Research >> Economics

Category: Research - Topic: Economics


Texas Manufacturing Activity Activity Stalls and Outlook Worsens in January
Posted: January 26, 2015 at 10:30 AM (Monday)

Texas factory activity was flat in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in at 0.7, indicating output was essentially unchanged from December.

Other survey measures also reflected sluggish activity during the month. The capacity utilization index fell to 5.1, its lowest reading in five months. The shipments index plunged from 20.8 to 6, due to a much higher share of respondents noting a decline in shipments in January than in December. The new orders index moved down from 2.7 to -7.7, registering its first negative reading since April 2013.

Perceptions of broader business conditions worsened this month, with both the general business activity index and the company outlook index dropping below zero for the first time in 20 months. The general business activity index dropped to -4.4, and the company outlook index fell 13 points, coming in at -3.8.

Labor market indicators reflected unchanged workweeks but continued employment increases. The employment index was 9.0 in January, slightly below last month’s level but close to its average reading over the past two years. Twenty percent of firms reported net hiring compared with 11 percent reporting net layoffs. The hours worked index edged down from 0.7 to -0.1, indicating no change in hours worked in January.

Wage pressures eased, while input and selling prices declined in January. The raw materials price index came in at -1.7, its first negative reading in more than five years. The finished goods price index fell 11 points to -6.7, after posting positive readings during the past 17 months. Looking ahead, 29 percent of respondents anticipate increases in raw materials prices over the next six months, while 19 percent expect declines. The wages and benefits index receded from 25.2 to 19.1, suggesting some moderation in upward pressure on compensation costs.

Indexes reflecting future business conditions fell notably in January. The index of future general business activity plummeted from 13 to -6.4. The index of future company outlook plunged from 21.8 to 2.5, its lowest reading in more than two years. Indexes for future manufacturing activity also declined this month but remained in positive territory.


Existing-Home Sales rose 2.4% in December
Posted: January 23, 2015 at 10:00 AM (Friday)

Despite low inventory conditions, existing-home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of Realtors®. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1 percent from 2013.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4 percent to a seasonally adjusted annual rate of 5.04 million in December from a downwardly-revised 4.92 million in November. From a year ago, December sales were higher by 3.5 percent and are now above year-over-year levels for the third straight month.

For all of 2014, there were 4.93 million sales, a 3.1 percent decline from 2013 (5.09 million). The national median existing-home price was $208,500, the highest since 2007 ($219,000) and a 5.8 percent increase from 2013 ($197,100).

Sales picked up in December to close a 2014 that got off to a sluggish start but showed encouraging signs of activity the second half of the year. Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated. Sales were measurably better in the second half – up 8 percent compared to the first six months of the year.

Total housing inventory at the end of December dropped 11.1 percent to 1.85 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace – down from 5.1 months in November. Unsold inventory is now 0.5 percent lower than a year ago (1.86 million).

A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4 percent interest rates. Housing costs – both rents and home prices – continue to outpace wages and are burdensome for potential buyers trying to save for a downpayment while looking for available homes in their price range.

The median existing-home price for all housing types in December was $209,500, which is 6.0 percent above December 2013. This marks the 34th consecutive month of year-over-year price gains.

The percent share of first-time buyers was 29 percent in December, down from 31 percent in November but up from a year ago (27 percent). First-time buyers in 2014 represented an average of 29 percent for the second straight year. A separate NAR survey released in late 2014 revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades.

Realtors® are optimistic the Federal Housing Administration’s plan to reduce annual mortgage insurance premiums will have a positive impact on first-time buyers once it goes into effect on January 26. NAR is a strong supporter of the FHA and its vital role in the mortgage marketplace for homebuyers. Realtors® support responsible lending to qualified borrowers and the move to lower premiums will enable more buyers to enter the market while continuing to protect taxpayers from the risky lending practices that led to the housing crash.

All-cash sales were 26 percent of transactions in December, up from 25 percent in November and 32 percent in December of last year. Individual investors, who account for many cash sales, purchased 17 percent of homes in December, up from last month (15 percent) but down from December 2013 (21 percent). Sixty-three percent of investors paid cash in December.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in December fell to 3.86 percent, its lowest level since May 2013 (3.54 percent), and down from 4.00 percent in November. The average annual rate was 4.17 percent in 2014.

Distressed sales – foreclosures and short sales – were up slightly in December (11 percent) from November (9 percent) but are down from 14 percent a year ago. Eight percent of December sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in December (17 percent in November), while short sales were discounted 12 percent (13 percent in November).

Properties typically stayed on the market the same amount of time in December (66 days) as November (65 days) but for a slightly shorter time frame than a year ago (72 days). Short sales were on the market the longest at a median of 98 days in December, while foreclosures sold in 61 days and non-distressed homes took 66 days. Thirty-one percent of homes sold in December were on the market for less than a month.

Single-family and Condo/Co-op Sales

Single-family home sales increased 3.5 percent to a seasonally adjusted annual rate of 4.47 million in December from 4.32 million in November, and are 4.0 percent above the 4.30 million pace a year ago. The median existing single-family home price was $210,200 in December, up 6.3 percent from December 2013.

Existing condominium and co-op sales declined 5.0 percent to a seasonally adjusted annual rate of 570,000 units in December from 600,000 in November, and are unchanged from a year ago. The median existing condo price was $204,000 in December, which is 3.2 percent higher than a year ago.


U.S. Leading Economic Index increased 0.5%
Posted: January 23, 2015 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.5 percent in December to 121.1 (2010 = 100), following a 0.4 percent increase in November, and a 0.6 percent increase October.

December’s gain in the LEI was driven by a majority of its components, suggesting the short-term outlook is getting brighter and the economy continues to build momentum. Still, a lack of growth in residential construction and average weekly hours in manufacturing remains a concern. Current economic conditions measured by the coincident indicators show employment and income gains are helping to keep the U.S. economy on a solid expansionary path despite some weakness in industrial production.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in December to 111.4 (2010 = 100), following a 0.5 percent increase in November, and a 0.3 percent increase in October.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in December to 115.0 (2010 = 100), following a 0.3 percent increase in November, and no change in October.


This month's release will incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, with this benchmark revision, the base year of the composite indexes was changed to 2010 = 100 from 2004 = 100. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.


Chicago Fed National Activity moderated in December
Posted: January 23, 2015 at 08:30 AM (Friday)

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.05 in December from +0.92 in November. None of the four broad categories of indicators that make up the index increased from November, and two of the four categories made negative contributions to the index in December.

The index’s three-month moving average, CFNAI-MA3, moved down to +0.39 in December from +0.54 in November. December’s CFNAI-MA3 suggests that growth in national economic activity was above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests modest inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.25 in December from +0.37 in November. Forty of the 85 individual indicators made positive contributions to the CFNAI in December, while 45 made negative contributions. Thirty-three indicators improved from November to December, while 52 indicators deteriorated. Of the indicators that improved, 14 made negative contributions.

Production-related indicators made a contribution of –0.12 to the CFNAI in December, down from +0.71 in November. Industrial production decreased 0.1 percent in December after moving up 1.3 percent in November, and manufacturing production increased 0.3 percent in December after a gain of 1.3 percent in November. However, manufacturing capacity utilization remained at 78.4 percent in December.

Employment-related indicators contributed +0.16 to the CFNAI in December, down somewhat from +0.21 in November. Nonfarm payrolls increased by 252,000 in December, down from a gain of 353,000 in the previous month. However, the unemployment rate decreased to 5.6 percent in December from 5.8 percent in November. The contribution of the sales, orders, and inventories category to the CFNAI remained at +0.03 in December.

The contribution of the consumption and housing category to the CFNAI decreased to –0.12 in December from –0.03 in November. Housing permits decreased to 1,032,000 annualized units in December from 1,052,000 in November. However, housing starts increased to 1,089,000 annualized units in December from 1,043,000 in the previous month.

The CFNAI was constructed using data available as of January 21, 2015. At that time, December data for 49 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The November monthly index was revised to +0.92 from an initial estimate of +0.73. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the November monthly index was due nearly equally to each factor.


Kansas City Fed Manufacturing Activity expanded at a slower pace in January
Posted: January 22, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity expanded at a slower pace in January, but producers’ expectations for future activity remained at solid levels. Most price indexes were lower than last month, especially for finished goods prices.

The month-over-month composite index was 3 in January, down from 8 in December and 6 in November . The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declines in some types of durable goods production, particularly electronics, machinery, and metal products, some of which is likely due to lower energy activity. Looking across District states, the weakest activity was in energy-dependent Oklahoma. In contrast, nondurable goods producers reported a slight increase in production, especially for food and plastics products. Most other month-over-month indexes were also down compared to last month. The production, shipments, and new orders indexes moved into negative territory for the first time in over a year, and the employment index posted a five-month low. The order backlog index plunged from 5 to -20, and the new orders for exports index decreased from 0 to -7. The finished goods inventory index continued to rise somewhat, and the raw materials inventory index moved up from 7 to 12.

Year-over-year factory indexes were lower than the previous month. The composite year-over-year index edged down from 11 to 9, and the production, new orders, shipments, and order backlog indexes all posted their lowest levels in over a year. The employment index moderated from 18 to 11, and the capital expenditures index eased further. The new orders for exports index fell into negative territory, while both inventory indexes increased slightly.

Future factory indexes continued to remain stable at mostly solid levels. The future composite index was unchanged at 19, while the future production, shipments, and new orders indexes inched higher. In contrast, the future order backlog index dropped from 17 to 3, and the future employment index eased from 30 to 24. The future capital expenditures index moderated from 25 to 16 after increasing last month. The future finished goods inventory index fell from 18 to 7, and the future raw materials inventory index also decreased slightly.

Most price indexes slowed modestly in January. The month-over-month finished goods price index declined from 1 to -3, its lowest level since July 2010, while the raw materials price index was basically unchanged. The year-over-year raw materials price index eased slightly, and the finished goods price index dropped from 34 to 19. The future raw materials price index moderated from 36 to 31, while the future finished goods price index was basically unchanged.


DJ-BTMU U.S. Business Barometer picked up by 0.4%
Posted: January 22, 2015 at 10:00 AM (Thursday)

For the week ending January 10 2015, the DJ-BTMU U.S. Business Barometer picked up by 0.4 percent to 98.9 after a sharp drop in the previous week. This week’s barometer was partially fueled by strong recovery in production indexes, in which electric output bounced back by 10.1 percent after falling in prior weeks; while truck production picked up by 25.3 percent. Good performances in consumption indexes were equally important. MBA’s purchase index skyrocketed by 23.6 percent, and freight car loadings increased by 4.4 percent.

On a year-over-year basis, the barometer showed a gain of 1.8 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, declined by 0.2 percent to 99.1. Its year-over-year growth rate was 1.1 percent.


Weekly Initial Unemployment Claims Decrease 10,000 to 307,000
Posted: January 22, 2015 at 08:30 AM (Thursday)

In the week ending January 17, the advance figure for seasonally adjusted initial claims was 307,000, a decrease of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 316,000 to 317,000. The 4-week moving average was 306,500, an increase of 6,500 from the previous week's revised average. The previous week's average was revised up by 2,000 from 298,000 to 300,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending January 10, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 10 was 2,443,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 2,424,000 to 2,428,000. The 4-week moving average was 2,427,000, an increase of 9,000 from the previous week's revised average. The previous week's average was revised up by 3,500 from 2,414,500 to 2,418,000.


December Housing Starts up 4.4%, Permits down 1.9%
Posted: January 21, 2015 at 08:30 AM (Wednesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,032,000. This is 1.9 percent (±1.3%) below the revised November rate of 1,052,000, but is 1.0 percent (±1.1%) above the December 2013 estimate of Single-family authorizations in December were at a rate of 667,000; this is 4.5 percent (±0.8%) above the revised November figure of 638,000. Authorizations of units in buildings with five units or more were at a rate of 338,000 in December. An estimated 1,032,900 housing units were authorized by building permits in 2014. This is 4.2 percent (±0.9%) above the 2013 figure of 990,800.

HOUSING STARTS
Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,089,000. This is 4.4 percent (±11.7%) above the revised November estimate of 1,043,000 and is 5.3 percent (±12.7%) above the December 2013 rate of 1,034,000. Single-family housing starts in December were at a rate of 728,000; this is 7.2 percent (±10.6%) above the revised November figure of 679,000. The December rate for units in buildings with five units or more was 339,000. An estimated 1,005,800 housing units were started in 2014. This is 8.8 percent (±2.9%) above the 2013 figure of 924,900.

HOUSING COMPLETIONS
Privately-owned housing completions in December were at a seasonally adjusted annual rate of 927,000. This is 6.3 percent (±12.9%) above the revised November estimate of 872,000 and is 19.6 percent (±14.2%) above the December 2013 rate of 775,000. Single-family housing completions in December were at a rate of 667,000; this is 9.5 percent (±12.0%) above the revised November rate of 609,000. The December rate for units in buildings with five units or more was 254,000. An estimated 883,000 housing units were completed in 2014. This is 15.5 percent (±3.2%) above the 2013 figure of 764,400.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 21, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 14.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 16, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 14.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 17 percent compared with the previous week. The Refinance Index increased 22 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 3 percent higher than the same week one year ago.

Mortgage application volume increased last week to its highest level since June 2013, led by a 22 percent increase in refinance application volume. This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week. Even with this increase, refinances made up only 48 percent of FHA volume, compared to 73 percent for VA, and 77 percent for conventional loans.

Conventional purchase applications were down about 3 percent for the week on a seasonally adjusted basis, but up 5 percent relative to last year at this time. FHA purchase applications were down 1 percent for the week on a seasonally adjusted basis.

MBA now provides additional data regarding the composition and level of application activity for government loan programs, including breakouts for FHA, VA, and USDA loans. Historical data for these new series are available to subscribers.

Conventional refinance applications increased 21 percent relative to the previous week, while government refinances increased 29 percent. The increase in government refinances was driven by a 57 percent surge in applications for FHA loans, which also boosted the FHA share of refinance applications to 5.2 percent from 4.1 percent the prior week.

The refinance share of mortgage activity increased to 74 percent of total applications, the highest level since May 2013, from 71 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.

The FHA share of total applications increased to 8.0 percent this week from 7.5 percent last week. The VA share of total applications decreased to 9.4 percent this week from 9.7 percent last week. The USDA share of total applications decreased to 0.6 percent from 0.8 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.80 percent, the lowest level since May 2013, from 3.89 percent, with points increasing to 0.29 from 0.23 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.86 percent, the lowest level since May 2013, from 3.88 percent, with points remaining unchanged at 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.66 percent, the lowest level since May 2013, from 3.71 percent, with points increasing to 0.15 from -0.05 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.10 percent, the lowest level since May 2013, from 3.16 percent, with points decreasing to 0.29 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.87 percent, the lowest level since June 2013, from 2.94 percent, with points decreasing to 0.41 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Philadelphia December Nonmanufacturing activity slowed in January
Posted: January 20, 2015 at 10:00 AM (Tuesday)

The pace of regional nonmanufacturing activity slowed in January, according to firms responding to this month's Nonmanufacturing Business Outlook Survey. The survey's indicators for general activity, new orders, and sales or revenues all decreased but remained positive. Responding firms continue to be optimistic about activity over the next six months.

