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Category: Research - Topic: Economics


Construction Spending increased 0.8% in April
Posted: July 1, 2015 at 11:08 AM (Wednesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during May 2015 was estimated at a seasonally adjusted annual rate of $1,035.8 billion, 0.8 percent (±1.5%)* above the revised April estimate of $1,027.0 billion. The May figure is 8.2 percent (±2.0%) above the May 2014 estimate of $957.6 billion.

During the first 5 months of this year, construction spending amounted to $382.1 billion, 5.9 percent (±1.5%) above the $360.8 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $752.4 billion, 0.9 percent (±0.8%) above the revised April estimate of $745.6 billion. Residential construction was at a seasonally adjusted annual rate of $359.5 billion in May, 0.3 percent (±1.3%)* above the revised April estimate of $358.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $392.8 billion in May, 1.5 percent (±0.8%) above the revised April estimate of $387.1 billion.

PUBLIC CONSTRUCTION
In May, the estimated seasonally adjusted annual rate of public construction spending was $283.4 billion, 0.7 percent (±2.5%)* above the revised April estimate of $281.5 billion. Educational construction was at a seasonally adjusted annual rate of $65.3 billion, 0.7 percent (±3.9%)* below the revised April estimate of $65.8 billion. Highway construction was at a seasonally adjusted annual rate of $85.1 billion, 2.1 percent (±6.9%)* above the revised April estimate of $83.3 billion.


June Manufacturing ISM expanded at 53.5
Posted: July 1, 2015 at 10:00 AM (Wednesday)

Economic activity in the manufacturing sector expanded in June for the 30th consecutive month, and the overall economy grew for the 73rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The June PMI® registered 53.5 percent, an increase of 0.7 percentage point over the May reading of 52.8 percent. The New Orders Index registered 56 percent, an increase of 0.2 percentage point from the reading of 55.8 percent in May. The Production Index registered 54 percent, 0.5 percentage point below the May reading of 54.5 percent. The Employment Index registered 55.5 percent, 3.8 percentage points above the May reading of 51.7 percent, reflecting growing employment levels from May at a faster rate. Inventories of raw materials registered 53 percent, an increase of 1.5 percentage points from the May reading of 51.5 percent. The Prices Index registered 49.5 percent, the same reading as in May, indicating lower raw materials prices for the eighth consecutive month. Comments from the panel indicate mostly stable to improving business conditions, with the notable exception relating to the oil and gas markets. Also noted is the negative effect on egg prices and availability due to the avian flu outbreak."

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


Help Wanted OnLine Labor Demand fell 144,300 to 5,300,700 in June
Posted: July 1, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies fell 144,300 to 5,300,700 in June, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The May Supply/Demand rate stands at 1.59 unemployed for each advertised vacancy with a total of 3.2 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.7 million in May.

“The first half of 2015 shows moderate growth with a strong first quarter partially offset by a weak second quarter,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “Overall employer demand for labor still continues at a very high level.”

In June, the Services/Production category saw large losses in Office/Admin (−32,100), Sales (−21,000), Installation/ Maintenance (−14,000), Construction (−12,700), and Food (−10,200) with only a small increase in Transportation (+6,800). While the Professional category also saw losses, it was much smaller than those in Services/Production with Healthcare showing a small gain (+1,600).


Challenger Layoffs Jumped to 44,842 in June
Posted: July 1, 2015 at 08:26 AM (Wednesday)

Job cuts increased by about 10 percent in June, as employers announced plans to reduce payrolls by 44,842 workers during the month. Meanwhile, heavier-than-expected downsizing throughout the first half of 2015 pushed the midyear total to its highest level since 2010, according to a report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

June job cuts were 9.3 percent higher than the 41,034 planned layoffs announced in May. They were 43 percent higher than June 2014, when job cuts totaled just 31,434. This marks the fifth year-over-year increase in job cuts in the first six months of 2015.

Overall, employers announced 287,672 job cuts during the first half of the year. That was up 17 percent from 2014, when the six-month total was 246,034. The midyear total is the highest since 297,677 job cuts were recorded in the first half of 2010.

The pace of job cutting was virtually unchanged between the first and second quarter of year. The 147,458 job cuts announced between April and the end of June was just 5.0 percent more than the 140,214 planned layoffs in the first three months of 2015. The second-quarter total was up 18 percent from a year earlier (124,693).

The first-half surge was due largely to the decline in oil prices, which rippled through the energy and industrial goods sectors. All told, the drop in oil prices was blamed for 69,582 job cuts in the first half of 2015. That is second only to the 86,978 job cuts attributed to “restructuring.”

The energy sector has taken the heaviest hit, cutting its workforce by 60,500 between January and June. Nearly 95 percent (57,168) of those were due to the drop in oil prices. At this point last year, the energy sector had announced just 3,908 job cuts.

Energy is not the only area experiencing increased job cuts. Unexpectedly, the retail sector ranks second in job cuts for the year, having announced 45,230 planned layoffs to date. That is up 68 percent from a year ago (26,863).

Retailers should be enjoying the benefits of falling oil prices, as consumers have the money they are saving at the gas pump to spend elsewhere. However, it appears that consumers were hording that cash, at least through the first half of the year. The most recent data suggests that consumers are finally starting to loosen up the purse strings.

Last week, the United States Commerce Department reported that consumer spending increased 0.9 percent in May, up from a 0.1 percent increase the previous month. The May surge was the biggest monthly increase in nearly six years.

Even if consumers start spending consistently, retailers are always vulnerable to changing consumer trends, technology and operational factors. Retail was the leading job cutting sector in June with 17,947 job cuts. Most of those were related to the closure of all Canadian stores by Minnesota-based Target.

Not all retail cuts are due to frugal consumers. In Target’s case, the retail chain simply made significant missteps when entering Canada two years ago and never gained traction among Canadian shoppers. The store closures, which resulted in 17,000 job cuts for the American-based employer, was among the first decisions by new CEO Brian Cornell, who is determined to revitalize the store here in America.

With consumers starting to spend more, we should see job cuts in retail start to decline in the second half of the year. We have already started to see a decline in oil-related job cuts as prices have begun to stabilize. Over the past two months, oil prices were blamed for just 1,297 job cuts. In contrast, oil prices caused 20,675 job cuts in April.

Overall, we expect the pace of downsizing to slow in the final six months of 2015. The factors that were contributing to increased cuts in the first half of the year appear to subsiding,” he concluded.


ADP National Employment Report increased by 237,000 in June
Posted: July 1, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 237,000 jobs from May to June according to the June ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 120,000 jobs in June, the same as May. Employment among companies with 50-499 employees increased by 86,000 jobs, up from 63,000 the previous month. Employment gains at large companies – those with 500 or more employees – increased from May, adding 32,000 jobs in June, up from 19,000. Companies with 500-999 employees bounced back to 27,000 jobs added after shedding 1,000 jobs in May. Companies with over 1,000 employees added 5,000 jobs, down from 21,000 the previous month.

