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University of Michigan Consumer Confidence Preliminary August Results at 97.6
Posted: August 18, 2017 at 10:00 AM (Friday)

Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects. The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound. As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017. Too few interviews were conducted following Charlottesville to assess how much it will weaken consumers' economic assessments. The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August. Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump's economic policy agenda have diminished. Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group. At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.


U.S. Leading Economic Index increased 0.3% in July
Posted: August 17, 2017 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for theU.S. increased 0.3 percent in July to 128.3 (2010 = 100), following a 0.6 percent increase in June, and a 0.3 percent increase in May.

“The U.S. LEI improved in July, suggesting the U.S. economy may experience further improvements in economic activity in the second half of the year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The large negative contribution from housing permits, a reversal from June, was more than offset by gains in the financial indicators, new orders and sentiment.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in July to 115.7 (2010 = 100), following a 0.1 percent increase in June, and a 0.3 percent increase in May.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in July to 124.8 (2010 = 100), following a 0.2 percent increase in June and a 0.2 percent increase in May.


Industrial Production increased 0.2%
Capacity Utilization unchanged at 76.7%

Posted: August 17, 2017 at 09:15 AM (Thursday)

Industrial production rose 0.2 percent in July following an increase of 0.4 percent in June. In July, manufacturing output edged down 0.1 percent; the production of motor vehicles and parts fell substantially, but that decrease was mostly offset by a net gain of 0.2 percent for other manufacturing industries. Following a six-month string of increases beginning in September 2016, factory output was little changed, on net, between February and July. The indexes for mining and utilities in July rose 0.5 percent and 1.6 percent, respectively. At 105.5 percent of its 2012 average, total industrial production was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector was unchanged in July at 76.7 percent, a rate that is 3.2 percentage points below its long-run (1972–2016) average.


Weekly Initial Unemployment Claims Decrease 12,000 to 232,000
Posted: August 17, 2017 at 08:30 AM (Thursday)

In the week ending August 12, the advance figure for seasonally adjusted initial claims was 232,000, a decrease of 12,000 from the previous week's unrevised level of 244,000. The 4-week moving average was 240,500, a decrease of 500 from the previous week's unrevised average of 241,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 5, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 5 was 1,953,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 1,951,000 to 1,956,000. The 4-week moving average was 1,960,250, a decrease of 6,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 1,965,000 to 1,966,250.


Philadelphia Fed Outlook Reported Activity continued to advance in August
Posted: August 17, 2017 at 08:30 AM (Thursday)

Manufacturing conditions in the region continued to advance in August, according to firms responding to this month’s Manufacturing Business Outlook Survey. The diffusion index for general activity fell slightly but continued to reflect growth. There was a notable improvement in the new orders and shipments indexes, and overall employment expansion continued among the reporting firms. The survey’s indexes of future activity indicate that firms expect a continuation of growth in the region’s manufacturing sector over the next six months.

Current Indicators All Remain Positive
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell slightly from 19.5 in July to 18.9 in August. The index has been positive for 13 consecutive months (see Chart). Despite the fallback in the general activity index, the demand for manufactured goods, as measured by the survey’s current new orders index, showed notable improvement: The diffusion index increased from 2.1 to 20.4. Firms reported that shipments also continued to rise. The current shipments index increased 17 points to 29.4.

The survey’s indicators for labor market conditions suggest modest growth in employment. The percentage of firms reporting increases in employment (15 percent) was greater than the percentage reporting decreases (5 percent). The employment index held near steady at 10.1. Firms also reported overall increases in average work hours in August, and the workweek index was positive for the 10th consecutive month.

Price Indexes Suggest Modest Price Pressures
The survey’s price indicators suggest moderate price pressures this month: Both the prices paid and prices received indexes remained positive and increased modestly from their July readings. With regard to prices paid for inputs, 24 percent of the respondents reported higher input prices, the same as last month. The current prices paid index edged 2 points higher after declining for the previous four months. The prices received index increased 5 points, with 16 percent of the firms reporting higher prices and 3 percent reporting lower prices.

Firms Expect Their Own Price Increases to Be Slightly Below the Rate of Inflation
In this month’s special questions, firms were asked to forecast the changes in the prices of their own products and for U.S. consumers over the next four quarters (see Special Questions). Regarding their own prices, the firms’ median forecast was for an increase of 2.0 percent, the same as when the question was last asked in May 2017. When asked about the rate of inflation for U.S. consumers over the next year, the firms’ median forecast was 2.5 percent, an increase from the previous forecast of 2.2 percent in May. Firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise 3.0 percent over the next four quarters, the same as the previous forecast in May. Firms’ forecast for the long-run (10-year average) inflation rate remained unchanged at 3.0 percent this quarter.

Six-Month Forecasts Show Improvement
The diffusion index for future general activity increased from a reading of 36.9 in July to 42.3 this month, its highest reading in four months (see Chart). Over the next six months, nearly 49 percent of the firms expect increases in activity, and only 7 percent expect decreases. The indexes for future new orders and shipments also increased from their July readings, by 10 points and 18 points, respectively. The future employment index increased 6 points, marking its highest reading in four months. Over 38 percent of the manufacturers said they expect to expand employment over the next six months, while only 5 percent expect to reduce employment. Although the future capital spending index fell 3 points, firms remain optimistic in their investment plans, with 42 percent of the firms expecting to increase capital spending over the next six months.

Summary
Responses to the August Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector, as all of the broad current indicators remained positive. Firms reported a notable expansion in new orders and shipments this month. The survey’s future indexes indicate that respondents continue to expect growth over the next six months.


July Housing Starts down 4.8%, Permits down 4.1%
Posted: August 16, 2017 at 08:30 AM (Wednesday)

Building Permits
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent (±0.9 percent) below the revised June rate of 1,275,000, but is 4.1 percent (±1.8 percent) above the July 2016 rate of 1,175,000. Single-family authorizations in July were at a rate of 811,000; this is unchanged from the revised June figure of 811,000. Authorizations of units in buildings with five units or more were at a rate of 377,000 in July.

Housing Starts
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000. This is 4.8 percent (±10.2 percent)* below the revised June estimate of 1,213,000 and is 5.6 percent (±8.5 percent)* below the July 2016 rate of 1,223,000. Single-family housing starts in July were at a rate of 856,000; this is 0.5 percent (±8.5 percent)* below the revised June figure of 860,000. The July rate for units in buildings with five units or more was 287,000.

Housing Completions
Privately-owned housing completions in July were at a seasonally adjusted annual rate of 1,175,000. This is 6.2 percent (±14.3 percent)* below the revised June estimate of 1,252,000, but is 8.2 percent (±12.6 percent)* above the July 2016 rate of 1,086,000. Single-family housing completions in July were at a rate of 814,000; this is 1.6 percent (±11.9 percent)* below the revised June rate of 827,000. The July rate for units in buildings with five units or more was 354,000.


Business Inventories up 0.5% in June
Posted: August 15, 2017 at 10:00 AM (Tuesday)

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 $1,356.8 billion, up 0.3 percent (±0.2 percent) from May 2017 and was up 4.3 percent (±0.4 percent) from June 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,869.3 billion, up 0.5 percent (±0.1 percent) from May 2017 and were up 2.8 percent (±0.2 percent) from June 2016.

The total business Inventories/Sales Ratio based on seasonally adjusted data at the end of June was 1.38. The June 2016 ratio was 1.40.


Builder Confidence rose 4 points to 68 in August
Posted: August 15, 2017 at 10:00 AM (Tuesday)

Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”

“The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,” said NAHB Chief Economist Robert Dietz. “GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.”

All three HMI components posted gains in August. The component gauging current sales conditions rose four points to 74 while the index charting sales expectations in the next six months jumped five points to 78. Meanwhile, the component measuring buyer traffic increased a single point to 49.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.


U.S. Retail Sales for July Increase 0.6%, Ex-Auto up 0.5%
Posted: August 15, 2017 at 08:30 AM (Tuesday)

Advance estimates of U.S. retail and food services sales for July 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $478.9 billion, an increase of 0.6 percent (± 0.5 percent) from the previous month, and 4.2 percent (± 0.9 percent) above July 2016. Total sales for the May 2017 through July 2017 period were up 3.9 percent (± 0.7 percent) from the same period a year ago. The May 2017 to June 2017 percent change was revised from down 0.2 percent (± 0.5 percent)* to up 0.3 percent (± 0.2 percent).

Retail trade sales were up 0.6 percent (± 0.5 percent) from June 2017, and up 4.3 percent (± 0.7 percent) from last year. Nonstore Retailers were up 11.5 percent (± 1.8 percent) from July 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 8.3 percent (± 1.9 percent) from last year.


U.S. Import Price Index edged up 0.1% in July
Posted: August 15, 2017 at 08:30 AM (Tuesday)

Prices for U.S. imports edged up 0.1 percent in July, the U.S. Bureau of Labor Statistics reported today, led by higher fuel prices which more than offset lower prices for nonfuel imports. The July increase in import prices followed declines in each of the 2 previous months. U.S. export prices advanced 0.4 percent in July, after decreasing 0.2 percent in June.


Empire State Manufacturing Survey Conditions grew strongly in August
Posted: August 15, 2017 at 08:30 AM (Tuesday)

Business activity grew strongly in New York State, according to firms responding to the August 2017 Empire State Manufacturing Survey. The headline general business conditions index climbed fifteen points to 25.2, its highest level in nearly three years. The new orders index rose seven points to 20.6 and the shipments index edged up to 12.4, pointing to solid gains in orders and shipments. Delivery times continued to lengthen, and inventory levels moved lower. Labor market indicators pointed to an increase in employment and hours worked. Input prices rose at a faster clip than last month, while selling prices rose at a somewhat slower pace. Indexes assessing the six-month outlook suggested that firms were very optimistic about future conditions.

