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Pending Home Sales Index jumped 5.5% in February
Posted: March 29, 2017 at 10:06 AM (Wednesday)

Pending home sales rebounded sharply in February to their highest level in nearly a year and second-highest level in over a decade, according to the National Association of Realtors®. All major regions saw a notable hike in contract activity last month.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, jumped 5.5 percent to 112.3 in February from 106.4 in January. Last month's index reading is 2.6 percent above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

Lawrence Yun, NAR chief economist, says February's convincing bump in pending sales is proof that demand is rising with spring on the doorstep. "Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country," he said. "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year."

Added Yun, "Last month being the warmest February in decades also played a role in kick-starting prospective buyers' house hunt."

Looking ahead to the busy spring months, Yun expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers.

"The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy," said Yun. "The country's healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation's low homeownership rate."

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast rose 3.4 percent to 102.1 in February, and is now 6.6 percent above a year ago. In the Midwest the index jumped 11.4 percent to 110.8 in February, but is still 0.6 percent lower than February 2016.

Pending home sales in the South climbed 4.3 percent to an index of 127.8 in February and are now 4.2 percent above last February. The index in the West increased 3.1 percent in February to 97.5, but is still 0.2 percent higher than a year ago.


Purchase Apps up, Refi's down in Latest MBA Weekly Survey
Posted: March 29, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 24, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.4 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 44.0 percent of total applications, its lowest level since October 2008, from 45.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.5 percent of total applications.

The FHA share of total applications decreased to 10.8 percent from 10.9 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.1 percent the week prior. The USDA share of total applications increased to 1.0 percent from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.33 percent from 4.46 percent, with points increasing to 0.43 from 0.41 (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 4.26 percent from 4.40 percent, with points decreasing to 0.26 from 0.37 (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 4.24 percent from 4.33 percent, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.57 percent from 3.68 percent, with points increasing to 0.43 from 0.37 (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 3.30 percent from 3.41 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Confidence improved sharply in March to 125.6
Posted: March 28, 2017 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in February, improved sharply in March. The Index now stands at 125.6 (1985=100), up from 116.1 in February. The Present Situation Index rose from 134.4 to 143.1 and the Expectations Index increased from 103.9 last month to 113.8.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was March 16.

“Consumer confidence increased sharply in March to its highest level since December 2000 (Index, 128.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”

Consumers’ appraisal of current conditions improved considerably in March. The percentage saying business conditions are “good” increased from 28.3 percent to 32.2 percent, while those saying business conditions are “bad” decreased from 13.4 percent to 12.9 percent. Consumers’ assessment of the labor market was also more positive. The percentage of consumers stating jobs are “plentiful” rose from 26.9 percent to 31.7 percent, while those claiming jobs are “hard to get” decreased moderately, from 19.9 percent to 19.5 percent.

Consumers were also significantly more optimistic about the short-term outlook. The percentage of consumers expecting business conditions to improve over the next six months increased from 23.9 percent to 27.1 percent, while those expecting business conditions to worsen declined from 10.5 percent to 8.4 percent.

Consumers’ outlook for the labor market was also more upbeat. The proportion expecting more jobs in the months ahead increased from 20.9 percent to 24.8 percent, while those anticipating fewer jobs declined from 13.6 percent to 12.2 percent. The percentage of consumers expecting their incomes to increase improved from 19.2 percent to 21.5 percent, while the proportion expecting a decrease declined from 8.1 percent to 7.0 percent.


Richmond Fed's Current Activity Index gained 5 points to a reading of 22
Posted: March 28, 2017 at 10:00 AM (Tuesday)

Manufacturers in the Fifth District were generally upbeat in March, according to the latest survey by the Federal Reserve Bank of Richmond. The index for shipments and new orders both rose and employment gains were more common. This improvement led to a composite index for manufacturing that rose from 17 in February to 22 in March — the strongest reading for that index since April 2010. In addition to improvement in the employment index, more firms reported longer workweeks and wage increases appeared to be more widespread.

Looking six months ahead, manufacturing executives were generally optimistic, although for some indicators, they were less optimistic than in February. For example, the expected shipments index fell from 53 to 44 and the expected new order index fell from 53 to 48. On the other hand, some indexes rose, such as the indexes for expected employment, average workweek, and wages.

Survey respondents reported that growth in both prices paid and prices received moderated slightly, as did expectations for price growth six months ahead.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.2% in January
Posted: March 28, 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 January 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 5.9% annual gain in January, up from 5.7% last month and setting a 31-month high. The 10-City Composite posted a 5.1% annual increase, up from 4.8% the previous month. The 20-City Composite reported a year-over-year gain of 5.7%, up from 5.5% in December.

Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over each of the last 12 months. In January, Seattle led the way with an 11.3% year-over-year price increase, followed by Portland with 9.7%, and Denver with a 9.2% increase. Twelve cities reported greater price increases in the year ending January 2017 versus the year ending December 2016.

The below charts compare year-over-year returns for Seattle and Portland with different ranges of housing prices (tiers). Tier level analysis from 2011 to present for 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 0.2% in January. The 10-City Composite posted a 0.3% increase and the 20-City Composite reported a 0.2% increase in January. After seasonal adjustment, the National Index recorded a 0.6% month-over-month increase, while both the 10-City and 20-City Composites each reported a 0.9% month-over-month increase. Thirteen of 20 cities reported increases in January before seasonal adjustment; after seasonal adjustment, 19 cities saw prices rise.

ANALYSIS
“Housing and home prices continue on a generally positive upward trend,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The recent action by the Federal Reserve raising the target for the Fed funds rate by a quarter percentage point is expected to add less than a quarter percentage point to mortgage rates in the near future. Given the market’s current strength and the economy, the small increase in interest rates isn’t expected to dampen home buying. If we see three or four additional increases this year, rising mortgage rates could become concern.

“While prices vary month-to-month and across the country, the national price trend has been positive since the first quarter of 2012. In February, the inventory of homes in the market represented 3.7 months of sales, lower than the long-term average of six months. Tight supplies and rising prices may be deterring some people from trading up to a larger house, further aggravating supplies because fewer people are selling their homes. The prices also hurt affordability as higher prices and mortgage rates shrink the number of households that can afford to buy at current price levels. At some point, this process will force prices to level off and decline – however we don’t appear to be there yet.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.9% annual gain in January 2017. The 10-City and 20-City Composites reported year-over-year increases of 5.1% and 5.7%, respectively. As of January 2017, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


Texas Fed Manufacturing Activity Increased in March
Posted: March 27, 2017 at 10:30 AM (Monday)

Texas factory activity increased for the ninth consecutive month in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose two points to 18.6, suggesting output growth picked up pace this month.

Other measures of current manufacturing activity also indicated expansion in March. The new orders index inched down to 9.5, while the growth rate of orders index inched up to 3.2, registering a third positive reading in a row. The capacity utilization and shipments indexes moved down but stayed positive, posting readings of 13.2 and 6.5, respectively.

Perceptions of broader business conditions improved again this month. The general business activity index fell eight points but remained positive at 16.9, and the company outlook index was largely unchanged at 17.9. The March figures represent the sixth and seventh positive readings in a row for general business activity and company outlook indexes, respectively.

Labor market measures indicated employment gains and longer workweeks in March. The employment index posted a third consecutive positive reading and edged down from 9.6 to 8.4. Nineteen percent of firms noted net hiring, compared with 10 percent noting net layoffs. The hours worked index moved up one point to 8.7.

Upward price pressures eased a bit in March, and wages continued to rise at about the same pace. The raw materials prices index fell six points to 25.2, still very high but ending a five-month trend of rising readings. The finished goods prices index fell 12 points to 7.5. The wages and benefits index held fairly steady at 19.7, with nearly 80 percent of firms noting no change in compensation costs.

Expectations regarding future business conditions continue to improve. The indexes of future general business activity and future company outlook came in at 36.3 and 39.1, respectively, exhibiting mixed movements from their February readings but still solidly in positive territory. Most other indexes for future manufacturing activity slipped but remained positive.


February New Orders for Durable Goods increased 1.7%, Ex-Trans up 0.4%
Posted: March 24, 2017 at 08:30 AM (Friday)

New Orders
New orders for manufactured durable goods in February increased $3.9 billion or 1.7 percent to $235.4 billion, the U.S. Census Bureau announced today. This increase, up two consecutive months, followed a 2.3 percent January increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 2.1 percent. Transportation equipment, also up two consecutive months, led the increase, $3.3 billion or 4.3 percent to $80.4 billion.