Goods-producing employment rose by 12,000 jobs in June, after adding 11,000 in May. The construction industry had another solid month in June adding 19,000 jobs, down from 28,000 last month. Meanwhile, manufacturing added 7,000 jobs in June, after losing 2,000 in May.

Service-providing employment rose by 225,000 jobs in June, a strong rise from 192,000 in May. The ADP National Employment Report indicates that professional/business services contributed 61,000 jobs in June, almost double May’s 32,000. Trade/transportation/utilities grew by 50,000, the same as the previous month. The 19,000 new jobs added in financial activities was an increase from last month’s 12,000.

June job numbers came in at their highest level since December 2014. Small businesses continue to lead the way adding over half of the total jobs this month.

The U.S. job machine remains in high gear. The current robust pace of job growth is double that needed to absorb the growth in the working age population. The only blemish in the job market is the loss of jobs in the energy sector. Most encouraging is the healthy rate of job growth among the nation’s smallest companies.


Purchase Apps dpwn, Refi's down in Latest MBA Weekly Survey
Posted: July 1, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 26, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week to its lowest level since December 2014. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 5 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 48.9 percent of total applications from 49.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.0 percent of total applications.

The FHA share of total applications increased to 14.0 percent from 13.9 percent the week prior. The VA share of total applications decreased to 10.8 percent from 10.9 percent the week prior. The USDA share of total applications increased to 1.0 percent from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.26 percent, its highest level since October 2014, from 4.19 percent, with points decreasing to 0.33 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.21 percent, its highest level since October 2014, from 4.14 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.04 percent, its highest level since September 2014, from 3.96 percent, with points increasing to 0.18 from 0.14 (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 3.44 percent, its highest level since October 2014, from 3.38 percent, with points decreasing to 0.31 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.09 percent from 3.04 percent, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Chicago Purchasing Managers Index increased 3.2 points to 46.4 in May
Posted: June 30, 2015 at 09:45 AM (Tuesday)

The Chicago Business Barometer recovered half of May’s loss in June but stayed in contraction for the second consecutive month, with activity weakening further in Q2 from an already depressed Q1.

The Barometer increased 3.2 points to 49.4 in June from 46.2 in May, up from February’s 5½-year low but spending the fourth month below 50 since the start of the year. Despite the modest improvement in June, the Barometer declined to 49.3 in Q2 from 50.5 in the previous quarter, the lowest since Q3 2009, a signal that the bounceback in economic growth in Q2 may be weaker than expected.

The increase in the Barometer between May and June was led by an 8.8% expansion in New Orders to 51.7 in June, pulling the indicator out of contraction. Production contracted at a slower pace, rising 8.7% in June but failing to jump above 50. Despite the rises, both measures remain at relatively low levels.

Aside from higher orders and output, there were few positives in the June Chicago Report. Amid weak demand in recent months, the Employment Indicator fell to the lowest since November 2009, standing below 50 for the second month in a row and pointing to a slowdown in the pace of hiring. Order Backlogs contracted at the fastest pace since September 2009 and was below 50 for the fifth month in a row, while Supplier Deliveries decreased more moderately but recorded a two-year low.

Companies continued to reduce their inventory levels that last month were viewed by many panellists as too high, an indication of weak demand. Inventories of finished goods fell 12% between May and June, marking the third consecutive decline and standing below 50 for the first time in four months.

Disinflationary pressures eased further in June following the rebound in oil prices, with Prices Paid rising for the second consecutive month to the highest since December.

In spite of the continued softness in the data, most companies in our panel were optimistic about the short-term outlook. Results from a special question asked this month showed 56.5% anticipated higher New Orders in Q3 compared with Q2, while 37.7% said they expected the same level of orders. Only 5.8% of respondents forecast a decline.

Chief Economist of MNI Indicators Philip Uglow said, “While the latest increase in New Orders is a tentative sign of a pick-up in demand over the coming months, there is no getting away from the general softness in the data. The Barometer hit a 5½ year low in Q2 and the weakness is having a detrimental impact on the level of hiring.”


S&P/Case-Shiller Home Price Indices unchanged% in April
Posted: June 30, 2015 at 09:00 AM (Tuesday)

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

Year-over-Year
Both Composites and the National index showed slightly lower year-over-year gains compared to last month. The 10-City Composite gained 4.6% year-over-year, while the 20-City Composite gained 4.9% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015 versus a 4.3% increase in March 2015.

Denver and San Francisco reported the highest year-over-year gains with price increases of 10.3% and 10.0%, respectively, over the last 12 months. Dallas reported an 8.8% year-over-year gain to round out the top three cities. Nine cities reported faster price increases in the year ended April 2015 over the year ended March 2015. Las Vegas prices rose 6.3% in the year to April versus 5.7% in the year to March 2015. In 11 cities, however, the rate of annual price gains slowed. Boston home prices were up 1.8% in the 12 months ending in April compared to a 4.6% gain in the 12 months ending in March 2015.

Month-over-Month
Before seasonal adjustment, the National index increased 1.1% in April and the 10-City and 20-City Composites posted gains of 1.0% and 1.1% month-over-month. After seasonal adjustment, the National index was unchanged; the 10- and 20-city composites were up 0.3% and 0.4%. All 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 12 were up and eight were down.

Analysis
Home prices continue to rise across the country, but the pace is not accelerating. Moreover, consumer expectations are consistent with the current pace of price increases. A recent national survey published by the New York Fed showed the average expected price increase among both owners and renters is 4.1%. Both the current rate of home price increases and the consumers’ expectations are a bit lower than the long term annual price change of 4.9% since 1975. These figures, however, do not adjust for inflation. The real, or inflation adjusted, price change since 1975 is one percent per year. Given the current inflation rate of under two percent, real home prices today are rising more quickly than is typical. The three out of five consumers in the survey who see home ownership as a good or somewhat good investment may be thinking in real terms.

Recent housing data is positive. Sales of new and existing homes are rising in recent reports and construction of new homes enjoyed strong gains in May. At the same time, the proportion of new construction that is apartments rather than single family homes remains high. In the past year, 34% of housing starts were apartments, compared to 22% on average since 1975. One aspect of this may be condominiums. Separately, S&P Dow Jones Indices reports the S&P/Case-Shiller Condo Price indices for Los Angeles, San Francisco, Chicago, Boston and New York. In all but LA, condo prices are rising faster than single family homes.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015. The 10- and 20-City Composites reported year-over-year increases of 4.6% and 4.9%.

As of April 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 14-16%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 31.0% and 32.0%.


