected a decrease in the goods deficit of $3.4 billion to $61.4 billion and a decrease in the services surplus of less than $0.1 billion to $19.6 billion.

Year-to-date, the goods and services deficit increased $10.6 billion, or 3.6 percent, from the same period in 2014. Exports decreased $47.0 billion or 3.5 percent. Imports decreased $36.4 billion or 2.2 percent.


Weekly Initial Unemployment Claims Increase 12,000 to 282,000
Posted: September 3, 2015 at 08:30 AM (Thursday)

In the week ending August 29, the advance figure for seasonally adjusted initial claims was 282,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 271,000 to 270,000. The 4-week moving average was 275,500, an increase of 3,250 from the previous week's revised average. The previous week's average was revised down by 250 from 272,500 to 272,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending August 22, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 22 was 2,257,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised down by 3,000 from 2,269,000 to 2,266,000. The 4-week moving average was 2,264,250, a decrease of 250 from the previous week's revised average. The previous week's average was revised down by 750 from 2,265,250 to 2,264,500.


Challenger Layoffs dropped to 41,186 in August
Posted: September 3, 2015 at 07:30 AM (Thursday)

Monthly job cuts plunged by more than 60 percent in August after surging to a four-year high in July on massive cuts in military staffing, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

Employers in the U.S. announced plans to shed 41,186 workers from payrolls last month, a 61 percent decline from the 105,696 layoffs in July. The July figure was the highest since September 2011, when monthly job cuts reached 115,730.

The August total was 2.9 percent higher than the same month a year ago, when 40,010 planned job cuts were announced. This marks the seventh month this year that the job-cut total was higher than the comparable month from 2014.

To date, employers have announced 434,554 job cuts in 2015. That is up 31 percent from the 332,931 planned layoffs in the first eight months of 2014. With monthly totals averaging 54,319, 2015 job cuts are on track to exceed 650,000 for the year, which would be the highest year-end tally since 2009 (1,272,030).

The retail sector saw the heaviest job cutting in August, with 9,601 planned layoffs reported during the month. Most of those were related to bankruptcy of east coast supermarket chain A&P, which is closing more than 100 stores and laying off a reported 8,500 workers by Thanksgiving.

The retail sector has announced 57,363 job cuts so far this year, which is a 90 percent increase over the 30,109 job cuts announced by this point in 2014.

“Overall, retail is relatively healthy, but we have seen some big layoffs this year, particularly from long-time players that simply have not been able to keep up with changing consumer trends. These retailers somehow manage to survive, but only through multiple bankruptcies, such as A&P. Earlier this year RadioShack announced 5,400 job cuts,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“Going forward, the recent volatility in the stock market may have a negative impact on retail sales, as investors who took a hit curtail spending. However, retailers may be reluctant to shed too many workers as we head into the holiday season. Overall, we have not seen any job cuts attributed to the stock market’s swoon. We are more likely to see cuts resulting from the underlying cause of the volatility, which is the weakening economy in China and other developing nations,” said Challenger.

The industrial goods sector saw the second heaviest downsizing activity in August, announcing 7,949 layoffs during the month. That is the largest number of job cuts for this sector since March, when 9,163 job cuts were announced.

About 22 percent of the industrial goods cuts were related to the recent drop in oil prices. In all, 3,808 job cuts were attributed to oil prices last month, which is down 57 percent from 8,878 oil-related job cuts in July.

Since the beginning of the year, oil prices have been blamed for 82,268 layoffs, mostly in the energy sector, but also among industrial goods manufacturers that supply equipment and materials for oil exploration and extraction.

“The stream of job cuts related to oil prices appears to be ebbing. The majority of these cuts came in the first four months of 2015, when we saw more than 68,000 layoffs related to oil. Since May, fewer than 14,000 job cuts have been attributed to oil prices,” noted Challenger.

“It is too soon to say if we have seen the last of the big oil cuts. As we head into the final months of 2015, there are definitely some red flags that suggest we may see more layoffs from the energy sector, as well as in other areas of the economy. The problems that China is facing could send shockwaves throughout the global economy, including the United States,” Challenger continued.

“The last quarter of the year is also when we tend to see companies make workforce and operational adjustments in order to meet year-end earnings goals,” he added.


Beige Book: Economic Activity continues at modest or moderate pace
Posted: September 2, 2015 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts indicate economic activity continued expanding across most regions and sectors during the reporting period from July to mid-August. Six Districts cited moderate growth while New York, Philadelphia, Atlanta, Kansas City, and Dallas reported modest increases in activity. The Cleveland District noted only slight growth since the last report. In most cases, these recent results represented a continuation of the overall pace reported in the July Beige Book. Respondents in most sectors across Districts expected growth to continue at its recent pace, but the Kansas City report cited more mixed expectations.

District reports on manufacturing activity were mostly positive, although among these, the Cleveland, St. Louis, Minneapolis, and Dallas Districts painted a somewhat mixed picture across manufacturing sectors. Only the New York and Kansas City Districts cited declines in manufacturing.

Retail contacts in a majority of Districts reported that their sales and revenues continued to expand. By contrast, the Cleveland and Minneapolis Districts cited flat consumer activity since the last report, Atlanta was mixed, and Dallas reported decreased sales year-over-year. Most Districts reported increased auto sales. Among Districts with information on tourism, activity was strong in most reports.

Demand for nonfinancial services, including staffing, generally expanded over the reporting period. Districts mentioning the transportation sector mostly noted activity increases. Districts reporting on the banking sector mostly tallied increases in both business and consumer loan volumes. Credit quality was reported to be improving in most Districts, while credit standards were generally said to be unchanged.

Reports on residential and commercial real estate markets across the Districts were mostly positive. Existing home sales and residential leasing widely improved, with home prices moving up in most areas. Commercial real estate activity also rose in most Districts; commercial construction activity ranged from strong in the Cleveland and Minneapolis Districts to up only slightly in Chicago, while commercial leasing was reported to have increased across the board.

Agricultural conditions were mixed across Districts. Farm contacts indicated that anticipated yields were up for corn and soybeans, but conditions deteriorated in the St. Louis and Kansas City Districts; drought was an ongoing concern in the San Francisco District and was also a factor in parts of the Atlanta and Minneapolis Districts. Districts reporting on the energy sector indicated that conditions were stable to declining; coal production was down in the Richmond and St. Louis Districts, while oil-related activity declined in the Cleveland, Atlanta, and Dallas Districts.

Most Districts reported modest to moderate growth in labor demand, although Boston, Cleveland, and Dallas cited only slight increases in hiring. This tightening of labor markets was said to be pushing wages up slightly in selected industries or occupations, especially in the New York, Cleveland, St. Louis, and San Francisco Districts. Across all Districts, input and selling prices were reported to be stable or up only slightly.


New orders for manufactured goods increased 0.4% in July
Posted: September 2, 2015 at 10:00 AM (Wednesday)

New orders for manufactured goods in July, up two consecutive months, increased $2.0 billion or 0.4 percent to $482.0 billion, the U.S. Census Bureau reported today. This followed a 2.2 percent June increase.

Shipments, down three of the last four months, decreased $0.8 billion or 0.2 percent to $483.6 billion. This followed a 0.6 percent June increase.

Unfilled orders, up two consecutive months, increased $2.8 billion or 0.2 percent to $1,198.0 billion. This followed a virtually unchanged June increase. The unfilled orders-to-shipments ratio was 6.89, down from 6.92 in June.

Inventories, down following three consecutive monthly increases, decreased $0.6 billion or 0.1 percent to $651.2 billion. This followed a 0.3 percent June increase. The inventories-to-shipments ratio was 1.35, unchanged from June.


Help Wanted OnLine Labor Demand rose 34,200 to 5,418,600 in August
Posted: September 2, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies rose 34,200 to 5,418,600 in August, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The July Supply/Demand rate stands at 1.54 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 8.3 million in July.

“Labor demand remained little changed in August, maintaining a basic flat trend over the past six months,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board. “The recent flat trend is not particularly troublesome given the continuing high monthly levels of employer demand in the labor market.”

In August, the Professional category showed some strength with Healthcare Practitioners (+14.3), Management (+12.1), Business and Finance (+5.2) and Computer (+3.1). The Services/Production category saw gains in Production (+6.4) and Transportation (+4.9) but a large loss in Office and Administration.


New York Purchasing Managers Business Activity dropped to 51.1 in August
Posted: September 2, 2015 at 10:00 AM (Wednesday)

New York City business activity expanded at the slowest rate in five months, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions backed off July’s high for the year to 51.1 in August.

Future optimism remained elevated and well above Current Conditions. The Six-Month Outlook came in at 68.5 in August.

Job growth improved to a 12-month high. But more significantly, a stronger pace of job creation was sustained – above the 60 mark – for the third straight month, the first such stretch since the end of the Great Recession. Employment rose to 65.8 in August.

Purchase volume bounced off a seven-month low. Quantity of Purchases increased to 57.5 in August.

The top line and forward guidance diverged. Current Revenues eased to 58.3 in August, but Expected Revenues improved to 81.6 in August.

Cost pressures picked up, while price pressures remained moderate. Prices Paid bounced of a two-year low to 57.1 in August, and Prices Received moderated to 55.6 in August.

Potential Business Opportunities/Impediments: Cost of benefits went back to the top of the impediment scale, followed by taxes and inflation. Technology and domestic demand were top opportunities along with a newcomer, occupancy.


2Q2015 Productivity Growth Increased 3.3%
Posted: September 2, 2015 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity increased at a 3.3-percent annual rate during the second quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output increased 4.7 percent and hours worked increased 1.4 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2014 to the second quarter of 2015, productivity increased 0.7 percent, reflecting increases in output and hours worked of 3.3 percent and 2.6 percent, respectively.

Unit labor costs in the nonfarm business sector decreased 1.4 percent in the second quarter of 2015, reflecting a 1.8-percent increase in hourly compensation and a 3.3-percent increase in productivity. Unit labor costs increased 1.7 percent over the last four quarters.

Manufacturing sector labor productivity increased 2.3 percent in the second quarter of 2015, as output increased 1.3 percent, and hours worked decreased 0.9 percent. Productivity increased 2.8 percent in the durable manufacturing sector and 1.2 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.0 percent, as output increased 2.3 percent, and hours increased 1.2 percent. Unit labor costs in manufacturing decreased 2.2 percent in the second quarter of 2015 and increased 0.2 percent from the same quarter a year ago.

Preliminary second quarter 2015 measures of productivity and costs were announced for the nonfinancial corporate sector. Productivity decreased 0.6 percent in the second quarter of 2015, as output decreased 0.2 percent, and hours worked increased 0.3 percent. Unit labor costs increased 2.8 percent, reflecting both a 2.2 percent increase in hourly compensation and a 0.6 percent decrease in productivity.

In the second quarter of 2015, nonfarm business productivity growth was revised up to 3.3 percent from 1.3 percent, mainly due to a 1.9-percentage point upward revision to output; hours were revised down slightly. The 3.3 percent increase in labor productivity reverses the declines in the measure during the previous two quarters, restoring the index of output per hour to its third quarter 2014 level. Unit labor costs declined 1.4 percent rather than increasing 0.5 percent as reported August 11, due to an upward revision to productivity; hourly compensation was not revised. In the manufacturing sector, productivity growth was revised down slightly to 2.3 percent from the preliminary estimate of 2.5 percent. Unit labor costs decreased at a 2.2-percent rate, a slightly smaller decline than was previously reported.