Shipments
Shipments of manufactured durable goods in February, up three of the last four months, increased $0.6 billion or 0.3 percent to $239.2 billion. This followed a 0.1 percent January decrease. Machinery, also up three of the last four months, led the increase, $0.3 billion or 0.9 percent to $31.1 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in February, down eight of the last nine months, decreased $0.2 billion or virtually unchanged to $1,114.7 billion. This followed a 0.3 percent January decrease. Transportation equipment, also down eight of the last nine months, drove the decrease, $1.1 billion or 0.1 percent to $752.7 billion.


Kansas City Fed Manufacturing Activity strengthened further in March
Posted: March 23, 2017 at 11:00 AM (Thursday)

Tenth District manufacturing activity strengthened further in March, and many indexes of expectations for future activity were at or near record highs. Most price indexes increased moderately.

The month-over-month composite index was 20 in March, its highest reading since March 2011, up from 14 in February and 9 in March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity in both durable and nondurable goods plants increased, particularly for metals, computer, electronic, and aircraft products. Most month-over-month indexes rose further in March. The production and shipments indexes increased considerably, while the new orders and order backlog indexes rose more moderately but remained high. The employment index moderated slightly from 17 to 13, and the new orders for exports index also eased. Both inventory indexes increased for the second straight month.

Most year-over-year factory indexes improved from the previous month. The composite year-over-year index grew from 6 to 14, and the production, shipments, new orders, and order backlog indexes also increased. The employment index jumped from -2 to 17, while the capital expenditures index eased slightly. The raw materials inventory index decreased from 3 to 1, while the finished goods inventory index moved into positive territory.

Expectations for future factory activity increased further to some of the highest levels in survey history. The future composite index edged up from 29 to 32, its highest reading ever. The future production, shipments, and new orders indexes all increased to near-record highs. The future employment index jumped from 30 to 43, its highest level in survey history, and the future capital expenditures index increased moderately. The future raw materials inventory index decreased from 20 to 8, and the future finished goods index also fell modestly.

Price indexes increased moderately in March. The month-over-month finished goods price index rose from 1 to 9, and the raw materials price index also edged up slightly. The year-over-year finished goods price index jumped from 13 to 26, and the raw materials price index also moved higher. The future raw materials price index rose from 53 to 59, and the future finished goods price index also increased.


New Home Sales in February at annual rate of 592,000
Posted: March 23, 2017 at 10:00 AM (Thursday)

Sales of new single-family houses in February 2017 were at a seasonally adjusted annual rate of 592,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.1 percent (±17.3 percent) above the revised January rate of 558,000 and is 12.8 percent (±18.0 percent) above the February 2016 estimate of 525,000.

The median sales price of new houses sold in February 2017 was $296,200. The average sales price was $390,400. The seasonally-adjusted estimate of new houses for sale at the end of February was 266,000. This represents a supply of 5.4 months at the current sales rate.


Weekly Initial Unemployment Claims Increase 15,000 to 258,000
Posted: March 23, 2017 at 08:30 AM (Thursday)

In the week ending March 18, the advance figure for seasonally adjusted initial claims was 258,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 241,000 to 243,000. The 4-week moving average was 240,000, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 1,750 from 237,250 to 239,000.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending March 11, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 11 was 2,000,000, a decrease of 39,000 from the previous week's revised level. The previous week's level was revised up 9,000 from 2,030,000 to 2,039,000. The 4-week moving average was 2,026,750, a decrease of 32,000 from the previous week's revised average. The previous week's average was revised up by 4,500 from 2,054,250 to 2,058,750.


Existing-Home Sales slid 3.7% in February
Posted: March 22, 2017 at 10:00 AM (Wednesday)

After starting the year at the fastest pace in almost a decade, existing-home sales slid in February but remained above year ago levels both nationally and in all major regions, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 3.7 percent to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month's decline, February's sales pace is still 5.4 percent above a year ago.

Lawrence Yun, NAR chief economist, says closings retreated in February as too few properties for sale and weakening affordability conditions stifled buyers in most of the country. "Realtors® are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that's pushing up price growth and pressuring the budgets of prospective buyers," he said. "Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market."

Added Yun, "A growing share of homeowners in NAR's first quarter HOME survey said now is a good time to sell, but until an increase in listings actually occurs, home prices will continue to move hastily."

The median existing-home price for all housing types in February was $228,400, up 7.7 percent from February 2016 ($212,100). February's price increase was the fastest since last January (8.1 percent) and marks the 60th consecutive month of year-over-year gains.

Total housing inventory at the end of February increased 4.2 percent to 1.75 million existing homes available for sale, but is still 6.4 percent lower than a year ago (1.87 million) and has fallen year-over-year for 21 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (3.5 months in January).

All-cash sales were 27 percent of transactions in February (matching the highest since November 2015), up from 23 percent in January and 25 percent a year ago. Individual investors, who account for many cash sales, purchased 17 percent of homes in February, up from 15 percent in January but down from 18 percent a year ago. Seventy-one percent of investors paid in cash in February (matching highest since April 2015).

First-time buyers were 32 percent of sales in February, which is down from 33 percent in January but up from 30 percent a year ago. NAR's 2016 Profile of Home Buyers and Sellers — released in late 2016 — revealed that the annual share of first-time buyers was 35 percent.

"The affordability constraints holding back renters from buying is a signal to many investors that rental demand will remain solid for the foreseeable future," said Yun. "Investors are still making up an above average share of the market right now despite steadily rising home prices and few distressed properties on the market, and their financial wherewithal to pay in cash gives them a leg-up on the competition against first-time buyers."

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage inched up in February to 4.17 percent from 4.15 percent in January. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 45 days in February, down from 50 days in January and considerably more than a year ago (59 days). Short sales were on the market the longest at a median of 214 days in February, while foreclosures sold in 49 days and non-distressed homes took 45 days. Forty-two percent of homes sold in February 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 February were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 27 days; Vallejo-Fairfield, Calif., 33 days; Seattle-Tacoma-Bellevue, Wash., 36 days; and Boulder, Colo., at 37 days.

NAR President William E. Brown, a Realtor® from Alamo, California, says being fully prepared is the right strategy for prospective buyers this spring. "Seek a preapproval from a lender, know what your budget is and begin discussions with a Realtor® early on about your housing wants and needs," he said. "Homes in many areas are selling faster than they were last spring. A buyer's idea of a dream home in a popular neighborhood is probably the same as many others. That's why they'll likely have to decide quickly if they see something they like and can afford."

Distressed sales — foreclosures and short sales — were 7 percent of sales for the third straight month in February, and are down from 10 percent a year ago. Six percent of February sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in February (14 percent in January), while short sales were discounted 17 percent (10 percent in January).

Single-family and Condo/Co-op Sales
Single-family home sales declined 3.0 percent to a seasonally adjusted annual rate of 4.89 million in February from 5.04 million in January, and are now 5.8 percent above the 4.62 million pace a year ago. The median existing single-family home price was $229,900 in February, up 7.6 percent from February 2016.

Existing condominium and co-op sales descended 9.2 percent to a seasonally adjusted annual rate of 590,000 units in February, but are still 1.7 percent higher than a year ago. The median existing condo price was $216,100 in February, which is 8.2 percent above a year ago.

Regional Breakdown
February existing-home sales in the Northeast slumped 13.8 percent to an annual rate of 690,000, but are still 1.5 percent above a year ago. The median price in the Northeast was $250,200, which is 4.1 percent above February 2016.

In the Midwest, existing-home sales fell 7.0 percent to an annual rate of 1.20 million in February, but are still 2.6 percent above a year ago. The median price in the Midwest was $171,700, up 6.1 percent from a year ago.

Existing-home sales in the South in January rose 1.3 percent to an annual rate of 2.34 million, and are now 5.9 percent above February 2016. The median price in the South was $205,300, up 9.6 percent from a year ago.

Existing-home sales in the West decreased 3.1 percent to an annual rate of 1.25 million in February, but are 9.6 percent above a year ago. The median price in the West was $339,900, up 9.6 percent from February 2016.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: March 22, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 17, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 5 percent higher than the same week one year ago. The Government Refinance Index decreased 12 percent to the lowest level since December 2014.