Paychex-IHS Small Business Jobs Index dipped to 100.63 in June
Posted: June 30, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index was relatively unchanged in June, declining just 0.03 percent, bringing the national index to 100.63. Year-over-year the index decreased 0.44 percent. After increasing 0.23 percent during the first quarter of 2015, the pace of employment growth slowed 0.16 percent in the second quarter. With a national index level above 100, employment growth conditions remain stronger than during the index’s base year of 2004. The East North Central region maintained its position as the highest-ranked regional index. Washington regained the lead among states once again. Dallas continued its streak of strong employment growth and was the top-ranked metro area for the ninth straight month.

At 100.63, the Paychex | IHS Small Business Jobs Index was almost unchanged in June as it remains below the level set throughout much of 2014. Among industries, employment conditions strengthened most in leisure and hospitality, while construction declined sharply.

Even though the pace of employment growth slowed slightly from the first quarter to the second, the past 12 months have shown the index consistently over 100, indicating a slow but steady continuation of job gains.


Texas Manufacturing Activity Still Contracting in June
Posted: June 29, 2015 at 10:30 AM (Monday)

Texas factory activity declined again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose to -6.5 but remained in negative territory, suggesting a fourth consecutive month of contracting output.

A similar pattern was seen among other measures of current manufacturing activity in June. The capacity utilization index increased to -6.1 and the shipments index increased to -8.8. These negative index levels indicate continued contraction, but the upward movement this month suggests the pace of decline slowed. The new orders index moved up to -10.3, while the growth rate of orders index edged down to -16.5.

Perceptions of broader business conditions worsened further, although not as sharply in June as in prior months. The general business activity index jumped nearly 14 points to -7, its highest reading since January. The company outlook index moved to -7.4, up from -10.5 last month.

Labor market indicators reflected slight employment declines and shorter workweeks. The June employment index was negative for a second month in a row but pushed up 7 points to -1.2. Fourteen percent of firms reported net hiring, compared with 15 percent reporting net layoffs. The hours worked index inched up from -11.6 to -10.7.

There was upward pressure on input prices and wages in June, and downward pressure on selling prices eased. The raw materials prices index jumped 9 points to 7.4 after five months of negative readings. The finished goods prices index remained negative for a sixth month but moved up to -1.9, suggesting an abatement of downward pressure. Meanwhile, the wages and benefits index remained positive and little changed at 16.4.

Expectations regarding future business conditions improved in June. The index of future general business activity edged up to 8.1 and the index of future company outlook came in at 13.4. Indexes of future manufacturing activity moved down slightly but remained in solid 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 June 16–24, and 115 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.


Pending Home Sales Index increased 0.9% in May
Posted: June 29, 2015 at 10:02 AM (Monday)

Pending home sales continued to rise in May and are now at their highest level in over nine years, according to the National Association of Realtors®. Gains in the Northeast and West were offset by small decreases in the Midwest and South.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April and is now 10.4 percent above May 2014 (101.9). The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006 (113.7).

Contract activity rose again in May for the fifth straight month, increasing the likelihood that home sales are off to their best year since the downturn. The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring. It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.

They warn that this year's stronger sales amidst similar housing supply levels from a year ago have caused home prices to rise to an unhealthy and unsustainable pace.

Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there's no question the goalpost will move further away for many renters wanting to become homeowners.

The PHSI in the Northeast increased 6.3 percent to 93.9 in May, and is now 10.6 percent above a year ago. In the Midwest the index declined 0.6 percent to 111.4 in May, but is still 7.8 percent above May 2014.

Pending home sales in the South decreased 0.8 percent to an index of 127.8 in May but are still 10.6 percent above last May. The index in the West rose 2.2 percent in May to 104.5, and is 13.0 percent above a year ago.


University of Michigan Consumer Confidence up in June to 96.1
Posted: June 26, 2015 at 10:00 AM (Friday)

Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004. Just as important, that same record was set by households in the top third of the income distribution as well as by the middle third and those in the bottom third of the income distribution. Moreover, the recent surveys recorded those same records when consumers were asked to evaluate prospects for the national economy, their personal finances, and buying conditions. Consumer spending will remain the driving force of economic growth in 2015. Overall, the data indicate growth in consumer spending of 3.0% in 2015.

Strong Economic Growth Expected
The economic slowdown has ended according to consumers. The fewest consumers thought the economy had worsened in the June 2015 survey than anytime since August of 2000. Consumers reported hearing of fewer recent job losses in June, and the majority of consumers anticipated good times in the economy as a whole during the year ahead. When averaged over the first half of 2015, consumers were more likely to expect good times in the economy than in the first half of any other year since 2000.

Personal Finances Improve
During the first six months of 2015, consumers more favorably assessed their current finances as well as their future financial prospects than in the first half of any other year since 2007. These very favorable expectations were driven by remarkably low income expectations: across all households during the first half of 2015, an income increase of 1.5% was expected, down from 2.5% in the first half of 2007. A lower prevailing inflation rate, however, made real income gains higher in the first half of 2015 than anytime since the first half of 2007.

The Consumer Sentiment Index was 96.1 in the June 2015 survey, up from 90.7 in May and significantly above last June’s 82.5. Other than January’s 98.1, the June reading is the highest since 2007. The Current Conditions Index was 108.9 in June, up from 100.8 in May and last June’s 96.6. The Expectations Index rose to 87.8 in the June 2015 survey, up from 84.2 in the May and substantially above last June’s 73.5.

The remarkably favorable economic assessments documented in the recent surveys were due to two factors. An improving economy was the most important component. But the gains were so outsized that they probably reflected the acceptance of a new lower comparison standard that was based on diminished expectations for long-term economic prospects. Parsing just how much has been due to an improving economy and how much to an acceptance of diminished economic standards will be revealed by their subsequent consumption behavior. Needless to say, the answer to this question has critical implications for appropriate economic policies.


Kansas City Fed Manufacturing Activity declined at a slightly slower pace in June
Posted: June 25, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined at a slightly slower pace than the previous month, and producers’ expectations improved modestly. Most price indexes continued to rise, particularly for raw materials.

The month-over-month composite index was -9 in June, up from -13 in May but down from -7 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods manufacturing improved slightly, although still negative, particularly for aircraft products and parts. However, nondurable goods production fell further broadly across all types of plants. Production fell in all District states except for Colorado, but continued to be most negative in energy-concentrated Oklahoma. The majority of other month-over-month indexes also remained negative. The production index contracted further from -13 to -21, its lowest level since February 2009, and the shipments index also decreased. On the other hand, although still negative, the new orders, order backlog, employment, and new orders for export indexes edged higher. The finished goods inventory index fell from 0 to -6, while the raw materials inventory index was basically unchanged.

