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Category: Research - Topic: Economics

Consumer Price Index increased 0.1% in May, Ex Fd & Engy up 0.2% Posted: June 18, 2013 at 08:30 AM (Tuesday) The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.4 percent before seasonal adjustment. The shelter index rose 0.3 percent and accounted for more than half of the seasonally adjusted all items increase in May. The energy index rose modestly, with the gasoline index flat but increases in the electricity and natural gas indexes accounting for the rise. The food index, however, turned down in May, with the food at home index falling 0.3 percent. The index for all items less food and energy increased 0.2 percent in May. Besides the shelter increase, advances in the indexes for airline fares, recreation, and apparel also contributed to the rise. In contrast, the indexes for medical care and used cars and trucks declined in May. The all items index increased 1.4 percent over the last 12 months, an increase from last month's 1.1 percent figure. The 12-month change in the index for all items less food and energy remained at 1.7 percent. The food index has risen modestly over the last 12 months, advancing 1.4 percent, while the index for energy has declined, falling 1.0 percent.
Real Average Hourly Earnings fell 0.2% in May Posted: June 18, 2013 at 08:30 AM (Tuesday) Real average hourly earnings for all employees fell 0.2 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease stems from an unchanged average hourly earnings combined with an increase of 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U). Real average weekly earnings fell 0.1 percent over the month due to the decrease in real average hourly earnings and an unchanged average workweek. Real average hourly earnings rose 0.5 percent, seasonally adjusted, from May 2012 to May 2013. The increase in real average hourly earnings, combined with a 0.3 percent increase in the average workweek, resulted in a 0.9 percent increase in real average weekly earnings over this period.
May Housing Starts up 6.8%, Permits down 3.1% Posted: June 18, 2013 at 08:30 AM (Tuesday) BUILDING PERMITS Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 974,000. This is 3.1 percent (±0.9%) below the revised April rate of 1,005,000, but is 20.8 percent (±1.3%) above the May 2012 estimate of 806,000. Single-family authorizations in May were at a rate of 622,000; this is 1.3 percent (±1.1%) above the revised April figure of 614,000. Authorizations of units in buildings with five units or more were at a rate of 325,000 in May. HOUSING STARTS Privately-owned housing starts in May were at a seasonally adjusted annual rate of 914,000. This is 6.8 percent (±10.1%) above the revised April estimate of 856,000 and is 28.6 percent (±14.4%) above the May 2012 rate of 711,000. Single-family housing starts in May were at a rate of 599,000; this is 0.3 percent (±8.7%) above the revised April figure of 597,000. The May rate for units in buildings with five units or more was 306,000. HOUSING COMPLETIONS Privately-owned housing completions in May were at a seasonally adjusted annual rate of 690,000. This is 0.9 percent (±13.4%) below the revised April estimate of 696,000, but is 12.6 percent (±13.7%) above the May 2012 rate of 613,000. Single-family housing completions in May were at a rate of 546,000; this is 4.2 percent (±13.9%) above the revised April rate of 524,000. The May rate for units in buildings with five units or more was 135,000.
ICSC Chain Store Sales edged up 0.3% in Jun 15 Wk Posted: June 18, 2013 at 07:45 AM (Tuesday) The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index edged up 0.3% in the week ended Saturday from the week before on a seasonally adjusted, comparable-store basis, as sales performance was mixed by store segment. "During the past week, department, electronics and drug store sales posted notable improvement, but there were pockets of notable weakness too among dollar stores and wholesale clubs," said ICSC Chief Economist Michael Niemira. "Most other segments were a tad stronger or a tad weaker than the year-over-year pace of the prior week." ICSC expects June industry sales will increase 3% to 3.5%. On a year-on-year basis, the reading rose 2.5%.
Builder Confidence Surges 8 points in June to 52 Posted: June 17, 2013 at 10:00 AM (Monday) Builder confidence in the market for newly-built single-family homes hit a significant milestone in June, surging eight points to a reading of 52 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Any reading over 50 indicates that more builders view sales conditions as good than poor. This is the first time the HMI has been above 50 since April 2006, and surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases. With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes. The eight-point jump in the index was the biggest one-month gain since August and September of 2002, when the HMI recorded a similar increase of eight points. Builders are experiencing some relief in the headwinds that are holding back a more robust recovery. Today’s report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark. All three HMI components posted gains in June. The index gauging current sales conditions increased eight points to 56, while the index measuring expectations for future sales rose nine points to 61 – its highest level since March 2006. The index gauging traffic of prospective buyers rose seven points to 40. The HMI three-month moving average was up in three of the four regions, with the Northeast and Midwest posting a one-point and three-point gain to 37 and 47, respectively. The South registered a four point gain to 46 while the West fell one point to 48.
Treasury International Capital Data for April 2013 Posted: June 17, 2013 at 09:00 AM (Monday) The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for April 2013. The sum total in April of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $12.7 billion. Of this, net foreign private inflows were $42.1 billion, and net foreign official inflows were negative $29.4 billion. Foreign residents decreased their holdings of long-term U.S. securities in April – net sales were $24.8 billion. Net sales by private foreign investors were $17.8 billion, and net sales by foreign official institutions were $6.9 billion. At the same time, U.S. residents increased their holdings of long-term foreign securities, with net purchases of $12.6 billion. Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were negative $37.3 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been negative $57.1 billion in April. Foreign residents decreased their holdings of U.S. Treasury bills by $15.1 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $30.1 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $99.9 billion.
Empire State Manufacturing Survey Conditions Improved Modestly Posted: June 17, 2013 at 08:30 AM (Monday) The June 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved modestly. The general business conditions index—the most comprehensive of the survey's measures—rose nine points to 7.8. Nevertheless, most other indicators in the survey fell. The new orders index slipped six points to -6.7, the shipments index fell twelve points to -11.8, and the unfilled orders index fell eight points to -14.5. The prices paid index held steady at 21.0, while the prices received index rose seven points to 11.3. Labor market conditions worsened, with the index for number of employees dropping to zero and the average workweek index retreating ten points to -11.3. Continuing the trend seen in the past few months, indexes for the six-month outlook declined, suggesting that optimism about future conditions was weakening further. In a series of supplementary survey questions, manufacturers were asked to look back and assess the short-term and medium-term effects of Superstorm Sandy on their business. As in last November’s survey (conducted immediately after the storm), the vast majority of upstate firms said that they were essentially unaffected by the storm. However, firms in New York City, Long Island, and the Lower Hudson Valley reported that it took an average of more than two weeks after the storm for business to get back to normal, and more than a third of these firms said that the storm had adversely affected their overall business revenue during the seven months since Sandy. General Business Conditions Index Recovers Some Ground After dipping into negative territory last month, the general business conditions index for June recovered some ground, rising nine points to 7.8—a sign that conditions had improved modestly. Roughly 29 percent reported that conditions had gotten better over the month, while 22 percent reported that conditions had worsened. However, while the general business conditions index was positive and higher than last month, many of the survey’s other indicators were negative and noticeably weaker. The new orders index fell six points to -6.7, and the shipments index fell twelve points to -11.8. The unfilled orders index dropped eight points to -14.5, and the delivery time index declined three points to -6.5. The inventories index fell three points to -11.3, extending the decline in inventories to a fourth consecutive month. Labor Market Conditions Soften The prices paid index was little changed at 21.0, pointing to a steady level of input price increases over the month. The prices received index climbed seven points to 11.3, indicating that selling price increases had picked up. Labor market conditions were weak: the index for number of employees fell six points to zero, indicating that employment levels were flat, and the average workweek index declined ten points to -11.3, a sign that hours worked fell modestly. Six-Month Outlook Continues to Weaken Hewing to the pattern of the past few months, indexes for the six-month outlook declined, suggesting that optimism about future conditions continued to wane. The future general business conditions index inched down to 25.0, the future new orders index fell nine points to 19.8, and the future shipments index fell five points to 20.2. The future prices paid index shot up sixteen points to 45.2, indicating that input price increases were expected to accelerate, while the future prices received index rose three points to 17.7. The index for expected number of employees retreated to 1.6, and the future average workweek index declined eleven points to -9.7. The capital expenditures index fell steeply, dropping twenty points to 3.2, and the technology spending index moved into negative territory for the first time since 2009, declining fifteen points to -3.2.
Industrial Production was unchanged% Capacity Utilization decreased to 77.6% Posted: June 14, 2013 at 09:15 AM (Friday) Industrial production was unchanged in May after having decreased 0.4 percent in April. In May, manufacturing production rose 0.1 percent after falling in each of the previous two months, and the output at mines increased 0.7 percent. The gains in manufacturing and mining were offset by a decrease of 1.8 percent in the output of utilities. At 98.7 percent of its 2007 average, total industrial production in May was 1.6 percent above its year-earlier level. The rate of capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent, a rate 0.2 percentage point below its level of a year earlier and 2.6 percentage points below its long-run (1972–2012) average.
Producer Price Index up 0.5% in May, ex Fd & Engy up 0.1% Posted: June 14, 2013 at 08:35 AM (Friday) The Producer Price Index for finished goods rose 0.5 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.7 percent in April and 0.6 percent in March. At the earlier stages of processing, prices received by manufacturers of intermediate goods declined 0.1 percent in May, and the crude goods index advanced 2.2 percent. On an unadjusted basis, prices for finished goods moved up 1.7 percent for the 12 months ended May 2013.
1Q2013 Current Account Deficit Increased Posted: June 14, 2013 at 08:30 AM (Friday) The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—increased to $106.1 billion (preliminary) in the first quarter of 2013 from $102.3 billion (revised) in the fourth quarter of 2012. The increase in the current-account deficit was accounted for by a decrease in the surplus on income and an increase in outflows of net unilateral current transfers, such as government grants, government pensions, and private remittances. These changes were partly offset by a decrease in the deficit on goods and an increase in the surplus on services.
Business Inventories up 0.3% in April Posted: June 13, 2013 at 10:00 AM (Thursday) The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,267.9 billion, down 0.1 percent (±0.2) from March 2013, but were up 1.5 percent (±1.1) from April 2012. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,657.2 billion, up 0.3 percent (±0.1) from March 2013 and up 4.2 percent (±1.5) from April 2012. The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.31. The April 2012 ratio was 1.27.
DJ-BTMU U.S. Business Barometer picked up slightly by 0.1% Posted: June 13, 2013 at 10:00 AM (Thursday) For the week ending June 1, 2013, the DJ-BTMU U.S. Business Barometer picked up slightly by 0.1 percent following a decrease of 0.4 percent in the prior week. Relatively-large declines in production indexes, especially in motor vehicle productions, were offset by gains of consumption indexes this week. Both Auto and Truck Production dropped significantly and Railroad Freight Carloadings also decreased by 1.2 percent, at almost same pace as last week. Within the consumption indexes, Chain Store Sales rose by 1.8 percent after falling by 0.9 percent and its positive contribution to the barometer was the largest among other indexes. On a year-over-year basis, the barometer showed an increase of 0.9 percent for the eighth consecutive week, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, continued to decrease by 0.1 percent. Its year-over-year growth rate was 0.8 percent.
U.S. Retail Sales for May up 0.6%, Ex-Auto up 0.3% Posted: June 13, 2013 at 08:30 AM (Thursday) The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $421.1 billion, an increase of 0.6 percent (±0.5%) from the previous month, and 4.3 percent (±0.7%) above May 2012. Total sales for the March through May 2013 period were up 3.7 percent (±0.5%) from the same period a year ago. The March to April 2013 percent change was unrevised from 0.1 percent (±0.3%). Retail trade sales were up 0.7 percent (±0.5%) from April 2013 and 4.3 percent (±0.7%) above last year. Nonstore retailers were up 11.3 percent (±2.1%) from May 2012 and building material and garden equipment and supplies dealers were up 10.1 percent (±4.0%) from last year.
U.S. Import Price Index declined 0.6% in May Posted: June 13, 2013 at 08:30 AM (Thursday) Prices for U.S. imports declined 0.6 percent in May, the U.S. Bureau of Labor Statistics reported today, after a 0.7 percent drop the previous month. Falling fuel and nonfuel prices contributed to the decreases in both months. U.S. export prices fell 0.5 percent in May following declines of 0.7 percent in April and 0.5 percent in March.
Weekly Initial Unemployment Claims Decrease 12,000 to 334,000 Posted: June 13, 2013 at 08:30 AM (Thursday) In the week ending June 8, the advance figure for seasonally adjusted initial claims was 334,000, a decrease of 12,000 from the previous week's unrevised figure of 346,000. The 4-week moving average was 345,250, a decrease of 7,250 from the previous week's unrevised average of 352,500. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending June 1, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 1 was 2,973,000, an increase of 2,000 from the preceding week's revised level of 2,971,000. The 4-week moving average was 2,967,250, a decrease of 12,750 from the preceding week's revised average of 2,980,000.
Purchase Apps up, Refi's up in Latest MBA Weekly Survey Posted: June 12, 2013 at 07:00 AM (Wednesday) Mortgage applications increased 5.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 7, 2013. Last week’s results included an adjustment for the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, increased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week. Despite the increase in the refinance index last week, the level is still 11 percent lower than two weeks prior and 36 percent lower than the recent peak at the beginning of May. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 14 percent compared with the previous week and was 6 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 69 percent of total applications from 68 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7 percent of total applications. The HARP share of refinance applications fell from 32 percent the prior week to 29 percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.15 percent, the highest rate since March 2012, from 4.07 percent, with points increasing to 0.48 from 0.35 (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 $417,500) increased to 4.25 percent, the highest rate since May 2012, from 4.20 percent, with points increasing to 0.32 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.81 percent, the highest rate since April 2012, from 3.76 percent, with points decreasing to 0.26 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.32 percent, the highest rate since April 2012, from 3.23 percent, with points remaining unchanged at 0.38 (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 2.78 percent, the highest rate since June 2012, from 2.76 percent, with points decreasing to 0.30 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Job Openings were 3.8 million in April Posted: June 11, 2013 at 10:00 AM (Tuesday) There were 3.8 million job openings on the last business day of April, little changed from 3.9 million in March, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) and separations rate (3.2 percent) also were little changed in April. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region. The number of job openings in April was 3.8 million, little changed from March. In April, the number of job openings was little changed in all industries and regions. The number of job openings in April (not seasonally adjusted) increased over the year for total nonfarm and government and was little changed for total private. Job openings increased over the year for several industries and state and local government. Job openings decreased over the year for information; arts, entertainment, and recreation; and federal government. Job openings were up over the year for the West and little changed in the other regions.