Activity Picks Up Markedly
Manufacturing firms in New York State reported that business activity expanded strongly in August. The general business conditions index rose fifteen points to 25.2, its highest level since September 2014. Forty-two percent of respondents reported that conditions had improved over the month, while 17 percent reported that conditions had worsened. The new orders index climbed seven points to 20.6, pointing to a solid increase in orders, and the shipments index rose slightly to 12.4. The unfilled orders index held steady at -4.7. The delivery time index was little changed at 5.4, pointing to somewhat longer deliver times, and the inventories index fell to -3.1, indicating that inventory levels were slightly lower.

Labor Market Conditions Improve
After retreating for the preceding three months, the index for number of employees increased two points to 6.2, pointing to a modest rise in employment levels, and the average workweek index advanced to 10.9, indicating that the average workweek lengthened. The prices paid index rose ten points to 31.0, a sign that input price increases picked up, while the prices received index fell five points to 6.2, suggesting that the pace of selling price increases moderated slightly.

Firms Very Optimistic
Indexes assessing the six-month outlook suggested that firms were quite optimistic about future conditions. The index for future business conditions rose ten points to 45.2, and the index for future new orders moved up eight points to 41.3. Employment was expected to increase modestly, though the average workweek was expected to decline slightly. The capital expenditures index slipped to 11.6, and the technology spending index fell to 9.3.


Forecasters See Weaker Outlook for Growth and Lower Unemployment
Posted: August 11, 2017 at 10:00 AM (Friday)

The outlook for growth in the U.S. economy over the next three years looks slightly weaker overall than that of three months ago, according to 39 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The panel expects real GDP to grow at an annual rate of 2.6 percent this quarter and 2.3 percent next quarter. On an annual-average over annual-average basis, the forecasters see real GDP growing 2.1 percent in 2017, unchanged from the previous survey. The forecasters predict real GDP will grow 2.4 percent in 2018, 2.2 percent in 2019, and 2.0 percent in 2020.

All of the projections for unemployment were revised slightly downward in comparison with the May 2017 survey. The forecasters predict the unemployment rate will be an annual average of 4.4 percent in 2017, before falling to 4.2 percent in 2018, and then increasing slightly to 4.3 percent for 2019, and remaining steady at 4.3 percent in 2020.

On the employment front, the forecasters have revised downward their estimates for job gains in 2017 but increased their estimates for job gains in 2018. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 180,400 in 2017, down from the previous estimate of 182,600, and 165,800 in 2018, up from the previous estimate of 162,800. (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.)

The charts below provide some insight into the degree of uncertainty the forecasters have about their projections for the rate of growth in the annual-average level of real GDP. Each chart presents the forecasters’ previous and current estimates of the probability that growth will fall into each of 11 ranges. For 2017, the panelists are more certain now than they were in the previous survey that real GDP growth will fall between 2.0 percent and 2.9 percent. For 2018, 2019, and 2020, the probabilities are also slightly higher now than they were in the survey of three months ago for real GDP growth between 2.0 percent and 2.9 percent.

The forecasters’ density projections for unemployment, shown below, shed light on uncertainty about the labor market over the next four years. Each chart presents the forecasters’ current estimates of the probability that unemployment will fall into each of 10 ranges. The charts show the forecasters are more certain now than they were three months ago that unemployment over the next four years will average between 4.0 percent and 4.9 percent.

Short-Term CPI and PCE Inflation Revised Downward Overall
Measured on a fourth-quarter over fourth-quarter basis, the inflation outlook is weaker for headline CPI inflation and headline PCE inflation. Headline CPI inflation is expected to average 1.7 percent in 2017, 2.2 percent in 2018, and 2.3 percent in 2019. The projections for headline PCE inflation are 1.5 percent for the current year, 1.9 percent for 2018, and 2.0 percent for 2019.

Over the next 10 years, 2017 to 2026, the forecasters expect headline CPI inflation to average 2.25 percent at an annual rate, down slightly from their previous estimate of 2.30 percent. The corresponding estimate for 10-year annual-average PCE inflation is 2.00 percent, also slightly down from the previous estimate of 2.09 percent.

The charts below show the median projections (red line) and the associated interquartile ranges (gray areas around the red line) for the projections for 10-year annual-average CPI and PCE inflation. The top and bottom panels highlight marginally lower levels of the long-term projection for CPI inflation and PCE inflation, respectively.

The figures below show the probabilities that the forecasters are assigning to the possibility that fourth-quarter over fourth-quarter core PCE inflation in 2017 and 2018 will fall into each of 10 ranges. For 2017 and 2018, the forecasters assign a higher chance than they previously predicted that core PCE inflation will be between 1.5 percent to 1.9 percent.

Risk of Decline in Real GDP Remains Low for 2017 and 2018
The forecasters see only a small chance of a contraction in real GDP in any of the next five quarters. For the current quarter, they predict a 6.7 percent chance of negative growth, down from 10.9 percent in the survey of three months ago. The forecasters see a lower probability of a negative quarter in 2017 and 2018 than they estimated three months ago.

Natural Rate of Unemployment Estimated at 4.5 Percent
In third-quarter surveys, we ask the forecasters to provide their estimates of the natural rate of unemployment — the rate of unemployment that occurs when the economy reaches equilibrium. The forecasters peg this rate at 4.50 percent. The table below shows, for each third-quarter survey since 1996, the percentage of respondents who use the natural rate in their forecasts and, for those who use it, the median estimate and the lowest and highest estimates. Forty-four percent of the 34 forecasters who answered the question report that they use the natural rate in their forecasts. The lowest estimate is 3.50 percent, and the highest estimate is 5.00 percent.


Consumer Price Index 0.1% in July, Ex Fd & Engy rose 0.1%
Posted: August 11, 2017 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 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 1.7 percent.

The indexes for shelter, medical care, and food all rose in July, leading to the seasonally adjusted increase in the all items index. The energy index declined slightly in July, with its major component indexes mixed. The index for natural gas declined, while the electricity index rose and the gasoline index was unchanged. The food index increased 0.2 percent, with the indexes for food at home and food away from home both rising.

The index for all items less food and energy rose 0.1 percent, the fourth month in a row it increased by that amount. The indexes for shelter, medical care, recreation, apparel, motor vehicle insurance, and airline fares all rose in July. These increases more than offset declines in the indexes for new vehicles, communication, used cars and trucks, and household furnishings and operations.

The all items index rose 1.7 percent for the 12 months ending July, a slightly larger increase than for the 12 months ending June. The index for all items less food and energy also rose 1.7 percent for the 12 month period, the same increase as for the 12 months ending May and June. The energy index rose 3.4 percent over the last year, while the food index increased 1.1 percent.


Real Average Hourly Earnings increased 0.2% in July
Posted: August 11, 2017 at 08:30 AM (Friday)

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

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

Real average hourly earnings increased 0.7 percent, seasonally adjusted, from July 2016 to July 2017. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 1.1-percent increase in real average weekly earnings over this period.


Weekly Initial Unemployment Claims Increase 3,000 to 244,000
Posted: August 10, 2017 at 08:30 AM (Thursday)

In the week ending August 5, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 240,000 to 241,000. The 4-week moving average was 241,000, a decrease of 1,000 from the previous week's revised average. The previous week's average was revised up by 250 from 241,750 to 242,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 29, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 29 was 1,951,000, a decrease of 16,000 from the previous week's revised level. The previous week's level was revised down by 1,000 from 1,968,000 to 1,967,000. The 4-week moving average was 1,965,000, an increase of 500 from the previous week's revised average. The previous week's average was revised down by 250 from 1,964,750 to 1,964,500.


Producer Price Index decreased 0.1% in July, ex Fd & Engy up 0.2%
Posted: August 10, 2017 at 08:30 AM (Thursday)

The Producer Price Index for final demand declined 0.1 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices inched up 0.1 percent in June and were unchanged in May. On an unadjusted basis, the final demand index increased 1.9 percent for the 12 months ended in July.

Over 80 percent of the July decrease in final demand prices is attributable to the index for final demand services, which fell 0.2 percent. Prices for final demand goods edged down 0.1 percent.

The index for final demand less foods, energy, and trade services was unchanged in July following a 0.2 percent advance in June. For the 12 months ended in July, prices for final demand less foods, energy, and trade services rose 1.9 percent.

Final demand services: The index for final demand services moved down 0.2 percent in July, the first decline since a 0.3 percent drop in February. Most of the July decrease can be traced to margins for final demand trade services, which fell 0.5 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Additionally, prices for final demand transportation and warehousing services declined 0.8 percent. In contrast, the index for final demand services less trade, transportation, and warehousing advanced 0.2 percent.

Product detail: About 60 percent of the July decrease in prices for final demand services is attributable to a 5.8 percent drop in margins for chemicals and allied products wholesaling. The indexes for machinery and equipment wholesaling; portfolio management; apparel, footwear, and accessories retailing; airline passenger services; and fuels and lubricants retailing also moved lower. Conversely, prices for traveler accommodation services rose 2.2 percent. The indexes for apparel wholesaling and hospital outpatient care also increased.

Final demand goods: Prices for final demand goods edged down 0.1 percent in July after inching up 0.1 percent in June. In July, the index for final demand energy fell 0.3 percent, and prices for final demand goods less foods and energy declined 0.1 percent. The index for final demand foods was unchanged.

Product detail: A major factor in the July decrease in prices for final demand goods was the index for gasoline, which moved down 1.4 percent. Prices for beef and veal, utility natural gas, motor vehicles, and basic organic chemicals also fell. In contrast, the index for grains jumped 17.1 percent. Prices for diesel fuel; pork; and consumer, institutional, and commercial plastic products also moved higher.


Wholesale Inventories up 0.7% in June
Posted: August 9, 2017 at 10:00 AM (Wednesday)

June 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $465.8 billion, up 0.7 percent (±0.5 percent) from the revised May level and were up 5.5 percent (±0.9 percent) from the June 2016 level. The April 2017 to May 2017 percent change was revised from the preliminary estimate of down 0.5 percent (±0.7 percent)* to down 0.1 percent (±0.7 percent)*.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $599.4 billion at the end of June, up 0.7 percent (±0.4 percent) from the revised May level. Total inventories were up 2.8 percent (±0.5 percent) from the revised June 2016 level. The May 2017 to June 2017 percent change was revised from the advance estimate of up 0.6 percent (±0.4 percent) to up 0.7 percent (±0.4 percent).