Year-over-year factory indexes decreased from the previous month. The composite year-over-year index eased from -5 to -9, and the production, shipments, new orders, and order backlog indexes all fell to their lowest levels since late 2009. The employment index fell back into negative territory after increasing last month, and the capital expenditures index inched lower while remaining positive. Both inventory indexes decreased from the previous month.

Most future factory indexes improved slightly in June. The future composite index edged up from 0 to 3, and the future production, new orders, and order backlog indexes also showed positive gains. The future capital expenditures index jumped from 0 to 13, its highest level in 5 months. In contrast, the future employment index decreased from 7 to 0, and the future shipments index also eased somewhat. The future finished goods inventory index fell from -5 to -11, while the future raw materials inventory index was basically unchanged.

Most price indexes continued to rise in June, although monthly selling prices were still negative. The month-over-month finished goods price index inched higher from -4 to -2, and the raw materials price index jumped from -6 to 13. The year-over-year raw materials price index increased from 6 to 27, and the finished goods price index edged up slightly. The future raw materials price index rose from 19 to 33, while the future finished goods price index was basically unchanged.


BTMU U.S. Business Barometer increased by 0.2%
Posted: June 25, 2015 at 10:00 AM (Thursday)

For the week ending June 13 2015, the BTMU U.S. Business Barometer increased by 0.2 percent to 98.6, following a decline of 0.3 percent in the previous week. This week’s barometer was mainly driven by strong performance in most production indexes. The largest contribution to this week’s recovery came from electric output, which rose by 10.1 percent. For the others, truck production went up by 4.5 percent, while auto production went down by 5.9 percent. Also steel production increased by 1.0 percent. As to the consumption side, chain store sales recovered by 0.3 percent, but MBA’s purchase index fell by 4.2 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 0.4 percent.


Personal Income increased 0.5%, Spending increased 0.9%
Posted: June 25, 2015 at 08:30 AM (Thursday)

Personal income increased $79.0 billion, or 0.5 percent, and disposable personal income (DPI) increased $65.5 billion, or 0.5 percent, in May, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $105.9 billion, or 0.9 percent. In April, personal income increased $69.6 billion, or 0.5 percent, DPI increased $57.0 billion, or 0.4 percent, and PCE increased $8.5 billion, or 0.1 percent, based on revised estimates.

Real DPI increased 0.2 percent in May, compared with an increase of 0.4 percent in April. Real PCE increased 0.6 percent, compared with an increase of less than 0.1 percent


Weekly Initial Unemployment Claims Increase 3,000 to 271,000
Posted: June 25, 2015 at 08:30 AM (Thursday)

In the week ending June 20, the advance figure for seasonally adjusted initial claims was 271,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 267,000 to 268,000. The 4-week moving average was 273,750, a decrease of 3,250 from the previous week's revised average. The previous week's average was revised up by 250 from 276,750 to 277,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 13, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 13 was 2,247,000, an increase of 22,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,222,000 to 2,225,000. The 4-week moving average was 2,237,000, an increase of 5,250 from the previous week's revised average. The previous week's average was revised up by 750 from 2,231,000 to 2,231,750.


1Q2015 GDP Final estimate decreased 0.2%
Posted: June 24, 2015 at 08:30 AM (Wednesday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- decreased at an annual rate of 0.2 percent in the first quarter of 2015, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.2 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the decrease in real GDP was 0.7 percent. With the third estimate for the first quarter, exports decreased less than previously estimated,and personal consumption expenditures (PCE) and imports increased more.

The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from PCE, private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The "third" estimate of the first-quarter percent change in GDP is 0.5 percentage point, or $23.6 billion, more than the second estimate issued last month, primarily reflecting upward revisions to exports, to personal consumption expenditures, to private inventory investment, to nonresidential fixed investment, and to state and local government spending that were partly offset by an upward revision to imports.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 24, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 1.6% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 19, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1% compared with the previous week. The Refinance Index increased 2% from the previous week.

The seasonally adjusted Purchase Index increased 1% from one week earlier. The unadjusted Purchase Index was unchanged compared with the previous week and was 18% higher than the same week one year ago.

The refinance share of mortgage activity increased to 49.0% of total applications from 48.5% the previous week. The adjustable-rate mortgage share of activity increased to 7.0% of total applications, the highest level since December 2014.

The FHA share of total applications decreased to 13.9% from 14.2% the week prior. The VA share of total applications decreased to 10.9% from 11.5% the week prior. The USDA share of total applications remained unchanged at 0.9% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.19% from 4.22%, with points decreasing to 0.38 from 0.46 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.14% from 4.18%, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.96% from 4.00%, with points decreasing to 0.14 from 0.20 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.38% from 3.43%, with points increasing to 0.37 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.04% from 3.15%, with points decreasing to 0.46 from 0.52 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.


New Home Sales in May at annual rate of 546,000
Posted: June 23, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in May 2015 were at a seasonally adjusted annual rate of 546,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±16.7%) above the revised April rate of 534,000 and is 19.5 percent (±19.7%)* above the May 2014 estimate of 457,000.

The median sales price of new houses sold in May 2015 was $282,800; the average sales price was $337,000. The seasonally adjusted estimate of new houses for sale at the end of May was 206,000. This represents a supply of 4.5 months at the current sales rate.


Richmond Fed's Current Activity Index gained 5 points to a reading of 6
Posted: June 23, 2015 at 10:00 AM (Tuesday)

Fifth District manufacturing activity grew modestly in June, according to the most recent survey by the Federal Reserve Bank of Richmond. The volume of new orders picked up, while order backlogs increased. However, shipments remained flat in June. Manufacturing employment continued to rise at a modest pace, while average wages grew moderately. Prices of raw materials and prices of finished goods rose at a faster pace in June.

Manufacturing executives anticipated positive business conditions during the next six months. Manufacturers expected faster growth in shipments and in the volume of new orders. Additionally, producers expected order backlogs to grow more quickly and looked for increased capacity utilization. Survey participants anticipated unchanged vendor lead times.

Manufacturers expected faster growth in the number of employees and looked for average wages to accelerate in the six months ahead. They expected a modest rise in the length of the average workweek. In addition, producers expected faster growth in prices paid and in prices received during the next six months.

Manufacturing activity increased modestly this month, with the composite index moving to a reading of 6 from last month's reading of 1. Shipments remained flat, while the index for new orders advanced nine points, reaching a reading of 11. Manufacturing hiring continued to grow at a modest pace this month. The indicator gained one point to finish at a reading of 4 in June.

Capacity utilization rose nearly on pace with last month. The index slipped one point to a reading of 6. Backlogs increased, moving the index to 6 from a reading of −10 a month ago. Vendor lead time lengthened slightly, with that index edging up one point to 7. Finished goods inventories rose more quickly than a month ago. The index gained 10 points to end at 31. However, raw materials inventories rose only slightly faster. That gauge moved up one point to 23.