Wholesale Inventories up 0.5% in April Posted: June 11, 2013 at 10:00 AM (Tuesday) The U.S. Census Bureau announced today that April 2013 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 $416.6 billion, up 0.5 percent (+/-0.5%)* from the revised March level and were up 0.7 percent (+/-3.2%)* from the April 2012 level. The March preliminary estimate was revised downward $0.7 billion or 0.2 percent. April sales of durable goods were up 1.6 percent (+/-1.1%) from last month and were up 4.2 percent (+/-4.0%) from a year ago. Sales of furniture and home furnishings were up 5.1 percent from last month and sales of machinery, equipment, and supplies were up 5.0 percent. Sales of nondurable goods were down 0.5 percent (+/-0.4%) from March and were down 2.2 percent (+/-3.9%)* from last April. Sales of apparel, piece goods, and notions were down 6.0 percent from last month and sales of petroleum and petroleum products were down 2.7 percent. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $504.8 billion at the end of April, up 0.2 percent (+/-0.2%)* from the revised March level and were up 4.1 percent (+/-4.7%)* from the April 2012 level. The March preliminary estimate was revised downward $0.4 billion or 0.1 percent. April inventories of durable goods were up 0.2 percent (+/-0.4%)* from last month and were up 5.9 percent (+/-5.6%) from a year ago. Inventories of motor vehicle and motor vehicle parts and supplies were up 1.9 percent from last month, while inventories of metals and minerals, except petroleum were down 1.1 percent. Inventories of nondurable goods were up 0.1 percent (+/-0.4%)* from March and were up 1.4 percent (+/-5.8%)* from last April. Inventories of beer, wine, and distilled alcoholic beverages were up 2.3 percent from last month. The April inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.21. The April 2012 ratio was 1.17.
ICSC Chain Store Sales fell 2.7% in Jun 8 Wk Posted: June 11, 2013 at 07:45 AM (Tuesday) U.S. chain-store sales rose 2.2 percent year on year for the week that ended on June 8, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. However, weekly comparable-store sales fell 2.7 percent as consumers' desire to shop waned, according to ICSC. "The across‐the‐board weakness was seen in nearly every retail category and was most likely due to the impact of considerable precipitation across parts of the country,” said Michael Niemira, ICSC's vice president of research and chief economist. “Heavy rain ‐‐ a result of the first tropical storm of the year ‐‐ made landfall in Florida and traveled up the East coast which curbed the consumer’s willingness, and ability, to shop and sales dipped sharply as a result. However, despite the results this past week ICSC expects that sales will bounce back over the course of the month.” ICSC Research anticipates comparable-store sales will increase by between 3 percent and 3.5 percent for the month of June. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.
NFIB Small Business Optimism Index rose 2.3 points to 94.4 Posted: June 11, 2013 at 07:30 AM (Tuesday) The NFIB Index of Small Business Optimism rose 2.3 points to 94.4. This is the second highest reading since the recession started but not one signaling strong economic growth. Pessimism about the economy and future sales did moderate, 8 of the 10 Index components gained, but planned job creation fell a point and reported job creation stalled after 5 “up” months. The U.S. economy continued to plod along in the first quarter, now at a revised 2.4 percent. Not much of an improvement over the 1.4 percent fourth quarter reading and still well below trend. The ISM has decline for three straight months and is below 50, the dividing line between expansion and contraction. Government spending has been in contraction for some time now, cutting the growth rate by a half a point or more while the private sector grows – but this is good. The deficit is now projected to fall to $650 billion, crushed by revenues from accelerated 2012 income generation induced by higher 2013 tax rates and by restoration of the FICA tax as well as sequestration. Of course the IRS may still be giving line dancing lessons. The Fed is on course to purchase $540 billion of Treasury bonds (almost all of the projected deficit) and $480 billion of mortgage securities. An increasing number of observers wonder whether this is having any impact of consequence on employment (the alleged target) or even housing. It is contributing to uncertainty about the longer term impact of QE on the economy, bond bubbles, and the impact of the rapid acceleration of house prices (from very low levels historically of course). The small business half of GDP is clearly not participating much beyond growth generated by population gains. More businesses are being formed than lost, so there is some boost to job creation there, but too many existing firms have not yet started to replace the workers shed during the recession. The Optimism Index is back to the May 2012 level which are identical to the November 2007 level (the Index fell all through 2007, signaling the oncoming recession). Since then, the Index has been higher in only three months, and by less than 2 points. The low for that period was 81.0 reached in March, 2009. So the Index is 13 points higher now, good news, but 6 points below the pre-2008 average and 13 points below the peak for the expansion, bad news. Until this sector gets in gear, it will be hard to generate meaningful economic growth. GDP growth was 8 percent in 1983, the first year of that recovery period. There are many headwinds for growth, the most important being consumer spending. Nothing encourages hiring and inventory and capital investment more than an growth in customers and spending. Consumer sentiment is up some, but not really supported by income growth or new jobs. The savings rate is under 3 percent, so spending is financed by reduced saving (which pays nothing anyway – people who bought 30 year Treasury bonds in 1983 are just now losing those great coupons). The flow of new regulations is very strong (the President promised to use regulatory power to accomplish his goals even if Congress did not cooperate), each agency with its own set of “victims”. On top of that, the ACA is about to grip the entire business community in a morass of new taxes, forms to fill out, fines and higher labor costs. Our global customers are experiencing slow growth for the most part and buying less. Monetary policy has become incomprehensible and Fiscal policy is in disarray. Uncertainty is a major impediment to economic progress. With 2014 elections almost upon us, we’ll just have to wait and see.
Employment Trends Index increased slightly in May to 111.76 Posted: June 10, 2013 at 10:02 AM (Monday) The Conference Board Employment Trends Index™ (ETI) increased slightly in May. The index now stands at 111.76, up from 111.11 (a downward revision) in April. The ETI figure for May is 3.0 percent higher than a year ago. While the increase in the Employment Trends Index (ETI) in May erased the small declines of the previous two months, overall, the growth in the ETI has remained weak,” said Gad Levanon, Director of Macroeconomic Research at The Conference Board. “Taken together with other recent indicators of economic activity, the ETI is suggesting that a significant improvement in employment growth is unlikely this summer.” May’s improvement in the ETI was driven by positive contributions from seven of its eight components. The increasing indicators — from the largest positive contributor to the smallest — were Number of Temporary Employees, Job Openings, Percentage of Firms With Positions Not Able to Fill Right Now, Real Manufacturing and Trade Sales, Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Industrial Production, and Ratio of Involuntarily Part-time to All Part-time Workers.
May Employment increased by 175,000 Unemployment Rate increased to 7.6% Posted: June 7, 2013 at 08:30 AM (Friday) Total nonfarm payroll employment increased by 175,000 in May, and the unemployment rate was essentially unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and retail trade. Both the number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were essentially unchanged in May. The civilian labor force rose by 420,000 to 155.7 million in May; however, the labor force participation rate was little changed at 63.4 percent. Over the year, the labor force participation rate has declined by 0.4 percentage point. The employment-population ratio was unchanged in May at 58.6 percent and has shown little movement, on net, over the past year. Total nonfarm payroll employment increased by 175,000 in May, with gains in professional and business services, food services and drinking places, and retail trade. Over the prior 12 months, employment growth averaged 172,000 per month. The change in total nonfarm payroll employment for March was revised from +138,000 to +142,000, and the change for April was revised from +165,000 to +149,000. With these revisions, employment gains in March and April combined were 12,000 less than previously reported.
DJ-BTMU U.S. Business Barometer dropped by 0.4% Posted: June 6, 2013 at 10:00 AM (Thursday) For the week ending May 25, 2013, the DJ-BTMU U.S. Business Barometer dropped by 0.4 percent following a slight pickup of 0.2 percent in the prior week. Consumption indexes dragged the barometer down this week and it reached the lowest since March 23. Railroad Freight Carloadings was down by 1.1 percent, offsetting the increase in the previous week. Chain Store Sales also dropped by 0.9 percent and on overage it was relatively weaker in May than in April. For production indexes, only Steel Production was down, which decreased by 0.8 percent. On a year-over-year basis, the barometer showed an increase of 0.9 percent for the seventh consecutive week, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, decrease by 0.1 percent for four weeks in a row. Its year-over-year growth rate was 0.8 percent.
Weekly Initial Unemployment Claims Decrease 11,000 to 346,000 Posted: June 6, 2013 at 08:30 AM (Thursday) In the week ending June 1, the advance figure for seasonally adjusted initial claims was 346,000, a decrease of 11,000 from the previous week's revised figure of 357,000. The 4-week moving average was 352,500, an increase of 4,500 from the previous week's revised average of 348,000. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 25, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 25 was 2,952,000, a decrease of 52,000 from the preceding week's revised level of 3,004,000. The 4-week moving average was 2,975,750, a decrease of 15,250 from the preceding week's revised average of 2,991,000.
Challenger Layoffs decline 4.5% in May Posted: June 6, 2013 at 07:30 AM (Thursday) Monthly job cuts declined for the third consecutive month in May, as U.S.-based employers announced plans to trim payrolls by 36,398 during the month, 4.5 percent fewer than 38,121 cuts in April. The May total was 41 percent lower than the same month a year ago, when employers slashed payrolls by 61,887 , according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc. To date, the nation’s employers have announced 219,560 planned job cuts in 2013. That is down 11 percent from the 245,540 planned cuts announced in the first five months of 2012. It is not unusual to see job cuts decline during the summer months. In fact, May is historically the slowest job-cut month of the year, averaging 57,688 since 1993. The next lowest job-cut month is June, according to Challenger records, which show it averaging 59,887 since 1993. The overall average monthly total across all months since 1993 is 70,288. The heaviest job-cutting last month occurred in the health care sector, where 4,886 job cuts were tracked. That was up slightly from 4,268 health care job cuts in April and more than double the 2,353 announced in May 2012. Overall, layoffs in health care are up 71 percent in 2013 to 20,867, compared to 12,177 in the first five months of 2012. Only two other sectors have seen bigger gains: media, where job cuts have increased 249 percent from 1,829 in the first five months of 2012 to 6,388 as of May; and the financial sector, which has seen job cuts increase by 103 percent from 17,284 in 2012 to 35,091 this year. The 35,091 job cuts announced by financial firms this year make this the sector with the highest number of layoffs to date. Retail ranks a close second, with 32,683 job cuts this year, including 1,386 in May. Despite the increases in some sectors, the overall pace of downsizing has slowed from 2012 levels. That is particularly good news in light of the fact that 2012 saw the fewest annual job cuts since 1997. Job cuts have been on the decline since reaching 55,356 in February and we are heading into the summer, which is the time of year when all business activity, including layoff activity, tends to slow. So far, the threat of massive job cuts related to federal spending cuts has failed to materialize. There were fewer than 1,500 job cuts directly attributed to federal cutbacks and sequestration. Of course, we are not out of the woods when it comes to government downsizing, but an improving economy is helping to bring in more tax revenue and lower the deficit. This may delay and/or minimize the impact of cutbacks on workforce levels. Even in areas with increased job cutting, such as health care, simultaneous hiring is offsetting the impact on the economy. In health care, for example, the nearly 21,000 planned job cuts tracked this year are far outweighed by job gains. According to the latest Bureau of Labor Statistics job report, the sector experienced a net gain of 19,000 jobs in April, marking a monthly average of 24,000 jobs per month over the past year. Meanwhile, a recent tally of online help-wanted ads by job search website Granted.com turned up more than 521,000 health care jobs on the site. In retail, where job cuts are up 56 percent this year to 32,683, more than 550,000 were hired in March and there were still 424,000 openings at the end of the month, according to the Bureau of Labor Statistics job openings and labor turnover survey. Home sales and prices are starting to see much better improvements each month. If these gains continue, it is going to drive up consumer confidence and spending through the summer, which should help the economy withstand the typical summer slowdown. We expect layoffs to remain muted through the third quarter. Hopefully, the housing recovery will be strong enough to finally kick hiring into high gear.
Beige Book: Economic Activity Increased at a Modest to Moderate Pace Posted: June 5, 2013 at 02:00 PM (Wednesday) Overall economic activity increased at a modest to moderate pace since the previous report across all Federal Reserve Districts except the Dallas District, which reported strong economic growth. The manufacturing sector expanded in most Districts since the previous Beige Book. Most Districts noted slight to moderate gains in consumer spending and a moderate increase in vehicle sales. Tourism showed signs of strength in several Districts. A wide variety of business services expanded, and transportation traffic increased for producer, consumer, and trade goods. Residential real estate and construction activity increased at a moderate to strong pace in all Districts. Commercial real estate and construction activity grew at a modest to moderate pace in most Districts. Overall bank lending increased since the previous report. Credit quality and deposits increased, while credit standards were largely unchanged. Agricultural conditions remained mixed across Districts, as weather patterns varied. Overall activity in the energy sector was flat, and mining was down. Hiring increased at a measured pace in several Districts, with some contacts noting difficulty finding qualified workers. Wage pressures remained contained overall, although several Districts reported a modest or moderate rise for selected occupations. Districts reported level prices to mild price increases; some manufacturers raised prices and some increases for input prices were noted.
New orders for manufactured goods increased 1.0% Posted: June 5, 2013 at 10:00 AM (Wednesday) New orders for manufactured goods in April, up two of the last three months, increased $4.9 billion or 1.0 percent to $474.0 billion, the U.S. Census Bureau reported today. This followed a 4.7 percent March decrease. Excluding transportation, new orders decreased 0.1 percent. Shipments, down two consecutive months, decreased $3.5 billion or 0.7 percent to $478.7 billion. This followed a 1.5 percent March decrease. Unfilled orders, up two of the last three months, increased $2.6 billion or 0.3 percent to $995.9 billion. This followed a 0.6 percent March decrease. The unfilled orders-to-shipments ratio was 6.26, up from 6.21 in March. Inventories, up five consecutive months, increased $1.1 billion or 0.2 percent to $627.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a slight March increase. The inventories-to-shipments ratio was 1.31, up from 1.30 in March.