The June Inventories/Sales Ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.29. The June 2016 ratio was 1.32.


2Q2017 Productivity Growth increased 0.9%
Posted: August 9, 2017 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity increased 0.9 percent during the second quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as output increased 3.4 percent and hours worked increased 2.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2016 to the second quarter of 2017, productivity increased 1.2 percent, reflecting a 2.7-percent increase in output and a 1.5-percent increase in hours worked.

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

Unit labor costs in the nonfarm business sector increased 0.6 percent in the second quarter of 2017, reflecting a 1.6-percent increase in hourly compensation and a 0.9-percent increase in productivity. Unit labor costs decreased 0.2 percent over the last four quarters.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 9, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 4, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.0 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 5 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 0.3 percent compared with the previous week and was 7 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 46.7 percent of total applications from 45.5 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 decreased to 10.2 percent from 10.3 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.14 percent from 4.17 percent, with points increasing to 0.38 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 $424,100) decreased to 4.07 percent from 4.11 percent, with points increasing to 0.26 from 0.25 (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 4.02 percent from 4.07 percent, with points increasing to 0.38 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 15-year fixed-rate mortgages decreased to 3.41 percent from 3.45 percent, with points decreasing to 0.41 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.31 percent from 3.30 percent, with points decreasing to 0.21 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings increased to 6.2 million in June
Posted: August 8, 2017 at 10:00 AM (Tuesday)

The number of job openings increased to 6.2 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.4 million and 5.2 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.1 percent and 1.2 percent, respectively. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job Openings
On the last business day of June, the job openings level increased to 6.2 million (+461,000). The job openings rate was 4.0 percent. The number of job openings increased for total private (+417,000) and for government (+44,000). Job openings increased in a number of industries with the largest increases occurring in professional and business services (+179,000), health care and social assistance (+125,000), and construction (+62,000). Job openings decreased in other services (-62,000). The number of job openings increased in the Midwest and West regions.

Hires
The number of hires was little changed at 5.4 million in June. The hires rate was 3.7 percent. The number of hires was little changed for total private and for government. The number of hires decreased for educational services (-29,000), but was little changed for all other industries. Hires decreased in the Northeast region.

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

The number of total separations was little changed at 5.2 million in June. The total separations rate was 3.6 percent. Total separations was little changed for total private and for government. Total separations decreased in state and local government, excluding education (-19,000). The number of total separations was little changed in all four regions.

The number of quits was little changed at 3.1 million in June. The quits rate was 2.1 percent. The number of quits was little changed for total private and for government. Quits decreased in finance and insurance (-21,000). The number of quits was little changed in all four regions.

There were 1.7 million layoffs and discharges in June, little changed from May. The layoffs and discharges rate was 1.2 percent in June. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level was little changed in all industries and regions.

The number of other separations was little changed in June. Other separations was essentially unchanged for total private and for government. Other separations increased in wholesale trade (+18,000) and other services (+14,000). The number of other separations decreased in information (-9,000) and state and local government, excluding education (-9,000). In all four regions, the number of other separations was little changed.

Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in June, hires totaled 63.4 million and separations totaled 61.1 million, yielding a net employment gain of 2.3 million. These totals include workers who may have been hired and separated more than once during the year.


NFIB Small Business Optimism Index rose 1.6 in July to 105.2
Posted: August 8, 2017 at 07:00 AM (Tuesday)

The Index of Small Business Optimism rose 1.6 points to 105.2, preserving the surge in optimism that started the day after the election. Seven of the 10 Index components posted a gain, two declined, and one was unchanged. Since the recession, the Index peaked at 105.9 in January, just 0.7 points above the July reading. Main Street was buoyed by stronger customer demand despite the dysfunction in Washington, D.C. The economy (GDP) grew about 2 percent in the first half of the year, nothing special, but the second quarter was much stronger than the first, and consumer spending was a major contributor to growth. The stock market continues to post record high readings, although a bit inconsistent with moderate growth in output from the nation’s business sector.

It appears that the Federal Reserve will stay on course, with a likely announcement about shrinking their portfolio in September and another 25 basis point increase in rates in December. Neither of these moves will have a major impact on owners, interest rates are still low, and lenders are more comfortable making loans now that we have left the “0 floor” behind.

Second quarter GDP growth came in at 2.6 percent. However, this is the first estimate from the Bureau of Economic Analysis, two revisions are yet to come. First quarter GDP was revised down to 1.2 percent. Consumers spent more, but residential investment weakened, and capital spending did not add to the growth. Inflation measures were lower in Q2, not good news for the Federal Reserve but they should be pleased that inflation has remained so low.

Although no progress has been made on health care or tax reform, many important changes have occurred to the regulatory structure with few if any new rules showing up in the Congressional Register. These changes will seep into the regulatory structure with little fanfare, but will have significant impacts on regulation costs paid by small businesses going forward.

Apparently economic activity in the second quarter was good enough to divert owner attention from the impotence of Washington lawmakers. There’s nothing like more customers to make owners happy, and optimism held up as did important measures of spending and hiring plans. Congress still holds the key to faster growth, so let’s hope they open the door.


Consumer Credit Increased at an annual rate of 4.50%
Posted: August 7, 2017 at 03:00 PM (Monday)

Consumer credit increased at a seasonally adjusted annual rate of 4-1/2 percent during the second quarter. Both revolving and nonrevolving credit increased at similar annual rates. In June, consumer credit increased at an annual rate of 4 percent.


Employment Trends Index increased in July to 133.77
Posted: August 7, 2017 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in July, after decreasing slightly in June. The index now stands at 133.77, up from 132.42 (a downward revision) in June. The change represents a 4.8 percent gain in the ETI compared to a year ago.

“Those who have been following The Conference Board’s Employment Trends Index are not surprised by the strong employment growth in June and July,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “In July, the rapid improvement in the index continued, suggesting solid hiring and further tightening of the labor market in the months ahead.”

July’s increase in the ETI was fueled by positive contributions from all eight components. From the largest positive contributor to the smallest, these were: Percentage of Firms with Positions Not Able to Fill Right Now, Ratio of Involuntarily Part-time to All Part-time Workers, Industrial Production, Number of Employees Hired by the Temporary-Help Industry, Consumer Confidence “Jobs Hard to Get” Percentage, Real Manufacturing and Trade Sales, Job Openings, and Initial Claims for Unemployment Insurance.


July Employment increased by 209,000
Unemployment Rate at 4.3%

Posted: August 4, 2017 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, professional and business services, and health care.

Household Survey Data
Both the unemployment rate, at 4.3 percent, and the number of unemployed persons, at 7.0 million, changed little in July. After declining earlier in the year, the unemployment rate has shown little movement in recent months.

Among the major worker groups, the unemployment rates for adult men (4.0 percent), adult women (4.0 percent), teenagers (13.2 percent), Whites (3.8 percent), Blacks (7.4 percent), Asians (3.8 percent), and Hispanics (5.1 percent) showed little or no change in July.

Among the unemployed, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.8 million in July and accounted for 25.9 percent of the unemployed.

The labor force participation rate, at 62.9 percent, changed little in July and has shown little movement on net over the past year. The employment-population ratio (60.2 percent) was also little changed in July but is up by 0.4 percentage point over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.3 million, was essentially unchanged in July. 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, 1.6 million persons were marginally attached to the labor force, down by 321,000 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 536,000 discouraged workers in July, essentially unchanged over the year. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment increased by 209,000 in July. Job gains occurred in food services and drinking places, professional and business services, and health care. Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016 (+187,000).

Employment in food services and drinking places rose by 53,000 in July. The industry has added 313,000 jobs over the year.

Professional and business services added 49,000 jobs in July, in line with its average monthly job gain over the prior 12 months.

In July, health care employment increased by 39,000, with job gains occurring in ambulatory health care services (+30,000) and hospitals (+7,000). Health care has added 327,000 jobs over the past year.

Employment in mining was essentially unchanged in July (+1,000). From a recent low in October 2016 through June, the industry had added an average of 7,000 jobs per month.

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. In manufacturing, the workweek was also unchanged at 40.9 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fourth consecutive month.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.10.

The change in total nonfarm payroll employment for May was revised down from +152,000 to +145,000, and the change for June was revised up from +222,000 to +231,000. With these revisions, employment gains in May and June combined were 2,000 more than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 195,000 per month.


Goods and Services Deficit Decreased in June 2017
Posted: August 4, 2017 at 08:30 AM (Friday)

The Nation's international trade deficit in goods and services decreased to $43.6 billion in June from $46.4 billion in May (revised), as exports increased and imports decreased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.6 billion in June, down $2.7 billion from $46.4 billion in May, revised. June exports were $194.4 billion, $2.4 billion more than May exports. June imports were $238.0 billion, $0.4 billion less than May imports.

The June decrease in the goods and services deficit reflected a decrease in the goods deficit of $2.1 billion to $65.2 billion and an increase in the services surplus of $0.6 billion to $21.6 billion. Year-to-date, the goods and services deficit increased $26.7 billion, or 10.7 percent, from the same period in 2016. Exports increased $64.9 billion or 6.0 percent. Imports increased $91.7 billion or 6.9 percent.


New orders for manufactured goods increased 3.0% in June
Posted: August 3, 2017 at 10:00 AM (Thursday)

New orders for manufactured goods in June, up following two consecutive monthly decreases, increased $14.0 billion or 3.0 percent to $481.1 billion, the U.S. Census Bureau reported today. This followed a 0.3 percent May decrease. Shipments, down following two consecutive monthly increases, decreased $0.9 billion or 0.2 percent to $471.5 billion. This followed a 0.3 percent May increase. Unfilled orders, up three of the last four months, increased $14.2 billion or 1.3 percent to $1,135.7 billion. This followed a 0.1 percent May decrease. The unfilled orders-to-shipments ratio was 6.83, up from 6.74 in May. Inventories, up seven of the last eight months, increased $1.0 billion or 0.2 percent to $649.1 billion. This followed a 0.2 percent May decrease. The inventories-to-shipments ratio was 1.38, up from 1.37 in May.