ADP National Employment Report increased by 190,000 in August
Posted: September 2, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 190,000 jobs from July to August according to the August ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 85,000 jobs in August, an increase of over one-third from July. Employment among companies with 50-499 employees increased by 66,000 jobs, 5,000 more than the previous month. Employment gains at large companies – those with 500 or more employees – fell from July, adding 40,000 jobs in August, down from 53,000. Companies with 500-999 added 5,000 jobs. Companies with over 1,000 employees added 34,000 jobs.

Goods-producing employment rose by 17,000 jobs in August, more than double the 7,000 gained in July.

The construction industry added 17,000 jobs in August, up from 15,000 last month. Meanwhile, manufacturing added 7,000 jobs in August, after gaining only 1,000 in July.

Service-providing employment rose by 173,000 jobs in August, up slightly from 170,000 in July. The ADP National Employment Report indicates that professional/business services contributed 29,000 jobs in August, up 3,000 from July. Trade/transportation/utilities grew by 28,000, down from 34,000 the previous month. The 13,000 new jobs added in financial activities was a gain from last month’s 10,000.

The job growth numbers for August improved slightly from July. The employment gains for the month are in line with the year to date average.

Recent global financial market turmoil has not slowed the U.S. job market, at least not yet. Job growth remains strong and broad-based, except in the energy industry, which continues to shed jobs. Large companies also remain more cautious in their hiring than smaller ones.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: September 2, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 11.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 28, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10 percent compared with the previous week. The Refinance Index increased 17 percent from the previous week to its highest level since April 2015. The seasonally adjusted Purchase Index increased 4 percent from one week earlier to its highest level since July 2015. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 25 percent higher than the same week one year ago.

"Although mortgage rates were unchanged for the week, Treasury rates were down sharply early in the week due to the global stock market rout and this led to a significant increase in application volume," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity increased to 58.7 percent of total applications from 55.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.5 percent of total applications.

The FHA share of total applications decreased to 12.7 percent from 13.1 percent the week prior. The VA share of total applications decreased to 9.8 percent from 11.4 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.08 percent, with points increasing to 0.37 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.05 percent from 4.00 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 3.87 percent from 3.90 percent, with points increasing to 0.32 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.30 percent from 3.33 percent, with points decreasing to 0.26 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.05 percent from 2.96 percent, with points unchanged at 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Construction Spending increased 0.7% in July
Posted: September 1, 2015 at 10:00 AM (Tuesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during July 2015 was estimated at a seasonally adjusted annual rate of $1,083.4 billion, 0.7 percent (±1.5%) above the revised June estimate of $1,075.9 billion. The July figure is 13.7 percent (±2.0%) above the July 2014 estimate of $952.5 billion. During the first 7 months of this year, construction spending amounted to $583.2 billion, 9.3 percent (±1.5%) above the $533.7 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $787.8 billion, 1.3 percent (±1.0%) above the revised June estimate of $777.4 billion. Residential construction was at a seasonally adjusted annual rate of $380.8 billion in July, 1.1 percent (±1.3%) above the revised June estimate of $376.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $407.0 billion in July, 1.5 percent (±1.0%) above the revised June estimate of $400.8 billion.

PUBLIC CONSTRUCTION
In July, the estimated seasonally adjusted annual rate of public construction spending was $295.6 billion, 1.0 percent (±2.6%) below the revised June estimate of $298.5 billion. Educational construction was at a seasonally adjusted annual rate of $66.4 billion, 3.0 percent (±3.5%) below the revised June estimate of $68.4 billion. Highway construction was at a seasonally adjusted annual rate of $90.3 billion, 0.2 percent (±6.6%) below the revised June estimate of $90.5 billion.


August Manufacturing ISM expanded slower at 51.1
Posted: September 1, 2015 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in August for the 32nd consecutive month, and the overall economy grew for the 75th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The August PMI® registered 51.1 percent, a decrease of 1.6 percentage points from the July reading of 52.7 percent. The New Orders Index registered 51.7 percent, a decrease of 4.8 percentage points from the reading of 56.5 percent in July. The Production Index registered 53.6 percent, 2.4 percentage points below the July reading of 56 percent. The Employment Index registered 51.2 percent, 1.5 percentage points below the July reading of 52.7 percent. Inventories of raw materials registered 48.5 percent, a decrease of 1 percentage point from the July reading of 49.5 percent. The Prices Index registered 39 percent, down 5 percentage points from the July reading of 44 percent, indicating lower raw materials prices for the 10th consecutive month. The New Export Orders Index registered 46.5 percent, down 1.5 percentage points from the July reading of 48 percent. Comments from the panel reflect a mix of modest to strong growth depending upon the specific industry, the positive impact of lower raw materials prices, but also a continuing concern over export growth."

Of the 18 manufacturing industries, 10 are reporting growth in August in the following order: Textile Mills; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Chemical Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Fabricated Metal Products; Plastics & Rubber Products; and Machinery. The six industries reporting contraction in August — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Computer & Electronic Products; and Transportation Equipment.


Paychex-IHS Small Business Jobs Index decreased to 100.48 in August
Posted: September 1, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index decreased 0.17 percent from July to August, bringing the national index to 100.48. Little movement in recent months gave way to August’s decline. The index was down 0.51 percent from August 2014. The East North Central continued as the top-performing regional index despite a slight decrease month over month. Wisconsin surpassed Washington to lead among states tracked by the index, while Dallas has continued success as the top-ranked metro area for eleven straight months.

The Paychex | IHS Small Business Jobs Index declined 0.17 percent in August. Nevertheless, small business job gains continue at a pace 0.48 percent faster than in our base period ten years ago.

"Although the national index growth rates have varied this year, the overall trend remains positive," said Martin Mucci, president and CEO of Paychex.


Texas Manufacturing Activity Essentially Flat, but Outlooks Deteriorate
Posted: August 31, 2015 at 10:30 AM (Monday)

Texas factory activity was essentially flat in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, climbed to near zero (-0.8), suggesting output held steady after five months of declines.

Other measures of current manufacturing activity showed mixed movements in August. The capacity utilization index, like the production index, rose to zero after several months in negative territory. The shipments index also edged up, coming in at -3. Sharp declines were seen in measures of demand, however. The new orders index plunged 13 points to -12.5 after rebounding to positive territory last month, and the growth rate of orders index fell from -5.2 to -14.

Perceptions of broader business deteriorated markedly in August. The general business activity index dropped 11 points from -4.6 to -15.8, and the company outlook index also posted a double-digit decline, coming in at -10.3.

Labor market indicators reflected slight employment declines and stable workweek length. The August employment index was negative for a fourth month in a row but edged up to -1.4. Fifteen percent of firms reported net hiring, compared with 16 percent reporting net layoffs. The hours worked index rose from -6.3 to 0.6, with the near-zero reading suggesting no change in workweek length from July.

There was notable downward pressure on prices in August, while upward wage pressure persisted. The raw materials prices index fell to -8 after a zero reading last month and a positive reading in June. The finished goods prices index declined 13 points to -15.7, hitting its lowest level since October 2009, when Texas was working its way out of the latest recession. Meanwhile, the wages and benefits index remained positive and rose slightly to 18.2.

Expectations regarding future business conditions deteriorated notably in August. The indexes of future general business activity and future company outlook both posted double-digit declines, but they remained slightly positive. Indexes for future manufacturing activity fell as well, but also remained in positive territory.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected Aug. 18–26, and 114 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.


Chicago Purchasing Managers Index down 0.3 points to 54.4 in August
Posted: August 31, 2015 at 09:45 AM (Monday)

The Chicago Business Barometer held on to most of July’s gain, falling just a fraction to 54.4 in August from 54.7 in July. While below the highs seen towards the end of last year, it’s still consistent with a bounceback in activity in the third quarter following recent weaker growth.

A slight easing in both Production and New Orders prompted the latest decline in the Barometer, with both paring some of the large gains seen in July that had left them at the highest level since January. While New Orders and Production softened in August, both remained above their 12-month averages and significantly up from the depressed levels seen between February and June.

Part of that resilience in Production and New Orders was due to stock growth as companies built inventories at the fastest pace since November 2014. Feedback from companies was mixed although our assessment is that the overall positive tone of the survey is consistent with a deliberate stock-build in anticipation of stronger demand in Q4.

Order Backlogs fell slightly, remaining below the 50 breakeven level for the seventh consecutive month, with companies still seeing some slack following the weakness in orders earlier in the year. In contrast, Supplier Deliveries jumped into expansion to the highest since March.

Underpinned by July‘s surge in output and orders, Employment rose in August to the highest since April. Despite the latest gain, the labour component remained in contraction for the fourth consecutive month and was still close to June’s nearly 5-1/2 year low. The Employment component has been relatively weak in recent months and the survey suggests it’s unlikely to see a strong pick-up in the short-term. Responding to a special question asked in August, 63% of our panel said they didn‘t plan to expand their workforce over the next three months.

The increases in Prices Paid seen over the past three months proved short-lived, with the indicator falling sharply into contraction in August as oil and other commodity prices plunged on the month.

It was pretty much steady as she goes in August with orders and output just about holding on to July‘s gains. While the slowdown earlier in the year looks temporary, we‘re still some way below the strong growth rates seen towards the end of 2014.


University of Michigan Consumer Confidence down in August to 91.9
Posted: August 28, 2015 at 10:00 AM (Friday)

Consumer confidence declined in late August mainly due to the recent volatility in stock prices. The overall decline was quite small, occurring very late in the month, as well as being offset by still quite favorable job and income prospects. To be sure, when data become available in mid September, much more will be known about consumers’ reactions to the volatile stock market. Overall, the data suggest that real personal consumption expenditures will expand by a still healthy 2.9% in 2015, with the pace of growth rising to 3.0% in 2016. Needless to say, consumer sentiment must be carefully monitored in the months ahead.

Stock Ownership Widespread
Changing stock prices is a direct concern to consumers. Among all households, 61% own stock, and among those in the upper half of the income distribution, 85% own stock, which rises to 91% among the top fifth of the income distribution. Although the dollar value of stock holdings is highly concentrated, a broad array of consumers have a stake in the market. The effect of changing stock prices on spending is not as widespread since most have stock in retirement accounts. Moreover, its impact on spending is much less than housing wealth.

Personal Finances Improve
Consumers evaluated their personal finances as positively as any time in the past eight years. An improved financial situation was reported by 45% of all households in August, only marginally below the recent peak of 47% recorded in April. More than one-third of all households reported recent income gains, and half anticipated higher incomes during the year ahead. News heard about job growth remained quite high and three-in-four consumers anticipated that the unemployment rate would hold constant or decline in the year ahead.

The Consumer Sentiment Index was 91.9 in the August 2015 survey, down from 93.1 in July, but significantly above last August’s 82.5. The Current Conditions Index was 105.1 in August, down from 107.2 in July and above last August’s 99.8. The Expectations Index posted a much smaller loss, falling only slightly to 83.4 in August from July’s 84.1 and remaining significantly higher than the 71.3 recorded last August.

How will consumers react to volatile stock prices? The Black Mondays of October 17, 1987 and August 24, 2015 represent two episodes when the stock market declined mainly due to reasons other than the domestic economy. Prior to each stock decline, the Sentiment Index was very positive, but immediately following, it fell by about 10%. Consumers quickly dismissed the 1987 episode since it didn’t involve their jobs or incomes, and today’s consumers hold similar favorable views about their job and income prospects. While this preliminary reading must be confirmed by additional data, there is every reason to expect continued growth.