Nonmanufacturing Activity Slowed
The diffusion index for current activity at the firm level decreased from 47.5 to 8.8 in January, its lowest reading since February 2014 (see Chart above). The percentage of respondents reporting increases in activity (44 percent) exceeded the percentage of respondents reporting decreases (35 percent). Responding firms had similar sentiments about activity in the region. About 41 percent of the respondents indicated increasing activity in the region compared with 32 percent that indicated decreasing activity, and the general activity index also fell to 8.8.

Demand for firms' services, as measured by the new orders and sales/revenues indexes, decreased but remained positive this month. The new orders index decreased from 25.0 in December to 14.7 in January. The percentage of firms reporting increases in new orders in January (41 percent) was little changed from last month; however, the percentage of firms reporting decreases rose from 18 percent last month to almost 27 percent this month. The sales/revenues index experienced a sharper drop, falling 24 points to 8.8, its lowest reading since February 2014, as fewer firms reported increases this month compared with last month.

Hiring Continued but Hours Fell
Survey results suggest mixed labor market conditions this month, on balance. The full-time employment index decreased 5 points, to 17.6. More than 29 percent of the respondents reported increases to full-time staff levels, down slightly from 33 percent last month. The part-time employment index increased from 15.0 in December to 20.6 in January. The workweek index decreased for the third consecutive month, to -5.9, and registered its lowest reading since January 2012.

Firms Reported Slight Increase in Input Prices
The prices of inputs rose for firms on net in January. The percentage of respondents reporting increases in input prices (21 percent) exceeded the percentage of respondents reporting decreases (6 percent). The prices paid index increased 10 points, to 14.7. The share of firms reporting no change in input prices decreased slightly from last month to 56 percent. Firms reported near steady prices for their own goods and services, as indicated by the prices received index decreasing 2 points to 2.9. Half of the responding firms also reported no change in prices, while the percentage of firms reporting increases (18 percent) edged out the percentage of firms reporting decreases (15 percent).

Capital Expenditures Growth Remained Positive
Firms continued to report increases, on net, in capital expenditures this month, particularly for equipment and software, though both indexes retreated from last month's readings. More than 32 percent of the respondents reported increases in equipment and software spending. The equipment and software expenditures index decreased 7 points, to 20.6, but remains near its average reading for 2014. The index for expenditures on physical plant remained positive but fell 7 points, to 2.9.

Future Indicators Remain High
Optimism about future activity over the next six months both at individual firms and in the region remained widespread despite decreases in both index readings. None of the respondents expect activity six months from now to decrease either at their own firms or in the region. Nearly 62 percent of the respondents expect activity to increase at their firms; however, the firm-level future general activity index decreased 11 points, to 61.8 (see Chart above). The future activity index for the region also decreased but remained high, at 82.4.

Firms Benefited from Lower Energy Prices
In this month's special question, respondents were asked about the effect of lower oil prices on their businesses (see Special Question). On net, lower oil prices have had a positive effect for local nonmanufacturing firms. Nearly 55 percent of the respondents reported a positive impact, compared with 9 percent of the respondents who reported a negative impact. More than 21 percent of the firms reported no impact because of the lower prices.

Summary
The January Nonmanufacturing Business Outlook Survey results suggest slower expansion in the region among nonmanufacturing firms. Index readings for general activity at both the company and regional levels, new orders, and sales/revenues remained positive but decreased from December readings. Firms remained optimistic about future growth.


Builder Confidence declined 1 points in January to 57
Posted: January 20, 2015 at 10:00 AM (Tuesday)

Builder confidence in the market for newly-built single-family homes declined one point to 57, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index released today. This marks the third straight month that the index has hovered in the upper 50s range.

After seven months above the key 50 benchmark, builder sentiment is reflecting the gradual improvement that is occurring in many markets throughout the nation,.

January’s HMI reading is in line with our forecast as we head into the new year. Steady economic growth, rising consumer confidence and a growing labor market will help the housing market continue to move forward in 2015.

The HMI component gauging current sales conditions remained unchanged at 62 in January while the index measuring expectations for future sales dropped four points to 60 and the component gauging traffic of prospective buyers fell two points to 44.

Looking at the three-month moving averages for regional HMI scores, the West rose by four points to 66, the Midwest registered a three-point gain to 57 and the Northeast was up two points to 47. The South dropped two points to 58.


Treasury International Capital Data for November 2014
Posted: January 16, 2015 at 04:00 PM (Friday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for November 2014. The sum total in November of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $6.3 billion. Of this, net foreign private outflows were $2.9 billion, and net foreign official outflows were $3.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in November; net purchases were $59.2 billion. Net purchases by private foreign investors were $53.0 billion, while net purchases by foreign official institutions were $6.2 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $25.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $33.5 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign acquisitions of long-term securities are estimated to have been $21.0 billion in November.

Foreign residents increased their holdings of U.S. Treasury bills by $8.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $4.0 billion. Banks' own net dollar-denominated liabilities to foreign residents decreased by $31.3 billion.


Industrial Production decreased 0.1%
Capacity Utilization decreased 0.3% to 79.7%

Posted: January 16, 2015 at 09:15 AM (Friday)

Industrial production decreased 0.1 percent in December after rising 1.3 percent in November. The decrease in December reflected a sharp drop in the output of utilities, as warmer-than-usual temperatures reduced demand for heating; excluding utilities, industrial production rose 0.7 percent. Manufacturing posted a gain of 0.3 percent for its fourth consecutive monthly increase. The index for mining increased 2.2 percent after falling in the previous two months. At 106.5 percent of its 2007 average, total industrial production in December was 4.9 percent above its level of a year earlier. For the fourth quarter of 2014 as a whole, industrial production advanced at an annual rate of 5.6 percent, with widespread gains among the major market and industry groups. Capacity utilization for the industrial sector decreased 0.3 percentage point in December to 79.7 percent, a rate that is 0.4 percentage point below its long-run (1972–2013) average


Consumer Price Index declined 0.4% in December, Ex Fd & Engy unch%
Posted: January 16, 2015 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.4 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 0.8 percent before seasonal adjustment.

The gasoline index continued to fall sharply, declining 9.4 percent and leading to the decrease in the seasonally adjusted all items index. The fuel oil index also fell sharply, and the energy index posted its largest one-month decline since December 2008, although the indexes for natural gas and for electricity both increased. The food index, in contrast, rose 0.3 percent, its largest increase since September.

The index for all items less food and energy was unchanged in December, following a 0.2 percent increase in October and a 0.1 percent rise in November. This was only the second time since 2010 that it did not increase. The shelter index continued to rise, and the index for medical care posted its largest increase since August 2013. However, these increases were offset by declines in a broad array of indexes including apparel, airline fares, used cars and trucks, household furnishings and operations, and new vehicles.

The all items index increased 0.8 percent over the last 12 months. This is notably lower than the 1.3 percent change for the 12 months ending November. The energy index has declined 10.6 percent over the span. In contrast, the 3.4 percent increase in the food index is its largest 12-month increase since February 2012. The index for all items less food and energy has increased 1.6 percent over the last 12 months, its smallest 12-month change since the 12 months ending February 2014.


Real Average Hourly Earnings rose 0.1% in December
Posted: January 16, 2015 at 08:30 AM (Friday)

Real average hourly earnings for all employees rose 0.1 percent from November to December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.2 percent decrease in average hourly earnings combined with a 0.4 percent decrease in the Consumer Price Index for All Urban Consumers (CPI-U).

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

Real average hourly earnings increased by 1.0 percent, seasonally adjusted, from December 2013 to December 2014. This increase in real average hourly earnings, combined with a 0.9 percent increase in the average workweek, resulted in a 1.9 percent increase in real average weekly earnings over this period.


Philadelphia January Outlook Suggest Slower Pace of Growth
Posted: January 15, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased modestly in January, according to firms responding to this month’s Manufacturing Business Outlook Survey. The survey’s current indicators for general activity and new orders fell from their readings in December, suggesting a slower pace of growth. Firms reported continued moderation in price pressures, attributable to lower energy costs. Overall, firms reported that lower energy prices were having overall net positive effects on manufacturing business. The survey’s indicators of future activity show continued optimism about continued growth over the next six months.

Indicators Suggest Slower Pace of Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased 18 points, from a revised reading of 24.3 in December to 6.3 this month. Demand for manufactured goods, as measured by the current new orders index, decreased 5 points, from a revised reading of 13.6 last month to 8.5 this month. Shipments also fell, with its index falling 22 points to -6.9, its first negative reading since February 2014. Firms reported shorter delivery times and a decrease in unfilled orders this month, on balance.

Firms’ responses suggest weaker labor market conditions in January. The percentage of firms reporting a decrease in employees (15 percent) exceeded the percentage reporting an increase (13 percent) for the first time in 19 months. The current employment index fell 10 points, from 8.4 to -2.0. Firms also reported reductions in the workweek: The percentage of firms reporting a shorter workweek (23 percent) was greater than the percentage reporting a longer workweek (16 percent).

Firms Report Continued Moderation in Input Prices
Input price pressures continued to decline for reporting manufacturers: The prices paid index fell 5 points to 9.8 in January and has now declined 15 points over the past three months (see Chart 2). Most firms (68 percent) reported that input prices were unchanged. With respect to prices received for manufactured goods, nearly the same percentage of firms reported price reductions (8 percent) as reported price increases (8 percent). The prices received index fell 10 points to just below zero, its lowest reading in 21 months. The largest percentage of firms (84 percent) reported no change in manufactured good prices.

Most Future Indicators Remain at High Levels
The diffusion index for future activity edged up by less than 1 point, to 50.9, in January and has remained near its current level over the past five months (see Chart 1). The future index for new orders held steady, but the future shipments index fell 7 points. More than 52 percent of the firms are expecting no change in their employment levels over the next six months, while the percentage expecting increases (33 percent) was substantially greater than the percentage expecting employment decreases (8 percent). The future employment index decreased slightly, from a revised reading of 24.9 in December to 24.0 in January.

Energy Price Reductions Are Having a Net Positive Effect
In this month’s special questions, firms were asked about the effects of lower oil prices on manufacturing business (see Special Questions). The responses indicate that the effects have been positive for most firms. Nearly 63 percent of the firms reported positive effects, while 16 percent reported negative effects. The largest percentage (39 percent) characterized the effect as slightly positive. The most frequently cited impact was that falling energy prices were lowering the costs of production (57 percent of the firms). For 23 percent of the firms, energy cost reductions were increasing sales margins. On the negative side, nearly one-third of the firms indicated they had experienced declines in business from energy production-related customers, but 10 percent reported demand increases from nonenergy-related customers. With regard to the firms’ own expectations for energy prices over the next six months, firms were evenly divided about whether there would be an increase or decrease in future demand for their manufactured products.

Summary

The Manufacturing Business Outlook Survey suggests a slower pace of expansion of the region’s manufacturing sector in January. The indicators for general activity and new orders both suggest moderating growth. Firms reported an overall reduction in shipments and labor usage for January. Respondents also indicated that price pressures were reduced and that lower energy prices are having net beneficial effects. Firms remain optimistic about increases in overall business and employment over the next six months.


DJ-BTMU U.S. Business Barometer declined by 1.8%
Posted: January 15, 2015 at 10:00 AM (Thursday)

For the week ending January 3 2015, the DJ-BTMU U.S. Business Barometer declined by 1.8 percent to 98.5. This week’s barometer was driven by both consumption and production indexes. Chain store sales (inflation-adjusted basis) fell by 3.7 percent. As to the production side, electric output dropped by 6.3 percent. Auto and truck production also decreased.

On a year-over-year basis, the barometer showed a gain of 1.8 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, fell by 0.3 percent to 99.4. Its year-over-year growth rate was 1.2 percent.


Weekly Initial Unemployment Claims Increase 19,000 to 316,000
Posted: January 15, 2015 at 08:30 AM (Thursday)

In the week ending January 10, the advance figure for seasonally adjusted initial claims was 316,000, an increase of 19,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 294,000 to 297,000. The 4-week moving average was 298,000, an increase of 6,750 from the previous week's revised average. The previous week's average was revised up by 750 from 290,500 to 291,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending January 3, a decrease of 0.1 percentage point from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 1.8 to 1.9 percent. The advance number for seasonally adjusted insured unemployment during the week ending January 3 was 2,424,000, a decrease of 51,000 from the previous week's revised level. The previous week's level was revised up 23,000 from 2,452,000 to 2,475,000. The 4-week moving average was 2,414,500, an increase of 11,500 from the previous week's revised average. The previous week's average was revised up by 6,000 from 2,397,000 to 2,403,000.


Producer Price Index fell 0.3% in December, ex Fd & Engy up 0.2%
Posted: January 15, 2015 at 08:30 AM (Thursday)

The Producer Price Index for final demand fell 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices decreased 0.2 percent in November and advanced 0.2 percent in October. On an unadjusted basis, the index for final demand increased 1.1 percent in 2014 after rising 1.2 percent in 2013.

In December, the 0.3-percent decline in the final demand index can be traced to a 1.2-percent drop in prices for final demand goods. In contrast, the index for final demand services moved up 0.2 percent.

Within intermediate demand, prices for processed goods fell 1.7 percent, the index for unprocessed goods moved down 5.0 percent, and prices for services were unchanged.


Empire State Manufacturing Survey Conditions expanded
Posted: January 15, 2015 at 08:30 AM (Thursday)

The January 2015 Empire State Manufacturing Survey indicates that business activity expanded for New York manufacturers. The headline general business conditions index climbed eleven points to 10.0. This month’s survey also showed modest growth in new orders and shipments. Labor market conditions were mixed, with the index for number of employees rising several points to 13.7, while the average workweek index remained negative at -8.4. Both the prices paid and prices received indexes came in at 12.6, indicating a continued modest increase in input prices and selling prices. As has been the case for much of the past year, indexes for the six-month outlook pointed to widespread optimism about future conditions.

Business Activity Expands
After falling slightly below zero last month, the general business conditions index bounced back in January, climbing eleven points to 10.0. Thirty-three percent of respondents reported that conditions had improved, while 23 percent reported that conditions had worsened. The new orders index rose six points to 6.1, signaling a modest increase in orders, and the shipments index rose seven points to 9.6, indicating a similarly modest rise in shipments. The unfilled orders index moved up after a sharp decline last month, but remained negative at -8.4. The delivery time index was -5.3, pointing to shorter delivery times, and the inventories index was -7.4, suggesting a decline in inventory levels.
Modest Price Increases Continue

The prices paid index was little changed at 12.6; for a fourth consecutive month, it showed a modest increase in input prices. The prices received index rose for a second month—a sign that selling prices were increasing at a faster pace. Labor market indicators were mixed. The index for number of employees climbed five points to 13.7, suggesting that employment levels continued to increase. The average workweek index, however, remained below zero and, at -8.4, pointed to a decline in hours worked for a fourth consecutive month.

Optimism Remains Widespread
Indexes assessing the six-month outlook conveyed considerable optimism about future business activity. The index for future general business conditions rose nine points to 48.4, with nearly 60 percent of respondents expecting conditions to improve. The future new orders and shipments indexes both advanced to levels just above 40. The index for expected number of employees rose eleven points to 31.6, its highest level in nearly three years, indicating that a significant expansion in employment is anticipated in the months ahead. The capital expenditures index was little changed at 14.7, while the technology spending index fell five points to 12.6.