The refinance share of mortgage activity decreased to 45.1 percent of total applications from 45.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.0 percent of total applications, the highest level since October 2014.

The FHA share of total applications decreased to 10.9 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.1 percent from 11.1 percent the week prior. The USDA share of total applications remained unchanged at 0.9 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 4.46 percent, with points increasing to 0.41 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.40 percent from 4.44 percent, with points increasing to 0.37 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since January 2014, 4.33 percent, from 4.29 percent, with points increasing to 0.40 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.68 percent from 3.66 percent, with points decreasing to 0.37 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 decreased to 3.41 percent from 3.45 percent, with points increasing to 0.25 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


4Q2016 Current Account Deficit Decreased
Posted: March 21, 2017 at 08:30 AM (Tuesday)

The U.S. current-account deficit decreased to $112.4 billion (preliminary) in the fourth quarter of 2016 from $116.0 billion (revised) in the third quarter of 2016, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit decreased to 2.4 percent of current-dollar gross domestic product (GDP) from 2.5 percent in the third quarter.

The $3.6 billion decrease in the current-account deficit mostly reflected a $19.9 billion increase in the surplus on primary income that was largely offset by a $17.5 billion increase in the deficit on goods. The changes in the surplus on services and the deficit on secondary income were relatively small.


Philadelphia NonManufacturing Activity Indicators continued to grow in March
Posted: March 21, 2017 at 08:30 AM (Tuesday)

The March Nonmanufacturing Business Outlook Survey indicated that business activity continued to expand in the region. The survey’s indicators for firm-level general activity, new orders, and sales/revenues fell from last month’s readings but remained positive. The indexes for employment improved, with respondents reporting overall increases in both full-time and part-time employees. Firms reported increases in input prices and decreases in prices for their own goods and services. Expectations for growth over the next six months remained high; however, optimism at the firm level has moderated over the past two months.

Indicators for Current Activity Fall, but Growth Remains Positive
Firms continued to report growth in overall business activity, but many of the survey’s current indicators fell this month. The diffusion index for general activity at the firm level edged down, from 38.0 in February to 32.5 in March (see Chart 1). Nearly 49 percent of the firms reported an increase in activity at their firms, while 16 percent reported a decrease. This index remained above its historical average of 28.4. Firms reported a strengthening in their perception of current regional economic activity, and the diffusion index for regional activity rose 6 points to 35.4. The sales/revenues index decreased for the second consecutive month, to 20.3, as the share of firms reporting an increase fell from 45 percent in February to 36 percent in March. The new orders index also decreased, from 25.3 last month to 22.6 this month. Thirty-six percent of the respondents reported increases in new orders, compared with the 13 percent who reported decreases.

Full-time and Part-time Employment Expands
The full-time employment index increased 5 points to 17.2, rising above its historical average of 14.3 (see Chart 2). Nearly 25 percent of the firms reported an increase in full-time employment, and 7 percent reported a decrease. The part-time employment index also rose 5 points, to 10.2. More than 20 percent of the firms reported an increase in part-time employment, and 10 percent reported a decrease. The average workweek index rose 6 points to 18.9, while the wages and benefits index fell 4 points to 22.3.

Input Prices Rise Slightly
Firms reported overall increases in input prices and decreases in the prices for their own goods and services. The prices paid index rose 3 points to 18.0 but remains below its historical average of 20.1. A larger share of firms reported increases in input prices (20 percent) than decreases (2 percent), but most firms reported no change (72 percent). Similarly, 76 percent of the firms reported no change in prices received for their own goods or services. Nonetheless, the prices received index decreased 3 points to -4.7, as 9 percent of the firms reported decreases in prices received compared with the 4 percent that reported increases.

Capital Expenditures Weaken
Indicators for spending on equipment and software and physical plant decreased for the second consecutive month but remained positive. The index for equipment and software spending fell 9 points to 19.9. Although the share of firms reporting increases in spending on equipment and software (25 percent) exceeded the share reporting decreases (5 percent), nearly 57 percent of the firms reported no change, up from 41 percent in February. The index for physical plant spending decreased 4 points to 21.4.

Expectations for Future Growth Remain Optimistic
The respondents to this month’s survey remained optimistic about future activity over the next six months. Although the diffusion index for future activity at the firm level decreased 4 points to 53.8, it remains above its historical average of 49.5 (see Chart 1). Nearly 61 percent of the respondents expect increases in activity at their firms over the next six months, while 7 percent expect decreases. The diffusion index for future activity at the regional level rose 4 points to 52.6. Nearly 57 percent of the respondents expect increases in activity in the region, and only 4 percent expect decreases.

Summary
Respondents to the Nonmanufacturing Business Outlook Survey reported that business expansion continued in March. Although the indicators for general current activity at the firm level, new orders, and sales/revenues decreased from last month’s readings, they remain positive, suggesting overall growth. Firms reported overall increases in full-time and part-time employment. Expectations for growth over the next six months remained optimistic.


Chicago Fed National Activity Growth increased in February
Posted: March 20, 2017 at 08:30 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, improved to +0.25 in February from +0.07 in January, reaching its highest level since December 2014. February’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.17 in February from +0.02 in January. Fifty-five of the 85 individual indicators made positive contributions to the CFNAI in February, while 30 made negative contributions. Sixty-three indicators improved from January to February, while 22 indicators deteriorated. Of the indicators that improved, 15 made negative contributions.

Employment-related indicators contributed +0.21 to the CFNAI in February, up from +0.06 in January. The civilian unemployment rate edged down to 4.7 percent in February from 4.8 percent in January; and civilian nonagricultural employment increased by 444,000 in February, following a decrease of 229,000 in the previous month.

The contribution from production-related indicators to the CFNAI edged up to +0.09 in February from +0.04 in January. Manufacturing production increased 0.5 percent for the second consecutive month in February, while total industrial production was unchanged in February after decreasing by 0.1 percent in January. The sales, orders, and inventories category made a contribution of +0.08 to the CFNAI in February, up from –0.01 in January. The Institute for Supply Management’s Manufacturing Purchasing Managers’ New Orders Index increased to 65.1 in February from 60.4 in January.

The contribution of the personal consumption and housing category to the CFNAI increased to –0.03 in February from –0.11 in January. Housing starts increased to 1,288,000 annualized units in February from 1,251,000 in January, but housing permits decreased to 1,213,000 annualized units in February from 1,293,000 in the previous month.

The CFNAI was constructed using data available as of March 17, 2017. At that time, February data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The January monthly index value was revised to –0.02 from an initial estimate of –0.05, and the December monthly index value was revised to +0.41 from last month’s estimate of +0.18. Revisions to the monthly index value can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the January monthly index value was primarily due to the former, while the revision to the December monthly index value was primarily due to the latter.


U.S. Leading Economic Index increased 0.6% in February
Posted: March 17, 2017 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in February to 126.2 (2010 = 100), following a 0.6 percent increase in January, and a 0.6 percent increase in December.

“After six consecutive monthly gains, the U.S. LEI is at its highest level in over a decade. Widespread gains across a majority of the leading indicators points to an improving economic outlook for 2017, although GDP growth is likely to remain moderate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “Only housing permits contributed negatively to the LEI in February, reversing gains over the previous two months.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in February to 114.9 (2010 = 100), following a 0.1 percent increase in January, and a 0.4 percent increase in December.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in February to 123.5 (2010 = 100), following a 0.2 percent increase in January, and a 0.3 percent increase in December.


University of Michigan Consumer Confidence Preliminary March Results at 97.6
Posted: March 17, 2017 at 10:00 AM (Friday)

The overall level of consumer sentiment remained quite favorable in early March due to renewed strength in current economic conditions as well as the extraordinary influence of partisanship on economic prospects. The Current Economic Conditions component reached its highest level since 2000, largely due to improved personal finances. While current economic conditions were not affected by partisanship, this was not true for the component about future economic prospects: among Democrats, the Expectations Index at 55.3 signaled that a deep recession was imminent, while among Republicans the Index at 122.4 indicated a new era of robust economic growth was ahead. Interestingly, those who self-identified as Independents had an Expectations Index of 88.3, which was nearly equal to the midpoint of the partisan difference. Importantly, there was no moderation in these extreme views from last month, with the maintenance of the partisan divide fueled by selective attention to economic news, with Democrats more frequently reporting unfavorable developments and Republicans more frequently hearing of favorable changes. Overall, the sentiment data has been characterized by rising optimism as well as by rising uncertainty due to the partisan divide. Optimism promotes discretionary spending, and uncertainty makes consumers more cautious spenders. This combination will result in uneven spending gains over time and across products.