Philadelphia Nonmanufacturing Activity nchanged in June
Posted: June 23, 2015 at 10:00 AM (Tuesday)

According to firms responding to this month's Nonmanufacturing Business Outlook Survey, the pace of regional nonmanufacturing activity in June was effectively unchanged from the prior month. The survey's indicators for employment rose, while the indicators for new orders were effectively unchanged, and indicators for sales fell. The future activity indicators were also relatively steady and show that the responding firms remain highly optimistic about activity increasing in the region over the next six months.

Nonmanufacturing Activity Remains High
The diffusion index for current activity at the firm level stands at 51.4 in June, falling less than a full point from its May reading (see Chart 1 above). Almost 60 percent of the respondents reported increasing activity at their own firms this month, down from 68 percent last month, but the percentage reporting decreasing activity also fell — from 16 percent in May to 8 percent in June. The diffusion index for current activity for the region was effectively unchanged at 54.1, as a majority of the responding firms continued to report increasing general activity in the region. Both indexes are significantly above their historical averages (31.6 for general activity at the firm level; 24.8 for general activity in the region).

New Orders and Sales Are Mixed But Remain High
The new orders index was almost unchanged and stands at 27.0 in June (see Chart 2 below). Nearly 41 percent of the firms reported increases in new orders. The sales/revenues index fell 11 points to 32.4, however. For this indicator, the percentage of firms reporting increases in sales or revenues declined from 61 percent in May to 54 percent in June. Nonetheless, both the new orders and sales/revenue indexes are above their historical averages (21.5 for new orders; 24.8 for sales/revenue).

Employment Conditions Strengthen
Responses to the survey indicate strengthening conditions for labor market demand in June. The full-time employment index rose 11 points, to 24.3, in June, as the percentage of respondents reporting increases to full-time staff levels rose from 27 percent last month to 35 percent this month. The part-time employment index also increased, from 27.3 in May to 32.4 in June. The workweek index decreased 4 points, however, to 18.9 in June.

Firms Report Higher Prices Paid
The prices paid index rose 24 points, to 35.1. This index is above its historical average of 20.9 but is also highly volatile. The percentage of respondents reporting increases in prices paid rose from 20 percent in May to 38 percent in June, and the percentage of respondents reporting decreases fell from 9 percent to 3 percent. Fewer firms reported decreases in prices received this month, as the prices paid index dropped 4 points, to 32.4, in June. The share of firms reporting no change in prices received stands at roughly 51 percent.

Spending on Equipment and Software Decreased
The share of firms reporting increases in capital expenditures for equipment and software fell this month, and the corresponding diffusion index declined 6 points to 18.9. The index for capital expenditures on physical plant fell 2 points, to 16.2, but the share of firms reporting increased capital expenditures held relatively steady at 24 percent.

Optimism About the Future Is High
Respondents to the survey remain highly optimistic about future activity over the next six months. At the individual firm level, there was a 7-point decline in the future activity diffusion index to 70.3, but a large majority (76 percent) of the respondents expect higher activity for their firms over the next six months, and only 5 percent expect lower activity. Nearly 84 percent of the respondents foresee increasing activity in the region, and the corresponding future activity index for the region rose 2 points to 81.1.

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


May New Orders for Durable Goods Decreased 1.8%, Ex-Trans up 0.5%
Posted: June 23, 2015 at 08:36 AM (Tuesday)

New orders for manufactured durable goods in May decreased $4.1 billion or 1.8 percent to $228.9 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 1.5 percent April decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 2.1 percent. Transportation equipment, also down three of the last four months, drove the decrease, $4.9 billion or 6.4 percent to $71.7 billion.

Shipments of manufactured durable goods in May, down four of the last five months, decreased $0.2 billion or 0.1 percent to $239.9 billion. This followed a 0.2 percent April decrease. Transportation equipment, also down four of the last five months, drove the decrease, $0.7 billion or 0.9 percent to $76.7 billion.

Unfilled orders for manufactured durable goods in May, down five of the last six months, decreased $5.7 billion or 0.5 percent to $1,195.5 billion. This followed a 0.2 percent April decrease. Transportation equipment, also down five of the last six months, led the decrease, $5.1 billion or 0.6 percent to $798.8 billion.

Inventories of manufactured durable goods in May, down following twenty-three consecutive monthly increases, decreased $0.8 billion or 0.2 percent to $400.6 billion. This followed a 0.2 percent April increase. Transportation equipment, down two of the last three months, led the decrease, $0.3 billion or 0.2 percent to $129.9 billion.

Nondefense new orders for capital goods in May decreased $5.2 billion or 6.6 percent to $74.3 billion. Shipments decreased $0.5 billion or 0.6 percent to $79.3 billion. Unfilled orders decreased $5.0 billion or 0.7 percent to $757.1 billion. Inventories decreased $1.1 billion or 0.6 percent to $176.2 billion. Defense new orders for capital goods in May increased $0.7 billion or 8.2 percent to $8.8 billion. Shipments increased less than $0.1 billion or 0.3 percent to $9.5 billion. Unfilled orders decreased $0.7 billion or 0.5 percent to $150.6 billion. Inventories decreased less than $0.1 billion or virtually unchanged to $21.6 billion.

Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $474.5 billion (revised from $476.7 billion); shipments, $481.5 billion (revised from $482.4 billion); unfilled orders, $1,201.2 billion (revised from $1,202.4 billion); and total inventories, $649.0 billion (virtually unchanged).


Existing-Home Sales rose 5.1% in May
Posted: June 22, 2015 at 10:00 AM (Monday)

Fueled partly by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years, according to the National Association of Realtors®. Led by the Northeast, all major regions experienced sales increases in May.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now increased year-over-year for eight consecutive months and are 9.2 percent above a year ago (4.90 million).

May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009 (5.44 million). Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers. However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.

Total housing inventory at the end of May increased 3.2 percent to 2.29 million existing homes available for sale, and is 1.8 percent higher than a year ago (2.25 million). Unsold inventory is at a 5.1-month supply at the current sales pace, down from 5.2 months in April.

The median existing-home price for all housing types in May was $228,700, which is 7.9 percent above May 2014. This marks the 39th consecutive month of year-over-year price gains.

The percent share of first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers.

The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs. More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed in May to 3.84 percent from 3.67 percent in April but remained below 4.00 percent for the sixth straight month.

Realtors® overwhelmingly support the Consumer Financial Protection Bureau's proposal of a two-month delay for the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation. NAR has long advocated the need to avoid implementing the new regulation during the peak buying season. With interest rates on the rise, many families wanting to buy are looking to lock-in at current rates and move into their new home before the school year starts. Holding off on TRID implementation through the summer helps these buyers avoid any disruption or delays in closings that could develop once the regulation goes into effect.