New Orders
New orders for manufactured durable goods in June, up following two consecutive monthly decreases, increased $14.8 billion or 6.4 percent to $245.8 billion, down from the previously published 6.5 percent increase. This followed a virtually unchanged May decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $14.7 billion or 19.0 percent to $91.7 billion. New orders for manufactured nondurable goods decreased $0.8 billion or 0.3 percent to $235.3 billion.

Shipments
Shipments of manufactured durable goods in June, down three of the last four months, decreased $0.1 billion or virtually unchanged to $236.2 billion, virtually unchanged from the previously published decrease. This followed a 1.3 percent May increase. Transportation equipment, down five of the last six months, drove the decrease, $0.4 billion or 0.5 percent to $78.8 billion. Shipments of manufactured nondurable goods, down three of the last four months, decreased $0.8 billion or 0.3 percent to $235.3 billion. This followed a 0.6 percent May decrease. Petroleum and coal products, down five consecutive months, drove the decrease, $1.1 billion or 2.7 percent to $39.8 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in June, up three of the last four months, increased $14.2 billion or 1.3 percent to $1,135.7 billion, virtually unchanged from the previously published increase. This followed a 0.1 percent May decrease. Transportation equipment, also up three of the last four months, led the increase, $12.8 billion or 1.7 percent to $776.8 billion.

Inventories
Inventories of manufactured durable goods in June, up eleven of the last twelve months, increased $1.8 billion or 0.5 percent to $397.4 billion, up from the previously published 0.4 percent increase. This followed a 0.2 percent May increase. Machinery, up seven of the last eight months, led the increase, $0.9 billion or 1.3 percent to $68.4 billion. Inventories of manufactured nondurable goods, down four consecutive months, decreased $0.8 billion or 0.3 percent to $251.7 billion. This followed a 0.7 percent May decrease. Petroleum and coal products, also down four consecutive months, drove the decrease, $1.2 billion or 3.4 percent to $33.4 billion. By stage of fabrication, June materials and supplies increased 0.6 percent in durable goods and decreased 0.6 percent in nondurable goods. Work in process decreased 0.1 percent in durable goods and increased 0.6 percent in nondurable goods. Finished goods increased 1.1 percent in durable goods and decreased 0.5 percent in nondurable goods.


ISM Non-Manufacturing Index dipped to 53.9% in July
Posted: August 3, 2017 at 10:00 AM (Thursday)

Economic activity in the non-manufacturing sector grew in July for the 91st consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 53.9 percent, which is 3.5 percentage points lower than the June reading of 57.4 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 55.9 percent, 4.9 percentage points lower than the June reading of 60.8 percent, reflecting growth for the 96th consecutive month, at a slower rate in July. The New Orders Index registered 55.1 percent, 5.4 percentage points lower than the reading of 60.5 percent in June. The Employment Index decreased 2.2 percentage points in July to 53.6 percent from the June reading of 55.8 percent. The Prices Index increased 3.6 percentage points from the June reading of 52.1 percent to 55.7 percent, indicating prices increased in July for the second consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth. The non-manufacturing sector did not sustain the previous rate of growth and cooled-off in July. The majority of respondents’ comments were mostly positive about business conditions and the state of the economy.

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


Weekly Initial Unemployment Claims Decrease 5,000 to 240,000
Posted: August 3, 2017 at 08:30 AM (Thursday)

In the week ending July 29, the advance figure for seasonally adjusted initial claims was 240,000, a decrease of 5,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 244,000 to 245,000. The 4-week moving average was 241,750, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 250 from 244,000 to 244,250.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 22, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 22 was 1,968,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 1,964,000 to 1,965,000. The 4-week moving average was 1,964,750, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 250 from 1,963,750 to 1,964,000.


Challenger Layoffs decreased to 28,307 jobs in July
Posted: August 3, 2017 at 07:30 AM (Thursday)

U.S.-based employers announced plans to cut payrolls by 28,307 jobs in July, the lowest monthly total since November 2016. Meanwhile, over 88,000 hiring announcements were recorded last month, the third-highest hiring month of the year and highest July total on record, according to a report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July job-cut total is 9 percent lower than the 31,105 cuts recorded in June, and 37.6 percent lower than the same month last year, when 45,346 cuts were recorded. Last month’s job cuts were the lowest monthly total since November 2016, when 26,936 cuts were announced.

So far this year, employers announced 255,307 planned job cuts, down 28.9 percent from the 359,100 cuts announced through the first seven months of 2016.

“Job cuts have slowed significantly as we reach mid-year. This month’s total was the lowest July total since 23,238 cuts were recorded in July 1995,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

In fact, monthly job cut totals have fallen under 30,000 only three times in the last ten years, all of which occurred in the last three years.

“While we have yet to see the large-scale layoffs of previous years, especially as oil and tech rebound, the specter of a downturn is on the horizon and could spell massive cuts as we head into the fourth quarter and into next year,” said Challenger.

Retail continues to lead all sectors this year with 63,989 announced cuts, 3,862 in July. Retail job cuts are 46.7 percent higher this year than through the same point last year, when 43,618 retail cuts were announced.

Health care products and services announced the second-highest number of job cuts in July, with 3,634, bringing that sector’s year-to-date total to 21,554. Companies in the services sector cut 2,607 jobs in July for a seven-month total of 18,022. Aerospace/defense companies announced 2,295 cuts in July, bringing that sector’s total through July to 11,092.

“While retailers are cutting the most jobs this year, those companies are also announcing the most hiring. These jobs are not the typical retail job, as consumers increasingly turn to online shopping. New retail jobs could be going to places like fulfillment and distribution centers, which increasingly need talent, as well as to workers with the tech skills necessary to interact with and manage the automation that’s revolutionizing the industry,” said Challenger.

Retailers have announced 245,616 of the 556,493 new jobs that have been announced so far this year, according to Challenger tracking. The seven-month hiring total is 500 percent higher than the 92,802 new jobs announced through July 2016. Computer firms have announced the second most new jobs this year 126,121, and the technology sector – Computer, Telecommunications, and Electronics combined – has announced 157,052 new hires.

“We typically see the most hiring announcements in September and October, as companies prepare for the holiday rush. It will be interesting to see whether there are such large gains again this year, or if the staffing that is currently occurring will keep those gains at bay,” said Challenger.


New York Purchasing Managers Business Activity increased in July to 62.8
Posted: August 2, 2017 at 08:30 PM (Wednesday)

New York City purchasing managers reported increased current business conditions while indicating significant drops in employment and current revenues, according to the survey taken by the Institute for Supply Management-New York.

New York Metro Current Business Conditions came in at 62.8 in July, the highest level seen since December of 2016. The Six-Month Outlook, which now addresses expectations for January 2018, decreased for the fourth consecutive month without leaving growth territory, coming in at 58.1 in July. The rate of decrease has also increased month over month since March. This month also marks the first time since July of 2016 that the six-month outlook was lower than current business conditions. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, fell to 37.8 in July after nearly breaking even in June. Quantity of Purchases increased to 52.8 in July after breaking even in June. News for the top line and forward guidance doubled down on the low numbers reported in June. Current Revenues fell to 44.4 in July from 46.9 in June, the lowest point since this index was included in the Report on Business in February 2012. July also marks the first time current revenues have been below breakeven for two months in a row. Expected Revenues increased to 69.4 in July, reaching a four-month high. Prices Paid fell to 52.8 in July after a 1-month uptick


Help Wanted OnLine Labor Demand decreased 157,700 to 4,605,700 in July
Posted: August 2, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 157,700 to 4,605,700 in July, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The June Supply/Demand rate stands at 1.46 unemployed for each advertised vacancy, with a total of 2.2 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.0 million in June.

The Professional occupational category saw losses in Computer and Math (-20.7) and Management (-6.0). The Services/Production occupational category saw losses in Sales (-27.3), Office and Administrative Support (-16,5), and Food Preparation (-7.7).


ADP National Employment Report increased by 178,000 jobs in July
Posted: August 2, 2017 at 08:15 AM (Wednesday)

Private sector employment increased by 178,000 jobs from June to July according to the July ADP National Employment Report®.

“Job gains continued to be strong in the month of July,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “However, as the labor market tightens employers may find it more difficult to recruit qualified workers.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The American job machine continues to operate in high gear. Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls. At this pace of job growth, unemployment will continue to quickly decline.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: August 2, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 28, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier to its lowest level since March 2017. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 45.5 percent of total applications from 46.0 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 increased to 10.3 percent from 10.2 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.5 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 ($424,100 or less) remained unchanged at 4.17 percent, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.11 percent from 4.06 percent, with points increasing to 0.25 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.07 percent from 4.05 percent, with points decreasing to 0.35 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.45 percent, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.30 percent from 3.29 percent, with points increasing to 0.29 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Construction Spending decreased 1.3% in June
Posted: August 1, 2017 at 10:00 AM (Tuesday)

Construction spending during June 2017 was estimated at a seasonally adjusted annual rate of $1,205.8 billion, 1.3 percent (±1.5 percent)* below the revised May estimate of $1,221.6 billion. The June figure is 1.6 percent (±1.8 percent)* above the June 2016 estimate of $1,186.4 billion. During the first 6 months of this year, construction spending amounted to $577.0 billion, 4.8 percent (±1.3 percent) above the $550.5 billion for the same period in 2016.

Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $940.7 billion, 0.1 percent (± 1.2 percent)* below the revised May estimate of $941.3 billion. Residential construction was at a seasonally adjusted annual rate of $502.9 billion in June, 0.2 percent (±1.3 percent)* below the revised May estimate of $504.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $437.8 billion in June, 0.1 percent (± 1.2 percent)* above the revised May estimate of $437.3 billion.