Beige Book: Economic Activity Continues at a "modest" or "moderate" pace
Posted: January 14, 2015 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand during the reporting period of mid-November through late December, with most Districts reporting a "modest" or "moderate" pace of growth. In contrast, the Kansas City District reported only slight growth in December. However, most of their contacts, along with those of several other Districts, expect somewhat faster growth over the coming months. The Dallas District indicated that growth slowed slightly during the reporting period and that several contacts expressed concern about the effect of lower oil prices on the District economy. Consumer spending increased in most Districts, with generally modest year-over-year gains in retail sales. Auto sales showed moderate to strong growth. Travel and tourism picked up during the reporting period. The pace of growth of demand for nonfinancial services varied widely across Districts and across sectors, but appeared to be moderate on balance. Manufacturing activity expanded in most Districts. Single-family residential real estate sales and construction were largely flat on balance across the Districts, while commercial real estate activity expanded. Demand for business and consumer credit grew. Credit quality improved a bit further overall. Agricultural conditions were mixed. Overall demand for energy-related products and services weakened somewhat, while the output of energy-related products increased.

Payrolls in a variety of sectors expanded moderately during the reporting period. Significant wage pressures were largely limited to workers with specialized technical skills. Prices increased slightly, on balance, in most Districts.


Business Inventories up 0.2% in November
Posted: January 14, 2015 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for November, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,345.8 billion, down 0.2 percent (±0.2%)* from October 2014, but were up 2.2 percent (±0.5%) from November 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,763.6 billion, up 0.2 percent (±0.1%) from October 2014 and up 4.4 percent (±0.5%) from November 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of November was 1.31. The November 2013 ratio was 1.28.


U.S. Import Price Index fell 2.5% in December
Posted: January 14, 2015 at 08:30 AM (Wednesday)

The price index for U.S. imports fell 2.5 percent in December following a 1.8-percent drop in November and a 1.4-percent decline in October, the U.S. Bureau of Labor Statistics reported today. Each of the monthly decreases was driven by lower fuel prices. U.S. export prices declined 1.2 percent in December, after decreasing 0.8 percent the previous month


U.S. Retail Sales for December decrease 0.9%, Ex-Auto down 1.0%
Posted: January 14, 2015 at 08:30 AM (Wednesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.9 billion, a decrease of 0.9 percent (±0.5%) from the previous month, but up 3.2 percent (±0.9%) above December 2013. Total sales for the 12 months of 2014 were up 4.0 percent (±0.6%) from 2013. Total sales for the October through December 2014 period were up 4.1 percent (±0.7%) from the same period a year ago. The October to November 2014 percent change was revised from +0.7 percent (±0.5%) to +0.4 percent (±0.1%).

Retail trade sales were down 1.1 percent (±0.5%) from November 2014, but 2.6 percent (±0.7%) above last year. Auto and other motor vehicle dealers were up 9.8 percent (±3.0%) from December 2013 and food services and drinking places were up 8.2 percent (±3.3%) from last year.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 14, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 49.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 9, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 49.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 119 percent compared with the previous week. The Refinance Index increased 66 percent from the previous week to the highest level since July 2013. The seasonally adjusted Purchase Index increased 24 percent from one week earlier to the highest level since September 2013. The unadjusted Purchase Index increased 83 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The US economy and job market continued to show signs of strength, but weakness abroad and tumbling oil prices have led to further declines in longer-term interest rates.

Mortgage rates reached their lowest level since May of 2013, and refinance application volume soared, more than doubling on an unadjusted basis, and up 66 percent after adjusting for the fact that the previous week included the New Year’s holiday. Conventional refinance volume increased to a greater extent than government refinance volume. Applications for larger refinance loans increased more than 4 times relative to the previous week. The average conventional refinance application increased to $298,700 from $233,500 the prior week. Although there was a somewhat smaller increase for government refinance volume, VA refinance applications increased by 50 percent. VA loans tend to be larger than FHA and USDA loans, and hence are more responsive to a given rate change.

In addition to the drop in rates, and news of improvement in the job market, there was additional positive news for prospective homebuyers with evidence that credit availability has increased somewhat, and with FHA’s announcement of a decrease in their mortgage insurance premiums. Purchase application volume increased by almost 24 percent, with stronger growth for conventional applications than for government loans. Purchase application volume was at its highest level since September 2013, increased on a year over year basis in the aggregate, and notably increased across most loan size categories, particularly for the conforming, middle of the market loan segments that had been weak for much of the past year. FHA purchase application volume was up by 17 percent for the week on a seasonally adjusted basis.

The refinance share of mortgage activity increased to 71 percent of total applications from 65 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.9 percent of total applications.

The FHA share of total applications decreased to 7.5 percent this week from 9.3 percent last week. The VA share of total applications decreased to 9.7 percent this week from 10.7 percent last week. The USDA share of total applications decreased to 0.8 percent from 0.9 percent last week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.89 percent, the lowest level since May 2013, from 4.01 percent, with points decreasing to 0.23 from 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.88 percent, the lowest level since May 2013, from 3.99 percent, with points decreasing to 0.23 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.71 percent, the lowest level since May 2013, from 3.81 percent, with points decreasing to -0.05 from -0.03 (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 3.16 percent, the lowest level since May 2013, from 3.24 percent, with points remaining unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.94 percent, the lowest level since October 2014, from 3.19 percent, with points decreasing to 0.46 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings were 5.0 million in November
Posted: January 13, 2015 at 10:00 AM (Tuesday)

There were 5.0 million job openings on the last business day of November, little changed from 4.8 million in October, the U.S. Bureau of Labor Statistics reported today. Hires (5.0 million) were little changed and separations (4.6 million) declined in November. Within separations, the quits rate (1.9 percent) was unchanged and the layoffs and discharges rate (1.2 percent) was little changed. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 5.0 million job openings on the last business day of November. The job openings rate was 3.4 percent. The number of job openings was little changed for total private and increased for government in November. Job openings increased for nondurable goods manufacturing and for state and local government. The number of job openings was little changed in all four regions.

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


NFIB Small Business Optimism Index gained 2.3 points to 100.4
Posted: January 13, 2015 at 07:30 AM (Tuesday)

The Small Business Optimism Index gained 2.3 points to 100.4 in December, at long last taking the Index back to its pre-recession average and the highest reading since October 2006. While last month’s gain was accounted for just 2 of the 10 Index components (expected business conditions and real sales), the gain in December was broad-based, with 8 components advancing, one unchanged and one declining by just 1 percentage point. The single component posting a decline was expected business conditions 6 months out. Last month, this component posted a 16 point gain, so the 1 percentage point decline simply confirmed the very strong gain in November.

The BEA reported a blow-out economy in Q3 and Q4 appears to have been OK. But “low rates for too long” never produced the spending surge the Federal Reserve expected. As pointed out years ago in this report, the economy would heal itself in spite of the impediments and distortions government policy put in place, allowing the Federal Reserve to declare “victory” even if its policies were counterproductive as many observers and even some Federal Reserve officials believed. The cost of the QEs is far from clear and remain to be determined. Certainly QE1 was the right move, but only financial markets were the primary beneficiaries of subsequent actions, not the real economy. Fiscal and regulatory policy have provided no help, forcing firms to spend more of their scarce resources complying with record amounts of regulation and leaving the budget and tax policy floating without direction. The budget deficit has declined by a trillion dollars mostly without the benefit of major spending cuts or priority realignments.

So, it took 4½ years from the start of the recovery for the Index of Small Business Optimism to reach its pre-recession average, slogging along, and never once posting an above average reading. Assuming that non-member firms are similar to NFIB members as they are certainly subject to the same economic winds, half of the economy was not participating in the “recovery”, a bifurcated economy. Large firms profited, sending profits and the stock market to record levels, but that success was not shared on Main Street.

The recovery of Main Street which consists of about 5.5 million firms with fewer than 20 employees, can provide a good base for stronger economic growth. But any election euphoria that persists will soon be snuffed out if Congress cannot lay out a positive plan and make some progress on the top problems facing small business owners including: health insurance costs, uncertainty about economic policy, energy costs, the cost of regulations and red tape and the tax code which is too confiscatory, too complex, and changed too often. Prospects for progress are not that good with President Obama still holding his veto pen.


Employment Trends Index increased in December to 128.43
Posted: January 12, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in December. The index now stands at 128.43, up from 127.83 in November. This represents a 7.5 percent gain in the ETI compared to a year ago.

“The Employment Trends Index increased in every single month of 2014, capping the year off with strong growth, 2.3 percent, in the final quarter,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board. “The strengthening in the ETI suggests that rapid job growth is likely to continue throughout the first half of 2015. And as the labor market tightens further, acceleration in wage growth is soon to follow.”

December’s increase in the ETI was driven by positive contributions from six of the 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, Industrial Production, Percentage of Firms With Positions Not Able to Fill Right Now, Number of Temporary Employees, and Real Manufacturing and Trade Sales.


Wholesale Inventories up 0.8% in November
Posted: January 9, 2015 at 10:00 AM (Friday)

The U.S. Census Bureau announced today that November 2014 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 $452.2 billion, down 0.3 percent (+/-0.5%)* from the revised October level, but were up 2.4 percent (+/-1.2%) from the November 2013 level. The October preliminary estimate was revised downward $1.0 billion or 0.2 percent. November sales of durable goods were up 0.2 percent (+/-0.7%)* from last month and were up 6.3 percent (+/-1.4%) from a year ago. Sales of nondurable goods were down 0.8 percent (+/-0.5%) from October and were down 0.8 percent (+/-2.1%)* from last November. Sales of chemicals and allied products were down 4.1 percent from last month and sales of beer, wine, and distilled alcoholic beverages were down 2.1 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $547.2 billion at the end of November, up 0.8 percent (+/-0.4%) from the revised October level and were up 7.1 percent (+/-0.9%) from the November 2013 level. The October preliminary estimate was revised upward $0.9 billion or 0.2 percent. November inventories of durable goods were up 0.8 percent (+/-0.5%) from last month and were up 8.9 percent (+/-1.2%) from a year ago. Inventories of computer and computer peripheral equipment and software were up 2.6 percent from last month and inventories of hardware and plumbing and heating equipment and supplies were up 1.7 percent. Inventories of nondurable goods were up 0.7 percent (+/-0.7%)* from October and were up 4.4 percent (+/-1.1%) from last November. Inventories of farm product raw materials were up 5.7 percent from last month and inventories of drugs and druggists' sundries were up 2.6 percent.

The November inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.21. The November 2013 ratio was 1.16.


December Employment increased by 252,000
Unemployment Rate declined to 5.6%

Posted: January 9, 2015 at 08:30 AM (Friday)

Total nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing.

The unemployment rate declined by 0.2 percentage point to 5.6 percent in December, and the number of unemployed persons declined by 383,000 to 8.7 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.1 percentage points and 1.7 million, respectively.

Among the major worker groups, the unemployment rate for adult women (5.0 percent) decreased by 0.2 percentage point in December, while the rates for adult men (5.3 percent), teenagers (16.8 percent), whites (4.8 percent), blacks (10.4 percent), and Hispanics (6.5 percent) showed little change. The jobless rate for Asians, at 4.2 percent (not seasonally adjusted), changed little from a year earlier.

In December, the number of long-term unemployed (those jobless for 27 weeks or longer) was essentially unchanged at 2.8 million and accounted for 31.9 percent of the unemployed. Over the year, the number of long-term unemployed has declined by 1.1 million.

The civilian labor force participation rate edged down by 0.2 percentage point to 62.7 percent in December. Since April, the participation rate has remained within a narrow range of 62.7 to 62.9 percent. In December, the employment-population ratio was 59.2 percent for the third consecutive month. However, the employment-population ratio is up by 0.6 percentage point over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in December at 6.8 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In December, 2.3 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 740,000 discouraged workers in December, down by 177,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment increased by 252,000 in December. In 2014, job
growth averaged 246,000 per month, compared with an average monthly gain of 194,000 in 2013. In December, employment increased in professional and business services, construction, food services and drinking places, health care, and manufacturing.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.6 hours in December. The manufacturing workweek edged down by 0.1 hour to 41.0 hours, and factory overtime edged up by 0.1 hour to 3.6 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.9 hours.

In December, average hourly earnings for all employees on private nonfarm payrolls decreased by 5 cents to $24.57, following an increase of 6 cents in November. Over the year, average hourly earnings have risen by 1.7 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees decreased by 6 cents to $20.68.

The change in total nonfarm payroll employment for October was revised from +243,000 to +261,000, and the change for November was revised from +321,000 to +353,000. With these revisions, employment gains in October and November were 50,000 higher than previously reported.


Consumer Credit Increased at an annual rate of 5.00%
Posted: January 8, 2015 at 03:00 PM (Thursday)

In November, consumer credit increased at a seasonally adjusted annual rate of 5 percent. Revolving credit decreased at an annual rate of 1-1/4 percent, while nonrevolving credit increased at an annual rate of 7-1/2 percent.


DJ-BTMU U.S. Business Barometer picked up by 0.2%
Posted: January 8, 2015 at 10:00 AM (Thursday)

For the week ending December 27 2014, the DJ-BTMU U.S. Business Barometer picked up by 0.2 percent to 100.3. This week’s barometer was driven by both consumption and production indexes. Chain store sales (inflation-adjusted basis) increased by 0.2 percent. As to the production side, auto and truck production increased by 28.5 and 9.1 percent respectively, while electric output decreased 3.0 percent.

On a year-over-year basis, the barometer showed a gain of 1.8 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, picked up by 0.3 percent to 100.1. Its year-over-year growth rate was 1.6 percent.


Weekly Initial Unemployment Claims Decrease 4,000 to 294,000
Posted: January 8, 2015 at 08:30 AM (Thursday)

In the week ending January 3, the advance figure for seasonally adjusted initial claims was 294,000, a decrease of 4,000 from the previous week's unrevised level of 298,000. The 4-week moving average was 290,500, a decrease of 250 from the previous week's unrevised average of 290,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending December 27, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 27 was 2,452,000, an increase of 101,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 2,353,000 to 2,351,000. The 4-week moving average was 2,397,000, a decrease of 17,000 from the previous week's revised average. The previous week's average was revised down by 250 from 2,414,250 to 2,414,000.


Help Wanted OnLine Labor Demand fell 79,200 to 5,174,700 in December
Posted: January 7, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies fell 79,200 to 5,174,700 in December, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The November Supply/Demand rate stands at 1.73 unemployed for each advertised vacancy with a total of 3.9 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 9.1 million in November.

Labor demand in 2014 continued its steady growth pattern to new series highs. Online labor demand quickly rebounded from the recession and surpassed the pre-recession series high in early 2012. In the 3 years since then, the level of online labor demand has increased further by about 20 percent.

The sustained high level of employer labor demand has helped reduce the number of unemployed with the U.S. Supply/Demand rate falling from a recession high of 5.2 in 2009 (over 5 unemployed for each available ad) to the current level of 1.7. During 2014, the Supply/Demand rate fell by over 20 percent as demand continued to increase and unemployment continued to fall. The Supply/Demand rates for most major occupational groups are now also about at pre-recession levels with the rates for Professional occupations now averaging 0.66 and Services/Production occupations averaging 2.33.


Goods and Services Deficit Decreased in November 2014
Posted: January 7, 2015 at 08:30 AM (Wednesday)

The Nation’s international trade deficit in goods and services decreased to $39.0 billion in November from $42.2 billion in October (revised), as imports decreased 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 $39.0 billion in November, down $3.2 billion from $42.2 billion in October, revised. November exports were $196.4 billion, $2.0 billion less than October exports. November imports were $235.4 billion, $5.2 billion less than October imports.