Personal Income increased 0.4%, Spending increased 0.3%
Posted: August 28, 2015 at 08:30 AM (Friday)

Personal income increased $67.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $61.5 billion, or 0.5 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $37.4 billion, or 0.3 percent. In June, personal income increased $59.4 billion, or 0.4 percent, DPI increased $52.4 billion, or 0.4 percent, and PCE increased $31.8 billion, or 0.3 percent, based on revised estimates.

Real DPI increased 0.4 percent in July, compared with an increase of 0.2 percent in June. Real PCE increased 0.2 percent, compared to an increase of less than 0.1 percent.


Kansas City Fed Manufacturing Activity continued to decline moderately in August
Posted: August 27, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity continued to decline moderately in August, similar to the pace of the previous few months. Producers cited weak oil and gas activity and the stronger dollar as key reasons for the continued decrease in activity. Most price indexes fell from the previous survey, with an actual decline in monthly price levels.

The month-over-month composite index was -9 in August, down from -7 in July and equal to -9 in June (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The decrease was mostly attributable to weaker nondurable goods manufacturing, led by a reduction in food, beverage, and plastics production. Durable goods production remained weak but stable, particularly for metals and machinery products. Production indexes fell in nearly all District states. The majority of other month-over-month indexes edged lower. The production index dropped from -5 to -16, and the new orders, shipments and order backlog indexes also declined moderately. On the other hand, the new orders index edged higher from -10 to -4, and the employment index rebounded slightly after falling considerably last month. The raw materials inventory index fell from -7 to -12, and the finished goods inventory index also decreased.

Year-over-year factory indexes were mixed but generally weaker than last month. The composite year-over-year index inched up from -10 to -9, and the employment index also moved higher from -16 to -4. The production index was unchanged at -20, while the shipments, new orders, and order backlog indexes decreased somewhat. The capital expenditures index moderated from 17 to 8, and the new orders for exports index fell further. The raw materials inventory index decreased from -1 to -5, while the finished goods inventory index moved into positive territory.

Most future factory indexes declined slightly in August, but remained above zero. The future composite index edged lower from 3 to 0, and the future production, shipments, and new orders indexes eased slightly but remained positive. The future order backlog index dropped from 3 to -13, its lowest level since March 2009, and the future capital expenditures index fell into negative territory for the first time in five years. Both future inventory indexes declined after some improvement last month.

Most price indexes decreased, particularly versus the previous month. The month-over-month raw materials price index plunged from 8 to -8, and the finished goods price index also declined into negative territory. The year-over-year raw materials price index edged down from 19 to 14, and the finished goods price index also fell. The future raw materials and finished goods price indexes both decreased to their lowest levels in nearly six years.


Pending Home Sales Index increased 0.5% in July
Posted: August 27, 2015 at 10:00 AM (Thursday)

Pending home sales were mostly unchanged in July, but rose modestly for the sixth time in seven months, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, marginally increased 0.5 percent to 110.9 in July from an upwardly revised 110.4 in June and is now 7.4 percent above July 2014 (103.3). The index has increased year-over-year for 11 consecutive months and is the third highest reading of 2015, behind April (111.6) and May (112.3).

The housing market began the second half of 2015 on a positive note, with pending sales slightly rising in July. Led by a solid gain in the Northeast, contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer. While demand and sales continue to be stronger than earlier this year, Realtors® have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.

Looking ahead, with inventory shortages likely to persist into the fall, Yun expects the national median existing-home price to increase 6.3 percent in 2015 to $221,400. Yun forecasts total existing-home sales this year to increase 7.1 percent to around 5.29 million, about 25 percent below the prior peak set in 2005 (7.08 million).

In light of the recent volatility in the stock market, it's possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment. Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing — albeit at a modest pace — and the labor market continues to add jobs.

Uncertainty in the equity markets — even if the Fed raises short-term rates in September — could stabilize long-term mortgage rates and preserve affordability for buyers.

The PHSI in the Northeast increased 4.0 percent to 98.8 in July, and is now 12.1 percent above a year ago. In the Midwest the index remained unchanged at 107.8 in July, and is now 5.7 percent above July 2014.

Pending home sales in the South increased slightly (0.6 percent) to an index of 124.2 in July and are now 6.5 percent above last July. The index in the West declined 1.4 percent in July to 103.0, but is still 7.5 percent above a year ago.


BTMU U.S. Business Barometer dropped by 0.4%
Posted: August 27, 2015 at 10:00 AM (Thursday)

For the week ending August 15 2015, the BTMU U.S. Business Barometer dropped by 0.4 percent to 99.1. This week’s barometer was dragged down by weak performances in both consumption and production indexes. Chain store sales and MBA’s purchase index plunged by 1.8 and 1.1 percent, respectively. As to the production side, electric output declined by 3.3 and truck production plummeted by 1.3 percent after growing by 0.7 percent last week. Even though auto and steel production both increased by 0.4 percent, they were totally offset by losses in other production indexes.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, decreased by 0.1 percent to 99.3. Its year-over-year growth rate was 0.8 percent.


2Q2015 GDP preliminary estimate increased 3.7%
Posted: August 27, 2015 at 08:30 AM (Thursday)

Real gross domestic product -- the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 3.7 percent in the second quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 percent.

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

The acceleration in real GDP in the second quarter reflected an upturn in exports, an acceleration in PCE, a deceleration in imports, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in private inventory investment, in federal government spending, and in residential fixed investment.

Real gross domestic income (GDI) -- the value of the costs incurred and the incomes earned in the production of goods and services in the nation's economy -- increased 0.6 percent in the second quarter, compared with an increase of 0.4 percent (revised) in the first. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.1 percent in the second quarter, compared with an increase of 0.5 percent in the first quarter.

The upward revision to the percent change in real GDP primarily reflected upward revisions to nonresidential fixed investment, to private inventory investment, to state and local government spending, and to PCE and a downward revision to imports.


Weekly Initial Unemployment Claims Decrease 6,000 to 271,000
Posted: August 27, 2015 at 08:30 AM (Thursday)

In the week ending August 22, the advance figure for seasonally adjusted initial claims was 271,000, a decrease of 6,000 from the previous week's unrevised level of 277,000. The 4-week moving average was 272,500, an increase of 1,000 from the previous week's unrevised average of 271,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending August 15, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 15 was 2,269,000, an increase of 13,000 from the previous week's revised level. The previous week's level was revised up 2,000 from 2,254,000 to 2,256,000. The 4-week moving average was 2,265,250, a decrease of 250 from the previous week's revised average. The previous week's average was revised up by 500 from 2,265,000 to 2,265,500.


July New Orders for Durable Goods Increased 2.0%, Ex-Trans up 0.6%
Posted: August 26, 2015 at 08:30 AM (Wednesday)

New orders for manufactured durable goods in July increased $4.6 billion or 2.0 percent to $241.1 billion, the U.S. Census Bureau announced today. This increase, up two consecutive months, followed a 4.1 percent June increase. Excluding transportation, new orders increased 0.6 percent. Excluding defense, new orders increased 1.0 percent. Transportation equipment, also up two consecutive months, led the increase, $3.8 billion or 4.7 percent to $83.2 billion.

Shipments of manufactured durable goods in July, up two consecutive months, increased $2.3 billion or 1.0 percent to $243.2 billion. This followed a 0.9 percent June increase. Transportation equipment, also up two consecutive months, led the increase, $1.9 billion or 2.5 percent to $80.3 billion.

Unfilled orders for manufactured durable goods in July, up two consecutive months, increased $2.3 billion or 0.2 percent to $1197.5 billion. This followed a virtually unchanged June increase. Transportation equipment, also up two consecutive months, drove the increase, $2.9 billion or 0.4 percent to $802.6 billion.

Inventories of manufactured durable goods in July, down two of the last three months, decreased $0.1 billion or virtually unchanged to $402.1 billion. This followed a 0.4 percent June increase. Primary metals, down six consecutive months, drove the decrease, $0.2 billion or 0.5 percent to $37.1 billion.

Nondefense new orders for capital goods in July increased $0.9 billion or 1.1 percent to $82.3 billion. Shipments increased $0.1 billion or 0.1 percent to $79.3 billion. Unfilled orders increased $3.1 billion or 0.4 percent to $762.2 billion. Inventories increased $0.2 billion or 0.1 percent to $177.3 billion. Defense new orders for capital goods in July increased $2.0 billion or 22.3 percent to $11.0 billion. Shipments increased $0.2 billion or 1.5 percent to $10.6 billion. Unfilled orders increased $0.5 billion or 0.3 percent to $149.8 billion. Inventories increased $0.2 billion or 1.0 percent to $23.0 billion.

Revised seasonally adjusted June figures for all manufacturing industries were: new orders, $480.0 billion (revised from $478.5 billion); shipments, $484.4 billion (revised from $483.5 billion); unfilled orders, $1,195.2 billion (revised from $1,194.7 billion); and total inventories, $652.6 billion (revised from $653.6 billion).


Purchase Apps up, Refi's down in Latest MBA Weekly Survey
Posted: August 26, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 21, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.2 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 1 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 18 percent higher than the same week one year ago.

Applications for government home purchase loans drove the increase; the seasonally adjusted FHA purchase index rose by 5.6 percent from the previous week while the seasonally adjusted VA purchase index rose by 5.2 percent over the week. Conventional purchase applications were essentially unchanged from the previous week.

The refinance share of mortgage activity decreased to 55.3 percent of total applications from 55.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.8 percent of total applications.

The FHA share of total applications increased to 13.1 percent from 12.9 percent the week prior. The VA share of total applications increased to 11.4 percent from 11.1 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.08 percent from 4.11 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.00 percent from 4.03 percent, with points decreasing to 0.24 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.90 percent from 3.88 percent, with points increasing to 0.21 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.33 percent from 3.37 percent, with points decreasing to 0.31 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.96 percent from 2.98 percent, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New Home Sales in July at annual rate of 507,000
Posted: August 25, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in July 2015 were at a seasonally adjusted annual rate of 507,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.4 percent (±14.8%)* above the revised June rate of 481,000 and is 25.8 percent (±22.6%) above the July 2014 estimate of 403,000.

The median sales price of new houses sold in July 2015 was $285,900; the average sales price was $361,600. The seasonally adjusted estimate of new houses for sale at the end of July was 218,000. This represents a supply of 5.2 months at the current sales rate.


Consumer Confidence rebounded in August to 101.5
Posted: August 25, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined in July, rebounded in August. The Index now stands at 101.5 (1985=100), up from 91.0 in July. The Present Situation Index increased from 104.0 last month to 115.1 in August, while the Expectations Index improved to 92.5 from 82.3 in July.

Consumer confidence rebounded in August, following a sharp decline in July. “Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the labor market. The uncertainty expressed last month about the short-term outlook has dissipated and consumers are once again feeling optimistic about the near future. Income expectations, however, were little improved.

Consumers’ assessment of current conditions was considerably more favorable in August. Those saying business conditions are “good” decreased marginally from 23.4 percent to 23.2 percent. Those claiming business conditions are “bad” declined modestly from 18.2 percent to 17.6 percent. Consumers were considerably more positive about the job market. Those stating jobs are “plentiful” increased from 19.9 percent to 21.9 percent, while those claiming jobs are “hard to get” decreased from 27.4 percent to 21.9 percent.

Consumers’ optimism about the short-term outlook also improved in August. The percentage of consumers expecting business conditions to improve over the next six months increased slightly from 15.3 percent to 15.8 percent, while those expecting business conditions to worsen declined from 10.3 percent to 8.3 percent.