Industrial Production unchanged%
Capacity Utilization fell to 75.4%

Posted: March 17, 2017 at 09:15 AM (Friday)

Industrial production was unchanged in February following a 0.1 percent decrease in January. In February, manufacturing output moved up 0.5 percent for its sixth consecutive monthly increase. Mining output jumped 2.7 percent, but the index for utilities fell 5.7 percent, as continued unseasonably warm weather further reduced demand for heating. At 104.7 percent of its 2012 average, total industrial production in February was 0.3 percent above its level of a year earlier. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4 percent, a rate that is 4.5 percentage points below its long-run (1972–2016) average


Job Openings was little changed at 5.6 million in January
Posted: March 16, 2017 at 10:00 AM (Thursday)

he number of job openings was little changed at 5.6 million on the last business day of January, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5.4 million and 5.3 million, respectively. Within separations, the quits rate was little changed at 2.2 percent and the layoffs and discharges rate was unchanged at 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions. The release also includes 2016 annual estimates for hires and separations. The annual number of hires at 62.7 million in 2016 was essentially the same as in 2015. The annual number of quits at 36.1 million increased in 2016 while the annual number of layoffs and discharges at 19.9 million declined.


February Housing Starts up 3.0%, Permits down 6.2%
Posted: March 16, 2017 at 08:30 AM (Thursday)

Building Permits
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,213,000. This is 6.2 percent (±1.8 percent) below the revised January rate of 1,293,000, but is 4.4 percent (±1.3 percent) above the February 2016 rate of 1,162,000. Single-family authorizations in February were at a rate of 832,000; this is 3.1 percent (±1.5 percent) above the revised January figure of 807,000. Authorizations of units in buildings with five units or more were at a rate of 334,000 in February.

Housing Starts
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,288,000. This is 3.0 percent (±13.0 percent)* above the revised January estimate of 1,251,000 and is 6.2 percent (±10.4 percent)* above the February 2016 rate of 1,213,000. Single-family housing starts in February were at a rate of 872,000; this is 6.5 percent (±10.9 percent)* above the revised January figure of 819,000. The February rate for units in buildings with five units or more was 396,000.

Housing Completions
Privately-owned housing completions in February were at a seasonally adjusted annual rate of 1,114,000. This is 5.4 percent (±9.6 percent)* above the revised January estimate of 1,057,000 and is 8.7 percent (±12.1 percent)* above the February 2016 rate of 1,025,000. Single-family housing completions in February were at a rate of 754,000; this is 6.5 percent (±9.7 percent)* below the revised January rate of 806,000. The February rate for units in buildings with five units or more was 344,000.


Philadelphia Fed Outlook Reported Activity continued to expand in March
Posted: March 16, 2017 at 08:30 AM (Thursday)

Results from the March Manufacturing Business Outlook Survey suggest that regional manufacturing activity continued to expand. The diffusion index for general activity fell from its high reading in February, but the survey’s other broad indicators for new orders, shipments, and employment all improved or were steady this month. Price pressures also picked up, according to reporting firms. The survey’s future indicators continued to improve and reflect a broadening base of optimism about future growth in manufacturing.

Current Indicators Suggest Expansion Continues
The index for current manufacturing activity in the region decreased from a reading of 43.3 in February to 32.8 this month. The index has been positive for eight consecutive months and remains at a relatively high reading (see Chart 1). Forty-four percent of the firms indicated increases in activity in March, while 11 percent reported decreases. The current new orders and shipments indexes increased, rising 1 point and 4 points, respectively. Both the delivery times and unfilled orders indexes were positive for the fifth consecutive month, suggesting longer delivery times and an increase in unfilled orders.

Firms reported an increase in manufacturing employment and work hours this month. The percentage of firms reporting an increase in employment (25 percent) exceeded the percentage reporting a decrease (8 percent). The current employment index improved 6 points, its fourth consecutive positive reading. Firms also reported an increase in work hours this month: The average workweek index, which increased 5 points, has been positive for five consecutive months.

Price Pressures Pick Up
The survey’s diffusion indexes for prices remained positive and increased from their readings in February. On the cost side, 41 percent of the firms reported increases in the prices paid for inputs; no firms reported paying lower prices. The prices paid index moved 11 points higher to 40.7, its highest reading since May 2011 (see Chart 2). With respect to prices received for firms’ own manufactured goods, 25 percent of the firms reported higher prices, and 4 percent reported lower prices. The prices received index increased 10 points.

Most Future Indicators Reflect Continued Optimism
The diffusion index for future general activity increased from 53.5 to 59.5 and is now at its highest reading since August 2014 (see Chart 1). Sixty-six percent of the manufacturers expect increases in activity over the next six months, while only 7 percent expect declines. The indexes for future new orders and shipments also moved up, increasing 10 points and 3 points, respectively. Firms also marked up their forecasts for employment increases. The future employment diffusion index increased 10 points to 38.5. One-half of the firms expect to increase employment over the next six months. Nearly 36 percent expect increases in work hours. Firms were also more optimistic about capital spending this month: The future capital spending diffusion index rose 12 points.

Firms Perceive Skills Mismatch and Report Unfilled Positions
In special questions this month, firms were asked about problems filling key positions with special labor skill requirements (see Special Questions). Firms were asked generally about worker shortages, any perceived mismatch between skill requirements and labor supply, and how they were dealing with such skills shortages. More than 60 percent of the firms reported labor shortages, while a higher percentage (68 percent) indicated skills mismatch between requirements and available labor. These percentages were notably higher than the responses the last time the questions were asked in May 2014. More than 47 percent of the surveyed firms also reported that they had positions that have remained vacant for more than 90 days, an increase from the 33 percent that reported vacancies in 2014. Nearly 45 percent of the firms reported that the skills associated with most of their key job openings required some college/technical training; 35 percent indicated that the key positions required only high school diplomas; and only 12 percent indicated that a college degree was required. Increasing recruitment efforts and providing additional training to existing staff were the most frequently cited actions to deal with the cited skills shortages. Nearly 46 percent of the firms reported increasing wages to address the skills shortage problem.

Summary
Responses to the March Manufacturing Business Outlook Survey suggest growth for the region’s manufacturing sector. All the broad indicators remained at positive readings with most indicators improving from their February readings. Increased price pressures were also in evidence this month. Indicators reflecting firms’ expectations for the next six months remained at high levels and showed continued improvement, suggesting expectations of continued growth in the manufacturing sector.


Weekly Initial Unemployment Claims Decrease 2,000 to 241,000
Posted: March 16, 2017 at 08:30 AM (Thursday)

In the week ending March 11, the advance figure for seasonally adjusted initial claims was 241,000, a decrease of 2,000 from the previous week's unrevised level of 243,000. The 4-week moving average was 237,250, an increase of 750 from the previous week's unrevised average of 236,500.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending March 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 4 was 2,030,000, a decrease of 30,000 from the previous week's revised level. The previous week's level was revised up 2,000 from 2,058,000 to 2,060,000. The 4-week moving average was 2,054,250, a decrease of 11,750 from the previous week's revised average. The previous week's average was revised up by 500 from 2,065,500 to 2,066,000.


Treasury International Capital Data for January 2017
Posted: March 15, 2017 at 04:00 PM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for January 2017. The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $110.4 billion. Of this, net foreign private inflows were $144.1 billion, and net foreign official outflows were $33.6 billion.

Foreign residents increased their holdings of long-term U.S. securities in January; net purchases were $14.7 billion. Net purchases by private foreign investors were $63.4 billion, while net sales by foreign official institutions were $48.7 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $8.4 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $6.3 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $1.1 billion in January.

Foreign residents increased their holdings of U.S. Treasury bills by $2.7 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $7.2 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $102.1 billion.