ISM Non-Manufacturing Index continued growth at 53.7% Posted: June 5, 2013 at 10:00 AM (Wednesday) Economic activity in the non-manufacturing sector grew in May for the 41st consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®. The NMI™ registered 53.7 percent in May, 0.6 percentage point higher than the 53.1 percent registered in April. This indicates continued growth at a slightly faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 56.5 percent, which is 1.5 percentage points higher than the 55 percent reported in April, reflecting growth for the 46th consecutive month. The New Orders Index increased by 1.5 percentage points to 56 percent, and the Employment Index decreased 1.9 percentage points to 50.1 percent, indicating growth in employment for the 10th consecutive month. The Prices Index decreased 0.1 percentage point to 51.1 percent, indicating prices increased at a slower rate in May when compared to April. According to the NMI™, 13 non-manufacturing industries reported growth in May. The majority of respondents' comments are optimistic about business conditions. However, there is a degree of uncertainty about the long-term outlook. The 13 non-manufacturing industries reporting growth in May — listed in order — are: Accommodation & Food Services; Transportation & Warehousing; Arts, Entertainment & Recreation; Educational Services; Management of Companies & Support Services; Wholesale Trade; Construction; Public Administration; Information; Retail Trade; Professional, Scientific & Technical Services; Finance & Insurance; and Utilities. The five industries reporting contraction in May are: Mining; Health Care & Social Assistance; Real Estate, Rental & Leasing; Other Services; and Agriculture, Forestry, Fishing & Hunting.
1Q2013 Productivity Growth Increased 0.5% Posted: June 5, 2013 at 08:30 AM (Wednesday) Nonfarm business sector labor productivity increased at a 0.5 percent annual rate during the first quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 2.1 percent in output and 1.6 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2012 to the first quarter of 2013, productivity increased 0.9 percent as output and hours worked increased 2.4 percent and 1.5 percent, respectively. Unit labor costs in nonfarm businesses fell 4.3 percent in the first quarter of 2013, the combined effect of a 3.8 percent decrease in hourly compensation and the 0.5 percent increase in productivity. The decline in hourly compensation is the largest in the series, which begins in 1947. However, over the last four quarters hourly compensation increased 2.0 percent and unit labor costs rose 1.1 percent. Manufacturing sector productivity increased 3.5 percent in the first quarter of 2013, as output rose 5.3 percent and hours worked increased 1.8 percent. In the durable and nondurable manufacturing sectors, productivity increased 3.5 percent and 3.9 percent, respectively. From the first quarter of 2012 to the first quarter of 2013, manufacturing sector productivity rose 1.6 percent as output grew 2.5 percent and hours rose 0.9 percent. Unit labor costs in manufacturing decreased 10.0 percent in the first quarter of 2013, due to both the 3.5 percent increase in productivity and a 6.9 percent decrease in hourly compensation. Over the last four quarters, hourly compensation increased 4.5 percent and unit labor costs increased 2.8 percent. Preliminary first-quarter 2013 measures were announced today for the nonfinancial corporate sector. Productivity increased 0.3 percent in the first quarter as output and hours increased 3.3 percent and 3.0 percent, respectively. Output per hour rose 0.6 percent over the last four quarters.
ADP National Employment Report increased by 135,000 Posted: June 5, 2013 at 08:15 AM (Wednesday) Private sector employment increased by 135,000 jobs from April to May, according to the May ADP National Employment Report®, which is produced by ADP®, a leading provider of human capital management 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. April’s job gains were revised downward to 113,000 from 119,000. The goods-producing sector shed a total of 3,000 jobs in May. Although construction payrolls rose by 5,000 in May, on top of an increase of 8,000 jobs in April, the manufacturing industry recorded a total loss of 6,000 jobs in May. Service-providing industries added 138,000 jobs in May, an improvement over the April gain of 113,000. However, the gains in May are below the average monthly gain of 156,000 during the first quarter. Among the service industries reported by the ADP National Employment Report, professional/business services added 42,000 jobs added over the month, more than twice as many as in April. Trade/transportation/utilities recorded a gain of 31,000 jobs, while financial activities added 7,000 jobs. U.S. private sector employment increased by 135,000 jobs during the month of May 2013, a slight increase over the previous month of April. The majority of new jobs in May came from the service-providing sector, which added a total of 138,000 jobs, while the goods-producing sector recorded a loss of 3,000 jobs. Notably, a gain of 5,000 jobs in the construction industry during May was offset by a decline of 6,000 lost jobs in the manufacturing industry. The job market continues to expand, but growth has slowed since the beginning of the year. The slowdown is evident across all industries and all but the largest companies. Manufacturers are reducing payrolls. The softer job market this spring is largely due to significant fiscal drag from tax increases and government spending cuts. Businesses with 49 or fewer employees added 58,000 jobs in May. Employment levels among medium-sized companies with 50-499 employees rose by 39,000, while employment at large companies – those with 500 or more employees – also increased by 39,000.
Purchase Apps down, Refi's down in Latest MBA Weekly Survey Posted: June 5, 2013 at 07:00 AM (Wednesday) Mortgage applications decreased 11.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 31, 2013. This week’s results include an adjustment for the Memorial Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 11.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 20 percent compared with the previous week. The Refinance Index decreased 15 percent from the previous week and is at its lowest level since the end of November 2011. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 14 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 68 percent of total applications from 71 percent the previous week, the lowest level since early July 2011. This is the fourth straight weekly decline for the refinance share. The adjustable-rate mortgage (ARM) share of activity increased to 6 percent of total applications. The HARP share of refinance applications has been unchanged at 32 percent for the past three weeks. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.07 percent, the highest rate since April 2012, from 3.90 percent, with points decreasing to 0.35 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This was the largest single-week increase in this rate since the week ending July 1, 2011. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.20 percent, the highest rate since May 2012, from 4.07 percent, with points increasing to 0.28 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.76 percent, the highest rate since May 2012, from 3.62 percent, with points increasing to 0.32 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.23 percent, the highest rate since June 2012, from 3.10 percent, with points increasing to 0.38 from 0.30 (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 2.76 percent, the highest rate since June 2012, from 2.60 percent, with points increasing to 0.41 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
ICSC Chain Store Sales rose 1.9% in Jun 1 Wk Posted: June 4, 2013 at 10:25 AM (Tuesday) The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index rose 1.9% in the week ended Saturday from the previous week on a seasonally adjusted, comparable-store basis. ICSC Chief Economist Michael Niemira said sales during the Memorial Day week were strong, most likely driven by holiday sales, the release of some pent-up demand and stronger high-income household confidence. Demand was steady but good at department stores, but weaker at apparel and furniture stores. Discount retailers, electronics stores and specialty stores saw strong sales. ICSC reaffirmed its previous view that May industry sales will increase 2% to 3%. On a year-on-year basis, the reading rose 4.3%, marking the strongest week of the year.
Goods and Services Deficit Increased in April 2013 Posted: June 4, 2013 at 08:30 AM (Tuesday) The Nation’s international trade deficit in goods and services increased to $40.3 billion in April from $37.1 billion (revised) in March, as imports increased more than exports. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total April exports of $187.4 billion and imports of $227.7 billion resulted in a goods and services deficit of $40.3 billion, up from $37.1 billion in March, revised. April exports were $2.2 billion more than March exports of $185.2 billion. April imports were $5.4 billion more than March imports of $222.3 billion. In April, the goods deficit increased $3.2 billion from March to $58.6 billion, and the services surplus increased $0.1 billion from March to $18.3 billion. Exports of goods increased $1.8 billion to $131.1 billion, and imports of goods increased $5.0 billion to $189.7 billion. Exports of services increased $0.4 billion to $56.3 billion, and imports of services increased $0.3 billion to $38.0 billion. The goods and services deficit decreased $6.3 billion from April 2012 to April 2013. Exports were up $3.1 billion, or 1.7 percent, and imports were down $3.2 billion, or 1.4 percent.
New York Purchasing Managers Business Activity grew at 54.4 Posted: June 4, 2013 at 08:30 AM (Tuesday) New York City business activity grew at a moderate pace, according to the survey taken by the Institute for Supply Management-New York (ISM-NY). Current Business Conditions came in at 54.4 in May, about a point below the long-run average. Future optimism improved. The Six-Month Outlook rose to a five-month high of 67.0 in May. The jobs picture disappointed. Employment fell below the breakeven 50 line, to 49.4 in May, for the first time in three months. Purchase volume contracted. Quantity of Purchases, 45.5 in May, fell to an eight-month low. Prices Paid, 54.5 in May, bounced off a nine-month low. Revenues, 50.0 in May, hit a six-month low, but the increase in Expected Demand, to a three-month high of 64.7 in May, suggests slower revenue growth might not last. Business impediments had a better tone compared to last month. “No difficulties” and skilled labor shortages were above average, working capital shortages and security concerns were average, and everything else was below average.
Construction Spending up 0.4% in April Posted: June 3, 2013 at 10:00 AM (Monday) The U.S. Census Bureau of the Department of Commerce announced today that construction spending during April 2013 was estimated at a seasonally adjusted annual rate of $860.8 billion, 0.4 percent (±1.6%) undefined above the revised March estimate of $857.7 billion. The April figure is 4.3 percent (±2.0%) above the April 2012 estimate of $825.1 billion. During the first 4 months of this year, construction spending amounted to $250.7 billion, 4.5 percent (±1.5%) above the $239.8 billion for the same period in 2012. PRIVATE CONSTRUCTION Spending on private construction was at a seasonally adjusted annual rate of $602.0 billion, 1.0 percent (±1.2%)undefined above the revised March estimate of $595.9 billion. Residential construction was at a seasonally adjusted annual rate of $301.9 billion in April, 0.1 percent (±1.3%)undefined below the revised March estimate of $302.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $300.1 billion in April, 2.2 percent (±1.2%) above the revised March estimate of $293.7 billion. PUBLIC CONSTRUCTION In April, the estimated seasonally adjusted annual rate of public construction spending was $258.8 billion, 1.2 percent (±2.8%)undefined below the revised March estimate of $261.8 billion. Educational construction was at a seasonally adjusted annual rate of $58.7 billion, 4.4 percent (±4.4%)undefined below the revised March estimate of $61.4 billion. Highway construction was at a seasonally adjusted annual rate of $76.7 billion, 0.5 percent (±9.9%)undefined above the revised March estimate of $76.2 billion.
May Manufacturing ISM contracted to 49.0 Posted: June 3, 2013 at 10:00 AM (Monday) Economic activity in the manufacturing sector contracted in May for the first time since November 2012, and the overall economy grew for the 48th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®. The PMI™ registered 49 percent, a decrease of 1.7 percentage points from April's reading of 50.7 percent, indicating contraction in manufacturing for the first time since November 2012 and only the second time since July 2009. This month's PMI™ reading is at its lowest level since June 2009, when it registered 45.8 percent. The New Orders Index decreased in May by 3.5 percentage points to 48.8 percent, and the Production Index decreased by 4.9 percentage points to 48.6 percent. The Employment Index registered 50.1 percent, a slight decrease of 0.1 percentage point compared to April's reading of 50.2 percent. The Prices Index registered 49.5 percent, decreasing 0.5 percentage point from April, indicating that overall raw materials prices decreased from last month. Several comments from the panel indicate a flattening or softening in demand due to a sluggish economy, both domestically and globally. Of the 18 manufacturing industries, 10 are reporting growth in May in the following order: Printing & Related Support Activities; Nonmetallic Mineral Products; Fabricated Metal Products; Wood Products; Furniture & Related Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Machinery; and Paper Products. The six industries reporting contraction in May — listed in order — are: Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; Plastics & Rubber Products; Computer & Electronic Products; and Primary Metals.
University of Michigan Consumer Confidence increased to 84.5 Posted: May 31, 2013 at 10:00 AM (Friday) A rising stock market and higher home prices prompted consumers to report their most improved financial situation in more than five years. The May gain was largest among upper income households (incomes above $80,000), although gains were recorded across all income groups. The overall mix of economic news recently heard by consumers was the most positive it has been in the past ten years, leading households to adopt the most improved outlook for the national economy since 2007. Importantly, the most common news item that consumers mentioned hearing was about rising employment, cited by one-third of all consumers. Moreover, consumers also expressed the most expansive buying plans since 2007. Personal Financial Assessments at Five Year High For the first time in five years, more consumers reported that their finances had improved rather than worsened, with recent income gains the most common reason. Moreover, 25% of high income consumers spontaneously mentioned gains in their household wealth, including increases in the value of their homes and stock holdings as well as reductions in their debts. Although income prospects also improved, the gains were much more modest: no income gains were anticipated by 54% of all households and by 45% of families with income above $80,000. Favorable Buying Plans Buying attitudes toward household durables improved to the highest levels since mid 2007 and vehicle buying attitudes were at the highest level since mid 2005. Assessments among homeowners of the current value of their homes were the most favorable since 2007. Although the expected annual increase in home values did not change among all homeowners, among households with incomes above $80,000, the annual expected increase was the highest recorded since 2007. Importantly, the recent run-up in home prices may have encouraged some homeowners to wait for additional gains before selling their current home to buy another. The Consumer Sentiment Index was 84.5 in the May 2013 survey, up from 76.4 one month earlier and 79.3 one year ago and the highest level recorded since July 2007. The Expectations Index rose to 75.8 in the May survey, up from 67.8 in April and last May’s 74.3. The Current Economic Conditions Index was 98.0 in May up from 89.9 in April and last May’s 87.2, reaching the highest level since August 2007. “The surge in consumer confidence is exactly the type of economic jump start the Federal Reserve intended to result from its aggressive policies. To be sure, con-sumers still expressed concerns with their financial prospects, especially about income gains over the longer term. It will take actual and repeated in-come increases rather than simply a renewed opti-mistic outlook for consumers to permanently re-vise their income expectations upward. This will occur as consumer spending gains encourage firms to end their hesitancy about hiring, and as higher tax revenues ease concerns over the Federal deficit putting any additional tax increases on hold.”
Chicago Purchasing Managers Index sprung 9.7 to 58.7 Posted: May 31, 2013 at 09:45 AM (Friday) The Chicago Purchasing Managers reported April's Chicago Business Barometer sprung 9.7 to 58.7, the highest since March 2012 and in sharp contrast to April's 3-1/2 year low. All Business Activity measures surged in May, reversing weakness seen in most categories in March and April. BUSINESS ACTIVITY: ORDER BACKLOGS, SUPPLIER DELIVERIES, and EMPLOYMENT: all snapped out of contraction; PRODUCTION: vaulted out of contraction to strongest since March 2012; INVENTORIES: lowest in 3-1/2 years. BUYING POLICY: CAPITAL EQUIPMENT and PRODUCTION MATERIAL: lead times shortened.