Consumers’ outlook for the labor market was more upbeat. Those anticipating more jobs in the months ahead increased from 13.7 percent to 14.6 percent, while those anticipating fewer jobs decreased sharply from 19.0 percent to 13.6 percent. The proportion of consumers expecting their incomes to increase declined moderately from 17.0 percent to 16.2 percent, while the proportion expecting a decline decreased from 11.3 percent to 10.0 percent.


Richmond Fed's Current Activity Index drooped 13 points to a reading of 0
Posted: August 25, 2015 at 10:00 AM (Tuesday)

Fifth District manufacturing activity slowed in August, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and order backlogs decreased, while new orders flattened this month. Manufacturing hiring softened this month; however, average wages continued to increase at a moderate pace. Prices of raw materials rose more slowly in August, while prices of finished goods grew slightly faster compared to last month.

Despite the soft current conditions, producers remained optimistic about future business conditions. Expectations were for solid increases in shipments and in the volume of new orders in the six months ahead, with increased capacity utilization. In addition, manufacturers looked for rising backlogs and longer vendor lead times.

Producers expected faster employment growth and solid growth in wages during the next six months. Survey participants looked for moderate growth in the average workweek. Looking ahead, manufacturers looked for faster growth in prices paid and prices received.

Overall, manufacturing conditions slowed in August, with several components softening. The composite index flattened to a reading of 0. Shipments dropped sharply; the index lost 20 points to end at −4 and the index for new orders fell 16 points to finish at a reading of 1. Manufacturing employment remained at a flat reading of 1.

Backlogs decreased in August, with the index settling 25 points lower at −15. The capacity utilization index also slipped this month, pulling the index down 14 points to a reading of −5. Vendor lead time lengthened slightly, with that indicator gaining five points to end at 9. Finished goods inventories rose at the same pace as last month; the index held steady at 24. Raw materials inventories increased at a faster pace this month. That gauge increased eight points to 24.


Philadelphia Nonmanufacturing Activity remained subdued in August
Posted: August 25, 2015 at 10:00 AM (Tuesday)

Responses to this month's Nonmanufacturing Business Outlook Survey suggest that regional nonmanufacturing activity improved somewhat but remained subdued in August. The current activity indexes improved from last month but remain below levels from the first half of the year. Firms also reported increases in new orders, sales, and employment, overall. Responding firms remain highly optimistic about activity increasing in the region and in their own firms over the next six months.

Nonmanufacturing Activity Remains Subdued
The diffusion index for current activity at the firm level showed improvement after falling sharply in July, rising 5 points, to 7.7, in August (see Chart 1 above). The increase in the index was due more to fewer respondents reporting decreases: The percentage of firms reporting decreases in activity declined from 38 percent in July to 28 percent in August; nearly 36 percent of the firms reported increases in August. Similarly, the diffusion index for current activity for the region increased from 8.1 to 15.4, as a smaller percentage of firms reported decreasing activity. Both indexes remain below readings seen earlier this year.

New Orders and Sales Show Improvement
After dropping to negative readings last month, both the new orders and sales/revenue indexes returned to positive territory in August. The new orders index increased from
-5.4 to 10.3. The percentage of firms reporting increases (26 percent) exceeded the percentage of firms reporting decreases (15 percent). Firms’ responses suggest improved sales or revenue: The share of respondents reporting increases grew from 22 percent last month to 36 percent this month, while the share reporting decreases fell from 43 percent to 31 percent. The sales/revenue index increased from -21.6 in July to 5.1 in August.

Firms Hire More Full-Time Employees
Responses to the survey indicate positive conditions for labor market demand in August, overall. The full-time employment index rose 10 points, to 15.4, as the percentage of respondents reporting increases to full-time staff levels rose from 16 percent last month to 28 percent this month (see Chart 2 below). The part-time employment index registered its second consecutive negative reading, edging down from -2.7 in July to -5.1 in August. Twenty-three percent of the firms reported decreases in part-time staff, exceeding the 18 percent of the firms that reported increases. The workweek index increased 10 points, to 10.3, in August.

Firms Report Slightly Higher Prices
The prices paid index rose 4 points, to 23.1. Although 64 percent of the firms reported no change in prices paid, 23 percent reported increases, and none of the respondents reported decreases. The prices received index also increased this month, from 5.4 to 10.3. A similar percentage of firms reported increases this month (15 percent) as did last month (16 percent), but the percentage of firms reporting decreases declined from 11 percent to 5 percent. Nearly 62 percent of the firms reported no change in prices received.

Capital Spending Remains Mostly Steady
Firms continued to report overall increases in spending for physical plant and equipment and software, and each index edged up 2 points, to 12.8 and 7.7, respectively. More than 15 percent of the respondents reported increases in plant spending compared with 3 percent that reported decreases. While a majority of the firms reported no change in expenditures for equipment and software (59 percent), the share of firms reporting increases (13 percent) exceeded the share reporting decreases (5 percent).

Optimism for Firm-Level Activity Improves
Respondents to the survey remain highly optimistic about future activity over the next six months. The future activity index at the firm level rose 25 points to 87.2, its highest reading since May 2012. Nearly 90 percent of the respondents, up from 68 percent last month, expect activity to increase at their firms. Although the future activity index for the region edged down 2 points, to 79.5, respondents remained very optimistic, with 82 percent of the firms expecting activity to increase.

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


S&P/Case-Shiller Home Price Indices gained 0.1% in June
Posted: August 25, 2015 at 09:00 AM (Tuesday)

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

Year-over-Year
The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 4.5% annual increase in June 2015 versus a 4.4% increase in May 2015. The 10-City Composite had marginally lower year-over-year gains, with an increase of 4.6% year-over-year. The 20-City Composite year-over-year pace was virtually unchanged from last month, rising 5.0% year-over-year.
Denver, San Francisco, and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.2%, 9.5%, and 8.2%, respectively. Eleven cities reported greater price increases in the year ending June 2015 over the year ending May 2015. Denver is the only city with a double digit increase, and Phoenix and Detroit had the longest streaks of year-over-year increases. Phoenix reported a 4.1% in June 2015, the seventh consecutive year-over-year increase. Detroit recorded 5.7% in June 2015, the sixth consecutive year-over-year increase.

Month-over-Month
Before seasonal adjustment, the National index and 20-City Composite both reported gains of 1.0% month-over-month in June. The 10-City Composite posted a gain of 0.9% month-over-month. After seasonal adjustment, the National index posted a gain of 0.1% while the 10-City and 20-City Composites were both down 0.1% month-over-month. All 20 cities reported increases in June before seasonal adjustment; after seasonal adjustment, nine were down, nine were up, and two were unchanged.

Analysis
Nationally, home prices continue to rise at a 4-5% annual rate, two to three times the rate of inflation. While prices in San Francisco and Denver are rising far faster than those in Washington DC, New York, or Cleveland, the city-to-city price patterns are little changed in the last year. Washington saw the smallest year-over-year gains in five of the last six months; San Francisco and Denver ranked either first or second of all cities in the last five months. The price gains have been consistent as the unemployment rate declined with steady inflation and an unchanged Fed policy.

The missing piece in the housing picture has been housing starts and sales. These have changed for the better in the last few months. Sales of existing homes reached 5.6 million at annual rates in July, the strongest figure since 2007. Housing starts topped 1.2 million units at annual rates with almost two-thirds of the total in single family homes. Sales of new homes are also trending higher. These data point to a stronger housing sector to support the economy. Two possible clouds on the horizon are a possible Fed rate increase and volatility in the stock market. A one quarter-point increase in the Fed funds rate won’t derail housing. However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer. A stock market correction is unlikely to do much damage to the housing market; a full blown bear market dropping more than 20% would present some difficulties for housing and for other economic sectors.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.5% annual gain in June 2015. The 10- and 20-City Composites reported year-over-year increases of 4.6% and 5.0%.

As of June 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2005 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 12-14%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 33.8% and 34.9%.


Chicago Fed National Activity picked up in July
Posted: August 24, 2015 at 08:30 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, edged up to a neutral reading in July from –0.08 in June. July’s CFNAI-MA3 suggests that growth in national economic activity was at its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.06 in July from a neutral reading in June. Fifty of the 85 individual indicators made positive contributions to the CFNAI in July, while 35 made negative contributions. Forty-four indicators improved from June to July, while 40 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.

The contribution from production-related indicators to the CFNAI rose to +0.28 in July from –0.14 in June. Industrial production was up 0.6 percent in July, following a gain of 0.1 percent in June. Manufacturing production increased 0.8 percent in July, after declining 0.3 percent in the previous month; and manufacturing capacity utilization rose to 76.2 percent in July, up from 75.7 percent in June.

The contribution from employment-related indicators to the CFNAI was unchanged at +0.11 in July. The unemployment rate was steady at 5.3 percent in July, and nonfarm payrolls increased by 215,000 in July after rising by 231,000 in June. The sales, orders, and inventories category also made a positive contribution to the CFNAI in July, though this contribution edged down to +0.01 from +0.06 in June.

The contribution of the personal consumption and housing category to the CFNAI moved up to –0.06 in July from –0.10 in June. Consumption indicators, on balance, improved in July, pushing the category’s contribution higher. Additionally, housing starts ticked up to 1,206,000 annualized units in July from 1,204,000 in June. However, housing permits declined to 1,119,000 annualized units in July from 1,337,000 in the previous month.

The CFNAI was constructed using data available as of August 20, 2015. At that time, July data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The June monthly index was revised to –0.07 from an initial estimate of +0.08, and the May monthly index was revised to –0.29 from last month’s estimate of –0.08. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the June monthly index was due primarily to the former, while the revision to the May monthly index was due primarily to the latter.


U.S. Leading Economic Index declined 0.2% in July
Posted: August 20, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.2 percent in July to 123.3 (2010 = 100), following a 0.6 percent increase in June, and a 0.6 percent increase in May.

The U.S. LEI fell slightly in July, after four months of strong gains. Despite a sharp drop in housing permits, the U.S. LEI is still pointing to moderate economic growth through the remainder of the year. Current conditions, measured by the coincident economic index, have been rising moderately but steadily, driven by rising employment and income, and even industrial production has improved in recent months.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in July to 112.5 (2010 = 100), following a 0.2 percent increase in June, and a 0.1 percent increase in May.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in July to 118.1 (2010 = 100), following a 0.7 percent increase in June, and a 0.3 percent increase in May.


Existing-Home Sales increased 2.0% in July
Posted: August 20, 2015 at 10:00 AM (Thursday)

Existing-home sales steadily increased for the third consecutive month in July, while stubbornly low inventory levels and rising prices are likely to blame for sales to first-time buyers falling to their lowest share since January, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0 percent to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June. Sales in July remained at the highest pace since February 2007 (5.79 million), have now increased year-over-year for ten consecutive months and are 10.3 percent above a year ago (5.07 million).

The increase in sales in July solidifies what has been an impressive growth in activity during this year's peak buying season. The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now. As a result, current homeowners are using their increasing housing equity towards the downpayment on their next purchase.

The median existing-home price for all housing types in July was $234,000, which is 5.6 percent above July 2014. July's price increase marks the 41st consecutive month of year-over-year gains.

Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand. Realtors® in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains.

Total housing inventory at the end of July declined 0.4 percent to 2.24 million existing homes available for sale, and is now 4.7 percent lower than a year ago (2.35 million). Unsold inventory is at a 4.8-month supply at the current sales pace, down from 4.9 months in June.

The percent share of first-time buyers declined in July for the second consecutive month, falling from 30 percent in June to 28 percent — the lowest share since January of this year (also 28 percent). A year ago, first-time buyers represented 29 percent of all buyers.