Public Construction
In June, the estimated seasonally adjusted annual rate of public construction spending was $265.1 billion, 5.4 percent (±2.6 percent) below the revised May estimate of $280.3 billion. Educational construction was at a seasonally adjusted annual rate of $67.5 billion, 5.5 percent (±3.9 percent) below the revised May estimate of $71.4 billion. Highway construction was at a seasonally adjusted annual rate of $82.4 billion, 6.6 percent (±6.7 percent)* below the revised May estimate of $88.2 billion.


July Manufacturing ISM expanded slower at 56.3
Posted: August 1, 2017 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in July, and the overall economy grew for the 98th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The July PMI® registered 56.3 percent, a decrease of 1.5 percentage points from the June reading of 57.8 percent. The New Orders Index registered 60.4 percent, a decrease of 3.1 percentage points from the June reading of 63.5 percent. The Production Index registered 60.6 percent, a 1.8 percentage point decrease compared to the June reading of 62.4 percent. The Employment Index registered 55.2 percent, a decrease of 2 percentage points from the June reading of 57.2 percent. The Supplier Deliveries Index registered 55.4 percent, a 1.6 percentage point decrease from the June reading of 57 percent. The Inventories Index registered 50 percent, an increase of 1 percentage point from the June reading of 49 percent. The Prices Index registered 62 percent in July, an increase of 7 percentage points from the June reading of 55 percent, indicating higher raw materials prices for the 17th consecutive month, with a faster rate of increase in July compared with June. Comments from the panel generally reflect expanding business conditions, with new orders, production, employment, backlog and exports all growing in July compared to June, as well as supplier deliveries slowing (improving) and inventories unchanged during the period.

Of the 18 manufacturing industries, 15 reported growth in July in the following order: Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; Machinery; Chemical Products; Paper Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Computer & Electronic Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Primary Metals; and Transportation Equipment. Three industries reported contraction in July compared to June: Apparel, Leather & Allied Products; Textile Mills; and Petroleum & Coal Product.


Personal Income unch%, Spending increased 0.1%
Posted: August 1, 2017 at 08:30 AM (Tuesday)

Personal income decreased $3.5 billion (less than -0.1 percent) in June according to estimates released
today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $4.2 billion
(less than -0.1 percent) and personal consumption expenditures (PCE) increased $8.1 billion (0.1 percent).

Real DPI decreased 0.1 percent in June and Real PCE increased less than 0.1 percent. The PCE price
index increased less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.


Paychex-IHS Small Business Jobs Index decreased to 99.98 in July
Posted: August 1, 2017 at 08:30 AM (Tuesday)

The Paychex | IHS Markit Small Business Employment Watch shows another monthly slowdown in small business jobs growth, while wages continue to rise at a steady pace. The Small Business Jobs Index dropped to 99.98 in July, 0.70 percent lower than in July 2016. An index level of 100 equates to moderate job gains, represented by the employment growth levels seen during the 2004 base year. National hourly earnings in July were $25.90, an increase of 2.94 percent ($0.74) year-over-year.

“At 99.98, the Small Business Jobs Index slowed for the fifth consecutive month, falling below the national baseline for the first time since 2011,” said James Diffley, chief regional economist at IHS Markit.

“Though job growth has continued to moderate following last year’s post-election upswing, wage growth is accelerating at a decent pace,” said Martin Mucci, Paychex president and CEO. “We’re keeping a close eye on the potential impact of minimum wage increases on job growth and hours worked, as well as monitoring the effects of a tightening labor market.”


Texas Fed Manufacturing Activity Strengthens, Outlooks Improve in July
Posted: July 31, 2017 at 10:30 AM (Monday)

Texas factory activity increased again in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose 11 points to 22.8, indicating output grew at a faster pace than in June.

Other measures of current manufacturing activity also indicated a pickup in growth. The new orders and the growth rate of orders indexes rose several points each, coming in at 16.1 and 12.2, respectively. The capacity utilization index moved up to 18.1 and the shipments index increased three points to 11.6.

Perceptions of broader business conditions improved again in July, with a sharp pickup in outlooks. The general business activity index edged up to 16.8, marking a 10th consecutive positive reading. The company outlook index jumped 15 points to 25.9, reaching its highest level since 2010.

Labor market measures indicated slightly stronger employment gains and longer workweeks this month. The employment index has been positive all year and edged up to 11.2, its highest reading since the end of 2015. Twenty-one percent of firms noted net hiring, compared with 9 percent noting net layoffs. The hours worked index ticked up to 9.8.

Prices and wages continued to rise in July. The raw materials prices index held steady at 15.5, while the finished goods prices index moved up slightly to 5.6. The wages and benefits index remained somewhat elevated at 20.6.

Expectations regarding future business conditions continued to reflect optimism. The indexes of future general business activity and future company outlook held steady at 31.6 and 34.8, respectively. Other indexes of future manufacturing activity showed mixed movements but remained solidly in positive territory.


Pending Home Sales Index increased 1.5% in June
Posted: July 31, 2017 at 10:00 AM (Monday)

After declining for three straight months, pending home sales reversed course in June as all major regions, except for the Midwest, saw an increase in contract activity, according to the National Association of Realtors®.

The Pending Home Sales Index*, a forward-looking indicator based on contract signings, climbed 1.5 percent to 110.2 in June from an upwardly revised 108.6 in May. At 0.5 percent, the index last month increased annually for the first time since March.

Lawrence Yun, NAR chief economist, says the bounce back in pending sales in most of the country in June is a welcoming sign. "The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs," he said. "Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria."

Added Yun, "Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago."

Yun does note that there could potentially be a sliver of increased hope in the months ahead for prospective first-time buyers, who continue to struggle reaching the market. Sales to investors last month were the lowest of the year (13 percent), which helped push all cash transactions to 18 percent – the smallest share since June 2009 (13 percent).

"It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market," said Yun. "Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market."

Heading into the second half of the year, Yun expects existing-home sales to finish around 5.56 million, which is an increase of 2.6 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast inched forward 0.7 percent to 98.0 in June, and is now 2.9 percent above a year ago. In the Midwest the index decreased 0.5 percent to 104.0 in June, and is now 3.4 percent lower than June 2016.

Pending home sales in the South rose 2.1 percent to an index of 126.0 in June and are now 2.6 percent above last June. The index in the West grew 2.9 percent in June to 101.5, but is still 1.1 percent below a year ago.


Chicago Purchasing Managers Index fell by 6.8 points to 58.9 in July
Posted: July 31, 2017 at 09:45 AM (Monday)

The MNI Chicago Business Barometer fell to 58.9 in July from 65.7 in June, the lowest level in three months.

While marking the seventeenth above-50 reading, July’s fall snapped a run of five straight monthly increases in business optimism. Each of the five Barometer components receded from last month but remained above their respective 12-month averages. This, therefore, points towards a return to trend after June’s stellar showing. The Barometer had risen 6.3 points in June, to the highest level since May 2014. July’s result means sentiment must average 62.2 in August and September for Q3 to come in flat on Q2.

The fall in sentiment was broad-based in July, though particularly concentrated across both demand and output. New orders fell by 11.6 points to 60.3, the lowest level since February, while Production fell 6.9 points to 60.8, the lowest since April. Firms also saw the level of backlogs slip in July. The Order Backlogs indicator fell 4.9 points from June’s 23-year high to 57.9 in July. Suppliers took slightly less time to deliver key inputs, with the respective indicator down to 61.5 from 62.8 in June, falling for the first time in five months.

Companies saw stock levels accumulate as the growth in demand cooled slightly. The Inventories indicator rose by 3.0 points to 54.9 in July, the highest in two months. The Employment indicator slipped for the second straight month in July, following up June’s 0.5 point drop with a further 4.0 point drop this month. This left the indicator at 52.6, the lowest since March but marginally above its 12-month average of 52.1. The indicator has performed materially better since the turn of the year having spent eight months of last year below the neutral-50 mark.

This month’s special question asked firms how wages across their business had changed over the past year. Over 70% said they had increased employees’ nominal pay during this time while a quarter said they kept wages unchanged. The remaining 3% of firms chose to cut wages to some extent. Of those that afforded wage rises to their employees, just under 40% increased wages by 1-2%, with just shy of 30% of firms offering a more generous 3-4% hike. Precisely 1.7% of businesses upped nominal wages by 1% while an equal proportion opted for the other extreme, raising wages by 5-6%.

Having eased in Q2, inflationary pressures at the factory gate picked up in July. The indicator rose 3.4 points to 60.9, the highest level in three months.


“MNI’s July Chicago Business Barometer should be viewed in the context of the underlying, upward trend in business sentiment witnessed since early 2016. Key indicators, despite reversing their June reading, remain above their respective averages set over the last twelve months, and point towards robust confidence among U.S firms,” said Jamie Satchi, Economist at MNI Indicators.


University of Michigan Consumer Confidence slipped in July to 93.4
Posted: July 28, 2017 at 10:00 AM (Friday)

Consumer sentiment continued to slowly fall in the July survey, although the overall level still remains quite favorable, according to the University of Michigan Surveys of Consumers.

The small decline amounted to 5.1 Index-points below the January peak, which was the highest figure in a dozen years, said economist Richard Curtin, director of the surveys. The decline was tempered by the most favorable evaluations of consumers' current finances in a decade. Consumers, however, were less optimistic about future prospects for the overall economy and their own personal finances.

Although the falloff in favorable economic expectations has already been significant, it would only be worrisome if it continued at the same pace during the second half of 2017, according to Curtin. Even with an improved second quarter, personal consumption spending is expected to advance during 2017 by about 2.4 percent

"Consumers' judgments about current economic conditions were based on the performance of the economy, but their views of future economic prospects were highly influenced by partisanship," Curtin said. "The difference on the Expectations Index between Democrats and Republicans was 45 Index-points (63.7 versus 108.7).

"Among Independents, in contrast, the Expectations Index was exactly equal to the weighted difference between the partisan extremes (80.5). The partisan gap has narrowed in the past six months, mostly due to Republicans tempering their optimism, while Democrats have maintained their pessimistic views."