With demand continuing to far exceed supply, properties typically stayed on the market for 40 days in May, up from April (39 days) but the third shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 131 days in May, while foreclosures sold in 56 days and non-distressed homes took 38 days. Forty-five percent of homes sold in May were on the market for less than a month.

All-cash sales were 24 percent of transactions in May for the third straight month and are down considerably from a year ago (32 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in May, unchanged from last month and down from 16 percent in May 2014. Sixty-seven percent of investors paid cash in May.

Distressed sales — foreclosures and short sales — remained at 10 percent for the third consecutive month in May and are below the 11 percent share a year ago. Seven percent of May sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in May (20 percent in April), while short sales were also discounted 16 percent (14 percent in April).

Single-family and Condo/Co-op Sales
Single-family home sales jumped 5.6 percent to a seasonally adjusted annual rate of 4.73 million in May from 4.48 million in April, and are and now 9.7 percent above the 4.31 million pace a year ago. The median existing single-family home price was $230,300 in May, up 8.6 percent from May 2014.

Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 620,000 units in May from 610,000 units in April, and are 5.1 percent higher than May 2014 (590,000 units). The median existing condo price was $216,400 in May, which is 1.9 percent higher than a year ago.

Regional Breakdown
May existing-home sales in the Northeast jumped 11.3 percent to an annual rate of 690,000, and are now 11.3 percent above a year ago. The median price in the Northeast was $269,000, which is 4.8 percent higher than May 2014.

In the Midwest, existing-home sales rose 4.1 percent to an annual rate of 1.27 million in May, and are 12.4 percent above May 2014. The median price in the Midwest was $181,900, up 9.4 percent from a year ago.

Existing-home sales in the South increased 4.3 percent to an annual rate of 2.18 million in May, and are 6.9 percent above May 2014. The median price in the South was $198,300, up 8.2 percent from a year ago.

Existing-home sales in the West climbed 4.3 percent to an annual rate of 1.21 million in May, and are 9.0 percent above a year ago. The median price in the West was $324,000, which is 10.2 percent above May 2014.


Chicago Fed National Activity slightly below average in May
Posted: June 22, 2015 at 08:44 AM (Monday)

The index’s three-month moving average, CFNAI-MA3, increased slightly to –0.16 in May from –0.20 in April. May’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below 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, which is also a three-month moving average, was unchanged at –0.13 in May. Thirty-five of the 85 individual indicators made positive contributions to the CFNAI in May, while 50 made negative contributions. Forty-three indicators improved from April to May, while 41 indicators deteriorated and one was unchanged. Of the indicators that improved, 21 made negative contributions.

The contribution from production-related indicators to the CFNAI ticked up to –0.17 in May from –0.19 in April. Industrial production was down 0.2 percent in May after decreasing 0.5 percent in April. The sales, orders, and inventories category made a neutral contribution to the CFNAI in May, up slightly from –0.01 in April.

The contribution from employment-related indicators to the CFNAI remained at +0.10 in May. Nonfarm payrolls increased by 280,000 in May, following a gain of 221,000 in the previous month; however, the unemployment rate edged up to 5.5 percent in May from 5.4 percent in April.

The contribution of the personal consumption and housing category to the CFNAI was steady at –0.09 in May. Housing starts decreased to 1,036,000 annualized units in May from 1,165,000 in April. However, housing permits increased to 1,275,000 annualized units in May from 1,140,000 in the previous month.

The CFNAI was constructed using data available as of June 18, 2015. At that time, May data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The April monthly index was revised to –0.19 from an initial estimate of –0.15. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the April monthly index was due primarily to the former.


U.S. Leading Economic Index increased 0.7% in May
Posted: June 18, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.7 percent in May to 123.1 (2010 = 100), following a 0.7 percent increase in April, and a 0.4 percent increase in March.

The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half. While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in May to 112.1 (2010 = 100), following a 0.2 percent increase in April, and no change in March.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in May to 117.0 (2010 = 100), following a 0.2 percent increase in April, and a 0.5 percent increase in March.


Philadelphia June Outlook Suggest Continued Growth
Posted: June 18, 2015 at 10:00 AM (Thursday)

Manufacturing conditions in the region improved in June, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments remained positive and increased over their readings in May. Employment and average work hours increased, on balance, at the reporting firms. Firms reported higher prices for raw materials and other inputs in June compared with reported price decreases in recent months. The survey’s indicators of future activity suggest that firms expect continuing growth in the manufacturing sector over the next six months.

Indicators Suggest Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 6.7 in May to 15.2 this month. This is the highest reading for the index since December. The demand for manufactured goods, as measured by the survey’s current new orders index, picked up this month. The new orders index increased 11 points to its highest reading since November. The current shipments index increased 13 points, also the highest reading since November.

Firms’ responses suggest modest expansion in employment in June. The percentage of firms reporting an increase in employees in June (22 percent) exceeded the percentage reporting a decrease (18 percent). The current employment index, however, fell nearly 3 points, to 3.8. Firms reported an overall modest increase in the workweek compared with a decrease last month: The workweek index increased from -5.6 to 4.7.

More Firms Report Input Prices Increases
Over 21 percent of the firms reported higher input prices this month, up significantly from the 5 percent that reported higher prices last month. The prices paid index increased 31 points to its highest reading in 8 months. The prices received index, which reflects firms’ own final goods prices, also increased from -5.4 to 4.8, the first positive reading in six months. The percent of firms reporting higher prices received (14 percent) exceeded the percentage reporting lower prices (10 percent), although 76 percent reported steady prices.

Most Future Indexes Move Higher
Most of the survey’s broad indicators of future growth showed marked improvement this month. The future general activity index increased 6 points to its highest reading since January (see Chart 1). The future index for shipments increased 24 points, while the future new orders index increased 13 points. About 31 percent of the firms expect expansion in their workforce over the next six months, while 9 percent expect a reduction. The future employment index was essentially flat, edging just 1 point higher this month. The future capital expenditures index weakened this month, falling 9 points to its lowest reading since March 2013.

Most Firms Expect to Increase Production in the Second Half of 2015
In this month’s special questions, firms were asked to appraise the underlying demand for their products as well as expected production growth for the second half of the year compared with the first half. Firms were also asked to evaluate how production increases would be achieved, by either increases in employment, work hours, or productivity gains.

Summary
The Manufacturing Business Outlook Survey suggests expansion of the region’s manufacturing sector in June. The survey’s indicators for general activity, new orders, and shipments all improved from their readings in May. Firms reported a modest increase in employment this month. A notable share of respondents reported higher prices of inputs this month. For their own manufactured products, more firms reported price increases than reported price decreases. Indicators reflecting firms’ expectations for the next six months improved this month, most notably for future new orders and shipments.