Personal Income decreased 0.1%, Spending decreased 0.2% Posted: May 31, 2013 at 08:30 AM (Friday) Personal income decreased $5.6 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $16.1 billion, or 0.1 percent, in April, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $20.5 billion, or 0.2 percent. In March, personal income increased $36.2 billion, or 0.3 percent, DPI increased $25.4 billion, or 0.2 percent, and PCE increased $14.2 billion, or 0.1 percent, based on revised estimates. Real disposable income increased 0.1 percent in April, compared with an increase of 0.3 percent in March. Real PCE increased 0.1 percent, compared with an increase of 0.2 percent.
Pending Home Sales Index Improved Slightly by 0.3% but Pace Slowing Posted: May 30, 2013 at 10:00 AM (Thursday) Pending home sales improved slightly in April and continue to be well above a year ago, according to the National Association of Realtors®. Gains in the Northeast and Midwest were offset largely by declines in the West and South. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.3 percent to 106.0 in April from 105.7 in March, and is 10.3 percent above April 2012 when it was 96.1; the data reflect contracts but not closings. Home contract activity is at the highest level since the index hit 110.9 in April 2010, immediately before the deadline for the home buyer tax credit. Pending sales have been above year-ago levels for the past 24 months. A familiar pattern has developed. The housing market continues to squeak out gains from already very positive conditions. Pending contracts so far this year easily correspond to higher closed home sales in 2013. Total existing-home sales are expected to rise just over 7 percent to about 5 million this year. Because of inventory shortages, higher home sales will push up home values to the highest level in five years. The national median existing-home price should increase close to 8 percent and exceed $190,000 in 2013. The PHSI in the Northeast jumped 11.5 percent to 92.3 in April and is 17.7 percent above a year ago. In the Midwest the index rose 3.2 percent to 107.1 in April and is 15.1 percent higher than April 2012. Pending home sales in the South slipped 1.1 percent to an index of 119.2 in April but are 12.3 percent above a year ago. With pronounced inventory constraints, the index in the West fell 7.6 percent in April to 94.6 and is 2.6 percent below April 2012.
DJ-BTMU U.S. Business Barometer moved up 0.2% Posted: May 30, 2013 at 10:00 AM (Thursday) For the week ending May 18, 2013, the DJ-BTMU U.S. Business Barometer picked up slightly by 0.2 percent after dropping for two consecutive weeks. The rebound in this week resulted from increases in both production and consumption indexes and there was no negative contribution to the barometer. Railroad Freight Carloadings, an index of the consumption, edged up following 0.1 percent two weeks’ consecutive decline. From the productions indexes, Lumber Production was up by 1.3 percent and Electric Output also increased significantly for the first time in four weeks. On a year-over-year basis, the barometer showed an increase of 0.9 percent for the sixth consecutive week, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, continued to decrease by 0.1 percent for three weeks in a row. Its year-over-year growth rate was 0.8 percent.
1Q2013 GDP preliminary estimate increased 2.4% Posted: May 30, 2013 at 08:30 AM (Thursday) eal gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.4 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, real GDP increased 2.5 percent. With the second estimate for the first quarter, increases in private inventory investment, in exports, and in imports were less than previously estimated, but the general picture of overall economic activity is not greatly changed. The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and exports that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the first quarter primarily reflected an upturn in private inventory investment, an acceleration in PCE, a smaller decrease in federal government spending, and an upturn in exports that were partly offset by an upturn in imports and a deceleration in nonresidential fixed investment. Motor vehicle output added 0.28 percentage point to the first-quarter change in real GDP after adding 0.18 percentage point to the fourth-quarter change. Final sales of computers added 0.02 percentage point to the first-quarter change in real GDP after adding 0.10 percentage point to the fourth-quarter change.
Weekly Initial Unemployment Claims Increase 10,000 to 354,000 Posted: May 30, 2013 at 08:30 AM (Thursday) In the week ending May 25, the advance figure for seasonally adjusted initial claims was 354,000, an increase of 10,000 from the previous week's revised figure of 344,000. The 4-week moving average was 347,250, an increase of 6,750 from the previous week's revised average of 340,500. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 18, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 18 was 2,986,000, an increase of 63,000 from the preceding week's revised level of 2,923,000. The 4-week moving average was 2,986,500, a decrease of 11,500 from the preceding week's revised average of 2,998,000.
ICSC Chain Store Sales slipped 0.9% in May 25 Wk Posted: May 29, 2013 at 07:45 AM (Wednesday) U.S. chain-store sales rose 2.8 percent year on year for the week that ended on May 25, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. However, retail sales slipped 0.9 percent week to week signaling no real consumer incentive to splurge. "Despite the Memorial Day weekend lead-in, retailers once again are saw the return of a rollercoaster spending pattern this past week,” said Michael Niemira, ICSC's vice president of research and chief economist. “Overall for the week the ICSC-GS consumer tracking survey found that demand was stronger at department, apparel and electronic stores, but considerably softer at discounters and wholesale clubs, thus highlighting the unevenness in sales across sales categories.” ICSC Research anticipates comparable-store sales to increase between 2 percent and 3 percent in May, or roughly the same increase that was observed in April. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.
Purchase Apps down, Refi's down in Latest MBA Weekly Survey Posted: May 29, 2013 at 07:00 AM (Wednesday) Mortgage applications decreased 8.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 24, 2013. The Market Composite Index, a measure of mortgage loan application volume, decreased 8.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 9 percent compared with the previous week. The Refinance Index decreased 12 percent, the largest single week drop in refinance applications this year, from the previous week to the lowest level since December 2012. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 14 percent higher than the same week one year ago. Refinance applications fell for the third straight week bringing the refinance index to its lowest level since December 2012 as mortgage rates increased to their highest level in a year. Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases. The refinance share of mortgage activity decreased to 71 percent of total applications from 74 percent the previous week to the lowest level since April 2012. The adjustable-rate mortgage (ARM) share of activity increased to 5 percent of total applications. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.90 percent, the highest rate since May 2012, from 3.78 percent, with points unchanged at 0.39 (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 $417,500) increased to 4.07 percent, the highest rate since August 2012, from 3.93 percent, with points decreasing to 0.27 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.62 percent, the highest rate since August 2012, from 3.53 percent, with points increasing to 0.27 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 3.10 percent, the highest rate since August 2012, from 2.96 percent, with points decreasing to 0.30 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 5/1 ARMs remained unchanged at 2.60 percent, with points increasing to 0.24 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Texas Manufacturing Activity Increased Sharply in May Posted: May 28, 2013 at 10:30 AM (Tuesday) Texas factory activity increased sharply in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from -0.5 to 11.2, indicating a notable pickup in output. Stronger manufacturing activity was reflected in other survey measures as well. The new orders index rebounded to 6.2 after falling to -4.9 in April. Similarly, the shipments index bounced back to 3.1 after dipping to -0.4. The capacity utilization index came in at 6.4, up from 2.7 last month. Perceptions of broader business conditions continued to worsen in May. The general business activity index remained negative but moved up five points to -10.5. The company outlook index declined from -2.2 to -6.8, reaching its lowest level since July 2010. Labor market indicators reflected weaker labor demand. The employment index fell to -6.3 in May, registering its first negative reading this year and reaching its lowest level since November 2009. Eight percent of firms reported hiring new workers compared with 15 percent reporting layoffs. The hours worked index came in at -2.3, suggesting the workweek shrunk further. Price movements were mixed in May; input prices and wages rose while selling prices declined. The raw materials price index was 6.4, above the April reading but still below the levels seen over the last eight months. The wages and benefits index edged down to 14, although the great majority of manufacturers continued to note no change in compensation costs. The finished goods price index pushed further negative to -8.3, its lowest reading since July 2010. Looking ahead, 30 percent of respondents anticipate further increases in raw materials prices over the next six months, while 19 percent expect higher finished goods prices. Expectations regarding future business conditions were mixed. The index of future general business activity remained negative but moved up from -6.7 to -2.6. The index of future company outlook was positive although it edged down to 5.3. Indexes for future manufacturing activity remained in strong positive territory. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected May 14–22, and 93 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.
Consumer Confidence increased again in May to 76.2 Posted: May 28, 2013 at 10:00 AM (Tuesday) The Conference Board Consumer Confidence Index®, which had improved in April, increased again in May. The Index now stands at 76.2 (1985=100), up from 69.0 in April. The Present Situation Index increased to 66.7 from 61.0. The Expectations Index improved to 82.4 from 74.3 last month. The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was May 15. Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer Confidence posted another gain this month and is now at a five-year high (Feb. 2008, Index 76.4). Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects. Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester.” Consumers’ appraisal of present-day conditions improved in May. Those saying business conditions are “good” increased to 18.8 percent from 17.5 percent, while those stating business conditions are “bad” decreased to 26.0 percent from 27.6 percent. Consumers’ assessment of the labor market was also more positive. Those claiming jobs are “plentiful” increased to 10.8 percent from 9.7 percent, while those claiming jobs are “hard to get” edged down to 36.1 percent from 36.9 percent. Consumers were considerably more optimistic about the short-term outlook. Those expecting business conditions to improve over the next six months increased to 19.2 percent from 17.2 percent, while those expecting business conditions to worsen decreased to 12.1 percent from 14.8 percent. Consumers’ outlook for the labor market was also more upbeat. Those expecting more jobs in the months ahead improved to 16.8 percent from 14.3 percent, while those expecting fewer jobs decreased to 19.7 percent from 21.8 percent. The proportion of consumers expecting their incomes to increase dipped slightly to 16.6 percent from 16.8 percent, while those expecting a decrease edged down to 15.3 percent from 15.9 percent.
Richmond Fed's Current Activity Index gained 4 to -2 Posted: May 28, 2013 at 10:00 AM (Tuesday) Manufacturing activity in the central Atlantic region contracted at a less pronounced rate in May after pulling back in April, according to the Richmond Fed’s latest survey. Looking at the main components of activity, volume of new orders edged lower and employment turned marginally negative. Shipments however, moved into positive territory. Evidence of diminished weakness was also reflected in most other indicators. District contacts reported that backlogs and capacity utilization remained negative but improved from April readings, while the gauge for delivery times turned positive. In addition, inventories grew at a slightly slower rate. Looking ahead, manufacturers in May were more optimistic about their future business prospects. An increasing number of contacts anticipated that new orders, backlogs, capacity utilization and capital expenditures would grow at a solid pace in coming months. Survey participants indicated that raw materials prices grew at a somewhat slower rate than a month ago, while finished goods prices grew at a slightly quicker pace. Over the next six months, however, respondents expected both raw materials and finished goods prices to grow at a slightly quicker rate than they had anticipated last month. In May, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — gained four points settling at −2 from April's reading of −6. Among the index's components, shipments recouped seventeen points to 8, the gauge for new orders slipped two points to finish at −10, and the jobs index subtracted six points to end at −3. Most other indicators also suggested some easing in the pace of recent weakness. The index for capacity utilization picked up twelve points to settle at −6, and the index for backlogs of orders gained ten points to finish at −11. The delivery times index turned positive, moving up four points to end at 2, while gauges for inventories were somewhat lower in May. The raw materials inventory index decreased eleven points to finish at 7, and the finished goods inventories moved down three points to end at 6.
S&P/Case-Shiller Home Price Indices increased 0.4% Posted: May 28, 2013 at 09:00 AM (Tuesday) Data through February 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10- and 20-City Composites rose 0.4% and 0.3% from January to February. All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0% while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively. In February 2013, the 10- and 20-City Composites posted annual increases of 8.6% and 9.3%, respectively. Home prices continue to show solid increases across all 20 cities. The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005. Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements. Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy. The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments. As of February 2013, average home prices across the United States are back to their autumn 2003 levels for both the 10-City and 20-City Composites. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 29-30%. The recovery from the early 2012 lows is 8.7% and 9.3%, respectively. In February 2013, the number of cities that posted positive monthly changes increased; Boston, Dallas, New York, Portland and San Diego are now among the MSAs posting month-over-month gains. Even though eight MSAs posted monthly declines, all twenty cities showed increases when compared to their February 2012 levels. Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa were the ten MSAs that continued to report double-digit year-over-year gains. San Diego and Tampa recorded their first months of double-digit annual increases of just over 10.0%.
Chicago Fed Midwest Manufacturing Index Decreased 0.5% Posted: May 28, 2013 at 08:30 AM (Tuesday) The Chicago Fed Midwest Manufacturing Index (CFMMI) decreased 0.5% in April, to a seasonally adjusted level of 95.9 (2007 = 100). Revised data show the index was up 0.3% in March. The Federal Reserve Board’s industrial production index for manufacturing (IPMFG) moved down 0.4% in April. Regional output rose 3.3% in April from a year earlier, and national output increased 1.7%. Production in three of the four regional sectors decreased in April: • Regional auto sector production declined 0.9%; • Regional steel sector output decreased 0.9%; • Regional machinery sector production moved down 0.3%; and • Regional resource sector output improved 0.1%. The region’s auto sector production declined 0.9% in April after increasing 1.9% in March. National auto production decreased 0.7% in April. The Midwest’s automotive output was up 5.8% in April relative to its year-ago level, and national automotive output was up 3.6%. The region’s steel sector output decreased 0.9% in April, following a decline of 1.1% in the previous month. The nation’s steel output was down 0.5% in April. Regional steel output was up 2.0% from its April 2012 level, and national steel output was up 0.8%. The Midwest’s machinery sector production moved down 0.3% in April after decreasing 0.4% in March. The nation’s machinery production decreased 0.1% in April. Regional machinery output was up 1.0% in April from its year-ago level, and national machinery output was up 1.5%. The Midwest resource sector’s output improved 0.1% in April after moving down 0.2% in March. The national resource sector’s output increased 0.2% in April. Production in the regional resource sector’s food and chemical subsectors increased from March to April, while production in its wood, paper, and nonmetallic mineral subsectors decreased. Compared with a year ago, regional resource output was up 1.9% in April, and national resource output was up 1.2%.