The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face. Rising rents and flat wage growth make it difficult for many to save for a downpayment, and the dearth of supply in affordable price ranges is limiting their options.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed to 4.05 percent in July from 3.98 percent in June — the first time above 4 percent since November 2014 (4.00 percent) and the highest since September 2014 (4.16 percent).

Properties typically stayed on the market for 42 days in July, an increase from June (34 days) but below the 48 days in July 2014. Short sales were on the market the longest at a median of 135 days in July, while foreclosures sold in 49 days and non-distressed homes took 41 days. Forty-three percent of homes sold in July were on the market for less than a month.

All-cash sales increased slightly to 23 percent of transactions in July (22 percent in June) but are down from 29 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in July, up from 12 percent in June but down from 16 percent in July 2014. Sixty-four percent of investors paid cash in July.

Representing the lowest share since NAR began tracking in October 2008, distressed sales — foreclosures and short sales — declined to 7 percent in July from 8 percent in June; they were 9 percent a year ago. Five percent of July sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in July (15 percent in June), while short sales were discounted 12 percent (18 percent in June).

The housing market is in a much better place and has come a long way since the depths of the recession. Five years ago, distressed sales represented 33 percent of the market in July. For many previously distressed homeowners throughout the country, rising home values in recent years have helped recover equity and the vast improvement in several local job markets means fewer are falling behind on their mortgage payments.

Single-family and Condo/Co-op Sales
Single-family home sales increased 2.7 percent to a seasonally adjusted annual rate of 4.96 million in July (highest since February 2007 at 5.08 million) from 4.83 million in June, and are now 11.0 percent above the 4.47 million pace a year ago. The median existing single-family home price was $235,500 in July, up 5.8 percent from July 2014.

Existing condominium and co-op sales fell 3.1 percent to a seasonally adjusted annual rate of 630,000 units in July from 650,000 units in June, but are still up 5.0 percent from July 2014 (600,000 units). The median existing condo price was $221,800 in July, which is 3.2 percent above a year ago.

Regional Breakdown
July existing-home sales in the Northeast decreased 2.8 percent to an annual rate of 700,000, but are still 9.4 percent above a year ago. The median price in the Northeast was $277,200, which is 1.3 percent higher than July 2014. In the Midwest, existing-home sales were at an annual rate of 1.32 million in July, unchanged from June and 10.9 percent above July 2014. The median price in the Midwest was $186,500, up 6.6 percent from a year ago.

Existing-home sales in the South increased 4.1 percent to an annual rate of 2.29 million in July, and are 9.6 percent above July 2014. The median price in the South was $203,500, up 7.0 percent from a year ago.

Existing-home sales in the West rose 3.2 percent to an annual rate of 1.28 million in July, and are 11.3 percent above a year ago. The median price in the West was $327,400, which is 8.4 percent above July 2014.


Philadelphia August Outlook Suggest Modest Growth
Posted: August 20, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased in August, according to firms responding to this month’s Manufacturing Business Outlook Survey. The indicators for general activity are holding fairly steady and suggest modest growth. While firms reported increased shipments compared with the prior month, the current indicators for new orders and employment suggest steady conditions. The survey’s indicators of future activity predict a continuation of growth in the region’s manufacturing sector over the next six months.

Firms Report Slight Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 5.7 in July to 8.3 in August. This index has hovered in a low range since the beginning of the current year, far below the highs of late 2014. The demand for manufactured goods, as measured by the survey’s current new orders index, remains low as well, falling slightly more than 1 point to 5.8 in August. However, the current shipments index rebounded 12 points to 16.7.

Firms’ responses suggest steady conditions in the regional labor market. The percentage of firms reporting an increase in employees in August (21 percent) exceeded the percentage reporting a decrease (16 percent), and the corresponding diffusion index for current employment increased 6 points, to 5.3. Firms reported modest increases in the workweek: The percentage of firms reporting a longer workweek (16 percent) was greater than the percentage reporting a shorter workweek (7 percent).

Firms Report Minor Price Changes
Input price pressures were subdued: The prices paid index fell 14 points, to 6.2. Although 78 percent of the firms reported that input prices were unchanged, the percentage of firms reporting price increases (13 percent) exceeded those reporting reductions (7 percent). With respect to prices received for manufactured goods, a majority of firms (81 percent) reported no change in prices. The percentage of firms reporting reductions in prices received (11 percent) exceeded those reporting increases in prices received (6 percent) for the first time in three months.

Manufacturers Expect Growth over the Next Six Months
The diffusion index for future activity increased from 41.5 in July to 43.1 this month and remains well entrenched as an indicator of continued growth (see Chart). The future index for new orders was virtually unchanged at 46.4, while the future shipments index decreased 12 points to 37.6. The future employment index held relatively steady at 21.5. Most firms (over 61 percent) are expecting no change in their employment levels over the next six months.

Export Shares Are Lower
In this month’s special questions, firms were asked about the growth of exports as a percentage of their total sales over the past year. The firms reporting decreases (23 percent) outnumbered those reporting increases (19 percent), producing a diffusion index of -4.2. The last time this question was asked (slightly more than one year ago), the share of firms reporting increases was much higher than the share reporting decreases (39 percent versus 7 percent), which resulted in a diffusion index of 31.6. Firms were also asked about the type of products they were exporting: Intermediate products held the largest share at 35 percent, followed by final business products at 23 percent and capital goods at 21 percent.

Summary
The Manufacturing Business Outlook Survey suggests a continuation of modest expansion of the region’s manufacturing sector. The indicators for general activity and new orders and shipments remain positive, and firms reported a slight increase in employment in August. Price pressures for inputs are subdued, and although more firms reported price decreases for their own products than reported price increases, a strong majority reported steady prices received. The indicators reflecting firms’ expectations about regional business conditions for the next six months were almost unchanged and remain strong. The responding firms also predict future employment growth.


BTMU U.S. Business Barometer decreased by 0.1%
Posted: August 20, 2015 at 10:00 AM (Thursday)

For the week ending August 8 2015, the BTMU U.S. Business Barometer decreased by 0.1 percent to 99.5. This week’s barometer was mainly driven by weak performances in production indexes. Auto production and electric output dropped by 5.4 and 2.8 percent, respectively; while steel production fell by 0.3 percent. Also, lumber production declined by 0.1 percent. On the consumption side, MBA’s purchase index plunged by 3.5 percent, although chain store sales climbed by 0.2 percent.

On a year-over-year basis, the barometer showed a gain of 1.1 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 99.5. Its year-over-year growth rate was 0.9 percent.


Weekly Initial Unemployment Claims Increase 4,000 to 277,000
Posted: August 20, 2015 at 08:30 AM (Thursday)

In the week ending August 15, the advance figure for seasonally adjusted initial claims was 277,000, an increase of 4,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 274,000 to 273,000. The 4-week moving average was 271,500, an increase of 5,500 from the previous week's revised average. The previous week's average was revised down by 250 from 266,250 to 266,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending August 8, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 8 was 2,254,000, a decrease of 24,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,273,000 to 2,278,000. The 4-week moving average was 2,265,000, an increase of 9,500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,254,250 to 2,255,500.


Consumer Price Index increased 0.1% in July, Ex Fd & Engy rose 0.1%
Posted: August 19, 2015 at 08:30 AM (Wednesday)

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

The indexes for food, energy, and all items less food and energy all rose slightly in July. The food index rose 0.2 percent as all six major grocery store food group indexes increased. The energy index rose 0.1 percent as an increase in the gasoline index more than offset declines in other energy component indexes.

The index for all items less food and energy also rose 0.1 percent in July. A 0.4-percent advance in the shelter index was the main contributor to the increase, though the indexes for medical care and apparel also rose. In contrast, the index for airline fares fell sharply, and the indexes for used cars and trucks, household furnishings and operations, and new vehicles all declined.

The all items index increased 0.2 percent for the 12 months ending July. The 12-month change has been rising since April. The index for all items less food and energy increased 1.8 percent for the 12 months ending July; this was the fourth time in 5 months the 12-month change was 1.8 percent. The food index increased 1.6 percent over the last 12 months. The energy index, however, continues to show a 12-month decline, falling 14.8 percent over the past year.


Real Average Hourly Earnings increased 0.1% in July
Posted: August 19, 2015 at 08:30 AM (Wednesday)

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

Real average weekly earnings increased by 0.4 percent over the month due to the increase in real average hourly earnings combined with an increase of 0.3 percent in the average workweek.

Real average hourly earnings increased by 1.9 percent, seasonally adjusted, from July 2014 to July 2015. This increase in real average hourly earnings, combined with a 0.3-percent increase in the average workweek, resulted in a 2.2-percent increase in real average weekly earnings over this period.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 19, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 3.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 14, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.6 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 to its highest level since May 2015. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier to its lowest level since March 2015. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 19 percent higher than the same week one year ago.

Concerns about the Chinese economy pushed interest rates down last week, resulting in a two basis point decline in thirty year fixed interest rate, bringing the rate down to its lowest since May 2015. The pick-up in refinance activity was led by larger loan sizes on average, as continued investor interest drove jumbo interest rates down even further, by five basis points.

The refinance share of mortgage activity increased to 55.5 percent of total applications from 53.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.

The FHA share of total applications decreased to 12.9 percent from 13.3 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 increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.11 percent, its lowest level since May 2015, from 4.13 percent, with points increasing to 0.37 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 $417,000) decreased to 4.03 percent, its lowest level since May 2015, from 4.08 percent, with points decreasing to 0.29 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.88 percent, its lowest level since May 2015, from 3.94 percent, with points decreasing to 0.17 from 0.22 (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 3.37 percent, its lowest level since July 2015, from 3.39 percent, with points decreasing to 0.36 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 decreased to 2.98 percent, its lowest level since May 2015, from 3.11 percent, with points increasing to 0.40 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


July Housing Starts up 0.2%, Permits down 16.3%
Posted: August 18, 2015 at 08:30 AM (Tuesday)

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for July 2015:

BUILDING PERMITS
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,119,000. This is 16.3 percent (±1.1%) below the revised June rate of 1,337,000, but is 7.5 percent (±1.4%) above the July 2014 estimate of 1,041,000. Single-family authorizations in July were at a rate of 679,000; this is 1.9 percent (±1.0%) below the revised June figure of 692,000. Authorizations of units in buildings with five units or more were at a rate of 412,000 in July.

HOUSING STARTS
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,206,000. This is 0.2 percent (±15.2%) above the revised June estimate of 1,204,000 and is 10.1 percent (±10.8%) above the July 2014 rate of 1,095,000. Single-family housing starts in July were at a rate of 782,000; this is 12.8 percent (±9.8%) above the revised June figure of 693,000. The July rate for units in buildings with five units or more was 413,000.

HOUSING COMPLETIONS
Privately-owned housing completions in July were at a seasonally adjusted annual rate of 987,000. This is 2.4 percent (±13.4%) above the revised June estimate of 964,000 and is 14.6 percent (±11.5%) above the July 2014 rate of 861,000. Single-family housing completions in July were at a rate of 627,000; this is 1.4 percent (±10.9%) below the revised June rate of 636,000. The July rate for units in buildings with five units or more was 350,000.


Treasury International Capital Data for June 2015
Posted: August 17, 2015 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for June 2015. The sum total in June of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $110.3 billion. Of this, net foreign private outflows were $66.9 billion, and net foreign official outflows were $43.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in June; net purchases were $87.2 billion. Net purchases by private foreign investors were $101.0 billion, while net sales by foreign official institutions were $13.8 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $15.9 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $103.1 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 $86.7 billion in June.