FOMC target funds range raised to 3/4 - 1.0%
Posted: March 15, 2017 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving close to the Committee's 2 percent longer-run objective; excluding energy and food prices, inflation was little changed and continued to run somewhat 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 expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 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.

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, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

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; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action was Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.


Builder Confidence jumped 6 points to 71 in March
Posted: March 15, 2017 at 10:00 AM (Wednesday)

Builder confidence in the market for newly-built single-family homes jumped six points to a level of 71 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since June 2005.

“Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“While builders are clearly confident, we expect some moderation in the index moving forward,” said NAHB Chief Economist Robert Dietz. “Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.”

All three HMI components posted robust gains in March. The component gauging current sales conditions increased seven points to 78 while the index charting sales expectations in the next six months rose five points to 78. Meanwhile, the component measuring buyer traffic jumped eight points to 54.

Looking at the three-month moving averages for regional HMI scores, the Midwest increased three points to 68 and the South rose one point to 68. The West dipped three points to 76 and the Northeast edged one point lower to 48.


Business Inventories up 0.3% in January
Posted: March 15, 2017 at 10:00 AM (Wednesday)

The combined value of distributive trade sales and manufacturers’ shipments for January, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,359.3 billion, up 0.2 percent (±0.2 percent)* from December 2016 and was up 6.4 percent (±0.4 percent) from January 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,841.4 billion, up 0.3 percent (±0.1 percent) from December 2016 and were up 2.3 percent (±0.3 percent) from January 2016.

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


Consumer Price Index increased 0.1% in February, Ex Fd & Engy up 0.2%
Posted: March 15, 2017 at 08:30 AM (Wednesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.7 percent before seasonal adjustment.

The February increase was the smallest 1-month rise in the seasonally adjusted all items index since July 2016. The gasoline index declined, partially offsetting increases in several indexes, including food, shelter, and recreation. The energy index fell 1.0 percent, with the decline in gasoline outweighing increases in the other energy component indexes. The food index increased 0.2 percent over the month, its largest rise since September 2015.

The index for all items less food and energy rose 0.2 percent in February. The indexes for shelter, recreation, apparel, airline fares, motor vehicle insurance, education, and medical care were among those that increased in February. Indexes that declined include communication, used cars and trucks, new vehicles, and household furnishings and operations.

The all items index rose 2.7 percent for the 12 months ending February; the 12-month increase has been trending upward since a July 2016 trough of 0.8 percent. The index for all items less food and energy rose 2.2 percent over the last 12 months; this was the fifteenth straight month the 12-month change remained in the range of 2.1 to 2.3 percent. The energy index rose 15.2 percent over the last year, while the food index was unchanged.


Real Average Hourly Earnings increased 0.1% in February
Posted: March 15, 2017 at 08:30 AM (Wednesday)

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

Real average weekly earnings increased 0.1 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 were unchanged, seasonally adjusted, from February 2016 to February 2017. The unchanged real average hourly earnings combined with a 0.3-percent decrease in the average workweek resulted in a 0.3-percent decrease in real average weekly earnings over this period.


Empire State Manufacturing Survey Conditions continued to expand in March
Posted: March 15, 2017 at 08:30 AM (Wednesday)

Business activity continued to grow at a solid clip in New York State, according to firms responding to the March 2017 Empire State Manufacturing Survey. The headline general business conditions index edged down two points to 16.4. The new orders index climbed to 21.3, its highest level in several years, pointing to a substantial increase in orders. The shipments index moved down to 11.3, indicating that shipments increased at a slower pace. The unfilled orders index rose to 14.2, its highest level in more than a decade, and delivery times lengthened. Labor market conditions pointed to an increase in both employment and hours worked. Input prices and selling prices increased at a slower pace this month. Indexes assessing the six-month outlook, although generally somewhat lower, continued to convey a high degree of optimism about future conditions.

Business Expansion Continues
Manufacturing firms in New York State reported that business activity continued to expand at a steady pace. After reaching its highest level in more than two years last month, the general business conditions index edged down two points to 16.4—its fifth consecutive positive reading. According to 34 percent of respondents, conditions had improved over the month, while 18 percent reported that conditions had worsened. The new orders index climbed eight points to 21.3, its highest level since 2009, pointing to a sizeable increase in orders. The shipments index fell seven points to 11.3, indicating that shipments increased at a slower pace. The unfilled orders index rose six points to 14.2, its highest level since 2004. The delivery time index moved up to 10.6, a sign of longer delivery times, and the inventories index dipped below zero, suggesting that inventory levels were slightly lower.

Employment Indexes Climb Further
After turning positive last month, employment indexes continued to march upward, pointing to continued improvement in labor market conditions. The index for number of employees rose to 8.8, and the average workweek index rose to 15.0. Price increases slowed. The prices paid index fell seven points to 31.0, and the prices received index moved down eleven points to 8.8.

Firms Remain Optimistic
Although future indexes were generally lower, indexes assessing the six-month outlook suggested that firms remained highly optimistic about future conditions. The index for future business conditions fell four points to 37.4. Employment and hours worked are expected to increase in the months ahead. The capital expenditures index edged up to 23.9, while the technology spending index fell eight points to 8.0.


U.S. Retail Sales for February Increase 0.1%, Ex-Auto up 0.2%
Posted: March 15, 2017 at 08:30 AM (Wednesday)

Advance estimates of U.S. retail and food services sales for February 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.0 billion, an increase of 0.1 percent (±0.5 percent)* from the previous month, and 5.7 percent (±0.9 percent) above February 2016. Total sales for the December 2016 through February 2017 period were up 5.4 percent (±0.7 percent) from the same period a year ago. The December 2016 to January 2017 percent change was revised from up 0.4 percent (±0.5 percent)* to up 0.6 percent (±0.3 percent).

Retail trade sales were up 0.1 percent (±0.5 percent)* from January 2017, and up 5.9 percent (±0.7 percent) from last year. Gasoline Stations sales were up 19.6 percent (±1.4 percent) from February 2016, while Nonstore Retailers were up 13.0 percent (±1.8 percent) from last year.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: March 15, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 10, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 6 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 45.6 percent of total applications from 45.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.2 percent of total applications, the highest level since October 2014.

The FHA share of total applications decreased to 11.1 percent from 11.8 percent the week prior. The VA share of total applications decreased to 11.1 percent from 11.6 percent the week prior. The USDA share of total applications remained unchanged at 0.9 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to its highest level since April 2014, 4.46 percent, from 4.36 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to its highest level since April 2014, 4.44 percent, from 4.27 percent, with points increasing to 0.28 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since January 2014, 4.29 percent, from 4.18 percent, with points increasing to 0.39 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.66 percent from 3.57 percent, with points increasing to 0.45 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.45 percent from 3.48 percent, with points increasing to 0.24 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Producer Price Index increased 0.3% in February, ex Fd & Engy up 0.3%
Posted: March 14, 2017 at 08:30 AM (Tuesday)

The Producer Price Index for final demand increased 0.3 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.6 percent in January and 0.2 percent in December. (See table A.) On an unadjusted basis, the final demand index climbed 2.2 percent for the 12 months ended February 2017, the largest advance since a 2.4-percent increase in the 12 months ended March 2012.

In February, over 80 percent of the advance in the final demand index is attributable to a 0.4 percent increase in prices for final demand services. The index for final demand goods moved up 0.3 percent.

Prices for final demand less foods, energy, and trade services rose 0.3 percent in February, the largest increase since a 0.3-percent advance in April 2016. For the 12 months ended in February, the index for final demand less foods, energy, and trade services climbed 1.8 percent.


NFIB Small Business Optimism Index fell 0.6 in February to 105.3
Posted: March 14, 2017 at 07:00 AM (Tuesday)

The Index of Small Business Optimism fell 0.6 points to 105.3, sustaining the remarkable surge in optimism that started November 9, 2016, the day after the election. Three of the 10 Index components posted a gain, six declined, all by just a few points, and one was unchanged. It is encouraging that the Index has held at 105 for three months now, and not faded. Monthly data were not available in the 1983 recovery for comparison when the record Index reading was last reached. Optimism has not faded, but the enthusiasm has yet to be translated into an equally impressive increase in spending and hiring. This will require progress on the agenda that business owners voted for.