The November decrease in the goods and services deficit reflected a decrease in the goods deficit of $3.3 billion to $58.3 billion and a decrease in the services surplus of $0.1 billion to $19.3 billion.

Year-to-date, the goods and services deficit increased $22.3 billion, or 5.1 percent, from the same period in 2013. Exports increased $60.0 billion or 2.9 percent. Imports increased $82.4 billion or 3.3 percent.


ADP National Employment Report increased by 241,000 in December
Posted: January 7, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 241,000 jobs from November to December according to the December ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 106,000 jobs in December, up from 99,000 in November. Employment among companies with 50-499 employees rose by 70,000, down slightly from November’s increase of 73,000. Employment at large companies – those with 500 or more employees – increased from 54,000 the previous month to 66,000 jobs added in December. Companies with 500-999 employees added 22,000 jobs, up from November’s 12,000, which accounted for most of the increase. Companies with over 1,000 employees added 43,000 jobs, just above November’s 42,000.

Goods-producing employment rose by 46,000 jobs in December, up from 40,000 jobs gained in November. The construction industry added 23,000 jobs, up from last month’s gain of 20,000. Meanwhile, manufacturing added 26,000 jobs in December, well above November’s 16,000 and the second highest monthly total of 2014 in that sector.

Service-providing employment rose by 194,000 jobs in December, up from 187,000 in November. The ADP National Employment Report indicates that professional/business services contributed 69,000 jobs in December. Expansion in trade/transportation/utilities grew by 44,000, down from November’s 54,000. The 16,000 new jobs added in financial activities was well above last month’s 5,000 and represented the largest monthly gain for 2014 in that sector.

December delivered another strong number well above 200,000 to close out a solid year of employment growth with over two and a half million jobs added. Small businesses continued to lead the way, but mid-sized and large companies also showed solid gains.

The job market continues to power forward. Businesses across all industries and sizes are adding to payrolls. At the current pace of job growth, the economy will be back to full employment by this time next year.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: January 7, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 9.1 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 2, 2015. The most recent week’s results include an adjustment to account for the New Year’s Day holiday, while the previous week’s results were adjusted for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.1 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 37 percent compared with two weeks ago. The Refinance Index decreased 12 percent from two weeks ago. The seasonally adjusted Purchase Index decreased 5 percent from two weeks earlier while the unadjusted Purchase Index decreased 33 percent compared with two weeks ago. The Purchase Index was 8 percent lower than the same week one year ago.

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity increased to 65 percent of total applications from 63 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.9 percent of total applications.

The FHA share of total applications increased to 9.3 percent this week from 9.2 percent last week. The VA share of total applications increased to 10.7 percent this week from 10.5 percent last week. The USDA share of total applications remained unchanged at 0.9 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.01 percent from 4.04 percent, with points decreasing to 0.28 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.99 percent from 4.05 percent, with points decreasing to 0.24 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 3.81 percent from 3.82 percent, with points decreasing to -0.03 from 0.08 (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 3.24 percent from 3.32 percent, with points decreasing to 0.30 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.19 percent from 3.26 percent, with points increasing to 0.51 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


ISM Non-Manufacturing Index grew slower at 56.2%
Posted: January 6, 2015 at 10:00 PM (Tuesday)

Economic activity in the non-manufacturing sector grew in December for the 59th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 56.2 percent in December, 3.1 percentage points lower than the November reading of 59.3 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 57.2 percent, which is 7.2 percentage points lower than the November reading of 64.4 percent, reflecting growth for the 65th consecutive month at a slower rate. The New Orders Index registered 58.9 percent, 2.5 percentage points lower than the reading of 61.4 percent registered in November. The Employment Index decreased 0.7 percentage point to 56 percent from the November reading of 56.7 percent and indicates growth for the tenth consecutive month. The Prices Index decreased 4.9 percentage points from the November reading of 54.4 percent to 49.5 percent, indicating prices contracted in December when compared to November. According to the NMI®, 12 non-manufacturing industries reported growth in December. Comments from respondents are mostly positive about business conditions and the overall economy for year-end.

The 12 non-manufacturing industries reporting growth in December — listed in order — are: Retail Trade; Accommodation & Food Services; Information; Management of Companies & Support Services; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Health Care & Social Assistance; Wholesale Trade; Construction; Utilities; Finance & Insurance; and Public Administration. The five industries reporting contraction in December are: Arts, Entertainment & Recreation; Mining; Educational Services; Other Services; and Transportation & Warehousing.


New orders for manufactured goods decreased 0.7%
Posted: January 6, 2015 at 10:00 AM (Tuesday)

New orders for manufactured goods in November, down four consecutive months, decreased $3.5 billion or 0.7 percent to $492.7 billion, the U.S. Census Bureau reported today. This followed a 0.7 percent October decrease. Excluding transportation, new orders decreased 0.6 percent.

Shipments, down three of the last four months, decreased $2.8 billion or 0.6 percent to $495.7 billion. This followed a 0.9 percent October decrease.

Unfilled orders, up nineteen of the last twenty months, increased $4.5 billion or 0.4 percent to $1,179.1 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.5 percent October increase. The unfilled orders-to-shipments ratio was 6.81, up from 6.75 in October.

Inventories, up twenty-four of the last twenty-five months, increased $0.7 billion or 0.1 percent to $656.3 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.1 percent October increase. The inventories-to-shipments ratio was 1.32, unchanged from October.


Paychex-IHS Small Business Jobs Index declined to 100.56 in December
Posted: January 6, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index declined 0.18 percent in the past 12 months, bringing the national index to 100.56 in December. Although the pace of small business employment growth is slowing, an index level above 100 indicates continued positive employment gains. With the strongest 12-month growth rate, the West North Central region maintained its lead among the regions. At 102.64, Washington continued to be the top-performing state for the third consecutive month. Dallas, meanwhile, held the top position among metro areas, despite a .64 percent one-month decline.

It appears that small businesses are not enjoying the same acceleration as the general economy, as the Paychex | IHS Small Business Jobs Index continued its downward trend through year-end. At 100.56, the national index is 0.18 percent below December 2013.

"With the index maintaining a level above 100, we're still seeing small business employment growth," said Martin Mucci, president and CEO of Paychex. "But the growth rate does appear to be moderating. As we begin the New Year, it will be interesting to see the impact falling energy prices and the power shift in Washington have on the country's small businesses in the months ahead."


New York Purchasing Managers Business Activity rose to 70.8 in December
Posted: January 5, 2015 at 08:30 AM (Monday)

New York City business activity expanded at the fastest pace in four years, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions rose to 70.8 in December, the highest level since October 2010. Readings above 70 have occurred only five percent of the time in the 21-year history of the Report on Business.

Future optimism hit a 10-month high. The Six-Month Outlook came in at 72.9 in December, the fifth month in the last six above the lofty 70 threshold.

Job growth bounced back after cooling in November. Employment advanced to 56.8 in December.

Purchase volume stayed in neutral. Quantity of Purchases maintained a 50.0 level in December for a second consecutive month.

The top line and forward guidance both accelerated. Current Revenues rose to 69.0 in December, and Expected Revenues improved to 76.2 in December.

Price measures moderated. Prices Paid was at 54.5 in December, and Prices Received edged down to 55.0 in December.


Construction Spending decreased 0.3% in November
Posted: January 2, 2015 at 10:00 AM (Friday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2014 was estimated at a seasonally adjusted annual rate of $975.0 billion, 0.3 percent (±1.5%) below the revised October estimate of $977.7 billion. The November figure is 2.4 percent (±1.6%) above the November 2013 estimate of $952.5 billion. During the first 11 months of this year, construction spending amounted to $884.6 billion, 5.7 percent (±1.3%) above the $836.9 billion for the same period in 2013.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $697.7 billion, 0.3 percent (±1.0%) above the revised October estimate of $695.7 billion. Residential construction was at a seasonally adjusted annual rate of $352.7 billion in November, 0.9 percent (±1.3%) above the revised October estimate of $349.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $345.0 billion in November, 0.3 percent (±1.0%) below the revised October estimate of $346.1 billion.

PUBLIC CONSTRUCTION
In November, the estimated seasonally adjusted annual rate of public construction spending was $277.3 billion, 1.7 percent (±2.5%) below the revised October estimate of $282.0 billion. Educational construction was at a seasonally adjusted annual rate of $62.1 billion, 2.5 percent (±3.1%) below the revised October estimate of $63.8 billion. Highway construction was at a seasonally adjusted annual rate of $85.7 billion, 0.3 percent (±5.4%) above the revised October estimate of $85.4 billion.


October Manufacturing ISM expanded slower at 55.57
Posted: January 2, 2015 at 10:00 AM (Friday)

Economic activity in the manufacturing sector expanded in December for the 19th consecutive month, and the overall economy grew for the 67th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The December PMI® registered 55.5 percent, a decrease of 3.2 percentage points from November’s reading of 58.7 percent. The New Orders Index registered 57.3 percent, a decrease of 8.7 percentage points from the reading of 66 percent in November. The Production Index registered 58.8 percent, 5.6 percentage points below the November reading of 64.4 percent. The Employment Index registered 56.8 percent, an increase of 1.9 percentage points above the November reading of 54.9 percent. Inventories of raw materials registered 45.5 percent, a decrease of 6 percentage points from the November reading of 51.5 percent. The Prices Index registered 38.5 percent, down 6 percentage points from the November reading of 44.5 percent, indicating lower raw materials prices in December relative to November. Comments from the panel are mixed, with some indicating that falling oil prices have an upside while others indicate a downside. Other comments mention the negative impact on imported materials shipment due to the West Coast dock slowdown.

Of the 18 manufacturing industries, 11 are reporting growth in December in the following order: Printing & Related Support Activities; Fabricated Metal Products; Primary Metals; Furniture & Related Products; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Textile Mills; Paper Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; and Transportation Equipment. The six industries reporting contraction in December — listed in order — are: Plastics & Rubber Products; Wood Products; Machinery; Nonmetallic Mineral Products; Chemical Products; and Computer & Electronic Products.


Pending Home Sales Index increased 0.8% in November
Posted: December 31, 2014 at 10:00 AM (Wednesday)

Pending home sales slightly improved in November and are above year-over-year levels for the third straight month, according to the National Association of Realtors®. All major regions except for the Midwest experienced a slight gain in activity in November.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 0.8 percent to 104.8 in November from a slightly downwardly revised 104.0 in October and is now 4.1 percent above November 2013 (100.7) – the highest year-over-year gain since August 2013 (5.6 percent).

Signed contracts inched forward in November and have been fairly stable but haven't broken out even as the economy picked up steam this spring. The consistent economic growth and steady hiring we've seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year's end," he said. "With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months.

YFalling gas prices will likely boost consumer confidence and allow prospective buyers the opportunity to save additional money for a downpayment. NAR's 2014 Profile of Home Buyers and Sellers (released in November) found that the median downpayment ranged from 6 percent for first-time buyers to 13 percent for repeat buyers. There's still misperception out there that a much higher downpayment is needed, while that's not the reality.

The PHSI in the Northeast rose 1.4 percent to 89.1 in November, and is now 7.0 percent above a year ago. In the Midwest the index decreased 0.4 percent to 100.0 in November, and is now 0.5 percent below November 2013.

Pending home sales in the South rose 1.3 percent to an index of 119.7 in November, and are 5.1 percent above last November. The index in the West increased 0.4 percent in November to 98.5, and is now 4.9 percent above a year ago.

Total existing-homes sales this year are expected to be around 4.94 million, a decline of 3.0 percent from last year (5.09 million), but are then forecasted to rise to 5.30 million in 2015. The national median existing-home price for all of this year will be close to $208,000, up 5.6 percent from 2013, and is likely to moderate to a pace between 4 and 5 percent next year. Existing-home prices rose 11.4 percent in 2013.


DJ-BTMU U.S. Business Barometer picked up by 0.2%
Posted: December 31, 2014 at 10:00 AM (Wednesday)

For the week ending December 20 2014, the DJ-BTMU U.S. Business Barometer picked up by 0.2 percent to 100.1. This week’s barometer was driven by both consumption and production indexes. Chain store sales (inflation-adjusted basis) increased by 3.5 percent, which marked a second consecutive big gain. Electric output increased 1.5 percent. On the other hand, truck production and lumber production decreased.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, picked up by 0.3 percent to 99.7. Its year-over-year growth rate was 1.1 percent.


Chicago Purchasing Managers Index fell 2.5 points to 58.3 in December
Posted: December 31, 2014 at 09:45 AM (Wednesday)

The Chicago Business Barometer fell 2.5 points to a five month low of 58.3 in December as Production and both ordering components expanded at the slowest pace since July.

The slowdown in the pace of activity exhibited since October’s one year high of 66.2 has been marked, although the Barometer averaged 61.8 in Q4, a little higher than the 59.1 seen in Q3. For 2014 as a whole the Barometer put in the best performance in three years, averaging 60.8 compared with 56.1 in 2013 and 54.6 in 2012.

The softening in business activity in December was led by a 5.1 point fall in Production to a still healthy pace of 61.6. Production has run above 60 for five months in a row, while New Orders at just below 60 suggests continued firm growth in the US economy.

Overall, four of the five components that comprise the Barometer fell in December. Only Employment increased, reversing nearly half of November’s fall.
Order Backlogs was the biggest concern for future expansion as it dipped into contraction following November’s softening in orders.

In the previous three months, companies built stocks sharply in anticipation of a strong December, and ahead of the winter season. There was a sharp downward correction in December, with the Inventories Indicator falling to the lowest since April. Some firms said they expected a further decline in Q1.

Inflationary pressures eased for the third consecutive month as Prices Paid declined to the lowest since April, following the plunge in oil prices to below $60 per barrel in December.

It was a disappointing end to to the year with the pulse rate of our business panel slowing noticeably in December. The trend, however, remains solid and consistent with continued growth in the US economy.


Weekly Initial Unemployment Claims Increase 17,000 to 298,000
Posted: December 31, 2014 at 08:45 AM (Wednesday)

In the week ending December 27, the advance figure for seasonally adjusted initial claims was 298,000, an increase of 17,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 280,000 to 281,000. The 4-week moving average was 290,750, an increase of 250 from the previous week's revised average. The previous week's average was revised up by 250 from 290,250 to 290,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending December 20, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 20 was 2,353,000, a decrease of 53,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,403,000 to 2,406,000. The 4-week moving average was 2,414,250, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 750 from 2,418,250 to 2,419,000.


Consumer Confidence improved in December to 92.6
Posted: December 30, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined in November, improved in December. The Index now stands at 92.6 (1985=100), up from 91.0 in November. The Present Situation Index rose to 98.6 from 93.7, while the Expectations Index decreased to 88.5 from 89.3 in November.

Consumer confidence rebounded modestly in December, propelled by a considerably more favorable assessment of current economic and labor market conditions. As a result, the Present Situation Index is now at its highest level since February 2008 (Index, 104.0). Consumers were moderately less optimistic about the short-term outlook in December, but even so, they are more confident at year-end than they were at the beginning of the year.

Consumers’ appraisal of current conditions was considerably more favorable in December. Those saying business conditions are “good” was unchanged at 24.8 percent, while those claiming business conditions are “bad” decreased from 21.8 percent to 19.6 percent. Consumers were also more positive in their assessment of the job market, with the proportion stating jobs are “plentiful” increasing from 16.2 percent to 17.1 percent, and those claiming jobs are “hard to get” decreasing from 28.7 percent to 27.7 percent.