BTMU U.S. Business Barometer dropped by 0.3%
Posted: June 18, 2015 at 10:00 AM (Thursday)

For the week ending June 6 2015, the BTMU U.S. Business Barometer dropped by 0.3 percent to 98.4, following a rise of 0.5 percent in the previous week. This week’s barometer was chiefly driven by weak performances in consumption indexes. Chain store sales plunged by 2.8 percent, the largest drop since the beginning of the year; although it was partially offset by strong performance in MBA’s purchase index, which increased by 9.7 percent. As to the production side, electric output, steel and lumber production reported minor losses, but they were entirely offset by gains in auto and truck production.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 0.5 percent.


Weekly Initial Unemployment Claims Decrease 12,000 to 267,000
Posted: June 18, 2015 at 08:30 AM (Thursday)

In the week ending June 13, the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 12,000 from the previous week's unrevised level of 279,000. The 4-week moving average was 276,750, a decrease of 2,000 from the previous week's unrevised average of 278,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending June 6, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 6 was 2,222,000, a decrease of 50,000 from the previous week's revised level. The previous week's level was revised up 7,000 from 2,265,000 to 2,272,000. The 4-week moving average was 2,231,000, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 1,750 from 2,226,750 to 2,228,500.


1Q2015 Current Account Deficit Increased
Posted: June 18, 2015 at 08:30 AM (Thursday)

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)—increased to $113.3 billion (preliminary) in the first quarter of 2015 from $103.1 billion (revised) in the fourth quarter of 2014. The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.3 percent in the fourth quarter. The increase in the current-account deficit was largely accounted for by a decrease in the surplus on primary income. In addition, the deficit on goods increased. These changes were partly offset by an increase in the surplus on services and a decrease in the deficit on secondary income.


Consumer Price Index increased 0.4% in May, Ex Fd & Engy rose 0.1%
Posted: June 18, 2015 at 08:30 AM (Thursday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 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 was unchanged before seasonal adjustment.

The gasoline index increased sharply in May, rising 10.4 percent and accounting for most of the seasonally adjusted all items increase. Other energy indexes were mixed, with the fuel oil index rising but the electricity index declining and the index for natural gas unchanged. The food index was unchanged for the second month in a row, as a decline in the food at home index offset an increase in the index for food away from home.

The index for all items less food and energy rose 0.1 percent in May, its smallest increase since December. The indexes for shelter, airline fares, and medical care all increased, as did the indexes for personal care, recreation, new vehicles, alcoholic beverages, and tobacco. In contrast, the indexes for apparel, for household furnishings and operations, and for used cars and trucks all declined in May.

The all items index was unchanged for the 12 months ending May after showing a 0.2-percent decline for the 12 months ending April. The energy index fell 16.3 percent over the last 12 months, with the gasoline index down 25.0 percent despite rising in May. The food index increased 1.6 percent over the last year, and the index for all items less food and energy rose 1.7 percent.


Real Average Hourly Earnings decreased 0.1% in May
Posted: June 18, 2015 at 08:30 AM (Thursday)

Real average hourly earnings for all employees decreased 0.1 percent from April to May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings being more than offset by a 0.4-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased by 0.1 percent over the month due to the decrease in real average hourly earnings and no change in the average workweek.

Real average hourly earnings increased by 2.2 percent, seasonally adjusted, from May 2014 to May 2015. This increase in real average hourly earnings, combined with no change in the average workweek, resulted in a 2.3-percent increase in real average weekly earnings over this period.


Federal Open Market Committee Press Conference
Posted: June 17, 2015 at 02:30 PM (Wednesday)


FOMC target funds rate reaffirmed at 0 - 1/4%
Posted: June 17, 2015 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter. The pace of job gains picked up while the unemployment rate remained steady. On balance, a range of labor market indicators suggests that under-utilization of labor resources diminished somewhat. Growth in household spending has been moderate and the housing sector has shown some improvement; however, business fixed investment and net exports stayed soft. Inflation continued to run below the Committee's longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports; energy prices appear to have stabilized. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of earlier declines in energy and import prices dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

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

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

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Jeffrey M. Lacker; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: June 17, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 5.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 12, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 15 percent higher than the same week one year ago.

"Rising rates continue to create volatility in weekly mortgage applications activity. The 10-year Treasury hit 2.5 percent last week and our survey's 30-year fixed rate of 4.22 percent is at its highest level since October 2014. The refinance index dropped to the lowest level since January 2015 as rates continued to increase," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity decreased to 48.5 percent of total applications from previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications.

The FHA share of total applications decreased to 14.2 percent from 14.3 percent the week prior. The VA share of total applications remained unchanged at 11.5 percent. The USDA share of total applications decreased to 0.9 percent from 1.1 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.22 percent from 4.17 percent, with points increasing to 0.46 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.18 percent from 4.15 percent, with points decreasing to 0.36 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 increased to 4.00 percent from 3.90 percent, with points increasing to 0.20 from 0.19 (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 3.43 percent from 3.37 percent, with points increasing to 0.33 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 increased to 3.15 percent from 3.06 percent, with points increasing to 0.52 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


May Housing Starts down 11.1%, Permits up 11.8%
Posted: June 16, 2015 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 1,275,000. This is 11.8 percent (±1.8%) above the revised April rate of 1,140,000 and is 25.4 percent (±2.1%) above the May 2014 estimate of 1,017,000. Single-family authorizations in May were at a rate of 683,000; this is 2.6 percent (±1.2%) above the revised April figure of 666,000. Authorizations of units in buildings with five units or more were at a rate of 557,000 in May.

HOUSING STARTS
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,036,000. This is 11.1 percent (±10.4%) below the revised April estimate of 1,165,000, but is 5.1 percent (±11.2%) above the May 2014 rate of 986,000. Single-family housing starts in May were at a rate of 680,000; this is 5.4 percent (±7.0%) below the revised April figure of 719,000. The May rate for units in buildings with five units or more was 349,000.

HOUSING COMPLETIONS
Privately-owned housing completions in May were at a seasonally adjusted annual rate of 1,034,000. This is 4.7 percent (±13.8%) above the revised April estimate of 988,000 and is 14.5 percent (±14.4%) above the May 2014 rate of 903,000. Single-family housing completions in May were at a rate of 635,000; this is 5.2 percent (±11.4%) below the revised April rate of 670,000. The May rate for units in buildings with five units or more was 392,000.


Treasury International Capital Data for April 2015
Posted: June 15, 2015 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for April 2015. 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 $106.6 billion. Of this, net foreign private inflows were $119.9 billion, and net foreign official outflows were $13.3 billion.