Foreign residents left their holdings of U.S. Treasury bills unchanged. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $7.0 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $189.9 billion.


Builder Confidence rose one point in August to 61
Posted: August 17, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in August rose one point to a level of 61 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since November 2005.

The fact the builder confidence has been in the low 60s for three straight months shows that single-family housing is making slow but steady progress. However, we continue to hear that builders face difficulties accessing land and labor.

Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015. Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.

Two of the three HMI components posted gains in August. The index measuring buyer traffic increased two points to 45 and the component gauging current sales conditions rose one point to 66. Meanwhile, the index charting sales expectations in the next six months held steady at 70.

Looking at the three-month moving averages for regional HMI scores, the West and Midwest each rose three points to 63 and 58, respectively. The South posted a two-point gain to 63 and the Northeast held steady at 46.


Empire State Manufacturing Survey Conditions Declined in August
Posted: August 17, 2015 at 08:30 AM (Monday)

The August 2015 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index tumbled nineteen points to -14.9, its lowest level since 2009. The new orders and shipments indexes also fell sharply, to -15.7 and -13.8 respectively, pointing to a marked decline in both orders and shipments. The inventories index dropped to -17.3, signaling that inventory levels were lower. Price indexes showed that input prices were slightly higher, while selling prices were flat. Labor market indicators suggested that employment levels and hours worked were little changed. Indexes for the six-month outlook registered somewhat greater optimism than in July, with the future general business conditions index rising seven points to 33.6.

Headline Index Falls to Its Lowest Level since the Great Recession
Business activity declined for New York manufacturers, according to the August 2015 survey. After hovering around zero since April, the general business conditions index dropped nineteen points to -14.9, its lowest level since April 2009. Nineteen percent of respondents reported that conditions had improved over the month, while 34 percent reported that conditions had worsened. The new orders index fell twelve points to -15.7, its lowest level in several years, indicating that orders were down appreciably, and the shipments index plunged twenty-two points to -13.8, pointing to a substantial decline in shipments. The unfilled orders index edged up three points to -4.5. The delivery time index fell to -4.6, indicating slightly shorter delivery times, and the inventories index fell nine points to -17.3, suggesting that inventory levels were significantly lower than last month.

Employment Flat
Price increases remained subdued. The prices paid index was little changed at 7.3, continuing the pattern of modest input price increases seen in recent months. The prices received index fell to 0.9, indicating that selling prices were flat. Labor market indicators pointed to little change in employment and hours worked. The index for number of employees edged down one point to 1.8, and the average workweek index fell to -1.8.

Despite Current Weakness, Outlook Remains Fairly Positive
While indexes for future activity fell short of the higher levels recorded throughout 2014, they still showed a fair degree of optimism about the six-month outlook. The index for future business activity climbed seven points to 33.6. The index for future new orders dipped to 29.4, while the index for future shipments rose eight points to 33.0. Indexes for future prices paid and received advanced. The index for future number of employees declined for a fifth consecutive month, reaching 3.6—a sign that little change in employment levels was expected in the months ahead. The capital expenditures index fell four points to 17.3, and the technology spending index rose three points to 13.6.


Forecasters See Slightly Slower Growth as the Unemployment Outlook Holds Steady
Posted: August 14, 2015 at 10:00 AM (Friday)

The outlook for growth in the U.S. economy over the next four years looks slightly lower from that of three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The panel expects real GDP to grow at an annual rate of 2.7 percent this quarter and 2.8 percent next quarter. On an annual-average over annual-average basis, the forecasters see real GDP growing 2.3 percent in 2015, down from the previous estimate of 2.4 percent. The forecasters predict real GDP will grow 2.8 percent in 2016, 2.6 percent in 2017, and 2.4 percent in 2018. The forecasts for 2017 and 2018 are slightly slower than the previous estimates.

The outlook for the labor market remains nearly unchanged. The forecasters predict the unemployment rate will be an annual average of 5.3 percent in 2015, before falling to 5.0 percent in 2016, 4.8 percent in 2017, and 4.7 percent in 2018. These projections are nearly the same as those of the previous survey.

On the jobs front, the forecasters have revised upward their estimates for job gains in 2015 and 2016. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 244,200 in 2015, up slightly from the previous estimate of 243,900, and 200,500 in 2016, up from the previous estimate of 180,100. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)


Industrial Production increased 0.6%
Capacity Utilization increased to 78.0%

Posted: August 14, 2015 at 09:15 AM (Friday)

Industrial production increased 0.6 percent in July after moving up 0.1 percent in June. In July, manufacturing output advanced 0.8 percent primarily because of an increase in motor vehicle assemblies. The output of motor vehicles and parts jumped 10.6 percent, and production elsewhere in manufacturing edged up 0.1 percent. The index for mining rose 0.2 percent, while the index for utilities fell 1.0 percent. At 107.5 percent of its 2012 average, total industrial production in July was 1.3 percent above its year-earlier level. (The comparison base year for industrial production was advanced to 2012 in the annual revision to the statistics published on July 21, 2015.) Capacity utilization for the industrial sector increased 0.3 percentage point in July to 78.0 percent, a rate that is 2.1 percentage points below its long-run (1972–2014) average.

The Federal Reserve Board issued its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on July 21, 2015.


Producer Price Index advanced 0.2% in July, ex Fd & Engy unch%
Posted: August 14, 2015 at 08:30 AM (Friday)

The Producer Price Index for final demand advanced 0.2 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.4 percent in June and 0.5 percent in May. On an unadjusted basis, the final demand index moved down 0.8 percent for the 12 months ended in July, the sixth straight 12-month decline.


In July, the increase in the final demand index can be traced to prices for final demand services, which climbed 0.4 percent. In contrast, the index for final demand goods edged down 0.1 percent.

Within intermediate demand, prices for processed goods moved down 0.2 percent, the index for unprocessed goods fell 2.9 percent, and prices for services advanced 0.2 percent.


Business Inventories up 0.8% in June
Posted: August 13, 2015 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for June, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,325.5 billion, up 0.2 percent (±0.2%) from May 2015, but was down 2.5 percent (±0.4%) from June 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,812.5 billion, up 0.8 percent (±0.1%) from May 2015 and were up 3.0 percent (±0.5%) from June 2014.

The total business inventories/sales ratio based on seasonally adjusted data at the end of June was 1.37. The June 2014 ratio was 1.30.


BTMU U.S. Business Barometer increased by 0.2%
Posted: August 13, 2015 at 10:00 AM (Thursday)

For the week ending August 1 2015, the BTMU U.S. Business Barometer increased by 0.2 percent to 99.6. This week’s barometer was mainly driven by robust performances in some production indexes. For instance, auto production picked up by 5.6 percent following a sharp drop of 12.6 percent in the previous week; while truck production bounced back by 3.1 percent. Also, steel production climbed by 1.0 percent after a loss of 0.8 percent in the prior week. As to the consumption side, MBA’s purchase index increased by 3.3 percent, but chain store sales fell by 0.4 percent.

On a year-over-year basis, the barometer showed a gain of 0.9 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 99.5. Its year-over-year growth rate was 0.9 percent.


U.S. Import Price Index declined 0.9% in July
Posted: August 13, 2015 at 08:30 AM (Thursday)

U.S. import prices declined 0.9 percent in July, after recording no change the previous month, the U.S. Bureau of Labor Statistics reported today. Both fuel prices and nonfuel prices contributed to the July decrease. The price index for U.S. exports fell 0.2 percent in July following a 0.3-percent drop in June.


U.S. Retail Sales for July increase 0.6%, Ex-Auto up 0.4%
Posted: August 13, 2015 at 08:30 AM (Thursday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $446.5 billion, an increase of 0.6 percent (±0.5%) from the previous month, and up 2.4 percent (±0.7%) above July 2014. Total sales for the May 2015 through July 2015 period were up 2.3 percent (±0.7%) from the same period a year ago. The May 2015 to June 2015 percent change was revised from -0.3 percent (±0.5%)* to virtually unchanged (±0.2%)*.

Retail trade sales were up 0.6 percent (±0.5%) from June 2015, and up 1.6 percent (±0.7%) above last year. Food services and drinking places were up 9.0 percent (±3.3%) from July 2014 and motor vehicle and parts dealers were up 6.9 percent (±2.8%) from last year.


Weekly Initial Unemployment Claims Increase 5,000 to 274,000
Posted: August 13, 2015 at 08:30 AM (Thursday)

In the week ending August 8, the advance figure for seasonally adjusted initial claims was 274,000, an increase of 5,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 270,000 to 269,000. The 4-week moving average was 266,250, a decrease of 1,750 from the previous week's revised average. This is the lowest level for this average since April 15, 2000 when it was 266,250. The previous week's average was revised down by 250 from 268,250 to 268,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending August 1, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 1 was 2,273,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,255,000 to 2,258,000. The 4-week moving average was 2,254,250, an increase of 14,250 from the previous week's revised average. The previous week's average was revised up by 1,000 from 2,239,000 to 2,240,000.


Job Openings was little changed at 5.2 million in June
Posted: August 12, 2015 at 10:00 AM (Wednesday)

The number of job openings was little changed at 5.2 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. The number of hires and separations were little changed at 5.2 and 4.9 million, respectively. Within separations, the quits rate remained at 1.9 percent for the third month in a row and the layoffs and discharges rate was little changed at 1.3 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings were little changed at 5.2 million on the last business day of June. The job openings rate for June 2015 remained at 3.6 percent for the third month in a row. The number of job openings was little changed for total private and government. Job openings decreased in nondurable goods manufacturing and were little changed in all four regions.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in June for total nonfarm and total private. The number of job openings for government was little changed. Job openings rose over the year for several industries with the largest increases occurring in professional and business services and in health care and social assistance. Job openings decreased over the year in mining and logging and in finance and insurance. The number of job openings increased over the year in the South and Midwest regions.


Purchase Apps flat, Refi's up in Latest MBA Weekly Survey
Posted: August 12, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 7, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week to its highest level since May 2015. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 20 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 53.1 percent of total applications from 51.3 percent the previous week. This is the highest refinance share since April 2015. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.8 percent of total applications.

The FHA share of total applications decreased to 13.3 percent from 13.8 percent the week prior. The VA share of total applications increased to 11.3 percent from 10.5 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.13 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 4.08 percent, with points increasing to 0.34 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.94 percent from 3.96 percent, with points unchanged at 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.39 percent from 3.36 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.11 percent from 3.02 percent, with points decreasing to 0.32 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Wholesale Inventories up 0.9% in June
Posted: August 11, 2015 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that June 2015 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $449.9 billion, up 0.1 percent (+/-0.7)* from the revised May level, but were down 3.8 percent (+/-1.2%) from the June 2014 level. The May preliminary estimate was revised downward $0.5 billion or 0.1 percent. June sales of durable goods were down 1.1 percent (+/-1.1%)* from last month and were down 1.5 percent (+/-1.6%)* from a year ago. Sales of motor vehicle and motor vehicle parts and supplies were down 2.8 percent from last month and sales of machinery, equipment, and supplies were down 2.2 percent. Sales of nondurable goods were up 1.2 percent (+/-0.7%) from May, but were down 5.7 percent (+/-1.8%) from last June. Sales of petroleum and petroleum products were up 3.7 percent from last month and sales of farm product raw materials were up 3.6 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $586.2 billion at the end of June, up 0.9 percent (+/-0.4%) from the revised May level and were up 5.4 percent (+/-1.4%) from the June 2014 level. The May preliminary estimate was revised downward $1.1 billion or 0.2 percent. June inventories of durable goods were up 0.1 percent (+/-0.4%)* from last month and were up 5.4 percent (+/-1.8%) from a year ago. Inventories of motor vehicle and motor vehicle parts and supplies were up 2.0 percent from last month, while inventories of computer and computer peripheral equipment and software were down 2.1 percent. Inventories of nondurable goods were up 2.3 percent (+/-0.5%) from May and were up 5.5 percent (+/-1.8%) from last June. Inventories of farm product raw materials were up 15.5 percent from last month and inventories of petroleum and petroleum products were up 3.6 percent.