Personal Finances Reach Decade Peak
The highest number of consumers reported an improved financial situation in both the June and July surveys than any other time since November of 2000. The financial strength was due to gains in incomes as well as gains in household wealth driven by rising stock prices and home values. Despite these gains, consumers became even more apprehensive about whether those gains would continue during the year ahead.

More Cautious Buyers
Favorable vehicle buying attitudes fell to the lowest level in six months. Among households with incomes in the top third, who account for the majority of new vehicle purchases, favorable vehicle buying fell to its lowest level in three years. Gas price expectations fell to their lowest levels in a decade, which will continue to favor light truck sales. Non-home owners among the millennial generation (ages 18 to 34) reported significantly less favorable home buying plans from May to July of 2017 than in the first four months of 2017.

The Consumer Sentiment Index was 93.4 in July 2017, between the 95.1 in June and last July's 90.0. The Current Conditions Index was 113.4 in July, although up slightly from last month's 112.5, it reached the highest level since 116.9 was recorded in November 2000. The Expectations Index fell to 80.5, from 83.9 in June and the peak of 90.3 in January 2017, but remained above last July's 77.8.


2Q2017 GDP advance estimate increased 2.6%, 1Q2017 GDP revised down to 1.2%
Posted: July 28, 2017 at 08:30 AM (Friday)

Real gross domestic product increased at an annual rate of 2.6 percent in the second quarter of 2017 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 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 “Source Data for the Advance Estimate” on page 3). The "second" estimate for the second quarter, based on more complete data, will be released on August 30, 2017.

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

Annual Update of the National Income and Product Accounts
The estimates released today reflect the results of the annual update of the national income and product accounts (NIPAs) in conjunction with the "advance" estimate of GDP for the second quarter of 2017. The update covers the first quarter of 2014 through the first quarter of 2017. For more information, see information on the "2017 Annual Update" on BEA’s Web site. Additionally, the August Survey of Current Business will contain an article that describes the results in detail.

The acceleration in real GDP growth in the second quarter reflected a smaller decrease in private inventory investment, an acceleration in PCE, and an upturn in federal government spending. These movements were partly offset by a downturn in residential fixed investment and decelerations in exports and in nonresidential fixed investment.

Current-dollar GDP increased 3.6 percent, or $169.0 billion, in the second quarter to a level of $19,226.7 billion. In the first quarter, current-dollar GDP increased 3.3 percent (revised), or $152.2 billion.

The price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 2.6 percent in the first quarter (revised) (table 4). The PCE price index increased 0.3 percent, compared with an increase of 2.2 percent. Excluding food and energy prices, the PCE price index increased 0.9 percent, compared with an increase of 1.8 percent.


Personal Income
Current-dollar personal income increased $118.9 billion in the second quarter, compared with an increase of $217.6 billion in the first quarter (revised). The deceleration in personal income primarily reflected decelerations in wages and salaries, in government social benefits, in nonfarm proprietors’ income, and in rental income, and downturns in personal interest income and in farm proprietors’ income. These movements were offset by an upturn in personal dividend income.

Disposable personal income increased $122.1 billion, or 3.5 percent, in the second quarter, compared with an increase of $176.3 billion, or 5.1 percent, in the first quarter (revised). Real disposable personal income increased 3.2 percent, compared with an increase of 2.8 percent.

Personal saving was $546.8 billion in the second quarter, compared with $553.0 billion in the first quarter (revised). The personal saving rate -- personal saving as a percentage of disposable personal income -- was 3.8 percent in the second quarter, compared with 3.9 percent in the first.

Updates for the first quarter of 2017
For the first quarter of 2017, real GDP is now estimated to have increased 1.2 percent; in the previously published estimates, first-quarter GDP was estimated to have increased 1.4 percent. The 0.2-percentage point downward revision to the percent change in first-quarter real GDP reflected downward revisions to nonresidential fixed investment, to private inventory investment, to residential fixed investment, and to federal government spending, and an upward revision to imports. These movements were partly offset by upward revisions to PCE, to state and local government spending, and to exports.

Real GDI is now estimated to have increased 2.6 percent in the first quarter; in the previously published estimates, first-quarter GDI was estimated to have increased 1.0 percent.


Employment Cost Index up 0.5% in 2Q2017
Posted: July 28, 2017 at 08:30 AM (Friday)

Compensation costs for civilian workers increased 0.5 percent, seasonally adjusted, for the 3-month period ending in June 2017, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.5 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.6 percent.

Civilian Workers
Compensation costs for civilian workers increased 2.4 percent for the 12-month period ending in June 2017. In June 2016, compensation costs increased 2.3 percent. Wages and salaries increased 2.3 percent for the current 12-month period and increased 2.5 percent for the 12-month period ending in June 2016. Benefit costs increased 2.5 percent for the 12-month period ending in June 2017. In June 2016, the increase was 2.0 percent.

Private Industry Workers
Compensation costs for private industry workers increased 2.4 percent over the year. In June 2016, the increase was the same. Wages and salaries increased 2.4 percent for the current 12-month period. In June 2016, the increase was 2.6 percent. The cost of benefits rose 2.2 percent for the 12-month period ending in June 2017, higher than the 1.7 percent increase in June 2016.

Employer costs for health benefits increased 1.2 percent for the 12-month period ending in June 2017.

Among occupational groups, compensation cost increases for private industry workers for the 12-month period ending in June 2017 ranged from 1.7 percent for sales and office occupations to 2.9 percent for service occupations.

Among industry supersectors, compensation cost increases for private industry workers for the 12- month period ending in June 2017 ranged from 1.8 percent for professional and business services to 3.9 percent for leisure and hospitality.

State and Local Government Workers
Compensation costs for state and local government workers increased 2.6 percent for the 12-month period ending in June 2017. In June 2016, the increase was 2.3 percent. Wages and salaries increased 2.1 percent for the 12-month period ending in June 2017, higher than the June 2016 increase of 1.7 percent. Benefit costs increased 3.2 percent for the 12-month period ending in June 2017. The prior year’s increase was 3.4 percent.


Kansas City Fed Manufacturing Activity expanded moderately in July
Posted: July 27, 2017 at 10:00 AM (Thursday)

Tenth District manufacturing activity expanded moderately again, and expectations for future activity eased slightly but remained positive. Price indexes remained mixed, with modest increases in finished goods prices.

The month-over-month composite index was 10 in July, down slightly from 11 in June but up from 8 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased moderately at non-durable goods plants, particularly for chemicals and plastics, while durable activity moderated somewhat. Month-over-month indexes were mixed. The production index tumbled from 23 to 4, and the shipments index fell into negative territory for the first time since August 2016. Conversely, the employment index remained solid, while the new orders index rose modestly, and the order backlog index also increased but remained negative. The raw materials inventory index rose slightly, and the finished good inventory index increased back into positive territory.

The year-over-year factory indexes were mixed in July. The year-over-year production index declined from 43 to 28, and the composite, shipment, new orders for exports, and employment indexes eased modestly. However, the new orders, order backlog, and capital expenditures indexes moved slightly higher. The raw materials inventory index fell moderately, while the finished goods inventory index inched down from 10 to 7.

Expectations for future factory activity edged down but remained positive. The future composite index fell from 25 to 19, and the future production and new orders indexes also decreased moderately but remained in positive territory. The future employment, shipments, and order backlog indexes inched lower. In contrast, the future capital expenditures index remained unchanged, while the future employee workweek index increased from 10 to 17. The future raw materials inventory index rose from 0 to 4, and the future finished goods inventory index increased to a five month high.

Price indexes remained mixed in July. The month-over-month finished goods price index increased from –2 to 7, while the raw materials price index inched higher. The year-over-year finished goods price index rose from 15 to 20, while the year-over-year raw materials price index eased slightly. The future raw materials price index decreased from 49 to 36, and the future finished goods price index moderated.


June New Orders for Durable Goods Increased 6.5%, Ex-Trans up 0.2%
Posted: July 27, 2017 at 08:30 AM (Thursday)

New Orders
New orders for manufactured durable goods in June increased $14.9 billion or 6.5 percent to $245.6 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.1 percent May decrease. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders increased 6.7 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $14.6 billion or 19.0 percent to $91.6 billion.

Shipments
Shipments of manufactured durable goods in June, down three of the last four months, decreased $0.1 billion or virtually unchanged to $236.0 billion. This followed a 1.2 percent May increase. Transportation equipment, down five of the last six months, drove the decrease, $0.4 billion or 0.6 percent to $78.8 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in June, up three of the last four months, increased $14.2 billion or 1.3 percent to $1,135.6 billion. This followed a 0.1 percent May decrease. Transportation equipment, also up three of the last four months, led the increase, $12.8 billion or 1.7 percent to $776.8 billion.

Inventories
Inventories of manufactured durable goods in June, up eleven of the last twelve months, increased $1.6 billion or 0.4 percent to $397.0 billion. This followed a 0.1 percent May increase. Machinery, up seven of the last eight months, led the increase, $0.8 billion or 1.2 percent to $68.3 billion.

Capital Goods
Nondefense new orders for capital goods in June increased $14.7 billion or 21.0 percent to $84.6 billion. Shipments increased $0.3 billion or 0.4 percent to $70.9 billion. Unfilled orders increased $13.8 billion or 2.0 percent to $709.8 billion. Inventories increased $1.0 billion or 0.6 percent to $177.6 billion. Defense new orders for capital goods in June increased $0.4 billion or 3.8 percent to $9.7 billion. Shipments decreased $0.2 billion or 2.2 percent to $10.0 billion. Unfilled orders decreased $0.3 billion or 0.2 percent to $140.3 billion. Inventories increased less than $0.1 billion or 0.1 percent to $22.5 billion.

Revised May Data
Revised seasonally adjusted May figures for all manufacturing industries were: new orders, $466.8 billion (revised from $464.9 billion); shipments, $472.3 billion (revised from $471.5 billion); unfilled orders, $1,121.4 billion (revised from $1,120.2 billion) and total inventories, $648.4 billion (revised from $648.9 billion).