New Orders for Durable Goods Increased 3.3%, Ex-Trans Up 1.3% Posted: May 24, 2013 at 08:30 AM (Friday) New orders for manufactured durable goods in April increased $7.2 billion or 3.3 percent to $222.6 billion, the U.S. Census Bureau announced today. This increase, up two of the last three months, followed a 5.9 percent March decrease. Excluding transportation, new orders increased 1.3 percent. Excluding defense, new orders increased 2.1 percent. Transportation equipment, also up two of the last three months, led the increase, $5.1 billion or 8.1 percent to $67.6 billion. This was led by nondefense aircraft and parts, which increased $1.9 billion. Shipments of manufactured durable goods in April, down following two consecutive monthly increases, decreased $1.3 billion or 0.6 percent to $227.1 billion. This followed a 0.9 percent March increase. Computers and electronic products, down three of the last four months, led the decrease, $0.8 billion or 2.9 percent to $27.6 billion. This followed a 3.3 percent March increase. Unfilled orders for manufactured durable goods in April, up two of the last three months, increased $2.7 billion or 0.3 percent to $996.2 billion. This increase followed a 0.5 percent March decrease. Computers and electronic products, up following two consecutive monthly decreases, led the increase, $1.0 billion or 0.8 percent to $131.8 billion. Inventories of manufactured durable goods in April, up three of the last four months, increased $1.3 billion or 0.4 percent to $377.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 0.1 percent March decrease. Transportation equipment, up thirty-two of the last thirty-three months, drove the increase, $1.7 billion or 1.5 percent to $116.5 billion. Nondefense new orders for capital goods in April increased $2.5 billion or 3.3 percent to $76.1 billion. Shipments decreased $2.2 billion or 3.0 percent to $71.7 billion. Unfilled orders increased $4.4 billion or 0.8 percent to $577.3 billion. Inventories increased $1.4 billion or 0.8 percent to $171.6 billion. Defense new orders for capital goods in April increased $1.8 billion or 31.3 percent to $7.6 billion. Shipments decreased $0.6 billion or 5.6 percent to $9.6 billion. Unfilled orders decreased $2.0 billion or 1.2 percent to $168.7 billion. Inventories increased $0.3 billion or 1.5 percent to $22.4 billion. Revised and recently benchmarked seasonally adjusted March figures for all manufacturing industries were: new orders, $470.2 billion (revised from $467.3 billion); shipments, $483.2 billion (revised from $481.8 billion); unfilled orders, $993.5 billion (revised from $990.1 billion); and total inventories, $627.4 billion (revised from $620.2 billion).
Kansas City Fed Manufacturing Activity Improved Somewhat Posted: May 23, 2013 at 11:00 AM (Thursday) Tenth District manufacturing activity improved somewhat, rising above zero for the first time in seven months, and producers’ expectations for future activity also increased. Most price indexes recorded little changes from the previous month. The month-over-month composite index was 2 in May, up from -5 in both April and March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The rise in production came from both durable and non-durable goods-producing plants, with the biggest increase coming from machinery and metals manufacturing. Other month-over-month indexes were mixed. The production index edged up from 1 to 5, and the shipments, new orders, and new orders for export indexes also rose. In contrast, the employment index fell from -3 to -7, while the order backlog index was unchanged. The raw materials inventory index rebounded from -17 to 0, and the finished goods inventory index moved slightly higher. The majority of year-over-year factory indexes improved somewhat in May. The composite year-over-year index increased from -6 to 0, and the production, shipments, and new orders indexes also rose. The capital expenditures index rebounded from 7 to 11 after falling last month, while the order backlog and employment indexes were basically unchanged. The new orders for exports index climbed higher after reaching its lowest level in nearly four years last month. Both inventory indexes improved modestly. Most future factory indexes rebounded after falling last month. The future composite index increased from 4 to 11, and the future production, shipments, and new order indexes improved markedly after posting four-year lows last month. The future order backlog index edged up, and the future capital expenditure index posted considerable gains. In contrast, the future employment index was unchanged, while the future new orders for exports indexes eased slightly. The raw materials inventory index rose from -7 to 1, and the finished goods inventory index also moved higher. Most price indexes remained stable from the previous month. The month-over-month raw materials price index was unchanged at 7, while the finished goods price index edged down to its lowest level since July 2010. The year-over-year raw materials and finished goods price indexes moved slightly lower. The future raw materials price index inched higher from 38 to 41, while the future finished goods price index eased somewhat, indicating fewer firms plan to pass recent cost increases through to customers.
New Home Sales in April at annual rate of 454,000 Posted: May 23, 2013 at 10:00 AM (Thursday) Sales of new single-family houses in April 2013 were at a seasonally adjusted annual rate of 454,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.3 percent (±12.8%) above the revised March rate of 444,000 and is 29.0 percent (±20.7%) above the April 2012 estimate of 352,000. The median sales price of new houses sold in April 2013 was $271,600; the average sales price was $330,800. The seasonally adjusted estimate of new houses for sale at the end of April was 156,000. This represents a supply of 4.1 months at the current sales rate.
DJ-BTMU U.S. Business Barometer moved down 0.5% Posted: May 23, 2013 at 10:00 AM (Thursday) For the week ending May 11, 2013, the DJ-BTMU U.S. Business Barometer moved down 0.5 percent for the second consecutive week, the biggest drop since February 9. Both consumption and production showed negative contributions to this week’s barometer. In consumption indexes, Chain Store Sales dropped by 2.0 percent following a 1.1 percent decline in the prior week. MBA’s Purchase Index also decreased for the first time in two months. As to production indexes, relatively large declines were seen in Lumber Production, which offset the increase of last week and Electric Output which decreased for three consecutive weeks. On a year-over-year basis, the barometer showed an increase of 0.9 percent for the fifth consecutive week, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, decreased by 0.1 percent. Its year-over-year growth rate was 0.8 percent.
Weekly Initial Unemployment Claims Decrease 23,000 to 340,000 Posted: May 23, 2013 at 08:30 AM (Thursday) In the week ending May 18, the advance figure for seasonally adjusted initial claims was 340,000, a decrease of 23,000 from the previous week's revised figure of 363,000. The 4-week moving average was 339,500, a decrease of 500 from the previous week's revised average of 340,000. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 11, unchanged from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 11 was 2,912,000, a decrease of 112,000 from the preceding week's revised level of 3,024,000. The 4-week moving average was 2,995,250, a decrease of 23,750 from the preceding week's revised average of 3,019,000.
Existing-Home Sales increased 0.6% in April Posted: May 22, 2013 at 10:00 AM (Wednesday) Existing-home sales rose in April but remain below underlying demand because of limited inventory and tight credit, according to the National Association of Realtors®. All regions are showing strong price gains from a year ago. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million in April from an upwardly revised 4.94 million in March. Resale activity is 9.7 percent above the 4.53 million-unit level in April 2012. The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5-million unit pace. Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction. Existing-home sales are at the highest pace since November 2009 when the market spiked to 5.44 million in response to the home buyer tax credit. Total sales have been above year-ago levels for 22 consecutive months, while prices show 14 consecutive months of year-over-year price increases. Total housing inventory at the end of April rose 11.9 percent, a seasonal increase to 2.16 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, compared with 4.7 months in March. Listed inventory is 13.6 percent below a year ago, when there was a 6.6-month supply, with current availability tighter in the lower price ranges. The national median existing-home price for all housing types was $192,800 in April, up 11.0 percent from April 2012. The last time there were 14 consecutive months of year-over-year price increases was from April 2005 to May 2006. Distressed homes – foreclosures and short sales – accounted for 18 percent of April sales, down from 21 percent in March and 28 percent in April 2012. Eleven percent of April sales were foreclosures, and 7 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in April, while short sales were discounted 14 percent. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 3.45 percent in April from 3.57 percent in March; it was 3.91 percent in April 2012. The median time on market for all homes was 46 days in April, down sharply from 62 days in March, and is 45 percent faster than the 83 days on market in April 2012. NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said market conditions have flipped in the past year. “With homes selling in half the time it took to sell a year ago, buyers must be both decisive and prudent,” he said. “Advice with contract terms and negotiations is where the expertise of a Realtor® shines for both buyers and sellers.” Short sales were on the market for a median of 73 days, while foreclosures typically sold in 43 days and non-distressed homes took 44 days. Forty-four percent of all homes sold in April were on the market for less than a month, while only 8 percent were on the market for a year or longer. First-time buyers accounted for 29 percent of purchases in April, compared with 30 percent in March and 35 percent in April 2012. All-cash sales were at 32 percent of transactions in April, up from 30 percent in March; they were 29 percent in April 2012. Individual investors, who account for most cash sales, purchased 19 percent of homes in April, unchanged from March; they were 20 percent in April 2012. Single-family home sales rose 1.2 percent to a seasonally adjusted annual rate of 4.38 million in April from 4.33 million in March, and are 9.0 percent above the 4.02 million-unit level in April 2012. The median existing single-family home price was $193,300 in April, which is 11.0 percent above a year ago. Existing condominium and co-op sales declined 3.3 percent to an annualized rate of 590,000 units in April from 610,000 in March, but are 15.7 percent above the 510,000-unit pace a year ago. The median existing condo price was $189,500 in April, up 11.3 percent from April 2012.
April Mass Layoffs total 1,199 actions, 116,849 workers Posted: May 22, 2013 at 10:00 AM (Wednesday) Employers took 1,199 mass layoff actions in April involving 116,849 workers as measured by new filings for unemployment insurance benefits during the month, the U.S. Bureau of Labor Statistics reported today. (Data are seasonally adjusted.) Each mass layoff involved at least 50 workers from a single employer. Mass layoff events decreased by 138 from March, and the number of associated initial claims decreased by 11,090. In April, 293 mass layoff events occurred in the manufacturing sector resulting in 29,744 initial claims. Monthly mass layoff events are identified using administrative data sources without regard to layoff duration. The national unemployment rate was 7.5 percent in April, essentially unchanged from the prior month and down from 8.1 percent a year earlier. Total nonfarm payroll employment increased by 165,000 over the month, and increased by 2,077,000 over the year.
Purchase Apps down, Refi's down in Latest MBA Weekly Survey Posted: May 22, 2013 at 07:00 AM (Wednesday) Mortgage applications decreased 9.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 17, 2013. The Market Composite Index, a measure of mortgage loan application volume, decreased 9.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index decreased 12 percent from the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 10 percent higher than the same week one year ago. “Mortgage rates increased to their highest level since March last week, leading to the largest single week drop in refinance applications this year,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “The refinance index has fallen almost 19 percent over the past two weeks and is back to its lowest level since late March. Purchase activity declined over the week but is still running about 10 percent above last year’s pace at this time.” The refinance share of mortgage activity decreased to 74 percent of total applications from 76 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5 percent of total applications. The HARP share of refinance applications increased from 30 percent last week to 32 percent this week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.78 percent from 3.67 percent, with points decreasing to 0.39 from 0.41 (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 $417,500) increased to 3.93 percent from 3.87 percent, with points increasing to 0.36 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.53 percent from 3.43 percent, with points decreasing to 0.13 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 2.96 percent from 2.88 percent, with points increasing to 0.32 from 0.31 (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 2.60 percent from 2.55 percent, with points remained unchanged at 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
ICSC Chain Store Sales rose just 0.2% in May 18 Wk Posted: May 21, 2013 at 07:00 AM (Tuesday) U.S. chain-store sales rose 3.1 percent year on year for the week that ended on May 18, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Retail sales were basically flat, or up 0.2 percent, week-to-week, according to the tracking study. "Consumers played catch-up this past week and helped to propel weekly sales for retailers,” said Michael Niemira, ICSC's vice president of research and chief economist. “However, weather conditions continue to play havoc with the weekly pace of sales." For the month of May, ICSC Research anticipates comparable-store sales to increase between 2 percent and 3 percent. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.
Chicago Fed National Activity slower in April Posted: May 20, 2013 at 08:30 AM (Monday) Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to –0.53 in April from –0.23 in March. Three of the four broad categories of indicators that make up the index decreased from March, and none of the categories made a positive contribution to the index in April. The index’s three-month moving average, CFNAI-MA3, ticked up to –0.04 in April from –0.05 in March. April’s CFNAI-MA3 suggests that growth in national economic activity was very near its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year. The CFNAI Diffusion Index increased to –0.03 in April from –0.04 in March. Thirty-two of the 85 individual indicators made positive contributions to the CFNAI in April, while 53 made negative contributions. Forty-four indicators improved from March to April, while 41 indicators deteriorated. Of the indicators that improved, eighteen made negative contributions. Production-related indicators contributed –0.34 to the CFNAI in April, down from –0.04 in March. Industrial production declined 0.5 percent in April after increasing 0.3 percent in March, and manufacturing production decreased 0.4 percent in April after moving down 0.3 percent in the previous month. Employment-related indicators made a neutral contribution to the CFNAI in April, down from +0.01 in March. While the unemployment rate decreased slightly in April, growth in nonfarm payrolls made a neutral contribution to the employment, unemployment, and hours category for the second straight month. The sales, orders, and inventories category contributed –0.01 to the CFNAI in April, up from –0.04 in March. The consumption and housing category contributed –0.17 to the CFNAI in April, down slightly from –0.15 in March. Housing starts decreased to 853,000 annualized units in April from 1,021,000 in March, although housing permits increased to 1,017,000 annualized units in April from 890,000 in the previous month. The CFNAI was constructed using data available as of May 17, 2013. At that time, April data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index was unchanged at –0.23 after data revisions. 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. For the March monthly index, the two factors offset each other.
U.S. Leading Economic Index rose 0.6% Posted: May 17, 2013 at 10:05 AM (Friday) The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in April to 95.0 (2004 = 100), following a 0.2 percent decline in March, and a 0.4 percent increase in February. Says Ataman Ozyildirim, economist at The Conference Board: “After a slight decline in March, the U.S. LEI rebounded in April, led by housing permits and the interest rate spread. Labor market conditions also contributed, although consumers’ outlook on the economy remains weak. In general, the LEI points to a continuing economic expansion with some upside potential. Meanwhile, the CEI, a measure of current conditions, has returned to a slow growth path, despite declining industrial production in April.” Says Ken Goldstein, economist at The Conference Board: “The index is 3.5 percent higher (annualized) than six months ago, suggesting expansion. However, the biggest risk right now is the adverse impact of cuts in federal spending. The biggest positive factor is the potential for improvement in the recovering housing and labor markets. The biggest unknown is the resiliency in confidence, both consumer and business.” The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in April to 105.6 (2004 = 100), following a 0.2 percent increase in March, and a 0.5 percent increase in February. The Conference Board Lagging Economic Index® (LAG) increased 0.1 percent in April to 118.4 (2004 = 100), following a 0.2 percent increase in March, and no change in February.