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


2Q2015 Productivity Growth Increased 1.3%
Posted: August 11, 2015 at 08:30 AM (Tuesday)

Nonfarm business sector labor productivity increased at a 1.3 percent annual rate during the second quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output increased 2.8 percent and hours worked increased 1.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2014 to the second quarter of 2015, productivity increased 0.3 percent, reflecting increases in output and hours worked of 2.8 percent and 2.6 percent, respectively.

Unit labor costs in the nonfarm business sector increased 0.5 percent in the second quarter of 2015, reflecting a 1.8 percent increase in hourly compensation and a 1.3 percent increase in productivity. Unit labor costs increased 2.1 percent over the last four quarters.

Manufacturing sector labor productivity increased 2.5 percent in the second quarter of 2015, as output increased 1.5 percent and hours worked decreased 1.0 percent. Productivity increased 3.4 percent in the durable manufacturing sector and 1.2 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.1 percent, as output increased 2.3 percent and hours increased 1.2 percent. Unit labor costs in manufacturing decreased 2.3 percent in the second quarter of 2015 and increased 0.2 percent from the same quarter a year ago.

Revised measures of Nonfarm business sector productivity decreased 1.1 percent in the first quarter of 2015--rather than falling 3.1 percent as reported June 4--solely reflecting a 2.1-percentage point upward revision to output; hours increased at the same 1.6 percent rate reported previously. Unit labor costs increased 2.3 percent in the first quarter of 2015--much less than a previously published increase of 6.7 percent--due to both the upward revision to productivity and a 2.2-percentage point downward revision to hourly compensation. Real hourly compensation increased 4.2 percent after revision, rather than the previous estimate of 6.5 percent.


NFIB Small Business Optimism Index rose 1.3 points to 95.4
Posted: August 11, 2015 at 07:30 AM (Tuesday)

The Small Business Optimism Index rose 1.3 points to 95.4. After giving up over 4 points in June, the Index clawed back 1.3 points in July, a familiar theme now, which has produced the most grudging gains in the Index’s history – and still not above the 42 year average of 98. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.

GDP growth for the first quarter was finally revised to 0.6 percent after an excursion into negative territory. Second quarter growth is initially estimated at 2.3 percent, but with revisions to come. Domestically, the economy feels so flat – because it was, and still is. Exports have been strong in the recession, explaining a lot of things such as the performance of the large firms with profits at a record high share of GDP. The stock market is at record high levels, yet the output of USA, Inc. is less than impressive as shown below. Exports and foreign operations contributed to record high profits for the Large Firm division of USA, Inc. which has been hoarding cash and repurchasing shares, not investing in the real economy.

When comparing the Index against the real growth in domestic spending (GDP + imports – exports), they are clearly highly correlated. Appearing at first blush to be coincident, the Index is really a leading indicator as the surveys are taken in the first month of the quarter while government statistics are available a month after the end of the quarter. Thus, the January survey predicts the growth in domestic spending for the first quarter, and the first estimates from the government come well after the end of the quarter. And the latest data suggests some more strength in the domestic economy is coming, but not a whole lot.

With small business accounting for half of the private GDP, prospects for a strong second half of growth seem modest at best. The Large Firm division will be coasting, not growing or investing, and the Small Business division is not in the mood for rapid expansion and hiring. But even so, the economy grows driven by population growth and investment to cover depreciation and technological obsolescence, but not a lot more. Washington’s plans to eliminate carbon and redistribute the wealth are growth depressants that offer little in the future beyond declining living standards and reduced opportunities. Congress appears to have little stomach to resist as every Congress runs deficits (Gingrich excepted), regardless of the political party in control. Unfortunately, politicians rely more and more on promises of subsidies or free stuff to get elected. This can’t be extrapolated very far into the future before disasters are the most likely outcomes.


Employment Trends Index Increased in July to 127.89
Posted: August 10, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in July for a second consecutive month. The index now stands at 127.89, up from 127.57 in June. The change represents a 4.4 percent gain in the ETI compared to a year ago.

““The growth in the Employment Trends Index slowed down in the past 3-6 months, suggesting that we may see somewhat slower job growth in the months ahead,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board. “Still, with almost no expansion of the labor force, a slowing of employment growth to 150,000-200,000 jobs a month would be enough to rapidly tighten the labor market.”

July’s increase in the ETI was driven by positive contributions from five of the eight components. In order from the largest positive contributor to the smallest, these were: Industrial Production, Initial Claims for Unemployment Insurance, Percentage of Firms with Positions Not Able to Fill Right Now, Real Manufacturing and Trade Sales, and Job Openings.


July Employment increased by 215,000
Unemployment Rate unchanged at 5.3%

Posted: August 7, 2015 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, health care, professional and technical services, and financial activities.

In July, both the unemployment rate (5.3 percent) and the number of unemployed persons (8.3 million) were unchanged. Over the year, the unemployment rate and the number of unemployed persons were down by 0.9 percentage point and 1.4 million, respectively.

Among the major worker groups, the unemployment rate for teenagers declined to 16.2 percent in July. The rates for adult men (4.8 percent), adult women (4.9 percent), whites (4.6 percent), blacks (9.1 percent), Asians (4.0 percent), and Hispanics (6.8 percent) showed little or no change. Among the unemployed, the number of new entrants decreased by 107,000 in July. New entrants are unemployed persons who never previously worked.

In July, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.2 million. These individuals accounted for 26.9 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 986,000.

The civilian labor force participation rate was unchanged at 62.6 percent in July, after declining by 0.3 percentage point in June. The employment-population ratio, at 59.3 percent, was also unchanged in July and has shown little movement thus far this year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in July at 6.3 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In July, 1.9 million persons were marginally attached to the labor force, down by 251,000 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 668,000 discouraged workers in July, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 215,000 in July, compared with an average monthly gain of 246,000 over the prior 12 months. In July, job gains occurred in retail trade, health care, professional and technical services, and financial activities.

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.6 hours in July. The manufacturing workweek for all employees also edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $24.99. Over the year, average hourly earnings have risen by 2.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $21.01 in July.

The change in total nonfarm payroll employment for May was revised from +254,000 to +260,000, and the change for June was revised from +223,000 to +231,000. With these revisions, employment gains in May and June combined were 14,000 higher than previously reported. Over the past 3 months, job gains have averaged 235,000 per month.


BTMU U.S. Business Barometer declined by 0.1%
Posted: August 6, 2015 at 10:00 AM (Thursday)

For the week ending July 25 2015, the BTMU U.S. Business Barometer declined by 0.1 percent to 99.4. This week’s barometer was largely driven by weak performances in production indexes. Auto and truck production, for instance, dropped by 12.6 and 1.5 percent, respectively; while coal and steel production fell by 1.3 and 0.8 percent, respectively. On the consumption side, chain store sales fell by 0.2 percent because business was particularly weak for department, drug and electronics stores; although it was offset by gains in railroad freight carloadings.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, decreased by 0.1 percent to 99.5. Its year-over-year growth rate was 0.8 percent.


Weekly Initial Unemployment Claims Increase 3,000 to 270,000
Posted: August 6, 2015 at 08:30 AM (Thursday)

In the week ending August 1, the advance figure for seasonally adjusted initial claims was 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. The 4-week moving average was 268,250, a decrease of 6,500 from the previous week's unrevised average of 274,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending July 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 25 was 2,255,000, a decrease of 14,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,262,000 to 2,269,000. The 4-week moving average was 2,239,000, a decrease of 18,000 from the previous week's revised average. The previous week's average was revised up by 1,750 from 2,255,250 to 2,257,000.


Challenger Layoffs rocketed to 105,696 in July
Posted: August 6, 2015 at 07:30 AM (Thursday)

Monthly job cuts rocketed to the highest level in nearly four years, as U.S. employers announced plans to shed 105,696 workers from their payrolls in July, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July total is 136 percent greater than the 44,842 job cuts recorded in June. It is 125 percent higher than the same month a year ago, when planned workforce reductions totaled 46,887. The last time more than 100,000 job cuts were announced in a single month was September 2011, when they reached 115,730.

The July surge brings the year-to-date job cut total to 393,368, which is 34 percent higher than the 292,921 cuts announced in the first seven months of 2014. This represents the highest seven-month total since 2009, when 978,048 job cuts were announced amid the worst recession since the Great Depression.

More than half of the July job cuts were the result of massive troop and civilian workforce reductions announced by the United States Army. The cutbacks will eliminate 57,000 from government payrolls over the next two years.

When the military makes cuts, they tend to be deep. In fact, the last time we saw more than 100,000 job cuts in September of 2011, it was 50,000 cuts by the US Army that dominated the total. With wars in Afghanistan and Iraq winding down and pressure to cut government spending, the military has been vulnerable to reductions.

Indeed, some of the biggest job cuts announced in recent years have come from the military and other government agencies. In addition to the 50,000 cuts announced by the US Army in 2011, the United States Air Force announced plans in 2005 to reduce its headcount by 40,000. Between 2002 and 2010, the United States Post Office announced three separate job cuts that affected a total of 90,000 workers.

The transition from the military to the civilian workforce is always challenging, but the economy is in a much better position to absorb this influx of job seekers now, compared to two or three years ago. This does not mean it will be easy for these service men and women, most of whom undoubtedly thought the military would offer career-long job security.

The most difficult part of the transition may be translating one’s military experience into terms that are meaningful to civilian employers. These men and women have skills and experience that are in demand, but they just don’t know how to describe them in a way that non-military recruiters understand. Luckily, there are a growing number of programs and services that help with this and there has been a concerted effort among the nation’s employers to hire former military.

According to the Bureau of Labor Statistics, the unemployment rate among Gulf War II veterans, which includes those from the conflicts in Iraq and Afghanistan, has fallen from a high of 15.2 percent in January 2011 to a current level of 5.4 percent, which matches the national average for all labor force participants.

While the government sector saw the heaviest cuts last month due to military cutbacks, the technology sector also announced several major workforce reductions. Microsoft shuttered the recently acquired Nokia division, which resulted in 7,800 job losses. Electronics and telecommunications equipment manufacturer Qualcomm announced plans to shed 4,500 workers. Chipmaker Intel Corp. also announced workforce reductions totaling 3,180 during the month.

Together, computer and electronics firms announced 18,891 job cuts in July. Computers firms have now announced 25,542 job cuts this year, which is 47 percent lower than the 48,361 cuts announced by these employers by this point last year.


Help Wanted OnLine Labor Demand rose 83,700 to 5,384,400 in July
Posted: August 5, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies rose 83,700 to 5,384,400 in July, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The June Supply/Demand rate stands at 1.57 unemployed for each advertised vacancy with a total of 3.0 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.3 million in June.

“Demand has flattened over the past five months, with alternating monthly increases followed by decreases,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “Overall, 2015 has shown moderate gains averaging about 38,000 per month, largely due to the very strong January and February increases.”