Chicago Fed National Activity points to a pickup in economic growth in June
Posted: July 27, 2017 at 08:30 AM (Thursday)

The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.01 in June from –0.08 in May. Forty of the 85 individual indicators made positive contributions to the CFNAI in June, while 45 made negative contributions. Fifty-six indicators improved from May to June, while 28 indicators deteriorated and one was unchanged. Of the indicators that improved, 21 made negative contributions.

The contribution from production-related indicators to the CFNAI increased to +0.09 in June from –0.16 in May. Total industrial production increased 0.4 percent in June after moving up 0.1 percent in May, and the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index increased to 57.8 in June from 54.9 in the previous month. The sales, orders, and inventories category made a contribution of +0.02 to the CFNAI in June, up slightly from a neutral contribution in May.

Employment-related indicators contributed +0.06 to the CFNAI in June, up from –0.05 in May. Civilian nonagricultural employment increased by 431,000 in June after decreasing by 64,000 in the previous month; however, the civilian unemployment rate ticked up to 4.4 percent in June from 4.3 percent in May.

The contribution of the personal consumption and housing category to the CFNAI edged up to –0.04 in June from –0.09 in May.

Housing starts increased to 1,215,000 annualized units in June from 1,122,000 in May, and housing permits increased to 1,254,000 annualized units in June from 1,168,000 in the previous month.

The CFNAI was constructed using data available as of July 20, 2017. At that time, June data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The May monthly index value was revised to –0.30 from an initial estimate of –0.26, and the April monthly index value was revised to +0.36 from last month’s estimate of +0.57. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the May and April monthly index values were primarily due to the latter.


Weekly Initial Unemployment Claims Increase 10,000 to 244,000
Posted: July 27, 2017 at 08:30 AM (Thursday)

In the week ending July 22, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 233,000 to 234,000. The 4-week moving average was 244,000, unchanged from the previous week's revised average. The previous week's average was revised up by 250 from 243,750 to 244,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 15, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 15 was 1,964,000, a decrease of 13,000 from the previous week's unrevised level of 1,977,000. The 4-week moving average was 1,963,750, an increase of 4,750 from the previous week's unrevised average of 1,959,000.


FOMC target funds rate reaffirmed at 1.00% - 1.25%
Posted: July 26, 2017 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated; this program is described in the June 2017 Addendum to the Committee's Policy Normalization Principles and Plans.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell.


New Home Sales in June at annual rate of 610,000
Posted: July 26, 2017 at 10:00 AM (Wednesday)

Sales of new single-family houses in June 2017 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.8 percent (±12.1 percent)* above the revised May rate of 605,000 and is 9.1 percent (±14.4 percent)* above the June 2016 estimate of 559,000.

The median sales price of new houses sold in June 2017 was $310,800. The average sales price was $379,500. The seasonally-adjusted estimate of new houses for sale at the end of June was 272,000. This represents a supply of 5.4 months at the current sales rate.


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

Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 21, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.4 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 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier to the lowest level since May 2017. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 8 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 46.0 percent of total applications from 44.7 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 decreased to 10.2 percent from 10.7 percent the week prior. The VA share of total applications decreased to 10.5 percent from 10.7 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.17 percent from 4.22 percent, with points increasing to 0.40 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.06 percent from 4.18 percent, with points decreasing to 0.24 from 0.30 (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 4.05 percent from 4.10 percent, with points increasing to 0.44 from 0.30 (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 3.45 percent from 3.48 percent, with points increasing to 0.45 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.29 percent from 3.32 percent, with points increasing to 0.26 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Confidence improved in July to 121.1
Posted: July 25, 2017 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined marginally in June (a downward revision), improved in July. The Index now stands at 121.1 (1985=100), up from 117.3 in June. The Present Situation Index increased from 143.9 to 147.8, while the Expectations Index rose from 99.6 last month to 103.3.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”

Consumers’ assessment of current conditions improved in July. Those saying business conditions are “good” increased from 30.6 percent to 33.3 percent, while those saying business conditions are “bad” was virtually unchanged at 13.5 percent. Consumers’ appraisal of the labor market was also more favorable. Those stating jobs are “plentiful” rose from 32.0 percent to 34.1 percent, while those claiming jobs are “hard to get” decreased slightly from 18.4 percent to 18.0 percent.

Consumers were also more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.1 percent to 22.9 percent, while those expecting business conditions to worsen declined from 10.0 percent to 8.2 percent.

Consumers’ outlook for the labor market improved. The proportion expecting more jobs in the months ahead was unchanged at 19.2 percent, but those anticipating fewer jobs decreased from 14.6 percent to 13.3 percent. Consumers, however, were not as upbeat about their income prospects as in June. The percentage of consumers expecting an improvement in their income declined moderately from 20.9 percent to 20.0 percent, while the proportion expecting a decline increased from 9.3 percent to 10.0 percent.


Richmond Fed's Current Activity Index rose 3 points to a reading of 14
Posted: July 25, 2017 at 10:00 AM (Tuesday)

Reports from Fifth District manufacturers improved some in July, according to the latest survey by the Federal Reserve Bank of Richmond. The composite index rose from 11 in June to 14 in July — the result of a slight increase in the measures of new orders and employment. The index for shipments remained at its June reading of 13. A larger share of firms reported higher wages and longer workweeks in July, as the wages index rose from 10 in June to 17 in July and the average workweek index rose from 1 to 9.

Manufacturing executives remained generally optimistic about activity six months ahead. Among the indexes for expected activity, almost every measure was well into positive territory and each increased, with the exception of the index for vendor lead time, which held steady at its June level of 7.

In terms of prices, survey respondents continued to report moderate growth in both prices paid and prices received. Meanwhile, expected growth in prices paid was slightly higher in July while expected growth in prices received was virtually unchanged.


S&P CoreLogic Case-Shiller Home Price Indices gained 1.0% in May
Posted: July 25, 2017 at 09:00 AM (Tuesday)

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

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.6% annual gain in May, the same as the prior month. The 10-City Composite annual increase came in at 4.9%, down from 5.0% the previous month. The 20-City Composite posted a 5.7% year-over-year gain, down from 5.8% in April.

Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities. In May, Seattle led the way with a 13.3% year-over-year price increase, followed by Portland with 8.9%, and Denver overtaking Dallas with a 7.9% increase. Nine cities reported greater price increases in the year ending May 2017 versus the year ending April 2017.

The below charts compare year-over-year returns for Seattle and Portland with different ranges of housing prices (tiers). Upon tier level analysis from 2011 to present, both Seattle and Portland’s year-over-year returns show housing prices in the high tier to be the most stable while housing prices in the low tier are the most volatile.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 1.0% in May. The 10-City Composite posted a 0.7% increase and 20-City Composite reported a 0.8% increase in May. After seasonal adjustment, the National Index recorded a 0.2% month-over-month increase. The 10-City Composite remained stagnant with no month-over-month increase. The 20-City Composite posted a 0.1% month-over-month increase. All 20 cities reported increases in May before seasonal adjustment; after seasonal adjustment, 14 cities saw prices rise.

ANALYSIS
“Home prices continue to climb and outpace both inflation and wages,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging. The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices.

“For the last 19 months, either Seattle or Portland OR was the city with fastest rising home prices based on 12-month gains. Since the national index bottomed in February 2012, San Francisco has the largest gain. Using Census Bureau data for 2011 to 2015, it is possible to compare these three cities to national averages. The proportion of owner-occupied homes is lower than the national average in all three cities with San Francisco being the lowest at 36%, Seattle at 46%, and Portland at 52%. Nationally, the figure is 64%. The key factor for the rise in home prices is population growth from 2010 to 2016: the national increase is 4.7%, but for these cities, it is 8.2% in San Francisco, 9.6% in Portland and 15.7% in Seattle. A larger population combined with more people working leads to higher home prices.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.6% annual gain in May 2017. The 10-City and 20-City Composites reported year-over-year increases of 4.9% and 5.7%, respectively.

As of May 2017, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


Philadelphia NonManufacturing Activity Indicators growing but at a slower pace in June
Posted: July 25, 2017 at 08:30 AM (Tuesday)

Respondents to the July Nonmanufacturing Business Outlook Survey reported that business activity continued to grow but at a slower pace. The indexes for firm-level general activity and sales/revenues remained positive but fell, suggesting a slowdown in growth this month. The new orders index fell to near zero. Expectations for growth over the next six months remained positive, although the index for future activity at the firm level continued to edge down from readings earlier this year.

Current Indicators Suggest Slower Growth
All of the survey’s broad indicators this month suggest a slower pace of expansion. The diffusion index for general activity at the firm level decreased from 28.0 in June to 18.1 in July and is now at its lowest reading in eight months (see Chart). The firm-level indicators for new orders and sales/revenues decreased notably this month. The new orders index fell 20 points to -0.1, its first negative reading since July 2015. Nearly 26 percent of the firms indicated an increase in new orders in July, but that was offset by 26 percent of the firms indicating a decrease. The firm-level sales/revenues index remained positive but also fell, decreasing 21 points to 17.1 in July. Over 41 percent of the firms reported higher sales/revenues in July, but 24 percent reported declines.

Firms also perceived a slower pace in regional economic conditions in July. The regional business activity index decreased from 33.6 in June to 23.4. The index, however, is still slightly higher than its historical average of 23.2.

Firms Report Continued Expansion of Employment
Labor market indicators continued to suggest overall growth in employment, but the indexes for both full-time and part-time employment moderated this month. The full-time employment index remained positive but edged down from a reading of 19.7 in June to 18.9 in July. The part-time employment index also fell, decreasing from 16.7 to 13.2.

Firms Report Price Increases
Firms reported increased price pressures this month. Although the largest percentage of firms (63 percent) reported steady input prices this month, nearly 23 percent of the firms reported paying higher prices for inputs, compared with 14 percent last month. The prices paid index increased 13 points, to 20.8, and is slightly above its historical average of 20.0. With respect to their own prices, 10 percent of the firms reported higher prices in July, and the prices received index edged 4 points higher, to 7.2, remaining slightly below its historical average of 11.8.