Philadelphia Fed April Outlook Suggest Weakening Posted: May 16, 2013 at 10:00 AM (Thursday) Manufacturing firms responding to the monthly Business Outlook Survey suggest that regional manufacturing activity weakened this month. All of the survey’s broadest current indicators were negative this month, indicating weaker conditions compared with April. The survey’s indicators of future activity improved, however, and suggest that firms expect overall growth over the next six months. Indicators Suggest Weakening The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 1.3 in April to -5.2 this month. The current activity index has shown no pattern of sustained growth over the past seven months, generally alternating between positive and negative readings (see Chart). The number of firms reporting decreased activity this month (29 percent) edged out those reporting increased activity (24 percent). Other current indicators showed similar weakness this month. The demand for manufactured goods remained weak, with the current new orders index declining from -1.0 to -7.9. The shipments index also indicated weakness, decreasing more sharply from 9.1 to -8.5. Firms reported a notable increase in inventories this month: The current inventories index increased from -22.2 to 4.1. Labor market conditions showed continued weakness, with indexes suggesting lower employment overall. The employment index decreased 2 points to -8.7, its second consecutive negative reading. The percentage of firms reporting employment decreases (22 percent) exceeded the percentage reporting increases (14 percent). The workweek index declined 10 points to -12.4, remaining negative for the fifth consecutive month. Price Pressures Remain Muted The survey’s price indexes suggest continued moderation in price pressures. With regard to purchased inputs, 18 percent of firms reported paying higher prices for inputs, while 11 percent reported lower input prices. The prices paid index edged 4 points higher than in April, which was its lowest reading since July 2009. The prices received index increased 4 points, to -3.3. The percentage of firms reporting lower prices for their own manufactured goods (10 percent) exceeded the percentage reporting higher prices (7 percent) for the fifth consecutive month. Six-Month Indicators Improve Notably The survey’s future indicators suggest improved optimism among the reporting manufacturers. The future activity index increased from 19.5 to 32.3, returning to near its level in March (see Chart). The percentage of firms expecting increases in activity over the next six months (45 percent) exceeded the percentage expecting decreases (12 percent) by a significant margin. The indexes for future new orders and shipments also improved, increasing 10 and 5 points, respectively. The future employment index also improved, increasing 2 points, a more modest increase than the other broader future indicators. Twenty-four percent of firms expect increases in employment over the next six months; 14 percent expect decreases. In special questions this month, firms were asked about their current inventory situation (see Special Questions). About 58 percent of firms indicated that their inventories were about right for current conditions. On balance, inventories are expected to fall in the second quarter: Nearly 26 percent of firms expect inventories to fall; 8 percent expect them to rise. Firms perceived little change in their customers’ inventory plans in recent months. The majority (54 percent) indicated no change in their customers’ inventory plans, and the share reporting decreases (12 percent) was near the share reporting increases (8 percent). Summary The May Business Outlook Survey indicates some weakening of activity this month, with all of the broad indicators recording negative diffusion indexes. The survey’s indicators have failed to exhibit any sustained pattern of growth in recent months. The indicators for general activity, new orders, and shipments suggest weaker conditions this month, and firms reported employment reductions. Price pressures continue to be modest. Despite weaker current indicators, firms continue to expect positive growth over the next six months.
DJ-BTMU U.S. Business Barometer moved down by 0.2% Posted: May 16, 2013 at 10:00 AM (Thursday) For the week ending May 4, 2013, the DJ-BTMU U.S. Business Barometer moved down 0.2 percent for the first time in eight weeks. Chain Store Sales decreased by 1.0 percent after two consecutive weeks’ gains. This partially resulted in a decline of this week’s barometer, although Lumber Production of production indexes climbed 3.0 percent and bounced back to the highest level since the beginning of January 2013. All other indexes showed only slight decreases. On a year-over-year basis, the barometer showed an increase of 0.8 percent for the fourth consecutive week, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, remained unchanged. Its year-over-year growth rate was 0.8 percent.
Consumer Price Index decreased 0.4% in April, Ex Fd & Engy up 0.1% Posted: May 16, 2013 at 08:30 AM (Thursday) The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment. As was the case in March, a sharp decrease in the gasoline index was the primary cause of the decline in the seasonally adjusted all items index. The fuel oil index also declined while the electricity and natural gas indexes increased; the net result was a 4.3 percent decrease in the energy index. The food index, unchanged in March, rose 0.2 percent in April. The index for all items less food and energy increased 0.1 percent in April, the same increase as in March. The indexes for shelter, used cars and trucks, new vehicles, and tobacco all increased in April. These increases were partially offset by declines in the indexes for apparel, airline fares, and recreation. The all items index increased 1.1 percent over the last 12 months, the smallest 12-month increase since November 2010. The index for all items less food and energy increased 1.7 percent over the span; this was its smallest 12-month increase since June 2011. The food index rose 1.5 percent while the energy index declined 4.3 percent.
Real Average Hourly Earnings rose 0.5% in Apr Posted: May 16, 2013 at 08:30 AM (Thursday) Real average hourly earnings for all employees increased 0.5 percent from March to April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings combined with a decrease of 0.4 percent in the Consumer Price Index for All Urban Consumers (CPI-U). Real average weekly earnings was unchanged over the month due to the increase in real average hourly earnings being offset by a 0.6 percent decrease in the average workweek. Real average hourly earnings rose 0.8 percent, seasonally adjusted, from April 2012 to April 2013. The increase in real average hourly earnings, combined with a 0.3 percent decrease in the average workweek, resulted in a 0.5 percent increase in real average weekly earnings over this period.
April Housing Starts down 15.5%, Permits up 14.3% Posted: May 16, 2013 at 08:30 AM (Thursday) BUILDING PERMITS Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,017,000. This is 14.3 percent (±1.0%) above the revised March rate of 890,000 and is 35.8 percent (±1.3%) above the April 2012 estimate of 749,000. Single-family authorizations in April were at a rate of 617,000; this is 3.0 percent (±0.9%) above the revised March figure of 599,000. Authorizations of units in buildings with five units or more were at a rate of 374,000 in April. HOUSING STARTS Privately-owned housing starts in April were at a seasonally adjusted annual rate of 853,000. This is 16.5 percent (±5.2%) below the revised March estimate of 1,021,000, but is 13.1 percent (±5.1%) above the April 2012 rate of 754,000. Single-family housing starts in April were at a rate of 610,000; this is 2.1 percent (±4.8%) below the revised March figure of 623,000. The April rate for units in buildings with five units or more was 234,000. HOUSING COMPLETIONS Privately-owned housing completions in April were at a seasonally adjusted annual rate of 689,000. This is 14.3 percent (±11.2%) below the revised March estimate of 804,000, but is 3.3 percent (±11.9%) above the April 2012 rate of 667,000. Single-family housing completions in April were at a rate of 536,000; this is 9.8 percent (±10.2%) below the revised March rate of 594,000. The April rate for units in buildings with five units or more was 149,000.
Weekly Initial Unemployment Claims Increase 32,000 to 360,000 Posted: May 16, 2013 at 08:30 AM (Thursday) In the week ending May 11, the advance figure for seasonally adjusted initial claims was 360,000, an increase of 32,000 from the previous week's revised figure of 328,000. The 4-week moving average was 339,250, an increase of 1,250 from the previous week's revised average of 338,000. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 4, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 4 was 3,009,000, a decrease of 4,000 from the preceding week's revised level of 3,013,000. The 4-week moving average was 3,015,250, a decrease of 21,000 from the preceding week's revised average of 3,036,250.
Builder Confidence Improves in May Posted: May 15, 2013 at 10:00 AM (Wednesday) Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May, released today. This gain, from a downwardly revised 41 in April, reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers. Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies. This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor. While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force. All three HMI components posted gains in May. The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53 – its highest level since February of 2007. The index gauging traffic of prospective buyers gained three points to 33. Looking at the three-month moving averages for regional HMI scores, no movement was recorded in the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May.
Industrial Production decreased 0.5% Capacity Utilization decreased to 77.8% Posted: May 15, 2013 at 09:15 AM (Wednesday) Industrial production decreased 0.5 percent in April after having increased 0.3 percent in March and 0.9 percent in February. Manufacturing output moved down 0.4 percent in April after a decline of 0.3 percent in March. The index for utilities decreased 3.7 percent in April, as heating demand fell back to a more typical seasonal level after having been elevated in March because of unusually cold weather. The output of mines increased 0.9 percent in April. At 98.7 percent of its 2007 average, total industrial production was 1.9 percent above its year-earlier level. The rate of capacity utilization for total industry decreased 0.5 percentage point to 77.8 percent, a rate 0.1 percentage point above its level of a year earlier but 2.4 percentage points below its long-run (1972--2012) average.
Treasury International Capital Data for March 2013 Posted: May 15, 2013 at 09:00 AM (Wednesday) The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2013. The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $2.1 billion. Of this, net foreign private inflows were negative $34.8 billion, and net foreign official inflows were $36.9 billion. Foreign residents increased their holdings of long-term U.S. securities in March – net purchases were $15.3 billion. Net purchases by private foreign investors were $9.7 billion, and net purchases by foreign official institutions were $5.6 billion. At the same time, U.S. residents increased their holdings of long-term foreign securities, with net purchases of $28.8 billion. Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were negative $13.5 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been negative $31.9 billion in March. Foreign residents increased their holdings of U.S. Treasury bills by $34.2 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $35.6 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $1.5 billion.
Producer Price Index decreased 0.7% in April, ex Fd & Engy up 0.1% Posted: May 15, 2013 at 08:30 AM (Wednesday) The Producer Price Index for finished goods decreased 0.7 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.6 percent in March and increased 0.7 percent in February. At the earlier stages of processing, prices received by manufacturers of intermediate goods declined 0.6 percent, and the crude goods index moved down 0.4 percent. On an unadjusted basis, prices for finished goods advanced 0.6 percent for the 12 months ended April 2013, the smallest 12-month rise since a 0.5-percent increase in July 2012.
Empire State Manufacturing Survey Conditions Declined Marginally Posted: May 15, 2013 at 08:30 AM (Wednesday) The May 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined marginally. The general business conditions index fell four points to -1.4, its first negative reading since January. The new orders index also edged into negative territory, and the shipments index fell to zero. The prices paid index declined eight points to 20.5, indicating a slowdown in selling price increases, while the prices received index was little changed at 4.6. Employment indexes were mixed, showing both a modest increase in the number of employees and a slight decline in the length of the average workweek. Indexes for the six-month outlook were generally lower, suggesting that optimism about future conditions had weakened. In a series of supplementary survey questions, firms were asked about past and expected changes in both the prices they paid for inputs and the prices they charged their customers. The same questions had previously been asked in surveys conducted in May 2012 and in May of earlier years. In the current survey, respondents, on average, expected the prices they paid to climb by 2.8 percent—the smallest anticipated rise since May 2009. Moreover, the average respondent anticipated an increase of just 1.2 percent in prices received—the smallest expected increase recorded since these questions were first asked in May 2007. General Business Conditions Index Falls Below Zero After three months of modestly positive readings, the general business conditions index fell four points to -1.4 in May, pointing to a slight deterioration in business conditions for New York manufacturers for the first time since January. Twenty-five percent of respondents reported that conditions had improved over the month, while 26 percent reported that conditions had worsened. The new orders index also fell below zero, declining three points to -1.2. The shipments index was little changed, holding at zero in a sign that shipments were flat. The unfilled orders index declined three points to -6.8. The delivery time index was unchanged at -3.4, and the inventories index fell three points to -8.0, suggesting a modest decline in inventory levels. Input Price Increases Slow The prices paid index fell eight points to 20.5, indicating that input prices were rising at a slower rate. The prices received index remained close to its April reading at 4.6, pointing to a modest yet steady increase in selling prices. The index for number of employees, little changed at 5.7, indicated a small increase in employment levels. The average workweek index, down seven points to -1.1, showed a slight reduction in the length of the average workweek. Level of Optimism Declines Indexes for the six-month outlook were generally lower this month, indicating that optimism about future conditions had slipped somewhat. The future general business conditions index declined for a second consecutive month, dropping six points to 25.5. The future new orders index fell seven points to 28.8, and the future shipments index fell fourteen points to 25.2. The future prices paid index retreated fifteen points to 29.6, suggesting that a slower pace of input price increases was expected in the months ahead, and the future prices received index was unchanged at 14.8. The index for expected number of employees fell fourteen points to 11.4, and the future average workweek index fell to 1.1. The capital expenditures index climbed two points to 22.7, and the technology spending index was little changed at 11.4.
Purchase Apps down, Refi's down in Latest MBA Weekly Survey Posted: May 15, 2013 at 07:00 AM (Wednesday) Mortgage applications decreased 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 May 10, 2013. The Market Composite Index, a measure of mortgage loan application volume, decreased 7.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index also decreased 4 percent compared with the previous week and was 10 percent higher than the same week one year ago. The refinance share of mortgage activity remained constant at 76 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity remained constant at 4 percent of total applications. After declining for seven weeks straight, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.67 percent from 3.59 percent, with points increasing to 0.41 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This rate is at its highest level since the week ending April 12, 2013. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.87 percent from 3.79 percent, with points increasing to 0.25 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.43 percent from 3.35 percent, with points decreasing to 0.16 from 0.57 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages increased to 2.88 percent from 2.81 percent, with points increasing to 0.31 from 0.29 (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 2.55 percent from 2.53 percent, with points increasing to 0.23 from 0.15 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
U.S. Import Price Index declined 0.5% in April Posted: May 14, 2013 at 08:30 AM (Tuesday) U.S. import prices fell 0.5 percent in April, the U.S. Bureau of Labor Statistics reported today, following a 0.2 percent decrease in March. Lower prices for both fuel and nonfuel imports contributed to the declines in each month. Prices for U.S. exports decreased 0.7 percent in April after a 0.5 percent decline in March.
ICSC Chain Store Sales slipped 2.0% in May 11 Wk Posted: May 14, 2013 at 07:45 AM (Tuesday) U.S. chain-store sales rose 1.2 percent year on year for the week that ended on May 11, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. The rate of growth was at its lowest level in many weeks. Additionally, week-to-week comparable-store sales fell 2 percent, marking the second consecutive weekly decline. "Abnormally cold weather in the mid-sections of the nation continued to pare seasonal merchandise demand, while the Northwest and Northeast were warmer than last year helping seasonal demand modestly," said Michael Niemira, ICSC's vice president of research and chief economist. "The roller-coaster pattern of sales growth from week to week reflects a confluence of factors — economic and environmental — that sway the number positively for a given period and sometimes those factors sway the number negatively." ICSC Research anticipates chain-store sales will increase between 2 percent and 3 percent in May. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.