Consumers’ optimism about the short-term outlook eased moderately in December. The percentage of consumers expecting business conditions to improve over the next six months edged down from 18.3 percent to 18.0 percent, but those expecting business conditions to worsen declined slightly from 10.4 percent to 10.1 percent. Consumers’ outlook for the labor market was marginally less optimistic. Those anticipating more jobs in the months ahead decreased from 15.5 percent to 14.7 percent, while those anticipating fewer jobs rose from 16.1 percent to 16.9 percent. The proportion of consumers expecting growth in their incomes declined moderately from 16.9 percent to 16.4 percent; however the proportion expecting a decrease also declined, from 11.0 percent to 10.0 percent.


S&P/Case-Shiller Home Price Indices decrease 0.1% in October
Posted: December 30, 2014 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for October 2014, shows that the pace of home prices across the country continues to decelerate although eight cities did see prices rise faster.

Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014 versus 4.8% in September.

Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, including San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earlier. Las Vegas led the declining annual returns with a decrease of -1.2%.

The National and Composite Indices were both slightly negative in October. Both the 10 and 20-City Composites reported a slight downturn, -0.1%, while the National Index posted a -0.2% change for the month. San Francisco and Tampa led all cities in October with increases of 0.8%. Chicago and Cleveland offset those gains by reporting decreases of -1.0% and -0.7% respectively.

October recorded mixed monthly figures. Ten cities recorded lower monthly figures while eight posted increases. Detroit and San Diego both reported flat monthly changes. San Francisco had the largest increase of all 20 cities at 0.8% month-over-month.

After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015. Two months ago, all 20 cities were experiencing weakening annual price increases., Last month, 18 experienced weakness. This time, 12 cities had weaker annual price growth, but eight saw the pace of price gains pick up. Seasonally adjusted, all 20 cities had higher prices than a month ago.

Most national economic statistics, other than those connected to housing, posted positive reports in November and early December. Third quarter GDP was revised to 5% real growth at annual rates, and unemployment was at 5.8% as payrolls added over 300,000 jobs in November. Housing was somber: housing starts pulled back 1.6%, existing home sales were at 4.93 million, down 6.1%, and new home sales were 438,000, down 1.6%, all in November.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014. The 10- and 20-City Composites reported year-over-year increases of 4.4% and 4.5%.

As of October 2014, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 16-17%. The recovery from the March 2012 lows is 28.5% and 29.3% for the 10-City and 20-City Composites.


ICSC Chain Store Sales unch% in Dec 27 Wk
Posted: December 30, 2014 at 07:45 AM (Tuesday)

U.S. chain-store sales rose 2.2 percent year on year for the week that ended on December 27 and included the final shopping days before Christmas, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. However, comparable store sales were flat compared with the previous week.

“Looking ahead to January, consumers reported that the share of their total holiday gift purchases that went into gift cards rose to 24.6 percent compared to 23.7 percent in 2013 – reinforcing the importance of post-Christmas shopping and gift-card redemption,” said Michael Niemira, ICSC's research consultant.


Texas Manufacturing Activity Picks Up Pace in December
Posted: December 29, 2014 at 10:30 AM (Monday)

Texas factory activity increased again in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose strongly from 6 to 15.8, indicating output grew at a faster pace in December.

Other measures of current manufacturing activity reflected continued growth during the month. The capacity utilization index rose from 9.8 to 12.4, due to a higher share of respondents noting an increase in December than in November. The shipments index climbed to 19.6, its highest reading in five months. The new orders index moved down from 5.6 to 1.3, suggesting moderating demand growth, but more than a quarter of firms noted increases in new orders over November levels.

Perceptions of broader economic conditions remained positive this month. The general business activity index fell from 10.5 to 4.1. The company outlook index was almost unchanged at 8.4, with 21 percent of respondents noting an improved outlook.

Labor market indicators reflected unchanged workweeks but continued employment increases. The December employment index held steady at a solid reading of 9.2, with 17 percent of firms reporting net hiring compared with 7 percent reporting net layoffs. The hours worked index dropped from 5.7 to 0, indicating no change in hours worked in December.

Upward pressures on prices eased, while wage pressure increased slightly. The raw materials prices index fell from 15.3 to 10.2, its lowest reading in eight months. The finished goods prices index declined as well to a 13-month low of 4.2. Looking ahead, 26 percent of respondents anticipate increases in raw materials prices over the next six months, while 24 percent expect higher finished goods prices. The wages and benefits index ticked up from 23.9 to 25.1. This index has been consistently elevated this year, suggesting continued upward pressure on compensation costs.

Expectations regarding future business conditions remained optimistic in December. The index of future general business activity fell from 18.3 to 13.9, while the index of future company outlook edged up to 24.1. Indexes for future manufacturing activity moved down in December but remained in solidly positive territory.


DJ-BTMU U.S. Business Barometer picked up by 1.4%
Posted: December 24, 2014 at 10:00 AM (Wednesday)

For the week ending December 13 2014, the DJ-BTMU U.S. Business Barometer picked up by 1.4 percent to 99.9. This week’s barometer was driven by both consumption and production indexes. Chain store sales (inflation-adjusted basis) increased by 3.1 percent. As to the production side, auto and truck production climbed by 12.3 and 9.2 percent respectively, while electric output decreased 0.5 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, picked up by 0.2 percent to 99.2. Its year-over-year growth rate was 0.8 percent.


Weekly Initial Unemployment Claims Decrease 9,000 to 280,000
Posted: December 24, 2014 at 08:30 AM (Wednesday)

In the week ending December 20, the advance figure for seasonally adjusted initial claims was 280,000, a decrease of 9,000 from the previous week's unrevised level of 289,000. The 4-week moving average was 290,250, a decrease of 8,500 from the previous week's unrevised average of 298,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending December 13, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 13 was 2,403,000, an increase of 25,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,373,000 to 2,378,000. The 4-week moving average was 2,418,250, an increase of 20,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,397,000 to 2,398,250.


Personal Income increased 0.4%, Spending increased 0.6%
Posted: December 23, 2014 at 10:00 AM (Tuesday)

Personal income increased $54.4 billion, or 0.4 percent, and disposable personal income (DPI) increased $42.4 billion, or 0.3 percent, in November, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $67.9 billion, or 0.6 percent. In October, personal income increased $49.8 billion, or 0.3 percent, DPI increased $39.7 billion, or 0.3 percent, and PCE increased $31.3 billion, or 0.3 percent, based on revised estimates.

Real DPI increased 0.5 percent in November, compared with an increase of 0.3 percent in October. Real PCE increased 0.7 percent, compared with an increase of 0.2 percent. The price index for PCE decreased 0.2 percent, in contrast to an increase of less than 0.1 percent.


New Home Sales in November at annual rate of 438,000
Posted: December 23, 2014 at 10:00 AM (Tuesday)

Sales of new single-family houses in November 2014 were at a seasonally adjusted annual rate of 438,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.6 percent (±12.3%)* below the revised October rate of 445,000 and is 1.6 percent (±17.8%)* below the November 2013 estimate of 445,000.

The median sales price of new houses sold in November 2014 was $280,900; the average sales price was $321,800. The seasonally adjusted estimate of new houses for sale at the end of November was 213,000. This represents a supply of 5.8 months at the current sales rate.


Richmond Fed's Current Activity Index gained 3 points to a reading of 7
Posted: December 23, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity grew modestly in December, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders edged up. Manufacturing employment grew at a faster pace this month, while average wages and the average workweek grew at a slightly slower pace than a month ago.

Producers anticipated improved business conditions during the next six months. Manufacturers expected faster growth in shipments and in the volume of new orders. Additionally, survey participants expected order backlogs to grow and anticipated increased capacity utilization. Expectations were for only slightly longer vendor lead times.

Firms expected faster growth in the number of employees and looked for average wages to grow more quickly in the months ahead. In contrast, survey participants looked for continued mild growth in the average workweek.

Prices of raw materials and finished goods rose at a slower pace in December compared to last month. Manufacturers expected faster growth in prices paid in the months ahead. However, producers expected little change in prices received over the next six months.

Overall, manufacturing activity grew modestly in December. The composite index for manufacturing gained three points from a month earlier to finish at a reading of 7. The index for shipments gained four points and the new orders index advanced three points, finishing at readings of 5 and 4, respectively. Manufacturing employment grew more quickly this month. At an index of 13, the December indicator gained three points from last month's reading of 10.

Capacity utilization decreased this month. The index fell 18 points from November’s reading to finish at an index of −5. Additionally, backlogs softened further this month, pulling the index down three points to finish at −5. Vendor lead time lengthened at a slightly slower pace, moving the index down five points to a reading of 2. Finished goods inventories rose more quickly compared to a month ago. That gauge gained two points to end at 22. Raw materials inventories rose at a slightly slower rate than a month ago. The index moved down three points to end at 20.


University of Michigan Consumer Confidence increased in December to 88.8
Posted: December 23, 2014 at 10:00 AM (Tuesday)

Consumer confidence reached its most favorable level in the December 2014 survey since the last cyclical peak was set in January 2007. The gains over the past several months have been primarily due to improving job and wage prospects, and more recently, to falling gasoline prices. Consumers held the most favorable long-term prospects for the national economy in the past decade. Importantly, the 2014 gains in jobs and wages were widespread across all population subgroups and regions. Overall, the data point toward a gain of about 3.0% in real consumer expenditures during 2015.

Favorable Job Expectations
Consumers reported hearing more positive economic developments in December than any other time in the last thirty years. Most of the news was dominated by job gains as well as declines in gasoline prices. Nearly two-thirds of all consumers thought the economy had recently improved, and most impressively, half expected the economy to avoid a recessionary downturn during the next five years, the most favorable reading in ten years. When specifically asked about prospects for the national unemployment rate during the year ahead, in the past three months consumers have held the most favorable outlook during the past 30 years.

Higher Income Gains Expected
The best news on personal finances was that consumers anticipated a significant increase in their incomes during 2015. Consumers expected an annual income gain of 1.7% in December, up from 1.1% in the prior three months and the highest level recorded since 2008. Expected wage gains were especially large among those under age 45, with a median anticipated income gain of 4.7%, up from 2.9% in last December’s survey.

The Sentiment Index was 93.6 in the December 2014 survey, up from 88.8 in the November and 82.5 last December. The was the highest level of the Sentiment Index since 96.9 was recorded in January 2007. The Current Conditions Index rose to 104.8 from 102.7 one month ago and 98.6 one year ago. The Expectations Index rose to 86.4 in December from 79.9 in November and 72.1 last December.

Consumers have much to be thankful for in this holiday season: renewed job growth, larger anticipated wage gains, and the steep decline in gasoline prices. Importantly, rather than basing their renewed optimism on volatile oil prices, consumers have become convinced that growing strength in the national economy will result in continued gains in jobs and wages during the year ahead. To be sure, consumers are thrilled to spend less at the gas pump, enabling them to expand their discretionary income during this holiday. Nonetheless, such a “tax cut” is no substitute for a widespread favorable job and income outlook among households.


3Q2014 GDP final estimate increased 5.0%
Posted: December 23, 2014 at 08:30 AM (Tuesday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 5.0 percent in the third quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.9 percent. With the third estimate for the third quarter, both personal consumption expenditures (PCE) and nonresidential fixed investment increased more than previously estimated.

The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, exports, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

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

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.4 percent in the third quarter, unrevised from the second estimate; this index increased 2.0 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.6 percent in the third quarter, compared with an increase of 1.7 percent.


New Orders for Durable Goods Decreased 0.7%, Ex-Trans Down 0.4%
Posted: December 23, 2014 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in November decreased $1.7 billion or 0.7 percent to $242.3 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 0.3 percent October increase. Excluding transportation, new orders decreased 0.4 percent. Excluding defense, new orders decreased 0.1 percent. Transportation equipment, also down three of the last four months, led the decrease, $0.9 billion or 1.2 percent to $75.5 billion.

Shipments of manufactured durable goods in November, down three of the last four months, decreased $0.9 billion or 0.4 percent to $245.3 billion. This followed a 0.1 percent October decrease. Transportation equipment, down following two consecutive monthly increases, led the decrease, $0.7 billion or 1.0 percent to $72.2 billion.

Unfilled orders for manufactured durable goods in November, up nineteen of the last twenty months, increased $4.4 billion or 0.4 percent to $1,178.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.5 percent October increase. Transportation equipment, up fourteen of the last fifteen months, led the increase, $3.3 billion or 0.4 percent to $749.9 billion.

Inventories of manufactured durable goods in November, up nineteen of the last twenty months, increased $1.7 billion or 0.4 percent to $408.2 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent October increase. Transportation equipment, also up nineteen of the last twenty months, led the increase, $1.2 billion or 0.9 percent to $133.2 billion.

Nondefense new orders for capital goods in November increased $0.4 billion or 0.5 percent to $82.8 billion. Shipments decreased $0.5 billion or 0.6 percent to $79.3 billion. Unfilled orders increased $3.5 billion or 0.5 percent to $739.2 billion. Inventories increased $0.9 billion or 0.5 percent to $186.5 billion. Defense new orders for capital goods in November decreased $0.8 billion or 8.1 percent to $9.5 billion. Shipments increased $0.1 billion or 1.1 percent to $9.9 billion. Unfilled orders decreased $0.4 billion or 0.2 percent to $158.0 billion. Inventories increased $0.2 billion or 0.9 percent to $24.1 billion.

Revised seasonally adjusted October figures for all manufacturing industries were: new orders, $496.2 billion (revised from $496.6 billion); shipments, $498.4 billion (revised from $499.2 billion); unfilled orders, $1,174.5 billion (revised from $1,174.2 billion); and total inventories, $655.8 billion (revised from $655.6 billion).


ICSC Chain Store Sales rose 3.1% in Dec 20 Wk
Posted: December 23, 2014 at 07:45 AM (Tuesday)

Estimates from the International Council of Shopping Centers showed that retailers could benefit from a last-minute shopping surge despite what the group called a “historically low” 11 percent of consumers who have yet to start buying holiday gifts. Sales in the week ended Saturday Dec. 20 rose 3.1 percent over the year-ago period, according to the ICSC and Goldman Sachs Weekly Chain Store Sales Index.

“The late shopping surge should continue all the way through Christmas Eve,” Michael Niemira, a research consultant at ICSC, said today in a statement.


Existing-Home Sales fell 6.1% in November
Posted: December 22, 2014 at 10:00 AM (Monday)

After hitting their highest level of the year, existing-home sales slid in November as housing supply showed some tightening, according to the National Association of Realtors®. All major regions experienced a decline in sales compared to a month earlier.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 6.1 percent to a seasonally adjusted annual rate of 4.93 million in November from a downwardly-revised 5.25 million in October. Sales dropped to their lowest annual pace since May (4.91 million) but are above year-over-year levels (up 2.1 percent from last November) for the second straight month.

Sales activity was choppy throughout the country in November and housing inventory began its seasonal decline. Fewer people bought homes last month despite interest rates being at their lowest levels of the year. The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.

The median existing-home price for all housing types in November was $205,300, which is 5.0 percent above November 2013. This marks the 33rd consecutive month of year-over-year price gains.

Total housing inventory at the end of November fell 6.7 percent to 2.09 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace – unchanged from last month. Despite the tightening in supply, unsold inventory remains 2.0 percent higher than a year ago, when there were 2.05 million existing homes available for sale.

Lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year’s promising job growth. Much faster price and rent appreciation – easily exceeding wage growth – will occur next year unless new construction picks up measurably.