The latest government statistics on growth confirmed that, contrary to the claims of many economists, the new Administration has not inherited a “strong” economy. The 1.6 percent GDP for 2016 hardly ranks among our better growth periods and the last eight years have not been much better. Coming out of the recession, small business owners were greeted with a large tax bill, Obamacare, and a fizzled stimulus package that mostly preserved the jobs of government workers, rather than stimulating economic growth. An avalanche of regulations followed, all through the recovery period. The growth we experienced was definitely in spite of government policy, not because of it. The private sector is stubbornly persistent when it comes to growth, regardless of obstacles.

The Federal Reserve will raise rates another 25 basis points, but this still leaves interest rates historically low. The percent of owners reporting paying higher interest rates on their last loan jumped 7 points to 11 percent in January and held at 9 percent in February, after averaging less than 2 percent since the recovery started in 2009. The interest rate is one of the most important prices in the economy, allocating capital to its highest valued uses. Since 2009, there has been very little movement as Fed policy has paralyzed the functioning of interest rates. The sooner the Federal Reserve restores the role of interest rates, the healthier the economy will become.

Evidence on the economy is mixed, the New York Federal Reserve puts first quarter growth at 3.1 percent while the Atlanta Federal Reserve is looking for 1.8 percent. Both have access to the same data. Growth will make everyone, regardless of politics, feel better. However, the gulf between liberals and conservatives is large. The University of Michigan/Reuters poll in February illustrated this, with the Expectations Index at 55 among Democrats, 120 for Republicans and 89 for Independents. The Democrats expect the worst, the Republicans the best. Spontaneous positive references to economic policy were made by a record 28 percent of consumers, 26 percent made negative references. Reality will resolve the gap.


Employment Trends Index increased in February to 131.39
Posted: March 13, 2017 at 10:53 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in February, after decreasing slightly in January. The index now stands at 131.39, up from 129.91 (a downward revision) in January. The change represents a 3.1 percent gain in the ETI compared to a year ago.

“The Employment Trends Index increased sharply in February, with positive contributions from each of its eight components, providing more evidence that job growth is accelerating,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “It seems that higher business confidence is carrying over to hiring. As a result, in 2017 labor supply constraints will be strongly felt across many industries and locations.”

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


February Employment increased by 235,000
Unemployment Rate dipped to 4.7%

Posted: March 10, 2017 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate was little changed at 4.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in construction, private educational services, manufacturing, health care, and mining.

Household Survey Data
The number of unemployed persons, at 7.5 million, changed little in February. The unemployment rate, at 4.7 percent, was little changed over the month but was down from 4.9 percent a year earlier.

Among the major worker groups, the unemployment rate decreased for Whites to 4.1 percent in February, while the jobless rates for adult men (4.3 percent), adult women (4.3 percent), teenagers (15.0 percent), Blacks (8.1 percent), Asians (3.4 percent), and Hispanics (5.6 percent) showed little or no change.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.8 million in February and accounted for 23.8 percent of the unemployed. Over the year, the number of long-term unemployed was down by 358,000.

In February, the labor force participation rate, at 63.0 percent, and the employment-population ratio, at 60.0 percent, showed little change.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 5.7 million in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

In February, 1.7 million persons were marginally attached to the labor force, little different 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 522,000 discouraged workers in February, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force in February had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment increased by 235,000 in February. Job gains occurred in construction, private educational services, manufacturing, health care, and mining.

In February, construction employment increased by 58,000, with gains in specialty trade contractors (+36,000) and in heavy and civil engineering construction (+15,000). Construction has added 177,000 jobs over the past 6 months.

Employment in private educational services rose by 29,000 in February, following little change in the prior month (-5,000). Over the year, employment in the industry has grown by 105,000.

Manufacturing added 28,000 jobs in February. Employment rose in food manufacturing (+9,000) and machinery (+7,000) but fell in transportation equipment (-6,000). Over the past 3 months, manufacturing has added 57,000 jobs.

Health care employment rose by 27,000 in February, with a job gain in ambulatory health care services (+18,000). Over the year, health care has added an average of 30,000 jobs per month.

Employment in mining increased by 8,000 in February, with most of the gain occurring in support activities for mining (+6,000). Mining employment has risen by 20,000 since reaching a recent low in October 2016.

Employment in professional and business services continued to trend up in February (+37,000). The industry has added 597,000 jobs over the year.

Retail trade employment edged down in February (-26,000), following a gain of 40,000 in the prior month. Over the month, job losses occurred in general merchandise stores (-19,000); sporting goods, hobby, book, and music stores (-9,000); and electronics and appliance stores (-8,000).

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

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in February. In manufacturing, the workweek was unchanged at 40.8 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls has been 33.6 hours since August 2016.

In February, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $26.09, following a 5-cent increase in January. Over the year, average hourly earnings have risen by 71 cents, or 2.8 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.86 in February.

The change in total nonfarm payroll employment for December was revised down from +157,000 to +155,000, and the change for January was revised up from +227,000 to +238,000. With these revisions, employment gains in December and January combined were 9,000 more than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 209,000 per month.


U.S. Import Price Index increased 0.2% in February
Posted: March 9, 2017 at 08:30 AM (Thursday)

Prices for U.S. imports advanced 0.2 percent in February, the U.S. Bureau of Labor Statistics reported today, led by higher nonfuel import prices which more than offset lower fuel prices. The February rise in import prices followed a 0.6-percent increase the previous month. U.S. export prices rose 0.3 percent in February, after advancing 0.2 percent in January.


Weekly Initial Unemployment Claims Increase 20,000 to 243,000
Posted: March 9, 2017 at 08:30 AM (Thursday)

In the week ending March 4, the advance figure for seasonally adjusted initial claims was 243,000, an increase of 20,000 from the previous week's unrevised level of 223,000. The 4-week moving average was 236,500, an increase of 2,250 from the previous week's unrevised average of 234,250.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending February 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 25 was 2,058,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 2,066,000 to 2,064,000. The 4-week moving average was 2,065,500, a decrease of 5,250 from the previous week's revised average. The previous week's average was revised down by 500 from 2,071,250 to 2,070,750.


Challenger Layoffs drop to 36,957 jobs in February
Posted: March 9, 2017 at 07:30 AM (Thursday)

The shortest month of the year saw a decline in layoff announcements, as US-employers announced plans to cut 36,957 jobs in February, 19 percent fewer than the 45,934 cuts announced in January, according to the latest report from global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

Last month’s total was 40 percent lower than the 61,599 cuts announced in February. Employers have announced 82,891 job cuts so far this year, which is a 40 percent decline from the 136,713 job cuts announced through February of last year.

Retail continues to lead all sectors in job cuts as the industry pivots toward online and shrinks brick-and-mortar operations. Retailers announced 11,889 job cuts in February for a two-month total of 34,380. Retail cuts are nearly 580 percent more than the 5,930 cuts recorded in the energy sector, the next highest industry so far this year.

“Retailers are experiencing a tremendous transformation from the traditional business model. The cost of digitizing merchandise, moving sales to online, and downsizing physical stores will likely take a toll on employees in this field,” said Andrew Challenger, vice president of Challenger, Gray & Christmas.

The largest layoff announcement last month came from JC Penney which will close 140 stores and cut 5,500 jobs. Grand Rapids-based Family Christian Stores is closing 240 stores in 36 states eliminating 1,300 workers, while L.L. Bean announced buyouts to over 900 staff in an effort to trim 10 percent of its workforce.

“Despite the cuts, this shift in retail will ultimately create new opportunities for job seekers, but they will need the requisite skills. The new retail employee will need considerable tech abilities, in addition to the necessary customer service experience,” added Challenger.

Indeed, retailers are seemingly adding jobs just as quickly as they are cutting. Through February, Challenger has tracked over 33,000 hiring plans announced by retailers. According to the latest data from the Bureau of Labor Statistics, retail experienced the most job gains in January with 46,000 jobs added.

The energy sector, meanwhile, recorded an 87 percent decline in job cut announcements compared to this point last year. Energy companies announced 5,930 cuts through February this year, versus 45,154 job cuts during the same period in 2016. Oil and gas companies announced 3,281 of the 4,077 energy sector job cuts last month.

“The energy sector announced over 107,000 jobs last year. It seems the bleeding has stopped for now. The new administration and EPA chief Scott Pruitt have already enacted legislation to aid oil & gas companies, but it remains to be seen if those actions will result in more jobs,” said Challenger.