NFIB Small Business Optimism Index gained 2.6 points to 92.1 Posted: May 14, 2013 at 07:30 AM (Tuesday) The Index gained 2.6 points, rising to 92.1. That beats falling, but it is barely above the recovery average of 90.7, making it another very poor reading. Four Index components rose, 2 fell, 6 were unchanged, a lot of “noise”, no clear direction. Owners are very pessimistic about the economy, with a net negative 15 percent expecting business conditions to be better in 6 months. As bad as that sounds, it was a 13 percentage point improvement over March. The world is starting to look a bit strange in many respects. Stock markets are at record high levels and corporate profits a record share of GDP (nominal). Yet real GDP barely grew in 2012 Q4 and a sub-par 2.5 percent in 2013 Q1. Just how we get record profits but hardly produce more output and have prices hardly growing is a bit of a contradiction. The NFIB survey suggests that the small-business sector is not growing. New business starts appear to be slightly ahead of terminations, but both levels are historically low. The Federal Reserve has stopped worrying about inflation. (Historically, inflation was considered the #1 concern of the Fed.) The Vicechair of the Fed has suggested that inflation will now be a tool used to impact employment rather than a target of policy. Although one can argue that without Quantitative Easing there would have been even less job growth, it does not appear that the massive QEs have had much of an impact on employment growth. The Fed is providing a trillion dollars’ worth of finance to the government, money that it does not have to tax from us or borrow from the private sector or the rest of the world. Debt is piling up and future servicing costs will be formidable. Meantime, interest income to consumers has declined half a trillion dollars over the past few years, that’s a huge loss of income and certainly impairs spending. Washington is always ready to help debtors but not savers. Small-business owners remain quite pessimistic about the future and this has depressed spending and hiring. Capital spending is low which will eventually impact worker productivity as will the conversion of full-time workers to part-time workers induced by the health care law. Managing two part-time workers to do the work of one full-time worker too expensive to hire will add to inefficiency. Although better than the past few months, the percent expecting business conditions to be worse in 6 months exceed the percent expecting improvement by 15 percentage points. More now expect real sales to be higher than lower by 4 percentage points, better than the past 6 months in which the margin was negative, but very thin. Only 4 percent think it’s a good time to expand. In “normal” times, that would be a double digit figure. Owners are preparing for higher taxes and the full implementation of the health care law, both large negatives. Consumers agree, less than 10 percent think government is doing a “good” job, 47 percent firmly believe it is “bad”. More customers would trigger more hiring and inventory investment and capital spending, but consumers seem to be unwilling to cooperate. But, only 23 percent plan to make capital expenditures and as many firms plan to cut inventories as plan to add to them. This does not stimulate much growth.
Business Inventories virtually unchanged% in March Posted: May 13, 2013 at 10:00 AM (Monday) The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,269.6 billion, down 1.1 percent (±0.1) from February 2013 and up 1.8 percent (±0.3) from March 2012. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,640.9 billion, virtually unchanged (±0.1)* from February 2013 and up 4.5 percent (±0.5) from March 2012. The total business inventories/sales ratio based on seasonally adjusted data at the end of March was 1.29. The March 2012 ratio was 1.26.
U.S. Retail Sales for April up 0.1%, Ex-Auto down 0.1% Posted: May 13, 2013 at 08:30 AM (Monday) The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $419.0 billion, an increase of 0.1 percent (±0.3%) from the previous month, and 3.7 percent (±0.7%) above April 2012. Total sales for the February through April 2013 period were up 3.7 percent (±0.5%) from the same period a year ago. The February to March 2013 percent change was revised from -0.4 percent (±0.5%) to -0.5 percent (±0.2%). Retail trade sales were virtually unchanged (±0.5%) from March 2013 and 3.6 percent (±0.7%) above last year. Nonstore retailers were up 15.4 percent (±2.0) from April 2012 and auto and other motor vehicle dealers were up 8.8 percent (±2.0) from last year.
Wholesale Inventories up 0.4% in March Posted: May 9, 2013 at 10:00 AM (Thursday) The U.S. Census Bureau announced today that March 2013 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 $414.7 billion, down 1.6 percent (+/-0.4%) from the revised February level, but were up 1.3 percent (+/-1.1%) from the March 2012 level. The February preliminary estimate was revised downward $0.9 billion or 0.2 percent. March sales of durable goods were down 0.6 percent (+/-0.9%)* from last month, but were up 1.7 percent (+/-1.2%) from a year ago. Sales of metals and minerals, except petroleum, were down 2.5 percent from last month. Sales of nondurable goods were down 2.5 percent (+/-0.9%) from February, but were up 1.0 percent (+/-1.2%)* from last March. Sales of petroleum and petroleum products were down 7.5 percent from last month and sales of apparel, piece goods, and notions were down 5.5 percent. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $503.1 billion at the end of March, up 0.4 percent (+/-0.4%)* from the revised February level and were up 4.7 percent (+/-1.2%) from the March 2012 level. The February preliminary estimate was revised downward $0.1 billion. March inventories of durable goods were up 0.5 percent (+/-0.4%) from last month and were up 7.2 percent (+/-1.4%) from a year ago. Inventories of hardware, and plumbing and heating equipment and supplies were up 2.1 percent from last month and inventories of motor vehicle and motor vehicle parts and supplies were up 1.2 percent. Inventories of nondurable goods were up 0.1 percent (+/-0.5%)* from February and were up 1.2 percent (+/-1.4%)* from last March. Inventories of apparel, piece goods, and notions were up 1.7 percent from last month, while inventories of petroleum and petroleum products were down 3.4 percent. The March inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.21. The March 2012 ratio was 1.17.
DJ-BTMU U.S. Business Barometer increased by 0.2% Posted: May 9, 2013 at 10:00 AM (Thursday) For the week ending April 27, 2013, the DJ-BTMU U.S. Business Barometer was 0.1 percent up following a gain of 0.2 percent in the prior week. Increases in consumption indexes mainly resulted in a slight rise of this week’s barometer. Chain Store Sales rose by 0.4 percent for the second consecutive week and Railroad Freight Carloadings was also up by 2.0 percent. Meanwhile Electric Output in the production index decreased by 2.7 percent after two weeks’ consecutive rises, dropping back down to the level seen before March. This is possibly because of decreasing demand for electricity, which was strong from March to the early April due to the colder-than-normal weather. On a year-over-year basis, the barometer showed an increase of 0.8 percent, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, remained unchanged. Its year-over-year growth rate was 0.8 percent.
Weekly Initial Unemployment Claims Decrease 4,000 to 323,000 Posted: May 9, 2013 at 08:30 AM (Thursday) In the week ending May 4, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 4,000 from the previous week's revised figure of 327,000. The 4-week moving average was 336,750, a decrease of 6,250 from the previous week's revised average of 343,000. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending April 27, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 27 was 3,005,000, a decrease of 27,000 from the preceding week's revised level of 3,032,000. The 4-week moving average was 3,034,250, a decrease of 24,500 from the preceding week's revised average of 3,058,750.
Purchase Apps up, Refi's up in Latest MBA Weekly Survey Posted: May 8, 2013 at 07:00 AM (Wednesday) Mortgage applications increased 7.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 3, 2013. The Market Composite Index, a measure of mortgage loan application volume, increased 7.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7 percent compared with the previous week. The Refinance Index increased 8 percent from the previous week to the highest level since December 2012. The gain in the Refinance Index was due to increases in both the conventional and government refinance indices of 8.8 percent and 5.7 percent respectively. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to the highest level since May 2010. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 12 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 76 percent of total applications from 75 percent the previous week to the highest level since February 2013. The adjustable-rate mortgage (ARM) share of activity increased to 4 percent of total applications. The HARP share of refinance applications fell from 34 percent last week to 30 percent this week. The government share of purchase applications declined to 29.1 percent, which is a two year low. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.59 percent, the lowest rate since December 2012, from 3.60 percent, with points increasing to 0.33 from 0.30 (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 $417,500) decreased to 3.79 percent from 3.80 percent, with points decreasing to 0.20 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.35 percent from 3.34 percent, with points increasing to 0.57 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.81 percent, the lowest rate in the history of the survey, from 2.84 percent, with points increasing to 0.29 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. The average contract interest rate for 5/1 ARMs decreased to 2.53 percent, the lowest rate in the history of the survey, from 2.55 percent, with points decreasing to 0.15 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Consumer Credit Increased at an annual rate of 3.50% Posted: May 7, 2013 at 03:00 PM (Tuesday) Consumer credit increased at a seasonally adjusted annual rate of 5-3/4 percent during the first quarter. Revolving credit was little changed, while nonrevolving credit increased at an annual rate of 8 percent. In March, consumer credit increased at an annual rate of 3-1/2 percent.
Job Openings were 3.8 million in March Posted: May 7, 2013 at 10:00 AM (Tuesday) There were 3.8 million job openings on the last business day of March, little changed from 3.9 million in February, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.2 percent) and separations rate (3.1 percent) were little changed in March. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region. The number of job openings in March was 3.8 million, little changed from February. In March, the number of job openings was little changed in all industries and regions. The number of job openings in March (not seasonally adjusted) was little changed over the year for total nonfarm, total private, and government. Job openings decreased over the year for nondurable goods manufacturing and federal government; openings increased over the year for accommodation and food services. Job openings were little changed over the year for all regions.
ICSC Chain Store Sales slipped 1.0% in May 4 Wk Posted: May 7, 2013 at 07:45 AM (Tuesday) U.S. chain-store sales rose 2.4 percent year on year for the week that ended on May 4, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. However, retail sales slipped 1 percent week-to-week as winter weather impacted the upper Midwest and Rocky Mountain states and gasoline prices rose nationwide, according to ICSC. "There were lots of cross-currents over the past week with weather ‘good’ or ‘bad’ in different parts of the country, an uptick in gasoline prices and improving high-end consumer confidence,” said Michael Niemira, ICSC's vice president of research and chief economist. “Overall, we expect that monthly sales results for April will be on track for about 2 percent gain (about 3 percent less drug stores) when retailers report their April sales on Thursday, May 9, 2013.” The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.
Employment Trends Index increased in April to 111.68 Posted: May 6, 2013 at 10:00 AM (Monday) The Conference Board Employment Trends Index™ (ETI) increased in April. The index now stands at 111.68, up from 111.61 (an upward revision) in March. The April figure is 3.8 percent higher than a year ago. Despite weak economic activity, the Employment Trends index is still signaling moderate job growth in the coming months. On average, employment has grown almost as fast as GDP over the past three years, and that is likely to continue into the third quarter of 2013. As a result, the average labor productivity of American workers will struggle to improve until GDP growth accelerates. April’s improvement in the ETI was driven by positive contributions from five of its eight components. The increasing indicators — from the largest positive contributor to the smallest — were Number of Temporary Employees, Initial Claims for Unemployment Insurance, Job Openings, Industrial Production, and Real Manufacturing and Trade Sales.
New orders for manufactured goods decreased 4.0% Posted: May 3, 2013 at 10:00 AM (Friday) New orders for manufactured goods in March, down two of the last three months, decreased $19.5 billion or 4.0 percent to $467.3 billion, the U.S. Census Bureau reported today. This followed a 1.9 percent February increase. Excluding transportation, new orders decreased 2.0 percent. Shipments, down following two consecutive monthly increases, decreased $5.0 billion or 1.0 percent to $481.8 billion. This followed a 0.4 percent February increase. Unfilled orders, down two of the last three months, decreased $7.1 billion or 0.7 percent to $990.1 billion. This followed a 0.7 percent February increase. The unfilled orders-to-shipments ratio was 6.20, down from 6.28 in February. Inventories, up four consecutive months, increased $0.2 billion to $620.2 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 0.2 percent February increase. The inventories-to-shipments ratio was 1.29, up from 1.27 in February.
ISM Non-Manufacturing Index continued slower growth at 53.1% Posted: May 3, 2013 at 10:00 AM (Friday) The NMI™ registered 53.1 percent in April, 1.3 percentage points lower than the 54.4 percent registered in March. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 55 percent, which is 1.5 percentage points lower than the 56.5 percent reported in March, reflecting growth for the 45th consecutive month. The New Orders Index decreased by 0.1 percentage point to 54.5 percent, and the Employment Index decreased 1.3 percentage points to 52 percent, indicating growth in employment for the ninth consecutive month. The Prices Index decreased 4.7 percentage points to 51.2 percent, indicating prices increased at a slower rate in April when compared to March. According to the NMI™, 14 non-manufacturing industries reported growth in April. Respondents' comments remain mostly positive about business conditions. Cost management and revenue pressures are areas of concern for many of the respective companies. The 14 non-manufacturing industries reporting growth in April — listed in order — are: Transportation & Warehousing; Retail Trade; Accommodation & Food Services; Construction; Management of Companies & Support Services; Arts, Entertainment & Recreation; Information; Utilities; Real Estate, Rental & Leasing; Wholesale Trade; Public Administration; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; and Finance & Insurance. The four industries reporting contraction in April are: Mining; Educational Services; Other Services; and Health Care & Social Assistance.
April Employment increased by 165,000 Unemployment Rate little changed at 7.5% Posted: May 3, 2013 at 08:30 AM (Friday) Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, food services and drinking places, retail trade, and health care. The unemployment rate, at 7.5 percent, changed little in April but has declined by 0.4 percentage point since January. The number of unemployed persons, at 11.7 million, was also little changed over the month; however, unemployment has decreased by 673,000 since January. The civilian labor force participation rate was 63.3 percent in April, unchanged over the month but down from 63.6 percent in January. The employment-population ratio, 58.6 percent, was about unchanged over the month and has shown little movement, on net, over the past year. Total nonfarm payroll employment increased by 165,000 in April, with job gains in professional and business services, food services and drinking places, retail trade, and health care. Over the prior 12 months, employment growth averaged 169,000 per month. The change in total nonfarm payroll employment for February was revised from +268,000 to +332,000, and the change for March was revised from +88,000 to +138,000. With these revisions, employment gains in February and March combined were 114,000 higher than previously reported.