All-cash sales were 25 percent of transactions in November, down from 27 percent in October and 32 percent in November of last year.

Individual investors, who account for many cash sales, purchased 15 percent of homes in November, unchanged from last month and below November 2013 (19 percent). Sixty-one percent of investors paid cash in November.

The percent share of first-time buyers in November climbed to 31 percent, up from October (29 percent) and is the highest share since October 2012 (also 31 percent). First-time buyers have represented an average of 29 percent of buyers through November of this year.

Fannie Mae and Freddie Mac’s new low downpayment program should improve access to credit for responsible buyers. NAR applauds Fannie and Freddie’s commitment to homeownership by serving creditworthy borrowers who lack the resources for substantial downpayments plus closing costs with its new downpayment program. The new program mitigates risk with strong underwriting and ensures that responsible buyers have access to safe and affordable mortgage credit. Furthermore, NAR believes lenders must do their part to ensure loans are prudently underwritten and are made available to qualified borrowers.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in November dropped to 4.00 percent, its lowest level since May 2013 (3.54 percent), and down from 4.04 percent in October.

Distressed sales – foreclosures and short sales – were unchanged in November from October (9 percent) and remained in the single digits for the fourth month this year; they were 14 percent a year ago. Six percent of November sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in November (15 percent in October), while short sales were discounted 13 percent (10 percent in October).

Properties typically stayed on the market in November longer (65 days) than last month (63 days) and a year ago (56 days). Short sales were on the market the longest at a median of 116 days in November, while foreclosures sold in 65 days and non-distressed homes took 63 days. Thirty-two percent of homes sold in November were on the market for less than a month.

Single-family and Condo/Co-op Sales

Single-family home sales dropped 6.3 percent to a seasonally adjusted annual rate of 4.33 million in November from 4.62 million in October, but remain 2.4 percent above the 4.23 million pace a year ago. The median existing single-family home price was $206,200 in November, up 5.6 percent from November 2013.

Existing condominium and co-op sales declined 4.8 percent to a seasonally adjusted annual rate of 600,000 units in November from 630,000 in October, and are unchanged from a year ago. The median existing condo price was $199,000 in November, which is 1.2 percent higher than a year ago.

Regional Breakdown

November existing-home sales in the Northeast declined 4.2 percent to an annual rate of 680,000, but are still 4.6 percent above a year ago. The median price in the Northeast was $246,100, which is 1.3 percent above a year ago.

In the Midwest, existing-home sales fell 8.9 percent to an annual level of 1.13 million in November, and are now 1.7 percent below November 2013. The median price in the Midwest was $160,500, up 7.0 percent from a year ago.

Existing-home sales in the South decreased 3.2 percent to an annual rate of 2.09 million in November, but remain 5.0 percent above November 2013. The median price in the South was $176,500, up 5.2 percent from a year ago.

Existing-home sales in the West dropped 9.6 percent to an annual rate of 1.03 million in November, and remain 1.0 percent below a year ago. The median price in the West was $292,700, which is 3.5 percent above November 2013.


Chicago Fed National Activity accelerated in November
Posted: December 22, 2014 at 08:30 AM (Monday)

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.73 in November from +0.31 in October. Two of the four broad categories of indicators that make up the index increased from October, and only one of the four categories made a negative contribution to the index in November.

The index’s three-month moving average, CFNAI-MA3, rose to +0.48 in November from +0.09 in October, reaching its highest level since May 2010. November’s CFNAI-MA3 suggests that growth in national economic activity was above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests modest inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.37 in November from +0.18 in October. Fifty-four of the 85 individual indicators made positive contributions to the CFNAI in November, while 31 made negative contributions. Fifty indicators improved from October to November, while 35 indicators deteriorated. Of the indicators that improved, six made negative contributions.

Production-related indicators made a contribution of +0.64 to the CFNAI in November, up from +0.09 in October. Industrial production increased 1.3 percent in November after moving up 0.1 percent in October, and manufacturing production increased 1.1 percent in November after moving up 0.4 percent in the previous month. In addition, manufacturing capacity utilization rose to 78.4 percent in November from 77.6 percent in October.

Employment-related indicators contributed +0.17 to the CFNAI in November, down somewhat from +0.22 in October. The unemployment rate remained steady at 5.8 percent in November, and average weekly initial unemployment insurance claims increased in November from October. However, nonfarm payrolls increased by 321,000 in November, up from a gain of 243,000 in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI decreased to +0.02 in November from +0.11 in October.

The contribution of the consumption and housing category to the CFNAI increased to –0.10 in November from –0.11 in October. Consumption indicators, on balance, improved, pushing the category’s contribution higher. However, housing starts decreased to 1,028,000 annualized units in November from 1,045,000 in October, and housing permits declined to 1,035,000 annualized units in November from 1,092,000 in the previous month.

The CFNAI was constructed using data available as of December 18, 2014. At that time, November data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The October monthly index was revised to +0.31 from an initial estimate of +0.14. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the October monthly index was due primarily to the former.


Kansas City Fed Manufacturing Activity continues moderate paced expansion in Dec
Posted: December 19, 2014 at 11:00 AM (Friday)

Tenth District manufacturing activity continued to expand at a moderate pace in December, and producers’ expectations for future activity remained at solid levels. Most price indexes grew at a slower pace, especially materials prices.

The month-over-month composite index was 8 in December, up slightly from 7 in November and 4 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The slight increase in activity was mostly attributed to durable goods producers, particularly for electronics, aircraft, and machinery products, while nondurable goods production remained sluggish. Most other month-over-month indexes were also slightly higher than last month. The production and employment indexes were unchanged, but the shipments, new orders, and order backlog indexes increased markedly. However, the new orders for exports index fell from 8 to 0. The finished goods inventory index rose for the second straight month, while the raw materials inventory index eased somewhat.

Year-over-year factory indexes were mixed. The composite year-over-year index edged up from 9 to 11, and the shipments, new orders, and new orders for exports indexes also increased. The employment index jumped from 10 to 18, its highest level in nearly two years. In contrast, the production index eased from 15 to 11, and the order backlog and capital expenditures indexes also decreased. Both inventory indexes increased after two months of decline.

Future factory indexes were mostly stable at solid levels. The future composite index was unchanged at 22, while the future shipments, new orders, and employment indexes increased further. The future capital spending index jumped from 15 to 23, its highest level in five months. In contrast, the future production index eased from 34 to 30, and the future order backlog index also inched lower. The future finished goods inventory index rose from 9 to 19, while the future raw materials inventory index edged down.

Most price indexes slowed in December. The month-over-month raw materials price index decreased from 12 to 5, and the finished goods price index fell to 0. The year-over-year raw materials price index eased slightly, while the finished goods price index was basically unchanged. The future raw materials price index moderated from 33 to 25, while the future finished goods price index ticked up somewhat.


U.S. Leading Economic Index increased 0.6%
Posted: December 18, 2014 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in November to 105.5 (2004 = 100), following a 0.6 percent increase in October, and a 0.8 percent increase in September.

The increase in the LEI signals continued moderate growth through the winter season. The biggest challenge has been, and remains, more income growth. However, with labor market conditions tightening, we are seeing the first signs of wage growth starting to pick up.

Widespread and persistent gains in the LEI point to strong underlying conditions in the U.S. economic expansion. The current situation, measured by the coincident economic index, has been improving steadily, with employment and industrial production making the largest contributions in November.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.4 percent in November to 110.7 (2004 = 100), following a 0.2 percent increase in October, and a 0.3 percent increase in September.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in November to 125.4 (2004 = 100), following no change in October, and a 0.1 percent increase in September.


Philadelphia December Outlook Suggest Reduced Activity
Posted: December 18, 2014 at 10:00 AM (Thursday)

Firms responding to the Manufacturing Business Outlook Survey indicated that the pace of regional manufacturing activity remained positive but decreased in December. The survey’s current indicators for general activity, new orders, shipments, and employment suggest growth; however, their values for this month were significantly lower than last month’s. The survey's indicators of future activity show optimism about continued growth over the next six months but declined slightly from last month’s readings.

Indicators Suggest Reduced Activity
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased 16 points, from a reading of 40.8 in November to 24.5 this month. The new orders and current shipments indexes also weakened significantly. The demand for manufactured goods, as measured by the current new orders index, decreased 20 points, from a reading of 35.7 last month to 15.7 this month. Shipments also fell, with its index falling 16 points to 16.1. Despite these declines from November, all the broad current activity indexes show a positive trend over the course of the current year.

Firms’ responses suggest deterioration in the labor market compared with November. The current employment index fell 15 points, as the percentage of firms reporting an increase in employees fell from 29 percent in November to 17 percent in December. The percentage of firms reporting a longer workweek was greater than the percentage reporting a shorter workweek (20 percent versus 14 percent). Nonetheless, the workweek index fell almost 2 points, to 6.2.

Firms Report Modest Price Increases
Input price pressures were reported to be slightly lower than last month’s: The prices paid index fell 3 points to 14.0 in December. Most firms reported that input prices were unchanged. With respect to prices received for manufactured goods, about 18 percent of the firms reported higher prices in December, and the index rose 1 point, to 12.5.

Future Indicators Weaken but Still Reflect Expected Growth
The diffusion index for future activity edged down 6 points, to 51.9, in December (see Chart 1). The future indexes for new orders and shipments both fell 3 points, but a majority of the firms continue to expect increased orders and shipments over the next six months. Firms also pulled back their expectations about employment growth. More than 51 percent of the firms are expecting no change in their employment levels over the next six months, compared with 41 percent last month. While the future employment index decreased, from 31.5 in November to 21.7 in December, the future workweek index rose about 8 points, to 18.3.

Input and Labor Cost Expectations
In this month’s special questions, firms were asked about their expectations for changes in various input and labor costs for the coming year (see Special Questions). The responses indicate that the largest average-annual increase is expected to be for health benefits (8.2 percent), which is similar to responses to the same questions in recent prior years. Wages and nonhealth benefits are expected to rise only 2.3 percent and 1.3 percent, respectively. Firms were also asked how the expected cost increases will compare with 2014 costs. For most categories, a majority of the firms reported that their costs would remain the same. One exception was the health benefits category, with 67 percent expecting higher costs. The share of firms indicating that their energy costs would be lower in 2014 was 48 percent, while the share that expected their energy costs to be the same was 32 percent.

Summary
The December Manufacturing Business Outlook Survey suggests a slower pace of expansion of the region’s manufacturing sector but general optimism about the future. Firms were less optimistic about employment increases over the next six months, however, and concerns about rising health-care costs continue to be reported.


DJ-BTMU U.S. Business Barometer declined by 0.3%
Posted: December 18, 2014 at 10:00 AM (Thursday)

For the week ending December 6 2014, the DJ-BTMU U.S. Business Barometer continued to decline by 0.3 percent to 98.5. This week’s barometer was driven by both consumption and production indexes. Chain store sales fell by 1.9 percent, on an inflation-adjusted basis, mainly owing to a stagnant holiday shopping after the Thanksgiving week big increase. As to the production side, auto and truck production dropped by 17.8 and 6.4 percent respectively, while electric output increased 2.6 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, declined by 0.1 percent to 98.7. Its year-over-year growth rate was 0.6 percent.


Weekly Initial Unemployment Claims Decrease 6,000 to 289,000
Posted: December 18, 2014 at 08:30 AM (Thursday)

In the week ending December 13, the advance figure for seasonally adjusted initial claims was 289,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 294,000 to 295,000. The 4-week moving average was 298,750, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 250 from 299,250 to 299,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending December 6, 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 December 6 was 2,373,000, a decrease of 147,000 from the previous week's revised level. The previous week's level was revised up 6,000 from 2,514,000 to 2,520,000. The 4-week moving average was 2,397,000, an increase of 10,000 from the previous week's revised average. The previous week's average was revised up by 1,500 from 2,385,500 to 2,387,000.


FOMC target funds rate maintained at 0 - 1/4%
Posted: December 17, 2014 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective, partly reflecting declines in energy prices. Market-based measures of inflation compensation have declined somewhat further; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. The Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

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

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

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Stanley Fischer; Loretta J. Mester; Jerome H. Powell; and Daniel K. Tarullo.

Voting against the action were Richard W. Fisher, who believed that, while the Committee should be patient in beginning to normalize monetary policy, improvement in the U.S. economic performance since October has moved forward, further than the majority of the Committee envisions, the date when it will likely be appropriate to increase the federal funds rate; Narayana Kocherlakota, who believed that the Committee's decision, in the context of ongoing low inflation and falling market-based measures of longer-term inflation expectations, created undue downside risk to the credibility of the 2 percent inflation target; and Charles I. Plosser, who believed that the statement should not stress the importance of the passage of time as a key element of its forward guidance and, given the improvement in economic conditions, should not emphasize the consistency of the current forward guidance with previous statements.


3Q2014 Current Account Deficit Increased
Posted: December 17, 2014 at 08:30 AM (Wednesday)

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)—increased to $100.3 billion (preliminary) in the third quarter of 2014 from $98.4 billion (revised) in the second quarter. The deficit remained at 2.3 percent of current-dollar gross domestic product (GDP). The increase in the current-account deficit was more than accounted for by an increase in the deficit on secondary income. In addition, the surplus on services decreased. These changes were partly offset by a decrease in the deficit on goods and an increase in the surplus on primary income.


Consumer Price Index declined 0.3% in November, Ex Fd & Engy up 0.1%
Posted: December 17, 2014 at 08:30 AM (Wednesday)

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.3 percent in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.3 percent before seasonal adjustment.

The gasoline index posted its sharpest decline since December 2008 and was the main cause of the decrease in the seasonally adjusted all items index. The indexes for fuel oil and natural gas also declined, and the energy index fell 3.8 percent. The food index rose 0.2 percent with major grocery store food groups mixed.

The index for all items less food and energy increased 0.1 percent in November. The shelter index rose 0.3 percent, and the indexes for medical care, airline fares, and alcoholic beverages also rose. In contrast, the indexes for apparel, used cars and trucks, recreation, household furnishings and operations, personal care, and new vehicles all declined in November.

The all items index increased 1.3 percent over the last 12 months, a notable decline from the 1.7 percent figure from the 12 months ending October. The index for all items less food and energy has increased 1.7 percent over the last 12 months, compared to 1.8 percent for the 12 months ending October. The food index has risen 3.2 percent over the span. However, the energy index has declined 4.8 percent over the past 12 months, with the gasoline and fuel oil indexes both falling over 10 percent.


Real Average Hourly Earnings rose 0.6% in November
Posted: December 17, 2014 at 08:30 AM (Wednesday)

Real average hourly earnings for all employees rose 0.6 percent from October to November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.4 percent increase in average hourly earnings combined with a 0.3 percent decrease in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased by 0.9 percent over the month due to the increase in real average hourly earnings combined with a 0.3 percent increase in the average workweek.

Real average hourly earnings increased by 0.8 percent, seasonally adjusted, from November 2013 to November 2014. This increase in real average hourly earnings, combined with a 0.3 percent increase in the average workweek, resulted in a 1.1 percent increase in real average weekly earnings over this period.


Purchase Apps down, Refi's unchanged in Latest MBA Weekly Survey
Posted: December 17, 2014 at 08:30 AM (Wednesday)

Mortgage applications decreased 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 December 12, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index remained unchanged from the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 5 percent lower than the same week one year ago.