In July, the Services/Production category rebounded with Office/Admin (+31,600), Food (+10,700), and Transportation (+14,200). The Professional category saw small gains and small losses across the various occupational groups with Education showing the largest gain (+4,300).


ISM Non-Manufacturing Index grew faster at 60.3% in July
Posted: August 5, 2015 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in July for the 66th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 60.3 percent in July, 4.3 percentage points higher than the June reading of 56 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 64.9 percent, which is 3.4 percentage points higher than the June reading of 61.5 percent, reflecting growth for the 72nd consecutive month at a faster rate. The New Orders Index registered 63.8 percent, 5.5 percentage points higher than the reading of 58.3 percent registered in June. The Employment Index increased 6.9 percentage points to 59.6 percent from the June reading of 52.7 percent and indicates growth for the 17th consecutive month. The Prices Index increased 0.7 percentage point from the June reading of 53 percent to 53.7 percent, indicating prices increased in July for the fifth consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth in July. The majority of the respondents continue to have a positive outlook on business conditions and the overall economy. This is reflected directly by a number of new highs for some of the indexes.

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


Goods and Services Deficit Increased in June 2015
Posted: August 5, 2015 at 08:30 AM (Wednesday)

The Nation's international trade deficit in goods and services increased to $43.8 billion in June from $40.9 billion in May (revised), as exports decreased and imports increased.

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 $43.8 billion in June, up $2.9 billion from $40.9 billion in May, revised. June exports were $188.6 billion, $0.1 billion less than May exports. June imports were $232.4 billion, $2.8 billion more than May imports.

The June increase in the goods and services deficit reflected an increase in the goods deficit of $2.9 billion to $63.5 billion and a decrease in the services surplus of less than $0.1 billion to $19.7 billion.

Year-to-date, the goods and services deficit increased $1.6 billion, or 0.6 percent, from the same period in 2014. Exports decreased $33.4 billion or 2.9 percent. Imports decreased $31.8 billion or 2.2 percent.


ADP National Employment Report increased by 185,000 in July
Posted: August 5, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 185,000 jobs from June to July according to the June ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 59,000 jobs in July, half of the June number. Employment among companies with 50-499 employees increased by 62,000 jobs, down from 78,000 the previous month. Employment gains at large companies – those with 500 or more employees – increased sharply from June, adding 64,000 jobs in July, up from 34,000. Companies with 500-999 added 17,000 jobs after adding 28,000 jobs in June. Companies with over 1,000 employees added 47,000 jobs, almost eight times the weak 6,000 added the previous month.

Goods-producing employment rose by 8,000 jobs in July, after adding 13,000 in June. The construction industry added 15,000 jobs in July, down from 17,000 last month. Meanwhile, manufacturing added 2,000 jobs in July, after gaining 9,000 in June.

Service-providing employment rose by 178,000 jobs in July, down from 216,000 in June. The ADP National Employment Report indicates that professional/business services contributed 42,000 jobs in July, down from June’s 61,000. Trade/transportation/utilities grew by 25,000, just over half of the previous month’s 47,000. The 10,000 new jobs added in financial activities was a drop from last month’s 16,000.

July employment growth was slower than June, but is still in line with what we have seen since the first of the year. Notably, large businesses with more than 500 employees had their strongest job gains since last December and were almost double the June number.

Job growth is strong, but it has moderated since the beginning of the year. Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown. Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 5, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 31, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 6 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 23 percent higher than the same week one year ago.

"Despite recent concerns about the economy, both purchase and refinance applications increased strongly in response to lower interest rates last week," said Lynn Fisher, MBA's Vice President of Research and Economics. "Refinance activity was the highest since May when rates were last at this level. The increase in purchase activity was also notable for this time of year, up 23 percent relative to a year ago."

The refinance share of mortgage activity increased to 51.3 percent of total applications from 50.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications.

The FHA share of total applications increased to 13.8 percent from 13.7 percent the week prior. The VA share of total applications decreased to 10.5 percent from 10.9 percent the week prior. The USDA share of total applications decreased to 0.8 percent from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.13 percent, its lowest level since May 2015, from 4.17 percent, with points decreasing to 0.34 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.08 percent, its lowest level since May 2015, from 4.12 percent, with points decreasing to 0.27 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.96 percent from 3.98 percent, with points decreasing to 0.22 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.36 percent, its lowest level since May 2015, from 3.39 percent, with points decreasing to 0.37 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 decreased to 3.02 percent, its lowest level since May 2015, from 3.04 percent, with points increasing to 0.43 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate was unchanged from last week.


New orders for manufactured goods increased 1.8% in June
Posted: August 4, 2015 at 10:00 AM (Tuesday)

New orders for manufactured goods in June, up following two consecutive monthly decreases, increased $8.7 billion or 1.8 percent to $478.5 billion, the U.S. Census Bureau reported today. This followed a 1.1 percent May decrease.

Shipments, up following two consecutive monthly decreases, increased $2.2 billion or 0.5 percent to $483.5 billion. This followed a 0.2 percent May decrease.

Unfilled orders, up following two consecutive monthly decreases, increased less than $0.1 billion or virtually unchanged to $1,194.7 billion. This followed a 0.5 percent May decrease. The unfilled orders-to-shipments ratio was 6.94, down from 6.99 in May.

Inventories, up four of the last five months, increased $3.6 billion or 0.6 percent to $653.6 billion. This followed a 0.1 percent May increase. The inventories-to-shipments ratio was 1.35, unchanged from May.


New York Purchasing Managers Business Activity rose to 68.8 in July
Posted: August 4, 2015 at 08:30 AM (Tuesday)

New York City business activity expanded at the fastest rate this year, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions rose to a seven-month high of 68.8 in July.

Future optimism backed off June’s five-year high, suggesting Current Conditions could follow suit in coming months. The Six-Month Outlook fell to 69.2 in July.

Job growth improved to an eleven-month high. Employment advanced to 64.8 in July.

Purchase volume cooled to a seven-month low. Quantity of Purchases decreased to 52.8 in July.

Both the top line and forward guidance grew at a slower pace. Current Revenues came in at 66.7 in July, and Expected Revenues was 72.2 in July.

Price pressures moderated and more so on the cost side. Prices Paid dipped to a two-year low of 50.0 in July, and Prices Received eased to 56.3 in July.

Potential Business Opportunities/Impediments: The most notable development was that concerns about compensation diminished. Cost of benefits and cost of labor, both at or near the top of the impediment scale over the last two years, were notably smaller headwinds.


Paychex-IHS Small Business Jobs Index rose slightly to 100.64 in July
Posted: August 4, 2015 at 08:30 AM (Tuesday)

For the second straight month, the Paychex | IHS Small Business Jobs Index was relatively unchanged, increasing slightly from 100.63 in June to 100.64 in July. The national index has seen little movement in recent months, essentially remaining flat from May to July. Still trailing employment growth seen in 2014, the index was down 0.46 percent from the previous July. The East North Central region continues as the highest-ranked regional index. Washington maintained its lead among states, and for the 10th straight month, Dallas ranked number one among metro areas for employment growth with an index level surpassing 105.

The Paychex | IHS Small Business Jobs Index indicates job gains have been steady in 2015 as the July reading of 100.64 is almost identical to May and June, as well as the beginning of the year in January (100.65).

The index data from July appears to be consistent with what the government reported last week, that the economy is experiencing slow, steady growth.


July Manufacturing ISM expanded slower at 52.7
Posted: August 3, 2015 at 10:00 AM (Monday)

Economic activity in the manufacturing sector expanded in July for the 31st consecutive month, and the overall economy grew for the 74th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The July PMI® registered 52.7 percent, a decrease of 0.8 percentage point below the June reading of 53.5 percent. The New Orders Index registered 56.5 percent, an increase of 0.5 percentage point from the reading of 56 percent in June. The Production Index registered 56 percent, 2 percentage points above the June reading of 54 percent. The Employment Index registered 52.7 percent, 2.8 percentage points below the June reading of 55.5 percent, reflecting growing employment levels from June but at a slower rate. Inventories of raw materials registered 49.5 percent, a decrease of 3.5 percentage points from the June reading of 53 percent. The Prices Index registered 44 percent, down 5.5 percentage points from the June reading of 49.5 percent, indicating lower raw materials prices for the ninth consecutive month. Comments from the panel reflect a combination of optimism mixed with uncertainties about international markets and the impacts of the continuing decline in oil prices.

Of the 18 manufacturing industries, 11 are reporting growth in July in the following order: Textile Mills; Paper Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Furniture & Related Products; Fabricated Metal Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Transportation Equipment; and Miscellaneous Manufacturing. The five industries reporting contraction in July are: Wood Products; Primary Metals; Plastics & Rubber Products; Chemical Products; and Machinery.


Construction Spending increased 0.1% in June
Posted: August 3, 2015 at 10:00 AM (Monday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2015 was estimated at a seasonally adjusted annual rate of $1,064.6 billion, 0.1 percent (±1.5%) above the revised May estimate of $1,063.5 billion. The June figure is 12.0 percent (±2.1%) above the June 2014 estimate of $950.3 billion. During the first 6 months of this year, construction spending amounted to $482.7 billion, 8.0 percent (±1.5%) above the $446.8 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $766.4 billion, 0.5 percent (±0.8%) below the revised May estimate of $770.0 billion. Residential construction was at a seasonally adjusted annual rate of $371.6 billion in June, 0.4 percent (±1.3%) above the revised May estimate of $370.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $394.8 billion in June, 1.3 percent (±0.8%) below the revised May estimate of $400.0 billion.

PUBLIC CONSTRUCTION
In June, the estimated seasonally adjusted annual rate of public construction spending was $298.2 billion, 1.6 percent (±2.6%) above the revised May estimate of $293.5 billion. Educational construction was at a seasonally adjusted annual rate of $67.2 billion, 0.2 percent (±5.1%) above the revised May estimate of $67.1 billion. Highway construction was at a seasonally adjusted annual rate of $90.9 billion, 1.2 percent (±6.3%) above the revised May estimate of $89.8 billion.


Personal Income increased 0.4%, Spending increased 0.5%
Posted: August 3, 2015 at 08:30 AM (Monday)

Personal income increased $68.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $60.6 billion, or 0.5 percent, in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $25.9 billion, or 0.2 percent. In May, personal income increased $66.3 billion, or 0.4 percent, DPI increased $53.8 billion, or 0.4 percent, and PCE increased $90.8 billion, or 0.7 percent, based on revised estimates.

Real DPI increased 0.2 percent in June, compared with an increase of 0.1 percent in May. Real PCE decreased less than 0.1 percent, in contrast to an increase of 0.4 percent.


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

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

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

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

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

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


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

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

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

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

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

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

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

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


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

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


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

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

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

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


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

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

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

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

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


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

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

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending July 18, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 18 was 2,262,000, an increase of 46,000 from the previous week's revised level. The previous week's level was revised up 9,000 from 2,207,000 to 2,216,000. The 4-week moving average was 2,255,250, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 2,250 from 2,253,750 to 2,256,000.


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.39 percent, the lowest level since June 2015, from 3.43 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

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


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

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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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


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

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

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

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

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

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


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

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

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

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

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


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

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

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

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


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

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

The average contract interest rate for 5/1 ARMs decreased to 3.08 percent from 3.13 percent, with points decreasing to 0.41 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


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

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

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

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

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

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

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

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

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

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


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

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

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

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


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

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

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

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

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


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

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

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

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


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

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

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

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $93.0 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $76.5 billion in May.

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


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

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

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