DJ-BTMU U.S. Business Barometer increased by 0.2% Posted: May 2, 2013 at 10:00 AM (Thursday) For the week ending April 20, 2013, the DJ-BTMU U.S. Business Barometer increased by 0.2 percent following a flat reading in the prior week. Chain Store Sales positively contributed the most to this week’s barometer, rebounding by 0.8 percent after showing a negative contribution in the previous week. In the production indexes, Auto Production maintained the pace of more than 2 percent increase from last week and Truck Production was slightly up this week. Electric Output and Coal Bituminous and Lignite Production increased for the second consecutive week, respectively. On a year-over-year basis, the barometer showed an increase of 0.8 percent, which compares to an average -3.3 percent decline over the Great Recession (determined to have ended in June 2009 according to the NBER). After flatlining 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 2012 slightly slowed to 1.4 percent following 2.2 percent in 2011. The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.1 percent for two consecutive weeks. Its year-over-year growth rate was 0.7 percent.
1Q2013 Productivity Growth Increased 0.7% Posted: May 2, 2013 at 08:30 AM (Thursday) Nonfarm business sector labor productivity increased at a 0.7 percent annual rate during the first quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 2.5 percent in output and 1.8 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2012 to the first quarter of 2013, productivity increased 0.9 percent as output and hours worked increased 2.5 percent and 1.5 percent, respectively. Unit labor costs in nonfarm businesses increased 0.5 percent in the first quarter of 2013, as an increase in hourly compensation was greater than the increase in productivity. Unit labor costs rose 0.6 percent over the last four quarters. Manufacturing sector productivity increased 3.8 percent in the first quarter of 2013, as output grew 5.6 percent and hours rose 1.7 percent. Output growth was robust in both manufacturing subsectors, while virtually all hours growth occurred in durable manufacturing. Over the last four quarters, manufacturing sector productivity increased 1.7 percent as output and hours worked rose 2.6 percent and 0.9 percent, respectively. Unit labor costs in manufacturing decreased 0.5 percent in the first quarter of 2013 and increased 1.6 percent from the same quarter a year ago. Preliminary fourth quarter and annual 2012 measures were announced today for the nonfinancial corporate sector. Productivity increased 2.3 percent in the fourth quarter of 2012 and edged up 0.1 percent over the last four quarters. Annual average productivity increased 0.5 percent from 2011 to 2012. In the fourth quarter of 2012, nonfarm business sector productivity declined 1.7 percent, a slightly smaller decline than reported March 7. Unit labor costs rose 4.4 percent, less than previously reported. Manufacturing sector productivity rose 2.2 percent in the fourth quarter reflecting a small upward revision to output. Unit labor costs in the manufacturing sector decreased slightly less than previously reported, as the upward revision of hourly compensation was more than that of productivity.
Goods and Services Deficit Decreased in March 2013 Posted: May 2, 2013 at 08:30 AM (Thursday) The Nation’s international trade deficit in goods and services decreased to $38.8 billion in March from $43.6 billion (revised) in February, 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 total March exports of $184.3 billion and imports of $223.1 billion resulted in a goods and services deficit of $38.8 billion, down from $43.6 billion in February, revised. March exports were $1.7 billion less than February exports of $186.0 billion. March imports were $6.5 billion less than February imports of $229.6 billion. In March, the goods deficit decreased $4.6 billion from February to $56.1 billion, and the services surplus increased $0.2 billion from February to $17.3 billion. Exports of goods decreased $1.8 billion to $130.3 billion, and imports of goods decreased $6.4 billion to $186.5 billion. Exports of services increased $0.1 billion to $53.9 billion, and imports of services decreased $0.1 billion to $36.6 billion. The goods and services deficit decreased $12.9 billion from March 2012 to March 2013. Exports were down $0.4 billion, or 0.2 percent, and imports were down $13.3 billion, or 5.6 percent.
Weekly Initial Unemployment Claims Decrease 18,000 to 324,000 Posted: May 2, 2013 at 08:30 AM (Thursday) In the week ending April 27, the advance figure for seasonally adjusted initial claims was 324,000, a decrease of 18,000 from the previous week's revised figure of 342,000. The 4-week moving average was 342,250, a decrease of 16,000 from the previous week's revised average of 358,250. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending April 20, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 20 was 3,019,000, an increase of 12,000 from the preceding week's revised level of 3,007,000. The 4-week moving average was 3,055,500, a decrease of 18,000 from the preceding week's revised average of 3,073,500.
New York Purchasing Managers Business Activity rose to 58.3 Posted: May 2, 2013 at 08:30 AM (Thursday) New York City business activity accelerated off a five-month low, according to the survey taken by the Institute for Supply Management-New York (ISM-NY). Current Business Conditions rose to 58.3 in April, reversing nearly all of the March decline. In the last 12 months, there have been three hiccups, all of which faded. Future optimism continued to be sustained, and this helps explain why the short-lived dips in current conditions did not turn into something more protracted. The Six-Month Outlook came in at 64.0 in April. The jobs picture had the best two-month stretch since last summer. Employment printed at 53.3 in April. Purchase volume picked up. Quantity of Purchases, 59.4 in April, bounced off a five-month low. Prices Paid, 51.6 in April, fell to a nine-month low. Revenues, 51.7 in April, hit a five-month low, but the increase in Expected Demand, to 62.9 in April, suggests slower revenue growth might not last. Business impediments had a better tone compared to last month. Skilled labor shortages rose off a four-month low, working capital shortages fell to a four-month low and the percentage of respondents with no difficulties jumped to about a two-year high. However, security concerns were above average after the terror attack in Boston.
Challenger Layoffs decline 23% in April Posted: May 2, 2013 at 07:30 AM (Thursday) Job cuts fell to their lowest level since December, as U.S. employers announced plans to trim payrolls by 38,121 in April, according to the latest report on downsizing activity released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc. April job cuts were 23 percent lower than March, when announced layoffs totaled 49,255. They were 6.0 percent lower than the 40,559 planned job cuts announced in April 2012. April represents the lowest job-cut month since last December, when 32,556 were tracked by Challenger. Through the first four months of 2013, the pace of downsizing is virtually equal to a year ago. Employers have announced 183,162 job cuts to date, which is only 0.27 percent lower than the 183,653 planned layoffs announced in the first four months of 2012. The economic slowdown that began late in the third quarter and is expected to turn into another summer slump has yet to result in increased or widespread downsizing. The biggest concern is that consumers, who had been holding up the economy for so many months, are starting to scale back their spending as wages continue to stagnate. Consumer spending was up 0.2 percent in March, due primarily to increased heating costs during the unseasonably cold month. Spending in other categories, such as household goods, retail and restaurants declined in March, according to the Commerce Department. Retail did see the highest number of job cuts announced in April with 5,897. That was down significantly from the 16,445 layoffs announced by retailers in March, but through the first four months of 2013, retail job cuts are up 64 percent from a year ago. These employers have cut 31,297 jobs, compared to 19,056 at the same point in 2012. American’s wages are not quite keeping pace with increased expenses. As a result, we are not going to see a big increase in consumer spending. It is just as unlikely that we will see a significant drop-off in spending. What is most likely is that consumers will simply shift their spending around. This spending shift is evident in largest retail job cut announced in April, which resulted from the sudden closure of all Sears and Walmart portrait studios, which were owned and operated by CPI Inc. The chain of photography studios was most likely undone by a combination of reduced spending and a dramatic change in the way people take and share pictures. People no longer hand out wallet-sized pictures of their kids anymore; they take pictures with their smartphones and share them on Facebook and Instagram. So, they shift their spending away from portrait studios and toward the latest smartphone or tablet. While retail was the top job-cutting sector of the month, the heaviest downsizing occurred in sectors that are not influenced by consumer spending. Health care, industrial goods, transportation, and aerospace and defense represented the remaining top-five job-cut sectors in April, accounting for 13,766 job cuts or 36 percent of the monthly total. Aerospace and defense firms announced 2,927 job cuts last month, more than 65 percent of which (1,928) were attributed to federal spending cuts or concerns over sequestration. Most private-sector firms have not been directly impacted by sequestration yet, due to the fact that government contracts are typically assigned well in advance and may be months or years away from completion. However, as we can see by early job cutting activity, companies are already taking steps to address the impact of future spending cuts. Another industry that must constantly look ahead and adjust workforce levels is the pharmaceutical industry. Last month, these firms announced 1,517 job cuts, bringing the year-to-date total to 4,702. Many of these workforce reductions are related to the fact that drug makers have products that will soon lose their patent protection and enter the generic market. While they may have other products in the pipeline, most companies are not going to continue to support an idle sales force during the lag time. Such was the case with pharmaceutical company Eli Lilly, which announced job cuts in April. Additionally, Illinois-based AbbVie, a spinoff of Abbott Laboratories, is expected to formally announced “hundreds of layoffs” as medications lose patent protection.
FOMC target funds rate at 0 - 1/4%, policy unchanged Posted: May 1, 2013 at 02:00 PM (Wednesday) Information received since the Federal Open Market Committee met in March suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. 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 growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. 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. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. 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. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.
Construction Spending down 1.7% in March Posted: May 1, 2013 at 10:00 AM (Wednesday) The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2013 was estimated at a seasonally adjusted annual rate of $856.7 billion, 1.7 percent (±1.5%) below the revised February estimate of $871.2 billion. The March figure is 4.8 percent (±1.6%) above the March 2012 estimate of $817.8 billion. During the first 3 months of this year, construction spending amounted to $181.7 billion, 4.7 percent (±1.6%) above the $173.6 billion for the same period in 2012. PRIVATE CONSTRUCTION Spending on private construction was at a seasonally adjusted annual rate of $598.4 billion, 0.6 percent (±1.2%)* below the revised February estimate of $602.0 billion. Residential construction was at a seasonally adjusted annual rate of $294.9 billion in March, 0.4 percent (±1.3%)* above the revised February estimate of $293.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $303.5 billion in March, 1.5 percent (±1.2%) below the revised February estimate of $308.2 billion. PUBLIC CONSTRUCTION In March, the estimated seasonally adjusted annual rate of public construction spending was $258.3 billion, 4.1 percent (±2.5%) below the revised February estimate of $269.2 billion. Educational construction was at a seasonally adjusted annual rate of $62.8 billion, 2.9 percent (±5.9%)* below the revised February estimate of $64.7 billion. Highway construction was at a seasonally adjusted annual rate of $73.8 billion, 5.2 percent (±6.3%)* below the revised February estimate of $77.8 billion.
April Manufacturing ISM expanded at a slower rate to 50.7 Posted: May 1, 2013 at 10:00 AM (Wednesday) Economic activity in the manufacturing sector expanded in April for the fifth consecutive month, and the overall economy grew for the 47th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®. The PMI™ registered 50.7 percent, a decrease of 0.6 percentage point from March's reading of 51.3 percent, indicating expansion in manufacturing for the fifth consecutive month, but at the lowest rate of the year. The New Orders Index increased in April by 0.9 percentage point to 52.3 percent, and the Production Index increased by 1.3 percentage points to 53.5 percent. The Employment Index registered 50.2 percent, a decrease of 4 percentage points compared to March's reading of 54.2 percent. The Prices Index registered 50 percent, decreasing 4.5 percentage points from March, indicating that overall raw materials prices remained unchanged from last month. Comments from the panel indicate a range of strong/steady growth, to flat/declining volumes, depending upon the particular industry. Of the 18 manufacturing industries, 14 are reporting growth in April in the following order: Furniture & Related Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Fabricated Metal Products; Paper Products; Machinery; Nonmetallic Mineral Products; Primary Metals; Miscellaneous Manufacturing; Petroleum & Coal Products; Plastics & Rubber Products; Transportation Equipment; and Computer & Electronic Products. The three industries reporting contraction in April are: Wood Products; Food, Beverage & Tobacco Products; and Chemical Products.
ADP National Employment Report increased by 119,000 Posted: May 1, 2013 at 08:15 AM (Wednesday) Private sector employment increased by 119,000 jobs from March to April, according to the April ADP National Employment Report®, which is produced by ADP®, a leading provider of human capital management 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. The March report, which reported job gains of 158,000, was revised downward to 131,000 jobs. Goods-producing employment rose by 6,000 jobs in April, its slowest pace of growth in seven months. Though it accounted for most of the weakness in goods production job growth in March, construction growth picked up in April and the industry added 15,000 jobs over the month. Meanwhile, manufacturers shed 10,000 jobs in April—the first decline in three months and the largest since September 2012. Service-providing jobs increased by 113,000, the weakest pace of growth in seven months. Among the service industries reported by the ADP National Employment Report, trade/transportation/utilities had the largest gain with 29,000 jobs added over the month. Professional/business services followed, adding 20,000 jobs, and financial activities added 7,000 jobs. During the month of April 2013, U.S. private sector employment increased by 19,000 jobs, representing the slowest pace of expansion since September 2012. The services sector generated the overwhelming majority of new jobs in April, contributing a total of 113,000, which helped to offset overall softness in the goods-producing sector, which was marked by a loss of 10,000 manufacturing jobs. Job growth appears to be slowing in response to very significant fiscal headwinds. Tax increases and government spending cuts are beginning to hit the job market. Job growth has slowed across all industries and most significantly among companies that employ between 20 and 499 workers. Businesses with 49 or fewer employees added 50,000 jobs in April. Employment levels among medium-sized companies with 50-499 employees rose by 26,000, while employment at large companies – those with 500 or more employees – increased by 43,000.
Purchase Apps up, Refi's up in Latest MBA Weekly Survey Posted: May 1, 2013 at 07:45 AM (Wednesday) Mortgage applications increased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 26, 2013. The Market Composite Index, a measure of mortgage loan application volume, increased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week and is at its highest level since the week ending January 18, 2013. The seasonally adjusted Purchase Index decreased 1.4 percent from one week earlier. The unadjusted Purchase Index decreased 0.5 percent compared with the previous week and was 13 percent higher than the same week one year ago. The refinance share of mortgage activity was unchanged at 75 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity was unchanged at 4 percent of total applications. The HARP share of refinance applications increased from 32 percent last week to 34 percent this week, the highest level since MBA began tracking HARP applications in February 2012. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.60 percent, the lowest rate since December 2012, from 3.65 percent, with points decreasing to 0.30 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.80 percent from 3.75 percent, with points decreasing to 0.29 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.34 percent from 3.37 percent, with points decreasing to 0.37 from 0.64 (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 2.84 percent, the lowest rate since December 2012, from 2.89 percent, with points decreasing to 0.26 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. The average contract interest rate for 5/1 ARMs decreased to 2.55 percent from 2.62 percent, with points increasing to 0.22 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.