“Amid plummeting oil prices and heightened concerns regarding global economic growth, interest rates dropped sharply through the course of the week, with longer-term Treasury yields falling more than 10 basis points. The average mortgage rate also dropped during the week, with several lenders offering 30-year fixed-rate loans with rates below four percent. The 30-year conforming rate was at its lowest level since May 2013, and the 30-year jumbo rate averaged 3.99 percent for the week,” said Mike Fratantoni, MBA’s Chief Economist. “Surprisingly, given this large drop in rates, applications for conventional refinance mortgages did not increase last week, but there was a notable pickup in government refinance applications, which were up 11 percent for the week, led by an almost 16 percent increase in VA refinance applications.”

The refinance share of mortgage activity increased to 66 percent of total applications, the highest level since December 2013, from 64 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.2 percent of total applications.

The FHA share of total applications decreased to 8.7 percent this week from 9.0 percent last week. The VA share of total applications increased to 10.6 percent this week from 9.6 percent last week. The USDA share of total applications remained unchanged at 0.8 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.06 percent, the lowest level since May 2013, from 4.11 percent, with points decreasing to 0.21 from 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.99 percent, the lowest level since May 2013, from 4.07 percent, with points increasing to 0.28 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.86 percent from 3.87 percent, with points decreasing to -0.04 from 0.03 (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 3.33 percent from 3.35 percent, with points decreasing to 0.27 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.00 percent from 3.11 percent, with points increasing to 0.43 from 0.19 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


November Housing Starts down 1.6%, Permits down 5.2%
Posted: December 16, 2014 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,035,000. This is 5.2 percent (±1.4%) below the revised October rate of 1,092,000 and is 0.2 percent (±1.8%) below the November 2013 estimate of 1,037,000. Single-family authorizations in November were at a rate of 639,000; this is 1.2 percent (±1.4%) below the revised October figure of 647,000. Authorizations of units in buildings with five units or more were at a rate of 367,000 in November.

HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,028,000. This is 1.6 percent (±8.1%) below the revised October estimate of 1,045,000 and is 7.0 percent (±10.2%) below the November 2013 rate of 1,105,000. Single-family housing starts in November were at a rate of 677,000; this is 5.4 percent (±8.1%) below the revised October figure of 716,000. The November rate for units in buildings with five units or more was 340,000.

HOUSING COMPLETIONS
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 863,000. This is 6.4 percent (±8.3%) below the revised October estimate of 922,000, but is 4.5 percent (±9.6%) above the November 2013 rate of 826,000. Single-family housing completions in November were at a rate of 596,000; this is 2.9 percent (±8.2%) below the revised October rate of 614,000. The November rate for units in buildings with five units or more was 256,000.


ICSC Chain Store Sales rose 3.0% in Dec 13 Wk
Posted: December 16, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index rose 3% in the week ended Saturday from the previous week on a seasonally adjusted, comparable-store basis.

The recent volatility reflects increased promotions of the season, according to Michael Niemira, ICSC research consultant.

"Consumers actually reported being considerably behind on their shopping compared to the same week last year--so the last few shopping days prior to Christmas should be robust," he added.

On a year-to-year basis, the weekly reading increased 1.1%


Treasury International Capital Data for October 2014
Posted: December 15, 2014 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for October 2014. The sum total in October of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $178.4 billion. Of this, net foreign private inflows were $166.5 billion, and net foreign official inflows were $11.9 billion.

Foreign residents decreased their holdings of long-term U.S. securities in October; net sales were $15.0 billion. Net sales by private foreign investors were $15.4 billion, while net purchases by foreign official institutions were $0.5 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $13.6 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign sales of long-term securities were $1.4 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $14.9 billion in October.

Foreign residents increased their holdings of U.S. Treasury bills by $24.0 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $25.8 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $167.4 billion.


Builder Confidence fell 1 points in December to 57
Posted: December 15, 2014 at 10:00 AM (Monday)

Following a four-point uptick last month, builder confidence in the market for newly built single-family homes fell one point in December to a level of 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

Members in many markets across the country have seen their businesses improve over the course of the year, and we expect builders to remain confident in 2015.

After a sluggish start to 2014, the HMI has stabilized in the mid-to-high 50s index level trend for the past six months, which is consistent with our assessment that we are in a slow march back to normal. As we head into 2015, the housing market should continue to recover at a steady, gradual pace.

Two of the three HMI components posted slight losses in December. The index gauging current sales conditions fell one point to 61, while the index measuring expectations for future sales dropped a single point to 65 and the index gauging traffic of prospective buyers held steady at 45.

Looking at the three-month moving averages for regional HMI scores, the West rose by four points to 62 and the Northeast edged up one point to 45, while the Midwest registered a three-point loss to 54 and the South dropped two points to 60.


Industrial Production increased 1.3%
Capacity Utilization increased 0.8% to 80.1%

Posted: December 15, 2014 at 09:15 AM (Monday)

Industrial production increased 1.3 percent in November after edging up in October; output is now reported to have risen at a faster pace over the period from June through October than previously published. In November, manufacturing output increased 1.1 percent, with widespread gains among industries. The rise in factory output was well above its average monthly pace of 0.3 percent over the previous five months and was its largest gain since February. In November, the output of utilities jumped 5.1 percent, as weather that was colder than usual for the month boosted demand for heating. The index for mining decreased 0.1 percent. At 106.7 percent of its 2007 average, total industrial production in November was 5.2 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.8 percentage point in November to 80.1 percent, a rate equal to its long-run (1972–2013) average.


Empire State Manufacturing Survey Conditions signaled a decline
Posted: December 15, 2014 at 08:30 AM (Monday)

The December 2014 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index dropped fourteen points to -3.6, its first negative reading in nearly two years. The new orders index also fell into negative territory, tumbling eleven points to -2.0, and the shipments index fell to -0.2. Labor market conditions were mixed, with the index for number of employees holding steady at 8.3, while the average workweek index declined to -11.5. The prices paid index was little changed at 10.4, indicating a continued modest increase in input prices, while the prices received index climbed to 6.3. Indexes for the six-month outlook continued to convey optimism, but to a somewhat lesser extent than in recent months.

General Business Conditions Index Retreats below Zero
For the first time in nearly two years, the general business conditions index signaled a decline in business activity for New York manufacturers. The index retreated fourteen points to -3.6 in December, with 19 percent of respondents reporting that conditions had improved over the month and 23 percent reporting that conditions had worsened. Overall, readings for the headline index during the fourth quarter of 2014 mark a significant downshift in activity from the levels seen during the five-month period from May through September. The new orders index fell eleven points to -2.0, indicating a small decline in orders, and the shipments index dropped twelve points to -0.2—a sign that shipments were flat. The unfilled orders index plummeted seventeen points to -24.0. The delivery time index drifted down to -14.6, suggesting that delivery times were shorter, and the inventories index fell to -11.5, pointing to lower inventory levels.

Small Increases Seen in Input and Selling Prices
The prices paid index was little changed at 10.4, signaling only a modest increase in input prices for a third consecutive month. After falling to zero in November, the prices received index advanced six points to 6.3 in December—evidence of a small increase in selling prices. Labor market indicators were mixed. The index for number of employees, at 8.3, held steady for a third consecutive month, suggesting that employment levels continued to increase. The average workweek index, by contrast, declined for a fourth consecutive month, and at -11.5, pointed to a noteworthy decline in hours worked.

Optimism Softens, but Remains High
Indexes assessing the six-month outlook were generally lower this month, but nevertheless conveyed considerable optimism about future business activity. The index for future general business conditions fell nine points to 38.6—still a fairly high figure by historical standards. The future new orders and shipments indexes declined to similar levels. The index for expected number of employees was 20.8, indicating that employment is expected to expand briskly, and the future average workweek index climbed to 12.5, its highest level in more than two years. The capital expenditures index fell twelve points to 15.6, and the technology spending index inched down to 17.7.


Producer Price Index fell 0.2% in November, ex Fd & Engy down 0.1%
Posted: December 12, 2014 at 08:30 AM (Friday)

The Producer Price Index for final demand fell 0.2 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease followed a 0.2-percent rise in October and a 0.1-percent decline in September. On an unadjusted basis, the index for final demand advanced 1.4 percent for the 12 months ended in November, the smallest 12-month increase since a 1.2-percent rise in February 2014.

In November, the 0.2-percent decline in final demand prices can be traced to the index for final emand goods, which decreased 0.7 percent. In contrast, prices for final demand services advanced 0.1 percent.

Within intermediate demand, prices for processed goods declined 1.0 percent, the index for unprocessed goods fell 1.3 percent, and prices for services moved up 0.3 percent.


Business Inventories up 0.2% in October
Posted: December 11, 2014 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for October, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,350.9 billion, down 0.1 percent (±0.3%)* from September 2014, but were up 3.4 percent (±0.5%) from October 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,760.4 billion, up 0.2 percent (±0.1%) from September 2014 and up 4.8 percent (±0.5%) from October 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of October was 1.30. The October 2013 ratio was 1.29.


DJ-BTMU U.S. Business Barometer declined by 0.2%
Posted: December 11, 2014 at 10:00 AM (Thursday)

For the week ending November 29 2014, the DJ-BTMU U.S. Business Barometer declined by 0.2 percent to 98.8 after three weeks of positive growth. This week’s barometer was driven by both consumption and production indexes. Chain store sales fell by 1.8 percent, mainly owing to weak performance in department and non-apparel speciality stores business. As to the production side, electric output dropped by 11.2 percent, although it was partially offset by gains in auto and truck production, which climbed by 22.7 and 3.5 percent, respectively.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.1 percent to 98.8. Its year-over-year growth rate was 0.9 percent.


U.S. Import Price Index declined 1.5% in November
Posted: December 11, 2014 at 08:30 AM (Thursday)

U.S. import prices declined 1.5 percent in November, after falling 1.2 percent in October, the U.S. Bureau of Labor Statistics reported today. Both decreases were driven by declining fuel prices. The price index for U.S. exports fell 1.0 percent in November following a 0.9-percent drop the previous month.


U.S. Retail Sales for November increase 0.7%, Ex-Auto up 0.5%
Posted: December 11, 2014 at 08:30 AM (Thursday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $449.3 billion, an increase of 0.7 percent (±0.5%) from the previous month, and 5.1 percent (±0.9%) above November 2013. Total sales for the September through November 2014 period were up 4.7 percent (±0.7%) from the same period a year ago. The September to October 2014 percent change was revised from +0.3 percent (±0.5%) to +0.5 percent (±0.2%).

Retail trade sales were up 0.7 percent (± 0.5%) from October 2014, and 4.9 percent (±0.7%) above last year. Auto and other motor vehicle dealers were up 9.5 percent (±3.2%) from November 2013 and non-store retailers were up 8.7 percent (±2.1%) from last year.


Weekly Initial Unemployment Claims Decrease 3,000 to 294,000
Posted: December 11, 2014 at 08:30 AM (Thursday)

In the week ending December 6, the advance figure for seasonally adjusted initial claims was 294,000, a decrease of 3,000 from the previous week's unrevised level of 297,000. The 4-week moving average was 299,250, an increase of 250 from the previous week's unrevised average of 299,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending November 29, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 29 was 2,514,000, an increase of 142,000 from the previous week's revised level. The previous week's level was revised up 10,000 from 2,362,000 to 2,372,000. The 4-week moving average was 2,385,500, an increase of 27,750 from the


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: December 10, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 5, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 52 percent compared with the previous week. The Refinance Index increased 13 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 37 percent compared with the previous week and was 4 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 64 percent of total applications from 60 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.0 percent of total applications.

The FHA share of total applications decreased to 9.0 percent this week from 9.3 percent last week. The VA share of total applications increased to 9.6 percent this week from 9.4 percent last week. The USDA share of total applications remained unchanged at 0.8 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.11 percent from 4.08 percent, with points remaining unchanged from 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.07 percent from 4.11 percent, with points decreasing to 0.16 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.87 percent from 3.85 percent, with points decreasing to 0.03 from 0.09 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.35 percent from 3.30 percent, with points increasing to 0.30 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 5/1 ARMs increased to 3.11 percent from 3.07 percent, with points decreasing to 0.19 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.


Wholesale Inventories up 0.4% in October
Posted: December 9, 2014 at 10:00 PM (Tuesday)

The U.S. Census Bureau announced today that October 2014 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 $454.6 billion, up 0.2 percent (+/-0.9) from the revised September level and were up 4.3 percent (+/-1.4%) from the October 2013 level. The September preliminary estimate was revised downward $0.6 billion or 0.1 percent. October sales of durable goods were up 0.8 percent (+/-1.2%) from last month and were up 6.0 percent (+/-1.4%) from a year ago. Sales of electrical and electronic goods were up 1.9 percent from last month. Sales of nondurable goods were down 0.3 percent (+/-1.1%) from September, but were up 2.8 percent (+/-2.5%) from last October. Sales of petroleum and petroleum products were down 5.8 percent from last month, while sales of farm product raw materials were up 8.0 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $542.0 billion at the end of October, up 0.4 percent (+/-0.4%) from the revised September level and were up 6.8 percent (+/-1.1%) from the October 2013 level. The September preliminary estimate was revised upward $0.9 billion or 0.2 percent. October inventories of durable goods were virtually unchanged (+/-0.4%) from last month, but were up 8.5 percent (+/-1.4%) from a year ago. Inventories of computer and computer peripheral equipment and software were down 3.6 percent from last month, while inventories of hardware and plumbing and heating equipment and supplies were up 1.6 percent. Inventories of nondurable goods were up 1.2% (+/-0.7%) from September and were up 4.2 percent (+/-1.2%) from last October. Inventories of drugs and druggists' sundries were up 3.2 percent from last month and inventories of paper and paper products were up 1.6 percent.

The October inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.19. The October 2013 ratio was 1.16.


Job Openings were 4.8 million in October
Posted: December 9, 2014 at 10:00 AM (Tuesday)

There were 4.8 million job openings on the last business day of October, little changed from 4.7 million in September, the U.S. Bureau of Labor Statistics reported today. Hires (5.1 million) and separations (4.8 million) were steady in October. Within separations, the quits rate (1.9 percent) was little changed and the layoffs and discharges rate (1.2 percent) was unchanged. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 4.8 million job openings on the last business day of October. The job openings rate was 3.3 percent. The number of job openings was little changed for total private and declined for government in October. (See table 1.) The level of job openings decreased for state and local government. The job openings level was little changed in all four regions.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in October for total nonfarm and total private, and was little changed for government. The job openings level increased over the year for many industries, including both professional and business services and accommodation and food services. The number of openings also increased over the year in all four regions.


ICSC Chain Store Sales decreased by 1.5% in Dec 6 Wk
Posted: December 9, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index fell 1.5% in the week ended Saturday from the previous week on a seasonally adjusted, comparable-store basis.

On a year-to-year basis, the weekly reading increased 2.9%.


NFIB Small Business Optimism Index gained 2.0 points to 98.1
Posted: December 9, 2014 at 07:30 AM (Tuesday)

The Small Business Optimism Index gained 2.0 points, taking the Index to its highest level since February 2007. The average of the Index from 1974Q4 to 2014 to date is 98, which includes all the Great Recession readings. What didn’t improve were the four “hard” Index components: job creation plans, plans for capital outlays, job openings and inventory investment plans, together adding a negative 1 percentage point to the Index. The entire gain in the Index was accounted for by two components: Expectations for Business Conditions in Six Months and Expectations for Real Sales Volumes, adding a combined 21 percentage points to net favorable responses, perhaps a response to the November election results.