Seasonal Factors Remain Important for Many Firms
In this month’s special questions, firms were asked to assess the importance of seasonal factors in business and how the importance of these factors has changed over time (see Special Questions). Although 59 percent of the firms indicated that seasonal factors have not changed over time, the percentage of firms indicating that seasonal factors had become less important over time (23 percent) was larger than the percentage of firms reporting that these factors have become more important over time (14 percent). Firms’ overall responses indicated seasonal increases in activity in the spring and fall and decreases in activity in midsummer (July and August, in particular) and during the winter months. Respondents were also asked about these patterns last year, and the results were not materially different.

Firms’ Forecasts for Future Growth Still Positive but Moderating
The respondents to this month’s survey were less optimistic about future activity over the next six months. The diffusion index for future activity at the individual firm level remained positive but decreased 8 points to 40.0 — its lowest reading in eight months (see Chart). The index has trended down from its peak in January of this year. Optimism about growth in the region also diminished this month. The future regional activity index fell 16 points to 34.5, also its lowest level in eight months. Both future indexes, although positive, are now below their long-run averages of 49.5 and 43.8, respectively.

Summary
Results from the July Nonmanufacturing Business Outlook Survey suggest continued business expansion among the region’s nonmanufacturing firms. Most of the survey's indicators, however, suggested a slower pace of growth. Upward price pressures were more widespread among the survey respondents this month, particularly for purchased inputs. Overall, employment continued to grow among the reporting firms, with firms reporting increases in both part-time and full-time employees. Firms’ six-month forecasts remain positive but continue a trend of moderation.


Existing-Home Sales Up 1.1% in May
Posted: July 24, 2017 at 10:00 AM (Monday)

Existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only the Midwest saw an increase in sales last month.

Total existing-home sales which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month's decline, June's sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. "Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that's straining their budget," he said. "The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines."

Added Yun, "The good news is that sales are still running slightly above last year's pace despite these persistent market challenges."

The median existing-home price for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month's median sales price surpasses May as the new peak and is the 64rd straight month of year-over-year gains.

Total housing inventory at the end of June declined 0.5 percent to 1.96 million existing homes available for sale, and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.

First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago. NAR's 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35 percent.

"It's shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs," said Yun. "Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers' dreams of owning a home this year."

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90 percent in June from 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.

"Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down," said President William E. Brown, a Realtor® from Alamo, California. "The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy."

All-cash sales were 18 percent of transactions in June, down from 22 percent both in May and a year ago, and the lowest since June 2009 (13 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.

Distressed sales – foreclosures and short sales – were 4 percent of sales in June, down from both May (5 percent) and a year ago (6 percent) and matching last September as the lowest share since NAR began tracking in October 2008. Three percent of June sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6 percent above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6 percent from June 2016.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6 percent higher than a year ago. The median existing condo price was $245,900 in June, which is 6.5 percent above a year ago.

Regional Breakdown
June existing-home sales in the Northeast fell 2.6 percent to an annual rate of 760,000, but are still 1.3 percent above a year ago. The median price in the Northeast was $296,300, which is 4.1 percent above June 2016.

In the Midwest, existing-home sales rose 3.1 percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7 percent from a year ago.

Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.

Existing-home sales in the West declined 0.8 percent to an annual rate of 1.21 million in June, but remain 2.5 percent above a year ago. The median price in the West was $378,100, up 7.4 percent from June 2016.


U.S. Leading Economic Index increased 0.6% in June
Posted: July 20, 2017 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for theU.S. increased 0.6 percent in June to 127.8 (2010 = 100), following a 0.2 percent increase in May, and a 0.2 percent increase in April.

“The U.S. LEI rose sharply in June, pointing to continued growth in the U.S. economy and perhaps even a moderate improvement in GDP growth in the second half of the year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The broad-based gain in the U.S. LEI was led by a large contribution from housing permits, which improved after several months of weakness.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in June to 115.5 (2010 = 100), following a 0.3 percent increase in May, and a 0.2 percent increase in April.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in June to 124.4 (2010 = 100), following a 0.1 percent increase in May and a 0.3 percent increase in April.


Weekly Initial Unemployment Claims Decrease 15,000 to 233,000
Posted: July 20, 2017 at 08:30 AM (Thursday)

In the week ending July 15, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 247,000 to 248,000. The 4-week moving average was 243,750, a decrease of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 245,750 to 246,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending July 8, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 8 was 1,977,000, an increase of 28,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 1,945,000 to 1,949,000. The 4-week moving average was 1,959,000, an increase of 8,750 from the previous week's revised average. The previous week's average was revised up by 1,000 from 1,949,250 to 1,950,250.


Philadelphia Fed Outlook Reported Activity Suggest Positive but Weaker Growth in July
Posted: July 20, 2017 at 08:30 AM (Thursday)

Manufacturing activity in the region continues to grow but at a slower pace, according to results from the July Manufacturing Business Outlook Survey. The diffusion indexes for general activity, new orders, shipments, employment, and work hours remained positive but fell from their readings in June. Respondents also reported a moderation of price pressures this month. Firms remained generally optimistic about future growth. More than one-third of the manufacturers expect to add to their payrolls over the next six months.

Current Indicators Suggest Positive but Weaker Growth
The index for current manufacturing activity in the region decreased from a reading of 27.6 in June to 19.5 this month (see Chart 1). The index has been positive for 12 consecutive months, but July’s reading is the lowest since November. Thirty-seven percent of the firms indicated increases in activity in July, down from 42 percent last month. The shipments index decreased 16 points, while the new orders index fell 24 points. Nearly 31 percent of the respondents reported a rise in new orders this month, down from 45 percent in June. Both the delivery times and unfilled orders indexes were positive for the ninth consecutive month, suggesting longer delivery times and increases in unfilled orders.

Firms reported overall increases in manufacturing employment this month, but the current employment index fell 5 points. The index has been positive for eight consecutive months. The percentage of firms reporting an increase in employment was 17 percent, while 6 percent reported a decrease. The average workweek index has been positive for nine consecutive months but decreased 17 points.
Price Indexes Suggest Moderated Price Pressures

The survey’s price indicators suggest moderated price pressures this month: Both the prices paid and prices received indexes remained positive but fell from their June readings. With regard to prices paid for inputs, 24 percent of the respondents reported higher input prices. The current prices paid index fell 5 points and has declined for four consecutive months. The prices received index fell 12 points (see Chart 2). With 17 percent of the firms reporting higher prices, this index is at its lowest reading in seven months.

Most Firms Expect Continued Growth
The survey’s six-month indicators remained positive this month, with firms generally expecting growth to continue. The diffusion index for future general activity increased from 31.3 in June to 36.9 this month (see Chart 1). Over half of the manufacturers expect increases in activity over the next six months, while 14 percent expect declines. The future new orders index increased 8 points, while the future shipments index fell 13 points. The future employment diffusion index decreased 3 points to 27.0. More than 34 percent of the firms expect to increase employment over the next six months. Optimism about future capital spending improved notably this month: The diffusion index for future capital spending increased 13 points, and 43 percent of the firms indicated they plan to increase such spending over the next six months.

Seasonal Activity Continues to Be Important to Some Manufacturers
In this month’s special questions, firms were asked to assess the importance of seasonal factors in production, seasonal changes in their production by month, and whether these seasonal factors have changed in importance over time (see Special Questions). Most firms (63 percent) reported that seasonal factors were not significant, while 35 percent indicated that they were significant. Of the firms that reported significant seasonal patterns, the most common pattern was increased production during the spring and fall and decreased activity in midsummer and during the winter months. Fifty-eight percent of the firms with seasonal patterns reported that seasonal effects have not changed; 25 percent saw seasonal patterns as less important, and only 12 percent indicated they were more significant.

Summary
Responses to the July Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector, but the pace of growth was slower. The survey’s future indexes indicate that respondents continue to expect growth over the next six months.


June Housing Starts up 8.3%, Permits up 7.4%
Posted: July 19, 2017 at 08:30 AM (Wednesday)

Building Permits
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,254,000. This is 7.4 percent (±1.1 percent) above the revised May rate of 1,168,000 and is 5.1 percent (±1.4 percent) above the June 2016 rate of 1,193,000. Single-family authorizations in June were at a rate of 811,000; this is 4.1 percent (±0.8 percent) above the revised May figure of 779,000. Authorizations of units in buildings with five units or more were at a rate of 409,000 in June.

Housing Starts
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,215,000. This is 8.3 percent (±15.8 percent)* above the revised May estimate of 1,122,000 and is 2.1 percent (±14.0 percent)* above the June 2016 rate of 1,190,000. Single-family housing starts in June were at a rate of 849,000; this is 6.3 percent (±13.5 percent)* above the revised May figure of 799,000. The June rate for units in buildings with five units or more was 359,000.

Housing Completions
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,203,000. This is 5.2 percent (±13.9 percent)* above the revised May estimate of 1,144,000 and is 8.1 percent (±13.9 percent)* above the June 2016 rate of 1,113,000. Single-family housing completions in June were at a rate of 798,000; this is 0.4 percent (±11.0 percent)* above the revised May rate of 795,000. The June rate for units in buildings with five units or more was 396,000.


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

Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 14, 2017. Last week's results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 33 percent compared with the previous week. The Refinance Index increased 13 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 27 percent compared with the previous week and was 7 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 44.7 percent of total applications from 42.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.7 percent of total applications.

The FHA share of total applications increased to 10.7 percent from 10.4 percent the week prior. The VA share of total applications decreased to 10.7 percent from 11.5 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.22 percent, with points decreasing to 0.31 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.18 percent from 4.19 percent, with points remaining unchanged at 0.30 (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 4.10 percent from 4.12 percent, with points decreasing to 0.30 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.48 percent from 3.50 percent, with points decreasing to 0.39 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 3.32 percent, with points decreasing to 0.21 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


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