February saw an increase in financial cuts as employers in this sector announced 3,292. That is 1,166 percent more than the 260 announced in January and 227 percent more than the 1,006 cuts announced in February 2016.

“The finance industry is experiencing its own shift to digital, which while causing job loss is also creating jobs. Finance experienced the third most job gains in January, according to the BLS,” noted Challenger.

Hiring announcements are at an all-time high, according to Challenger tracking. In the first two months of the year, employers have announced plans to hire 162,266 workers, the bulk of which came from Amazon’s January announcement to hire 100,000 workers. That is the highest January-February hiring total on record. The next highest total for the first two months of the year occurred in 2013, when employers announced plans to hire 152,957 workers.


Wholesale Inventories down 0.2% in January
Posted: March 8, 2017 at 10:00 AM (Wednesday)

January 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 $463.6 billion, down 0.1 percent (±0.5 percent) from the revised December level, but were up 8.4 percent (±0.9 percent) from the January 2016 level. The November 2016 to December 2016 percent change was revised from the preliminary estimate of up 2.6 percent (±0.7 percent) to up 2.4 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 $600.0 billion at the end of January, down 0.2 percent (±0.2 percent) from the revised December level. Total inventories are up 2.2 percent (±0.9 percent) from the revised January 2016 level. The December 2016 to January 2017 percent change was revised from the advance estimate of down 0.1 percent (±0.2 percent) to down 0.2 percent (±0.2 percent).

The January Inventories/Sales Ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.29. The January 2016 ratio was 1.37.


Help Wanted OnLine Labor Demand decreased 360,200 to 4,537,600 in February
Posted: March 8, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 360,200 to 4,537,600 in February, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The January Supply/Demand rate stands at 1.56 unemployed for each advertised vacancy, with a total of 2.7 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.6 million in January.

The Professional occupational category saw losses in Healthcare Practitioners (-48.6), Computer/Math (-28.3) and Management (-24.7). The Services/Production occupational category saw losses in Office/Admin (-43.8), Transportation (-41.7), and Sales (-22.5).

NOTE: Recently, the HWOL Data Series has experienced a declining trend in the number of online job ads that may not reflect broader trends in the U.S. labor market. Based on changes in how job postings appear online, The Conference Board is reviewing its HWOL methodology to ensure accuracy and alignment with market trends.


4Q2016 Productivity Growth Increased 1.3%
Posted: March 8, 2017 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity increased at a 1.3-percent annual rate during the fourth quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked increased 1.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2015 to the fourth quarter of 2016, productivity increased 1.0 percent, reflecting increases in output and hours worked of 2.2 percent and 1.2 percent, respectively. Annual average productivity increased 0.2 percent from 2015 to 2016.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Measures released today were based on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 1.7 percent in the fourth quarter of 2016, reflecting a 3.0-percent increase in hourly compensation and a 1.3-percent increase in productivity. Unit labor costs increased 2.0 percent over the last four quarters.

Manufacturing sector labor productivity increased 2.0 percent in the fourth quarter of 2016, as output increased 1.6 percent and hours worked decreased 0.4 percent. Output per hour increased 1.5 percent in the durable goods manufacturing sector and 2.7 percent in the nondurable goods sector. Over the last four quarters, manufacturing sector productivity increased 0.5 percent, as output increased 0.5 percent and hours worked were unchanged. (See tables A1, 3, 4, and 5.) Unit labor costs in manufacturing increased 2.4 percent in the fourth quarter of 2016 and rose 2.1 percent from the same quarter a year ago. Hourly compensation increased 4.4 percent in the fourth quarter of 2016.

Revised and previous measures for the fourth quarter of 2016 are shown in table B1 for the business, nonfarm business, and manufacturing sectors. In the fourth quarter of 2016, nonfarm business productivity was not revised, increasing at the same 1.3-percent rate reported February 2; both output and hours worked were revised up slightly to rates of 2.4 percent and 1.0 percent, respectively. Unit labor costs were not revised, increasing at the same 1.7 percent rate as previously reported.

Manufacturing productivity increased 2.0 percent rather than 0.7 percent in the fourth quarter of 2016, reflecting both an upward revision to output and a downward revision to hours. Because the upward revision to productivity was larger than an upward revision to hourly compensation, manufacturing unit labor costs increased 2.4 percent, rather than the 3.3-percent rate reported in the preliminary release. (See table B1.)

In the third quarter of 2016, nonfarm business productivity growth was revised down slightly to an increase of 3.3 percent, due solely to a small upward revision to hours. Unit labor costs increased 0.7 percent, more than previously reported, reflecting a downward revision to productivity and a 0.4 percentage point upward revision to hourly compensation. In the manufacturing sector, productivity was unchanged from the second quarter to the third quarter of 2016, as previously reported. Unit labor costs were revised up and increased 4.1 percent, rather than 3.3 percent as previously reported, reflecting an upward revision to hourly compensation. (See table B2.) Nonfinancial corporate sector productivity increased 6.3 percent in the third quarter of 2016, slightly lower than previously reported, with the revision due solely to an upward revision to hours. (See table A2.)

Table C1 presents annual average changes for the most recent 5 years for the nonfarm business sector and the total manufacturing sector. Annual average changes in productivity, output, and hours for the nonfarm business sector in 2016 were the same as the preliminary estimates: productivity grew 0.2 percent, output increased 1.7 percent, and hours worked increased 1.5 percent. Productivity increased at an average annual rate of 0.6 percent over the last 5 years (2011 to 2016), well below the long-term rate of 2.1 percent from 1947 to 2016.

Unit labor costs in the nonfarm business sector rose 2.6 percent in 2016, reflecting increases of 2.9 percent in hourly compensation and 0.2 percent in productivity. Real hourly compensation, which takes into account changes in consumer prices, increased 1.6 percent in 2016. In each of the last 3 years (2014, 2015, and 2016), real hourly compensation growth has outpaced productivity growth; prior to 2014, the last year in which real hourly compensation had grown faster than productivity was 2000.

In the manufacturing sector, productivity increased 0.3 percent in 2016, similar to the 0.2-percent rate in 2015; in both years productivity was revised down due to an upward revision to hours worked. Manufacturing productivity increased at an average annual rate of 0.5 percent over the last 5 years (2011 to 2016), which is well below the growth rate of 3.2 percent from 1987 to 2016. Unit labor costs increased 2.7 percent in 2016, rather than 2.6 percent as reported February 2.


ADP National Employment Report increased by 298,000 jobs in February
Posted: March 8, 2017 at 08:15 AM (Wednesday)

Private sector employment increased by 298,000 jobs from January to February according to the February ADP National Employment Report®.

“February proved to be an incredibly strong month for employment with increases we have not seen in years,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Gains were driven by a surge in the goods sector, while we also saw the information industry experience a notable increase.”

Mark Zandi, chief economist of Moody’s Analytics said, “February was a very good month for workers. Powering job growth were the construction, mining and manufacturing industries. Unseasonably mild winter weather undoubtedly played a role. But near record high job openings and record low layoffs underpin the entire job market.”


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: March 8, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending March 3, 2017. The previous week's results included an adjustment for the President's Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week to the highest level since December 2016. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 15 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 45.4 percent of total applications from 45.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.7 percent of total applications to the highest level since October 2014. The average loan size for purchase applications reached a survey high at $313,300.

The FHA share of total applications decreased to 11.8 percent from 12.3 percent the week prior. The VA share of total applications decreased to 11.6 percent from 11.7 percent the week prior. The USDA share of total applications remained unchanged at 0.9 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.36 percent from 4.30 percent, with points increasing to 0.44 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.27 percent from 4.23 percent, with points increasing to 0.26 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.18 percent from 4.07 percent, with points decreasing to 0.32 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.57 percent from 3.51 percent, with points remaining unchanged at 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.48 percent from 3.35 percent, with points decreasing to 0.20 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Credit Increased at an annual rate of 2.75%
Posted: March 7, 2017 at 03:00 PM (Tuesday)

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


Goods and Services Deficit Increased in January 2017
Posted: March 7, 2017 at 08:30 AM (Tuesday)

The Nation's international trade deficit in goods and services increased to $48.5 billion in January from $44.3 billion in December (revised), as imports increased more than exports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $48.5 billion in January, up $4.2 billion from $44.3 billion in December, revised. January exports were $192.1 billion, $1.1 billion more than December exports. January imports were $240.6 billion, $5.3 billion more than December imports.