Last month, we asked if the election outcome would matter to small business owners, planning to look for evidence in the November survey results which are mailed in over the entire month. It clearly had no impact on hiring and spending plans, these were unchanged from October numbers. But expectations did improve, with a 16 percentage point gain in expectations for better business conditions in 6 months and a 5 point gain in expectations for higher real sales in the coming months, likely not a response to “Black Friday” or “Small Business Saturday” results.

Responses to the question “Is now a good time to expand your business substantially?” might also be a result of election euphoria. The percent responding NO fell 5 percentage points to 53 percent, nice, but not the lowest reading in 2014. However, the percent of those saying NO and blaming the “political climate” fell from 28 percent of those who said NO to 19 percent, a significant decline and the lowest since January, 2012. The high reading was 37 percent in October, 2013. So it appears likely that the election outcome played a significant role in improving the Index of Small Business Optimism, but only two of the ten Index components appeared to be impacted. What is needed is a translation of this optimism into spending and hiring.

Third quarter real GDP growth was revised up to 3.9 percent making the 6 months in the middle of 2014 one of the best growth periods in decades. However, this didn’t do much for small business job creation in the U.S. One reason is that a lot of this growth has been driven by inventory building, unusual defense outlays and exports, selling around the world, an activity that doesn’t involve many small businesses. Expectations for growth in the fourth quarter are not as rosy, reverting to the high 2 percent pace.

A new round of healthcare events will impact business owners in the coming months and consumers will find that their out of pocket outlays for healthcare will be rising because their policies have high deductibles. Just what impact this will have on spending remains to be seen.


Employment Trends Index increased in November to 123.24
Posted: December 8, 2014 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in November. The index now stands at 123.24, up from 122.8 (a downward revision) in October. This represents a 6.1 percent gain in the ETI compared to a year ago.

The Employment Trends Index increased for the 11th straight month in November, and recent solid improvements suggest that strong job growth is likely to continue into early next year. We will probably reach the natural rate of unemployment, 5.5 percent, within a few months, and these tighter labor market conditions should lead to acceleration in wage growth.

November’s increase in the ETI was driven by positive contributions from five of the eight components. In order from the largest positive contributor to the smallest, these were: Industrial Production, Ratio of Involuntarily Part-time to All Part-time Workers, Number of Temporary Employees, Real Manufacturing and Trade Sales, and Job Openings.


Consumer Credit Increased at an annual rate of 5.00%
Posted: December 5, 2014 at 03:00 PM (Friday)

In October, consumer credit increased at a seasonally adjusted annual rate of 5 percent. Revolving credit increased at an annual rate of 1-1/4 percent, while nonrevolving credit increased at an annual rate of 6-1/4 percent.


New orders for manufactured goods decreased 0.7%
Posted: December 5, 2014 at 10:00 AM (Friday)

New orders for manufactured goods in October, down three consecutive months, decreased $3.3 billion or 0.7 percent to $496.6 billion, the U.S. Census Bureau reported today. This followed a 0.5 percent September decrease. Excluding transportation, new orders decreased 1.4 percent.

Shipments, down two of the last three months, decreased $3.8 billion or 0.8 percent to $499.2 billion. This followed a 0.1 percent September increase.

Unfilled orders, up eighteen of the last nineteen months, increased $4.9 billion or 0.4 percent to $1,174.2 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.4 percent September increase. The unfilled orders-to-shipments ratio was 6.73, up from 6.71 in September.

Inventories, up twenty-three of the last twenty-four months, increased $0.5 billion or 0.1 percent to $655.6 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.2 percent September increase. The inventories-to-shipments ratio was 1.31, up from 1.30 in September.


November Employment increased by 321,000
Unemployment Rate was unchanged at 5.8%

Posted: December 5, 2014 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 321,000 in November, and the unemployment rate was unchanged at 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, led by growth in professional and business services, retail trade, health care, and manufacturing.

In November, the unemployment rate held at 5.8 percent, and the number of unemployed persons was little changed at 9.1 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.2 percentage points and 1.7 million, respectively.

Among the major worker groups, the unemployment rate for adult men rose to 5.4 percent in November. The rates for adult women (5.3 percent), teenagers (17.7 percent), whites (4.9 percent), blacks (11.1 percent), and Hispanics (6.6 percent) showed little change over the month. The jobless rate for Asians was 4.8 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.8 million in November. These individuals accounted for 30.7 percent of the unemployed. Over the past 12 months, the number of long-term unemployed declined by 1.2 million.

The civilian labor force participation rate held at 62.8 percent in November and has been essentially unchanged since April. The employment-population ratio, at 59.2 percent, was unchanged in November but is up by 0.6 percentage point over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 6.9 million, changed little in November. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In November, 2.1 million persons were marginally attached to the labor force, essentially unchanged 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 698,000 discouraged workers in November, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in November had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 321,000 in November, compared with an average monthly gain of 224,000 over the prior 12 months. In November, job growth was widespread, led by gains in professional and business services, retail trade, health care, and manufacturing.

In November, the average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours. The manufacturing workweek rose by 0.2 hour to 41.1 hours, and factory overtime edged up by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.

Average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $24.66 in November. Over the year, average hourly earnings have risen by 2.1 percent. In November, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $20.74.

The change in total nonfarm payroll employment for September was revised from +256,000 to +271,000, and the change for October was revised from +214,000 to +243,000. With these revisions, employment gains in September and October combined were 44,000 more than previously reported.


Goods and Services Deficit Decreased in October 2014
Posted: December 5, 2014 at 08:30 AM (Friday)

The Nation’s international trade deficit in goods and services decreased to $43.4 billion in October from $43.6 billion in September (revised), as exports increased more than imports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.4 billion in October, down $0.2 billion from $43.6 billion in September, revised. October exports were $197.5 billion, $2.3 billion more than September exports. October imports were $241.0 billion, $2.1 billion more than September imports.

The October decrease in the goods and services deficit reflected a decrease in the goods deficit of less than $0.1 billion to $62.7 billion and an increase in the services surplus of $0.1 billion to $19.2 billion.

Year-to-date, the goods and services deficit increased $20.5 billion, or 5.1 percent, from the same period in 2013. Exports increased $57.8 billion or 3.1 percent. Imports increased $78.3 billion or 3.4 percent.


DJ-BTMU U.S. Business Barometer climbed by another 0.4%
Posted: December 4, 2014 at 10:00 AM (Thursday)

For the week ending November 22 2014, the DJ-BTMU U.S. Business Barometer climbed by another 0.4 percent to 99.0, extending the positive trend to three weeks. This week’s barometer was driven by both consumption and production indexes. Chain store sales jumped 2.2 percent partly owing to early Black Friday promotions, but was somewhat offset by a drop of 4.8 percent in MBA’s purchase index. As to the production side, all indexes, except auto and truck production, posted gains this week, particularly electric output, which rose by 6.5 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.2 percent to 98.7. Its year-over-year growth rate was 0.9 percent.


Weekly Initial Unemployment Claims Decrease 17,000 to 297,000
Posted: December 4, 2014 at 08:30 AM (Thursday)

In the week ending November 29, the advance figure for seasonally adjusted initial claims was 297,000, a decrease of 17,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 313,000 to 314,000. The 4-week moving average was 299,000, an increase of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 294,000 to 294,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending November 22, unchanged from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 1.7 to 1.8 percent. The advance number for seasonally adjusted insured unemployment during the week ending November 22 was 2,362,000, an increase of 39,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,316,000 to 2,323,000. The 4-week moving average was 2,355,250, an increase of 1,500 from the previous week's revised average. The previous week's average was revised up by 1,750 from 2,352,000 to 2,353,750.


Challenger Layoffs declined by 30% in November
Posted: December 4, 2014 at 07:30 AM (Thursday)

Downsizing activity by U.S.-based employers declined by 30 percent in November, with 35,940 planned job cuts announced during the penultimate month of 2014, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The November slowdown comes just one month after job cuts surged 70 percent to 51,183 in October. The November total was 21 percent lower than the 45,314 job cuts announced the same month a year ago.

Heading into the final month of the year, employers have announced 450,531 job cuts, to date. That is down 5.8 percent from 478,428 at the same point in 2013. Currently, job cuts are on pace to finish 2014 with the lowest year-end total since 1997.

Companies in the consumer products industry saw the heaviest downsizing last month, shedding 5,158 jobs from their payrolls. The health care sector followed closely, with 5,124 announced job cuts during the month.

Year-to-date, the computer industry remains the top job-cutting industry, having announced 58,207 planned layoffs. That is nearly double the 29,558 job cuts announced by computer firms between January and November 2013.

The second leading job-cut industry to date is the retail sector, which has announced 41,588 job cuts this year, including 2,640 last month.

While retailers have cut about 9,500 jobs over the last two months, this is an area that continues to expand. Right now, these employers are adding tens of thousands of seasonal workers to help with the holiday rush. It is true that these jobs are temporary and most will be eliminated in the new year. However, government data show that employment in the sector has nearly reached pre-recession levels and continues to grow.

Seasonally-adjusted employment figures from the Bureau of Labor Statistics, which are intended to smooth out the volatile fluctuations related to seasonal hiring, show that there were 15.4 million workers in retail, as of October. That is just shy of the record-level of 15.5 million reached in 2007.

And, before dismissing all of these new jobs as low-skilled, low-paying sales clerk and cashier jobs, remember that the shift toward online shopping means retailers are hiring more and more app developers, IT security professionals, online and social media marketing teams, logistics engineers, as analysts to collect, sort and interpret all of that data collected with each mouse click.


Beige Book: Economic Activity Continues to Expand
Posted: December 3, 2014 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand in October and November. A number of Districts also noted that contacts remained optimistic about the outlook for future economic activity. Consumer spending continued to advance in most Districts, and reports on tourism were mostly positive. Employment gains were widespread across Districts, and Districts reporting on business spending generally noted some improvement. Demand for nonfinancial services generally increased. Manufacturing activity strengthened in most Districts. Construction and real estate activity expanded overall, but at a pace that varied by sector and by District. Lending typically held steady or increased. Crop yields were generally good, although overly wet or dry conditions were an issue in some Districts. Most crop prices were lower than last year, but livestock prices were higher. Energy and mining activity was higher on net, though lower oil prices were a concern for the oil industry in the Atlanta and Dallas Districts. Overall price and wage inflation remained subdued.


Help Wanted OnLine Labor Demand rose 170,200 to 5,253,900 in November
Posted: December 3, 2014 at 10:00 AM (Wednesday)

Online advertised vacancies rose 170,200 to 5,253,900 in November, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The October Supply/Demand rate stands at 1.77 unemployed for each advertised vacancy with a total of 3.9 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 9.0 million in October.

November labor demand shows renewed strength, helping to boost a slow-growth second half of the year. Gains were widespread across States and MSAs with continued positive trend growth across much of the U.S.

In November, the Professional category saw strong gains in Management (17,100), Business and Finance (15,400) and Computer (12,800) with a loss in Healthcare (-11,400). The Services/Production category saw gains in Office/Admin (43,100), Food (20,100) and Transportation (16,900) with a small drop in Sales (-8,800). Supply/Demand rates continue to improve, providing better opportunities for job seekers).


ISM Non-Manufacturing Index increased to 59.3%
Posted: December 3, 2014 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in November for the 58th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 59.3 percent in November, 2.2 percentage points higher than the October reading of 57.1 percent. This represents continued growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased to 64.4 percent, which is 4.4 percentage points higher than the October reading of 60 percent, reflecting growth for the 64th consecutive month at a faster rate. The New Orders Index registered 61.4 percent, 2.3 percentage points higher than the reading of 59.1 percent registered in October. The Employment Index decreased 2.9 percentage points to 56.7 percent from the October reading of 59.6 percent and indicates growth for the ninth consecutive month. The Prices Index increased 2.3 percentage points from the October reading of 52.1 percent to 54.4 percent, indicating prices increased at a faster rate in November when compared to October. According to the NMI®, 14 non-manufacturing industries reported growth in November. Comments from the majority of respondents indicate that business conditions are on track for continued growth. The respondents have also stated that there is some strain on capacity due to the month-over-month increase in activity.

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

Tags - Research
ADP EMPLOYMENT
BEIGE BOOK
BUSINESS BAROMETER
BUSINESS INVENTORIES
CASE-SHILLER
CHALLENGER LAYOFFS
CHICAGO FED MIDWEST MFG
CHICAGO FED NATL ACTIVITY
CHICAGO PMI
CONSTRUCTION SPENDING
CONSUMER CONFIDENCE
CONSUMER CREDIT
CPI
CURRENT ACCOUNT
DURABLE GOODS
EMPLOYMENT COST INDEX
EMPLOYMENT TRENDS INDEX
EXISTING HOME SALES
FACTORY ORDERS
FOMC STMT
FOMC
GDP
HELP WANTED HWOL
HOUSING STARTS
ICSC CHAIN STORE
IMPORT PRICE INDEX
INDUSTRIAL PRODUCTION
INTERNATIONAL TRADE
ISM MFG
ISM NON-MFG
JOB OPENINGS
JOBLESS CLAIMS
KANSAS CITY FED MFG
LEADING INDEX
MASS LAYOFFS
MICH CONSUMER CONFIDENCE
MORTGAGE APPS
NAHB INDEX
NAPM-NY
NBER
NEW HOME SALES
NEW YORK FED MFG
NFIB OPTIMISM INDEX
NONFARM EMPLOYMENT
PAYCHEX-IHS SMALL JOBS
PENDING HOME SALES
PERSONAL INCOME
PHILA FED FORECASTERS
PHILA FED MFG
PHILA FED NON-MFG
PPI
PRODUCTIVITY GROWTH
REAL HOURLY EARNINGS
RETAIL SALES
RICHMOND FED MFG
TEXAS FED MFG
TREASURY INTL CAPITAL
WHOLESALE INVENTORIES
Archives
Jan 2015
Dec 2014
Nov 2014
Oct 2014
Sep 2014
Aug 2014
Jul 2014
Jun 2014
May 2014
Apr 2014
Mar 2014
Feb 2014
Jan 2014
Dec 2013
Nov 2013
Oct 2013
Sep 2013
Aug 2013
Jul 2013
Jun 2013
May 2013
Apr 2013
Mar 2013
Feb 2013
Jan 2013
Dec 2012
Nov 2012
Oct 2012
Sep 2012
Aug 2012
Jul 2012
Jun 2012
May 2012
Apr 2012
Mar 2012
Feb 2012
Jan 2012
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Dec 2009
Nov 2009
Oct 2009
Sep 2009
Aug 2009
Jul 2009
Jun 2009
May 2009
Apr 2009
Mar 2009
Feb 2009
Jan 2009
Dec 2008
Nov 2008
Oct 2008
Sep 2008
Aug 2008


Buy Economic Books at

The OneWall.com Book Shop

Quick Links
Barron's Online
Bloomberg
CNBC
CNBC TV Live
CNet Investor
Financial Times (UK)
Forbes
MSNBC TV Live
NBC News
NY Times
The Economist
TheStreet.com
Wall St Journal
Dismal Scientist
Dr. Ed Yardeni
FRED Graph
Lawrence Kudlow
Stone McCarthy
NABE
ABC News
CNNfn
Institutional Investor
MarketWatch
Cash Prices - WSJ.com
Dr. Jeremy Siegel
Market Map
NY RBOB Gas
BankStocks.com
Dow Jones Indices
Morningstar
SP Indices
Mt Washington Observatory
Weather.com
Yahoo!!


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.

CFA Institute

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