The January increase in the goods and services deficit reflected an increase in the goods deficit of $4.0 billion to $69.7 billion and a decrease in the services surplus of $0.3 billion to $21.2 billion.

Year-over-year, the goods and services deficit increased $5.1 billion, or 11.8 percent, from January 2016. Exports increased $13.3 billion or 7.4 percent. Imports increased $18.4 billion or 8.3 percent.


Paychex-IHS Small Business Jobs Index increased to 100.78 in February
Posted: March 7, 2017 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index continued to increase in February, rising to 100.78, up 0.16 percent from the previous month and 0.39 percent for the quarter. Not only has the national index increased for three consecutive months, but the rate of growth has increased each month as well. The national index, however, is approximately flat to February 2016, up just 0.03 percent.

East South Central continues to lead small business growth among regions, improving its pace 1.83 percent year-over-year, followed by South Atlantic. Tennessee once again leads all states. Top-ranked for the third consecutive month at 103.85, Atlanta spiked 0.93 percent, its best one-month gain in nearly three years. Financial Activities jumped 0.53 percent in February, the best one-month gain among the industry sectors.

“Since November, small business job conditions have shown broad-based improvement as all industries and regions have positive three-month growth rates,” said James Diffley, chief regional economist at IHS Markit.

“After three months of continued small business employment growth, it appears that business optimism following the election is now translating to jobs,” said Martin Mucci, Paychex president and CEO.


New orders for manufactured goods increased 1.2% in January
Posted: March 6, 2017 at 10:00 AM (Monday)

New orders for manufactured goods in January, up six of the last seven months, increased $5.5 billion or 1.2 percent to $470.2 billion, the U.S. Census Bureau reported today. This followed a 1.3 percent December increase. Shipments, up ten of the last eleven months, increased $1.1 billion or 0.2 percent to $478.3 billion. This followed a 2.5 percent December increase. Unfilled orders, down seven of the last eight months, decreased $4.0 billion or 0.4 percent to $1,114.1 billion. This followed a 0.8 percent December decrease. The unfilled orders-to-shipments ratio was 6.57, down from 6.59 in December. Inventories, up six of the last seven months, increased $1.0 billion or 0.2 percent to $627.9 billion. This followed a 0.3 percent December increase. The inventories-to-shipments ratio was 1.31, unchanged from December.

New Orders
New orders for manufactured durable goods in January, up following two consecutive monthly decreases, increased $4.5 billion or 2.0 percent to $230.7 billion, up from the previously published 1.8 percent increase. This followed a 0.9 percent December decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $4.5 billion or 6.2 percent to $76.5 billion. New orders for manufactured nondurable goods increased $1.0 billion or 0.4 percent to $239.5 billion.

Shipments
Shipments of manufactured durable goods in January, up four of the last five months, increased $0.1 billion or virtually unchanged to $238.8 billion, up from the previously published 0.1 percent decrease. This followed a 1.7 percent December increase. Fabricated metal products, up six of the last seven months, drove the increase, $0.4 billion or 1.3 percent to $31.4 billion. Shipments of manufactured nondurable goods, up ten of the last eleven months, increased $1.0 billion or 0.4 percent to $239.5 billion. This followed a 3.4 percent December increase. Petroleum and coal products, up five of the last six months, drove the increase, $1.1 billion or 2.4 percent to $45.3 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in January, down seven of the last eight months, decreased $4.0 billion or 0.4 percent to $1,114.1 billion, virtually unchanged from the previously published decrease. This followed a 0.8 percent December decrease. Transportation equipment, also down seven of the last eight months, drove the decrease, $5.4 billion or 0.7 percent to $753.1 billion.

Inventories
Inventories of manufactured durable goods in January, up two of the last three months, increased $0.3 billion or 0.1 percent to $384.1 billion, up from the previously published virtually unchanged increase. This followed a 0.1 percent December decrease. Computers and electronic products, up three of the last four months, drove the increase, $0.4 billion or 0.9 percent to $42.9 billion. Inventories of manufactured nondurable goods, up five of the last six months, increased $0.8 billion or 0.3 percent to $243.8 billion. This followed a 0.9 percent December increase. Petroleum and coal products, also up five of the last six months, drove the increase, $0.8 billion or 2.8 percent to $30.3 billion. By stage of fabrication, January materials and supplies increased 0.4 percent in durable goods and decreased 0.2 percent in nondurable goods. Work in process increased 0.1 percent in durable goods and 0.5 percent in nondurable goods. Finished goods decreased 0.4 percent in durable goods and increased 0.6 percent in nondurable goods.


ISM Non-Manufacturing Index increased to 57.6% in February
Posted: March 3, 2017 at 10:00 AM (Friday)

Economic activity in the non-manufacturing sector grew in February for the 86th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 57.6 percent, which is 1.1 percentage points higher than the January reading of 56.5 percent. This is the highest reading since October 2015 and represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 63.6 percent, 3.3 percentage points higher than the January reading of 60.3 percent, which is the highest reading since February 2011, when the index registered 63.8 percent, reflecting growth for the 91st consecutive month, at a faster rate in February. The New Orders Index registered 61.2 percent, 2.6 percentage points higher than the reading of 58.6 percent in January. This is the highest reading since August 2015, when the index registered 62.7 percent. The Employment Index increased 0.5 percentage point in February to 55.2 percent from the January reading of 54.7 percent. The Prices Index decreased 1.3 percentage points from the January reading of 59 percent to 57.7 percent, indicating prices increased for the 11th consecutive month, at a slower rate in February. According to the NMI®, 16 non-manufacturing industries reported growth in February. The non-manufacturing sector reflected strong growth in February after cooling off in January. Respondents’ comments continue to be mixed, with some uncertainty; however, the majority indicate a positive outlook on business conditions and the overall economy.

INDUSTRY PERFORMANCE
The 16 non-manufacturing industries reporting growth in February — listed in order — are: Utilities; Mining; Management of Companies & Support Services; Other Services; Accommodation & Food Services; Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Professional, Scientific & Technical Services; Finance & Insurance; Public Administration; Educational Services; Wholesale Trade; Arts, Entertainment & Recreation; Retail Trade; Transportation & Warehousing; and Construction. The two industries reporting contraction in February are: Real Estate, Rental & Leasing; and Information.


New York Purchasing Managers Business Activity dropped in February to 51.3
Posted: March 2, 2017 at 08:30 AM (Thursday)

New York City purchasing managers reported slower growth while still indicating a faster pace of activity in February, according to the survey taken by the Institute for Supply Management-New York. With the exception of Employment, which fell below the breakeven point in February, all report indices stayed in growth territory, even as future optimism eased for the third consecutive month. Two indices - Quantity of Purchases and Current Revenues - increased over January's findings.

New York Metro
Current Business Conditions came in at 51.3 in February, continuing the slide from December's fourteen-month high. The Six-Month Outlook decreased to 58.2 in February, continuing to ease from the eighteen month high seen in December. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, decreased to 43.2 in February after rising above the breakeven point in January for only the fourth time in twelve months. Quantity of Purchases came in at 53.3 in February after briefly falling below the breakeven point in January.

News for the top line and forward guidance continued to be positive. Current Revenues were 62.1 in February, one of two indices to increase this month. Expected Revenues fell slightly to 66.7 in February, staying squarely in growth territory. Prices Paid decreased yet again, falling to 51.8 in February.


Weekly Initial Unemployment Claims Decrease 19,000 to 223,000
Posted: March 2, 2017 at 08:30 AM (Thursday)

In the week ending February 25, the advance figure for seasonally adjusted initial claims was 223,000, a decrease of 19,000 from the previous week's revised level. This is the lowest level for initial claims since March 31, 1973 when it was 222,000. The previous week's level was revised down by 2,000 from 244,000 to 242,000. The 4-week moving average was 234,250, a decrease of 6,250 from the previous week's revised average. This is the lowest level for this average since April 14, 1973 when it was 232,750. The previous week's average was revised down by 500 from 241,000 to 240,500.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending February 18, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 18 was 2,066,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,060,000 to 2,063,000. The 4-week moving average was 2,071,250, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 750 from 2,069,750 to 2,070,500.


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

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

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