Foreign residents increased their holdings of long-term U.S. securities in April; net purchases were $41.2 billion. Net purchases by private foreign investors were $58.3 billion, while net sales by foreign official institutions were $17.1 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $12.8 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $53.9 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $38.1 billion in April.

Foreign residents decreased their holdings of U.S. Treasury bills by $12.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $2.0 billion. Banks' own net dollar-denominated liabilities to foreign residents increased by $70.6 billion.


Builder Confidence Rose 5 Points in June to 59
Posted: June 15, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in June rose five points to a level of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. This is the highest reading since September 2014.

“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe. “At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted healthy gains in June. The component gauging current sales conditions jumped seven points to 65, the index charting sales expectations in the next six months increased six points to 69, and the component measuring buyer traffic rose five points to 44.

Looking at the three-month moving averages for regional HMI scores, the South and Northeast each rose three points to 60 and 44, respectively. The West posted a two-point gain to 57 while the Midwest dropped by one point to 54.


Industrial Production decreased 0.2%
Capacity Utilization decreased to 78.1%

Posted: June 15, 2015 at 09:15 AM (Monday)

Industrial production decreased 0.2 percent in May after falling 0.5 percent in April. The decline in April was larger than previously reported, but the rates of change for previous months were generally revised higher, leaving the level of the index in April slightly above its initial estimate. Manufacturing output decreased 0.2 percent in May and was little changed, on net, from its level in January. In May, the index for mining moved down 0.3 percent after declining more than 1 percent per month, on average, in the previous four months. The slower rate of decrease for mining output last month was due in part to a reduced pace of decline in the index for oil and gas well drilling and servicing. The output of utilities increased 0.2 percent in May. At 105.1 percent of its 2007 average, total industrial production in May was 1.4 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 78.1 percent, a rate that is 2.0 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Worsened Slightly in June
Posted: June 15, 2015 at 08:30 AM (Monday)

The June 2015 Empire State Manufacturing Survey indicates that business conditions worsened slightly for New York manufacturers. The headline general business conditions index fell five points to -2.0, its second negative reading in the past three months. The new orders index fell six points to -2.1, and the shipments index edged down to 12.0. Labor market indicators pointed to a small increase in employment levels and the average workweek. Price indexes were little changed. At 9.6, the prices paid index remained near last month’s multiyear low, and the prices received index held steady at 1.0, indicating that selling prices were flat for a second consecutive month. The index for future general business conditions retreated in June, suggesting that optimism about future business conditions waned.

Business Conditions Decline Slightly
Business conditions worsened marginally for New York manufacturers, according to the June 2015 survey. The general business conditions index dropped five points to -2.0. This index has been hovering near zero for the past three months, suggesting that activity has remained flat since April. Twenty-six percent of respondents reported that conditions had improved, while 28 percent reported that conditions had worsened. After a brief foray into positive territory last month, the new orders index fell back below zero: at -2.1, it indicated a small decline in orders. The shipments index was little changed at 12.0, suggesting that shipments continued to grow steadily. The unfilled orders index advanced seven points but, at -4.8, it pointed to a small decline in unfilled orders. The delivery time index climbed to -1.9, and the inventories index fell to 1.9, suggesting little change in delivery times and inventory levels.

Price Increases Remain Subdued
Price increases continued to be restrained. After reaching a multiyear low last month, the prices paid index was little changed at 9.6, indicating a modest increase in input prices. The prices received index held steady at 1.0—a sign that selling prices remained flat. Labor market conditions pointed to a modest increase in employment and a small increase in hours worked. The index for number of employees edged up three points to 8.7, and the average workweek index climbed six points to 3.9.

Optimism Wanes Further in June
The index for future general business conditions fell for a second consecutive month. The four-point drop, to 25.8, signaled that optimism about the six-month outlook ebbed further in June. The future new orders index fell eight points to 26.1, and the index for future shipments fell ten points to 22.1. The future inventories index plunged twenty points to -17.3, suggesting a widespread belief that inventory levels would decline in the months ahead. Indexes for future prices paid and received were little changed. The index for future employment declined for a third consecutive month but, at 13.5, it still suggested that manufacturers expected employment levels to rise. The capital expenditures index moved down four points to 11.5, and the technology spending index fell to -1.0.


Producer Price Index rose 0.5% in May, ex Fd & Engy up 0.2%
Posted: June 12, 2015 at 08:30 AM (Friday)

The Producer Price Index for final demand rose 0.5 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.4 percent in April and advanced 0.2 percent in March. On an unadjusted basis, the final demand index declined 1.1 percent for the 12 months ended in May, the fourth straight 12-month decrease.

In May, the increase in the final demand index can be traced to prices for final demand goods, which rose 1.3 percent. The index for final demand services was unchanged.

Within intermediate demand, prices for processed goods climbed 1.0 percent, the index for unprocessed goods jumped 3.3 percent, and prices for services fell 0.5 percent.


Business Inventories up 0.6% in April
Posted: June 11, 2015 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,318.8 billion, up 0.6 percent (±0.2%) from March 2015, but was down 2.3 percent (±0.5%) from April 2014.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,793.2 billion, up 0.4 percent (±0.1%) from March 2015 and were up 2.6 percent (±0.5%) from April 2014.

The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.36. The April 2014 ratio was 1.29.


BTMU U.S. Business Barometer picked up by 0.5%
Posted: June 11, 2015 at 10:00 AM (Thursday)

For the week ending May 30 2015, the BTMU U.S. Business Barometer picked up by a solid 0.5 percent to 98.7, after declining by 0.4 percent in the prior week. This week’s recovery stemmed from strong performances in both consumption and production indexes. Chain store sales rose by 1.9 percent after four consecutive weeks of decline. Electric output as well climbed by a sharp 10.3 percent following a 2.4 percent drop in the previous week. However, indexes such as truck and coal production reported losses, although they were not large enough to offset the gains.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 0.6 percent.


U.S. Import Price Index increased 1.3% in May
Posted: June 11, 2015 at 08:30 AM (Thursday)

U.S. import prices increased 1.3 percent in May following declines in each of the previous 10 months, the U.S. Bureau of Labor Statistics reported today. The May advance was driven by an increase in fuel prices. The price index for U.S. exports rose 0.6 percent in May, after a 0.7-percent decrease in April.


U.S. Retail Sales for May increase 1.2%, Ex-Auto up 0.4%
Posted: June 11, 2015 at 08:30 AM (Thursday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $444.9 billion, an increase of 1.2 percent (±0.5%) from the previous month, and 2.7 percent (±0.9%) above May 2014. Total sales for the March 2015 through May 2015 period were up 2.1 percent (±0.7%) from the same period a year ago. The March 2015 to April 2015 percent change was revised from virtually unchanged (±0.5%) to +0.2 percent (±0.2%).

Retail trade sales were up 1.4 percent (±0.5%) from April 2015, and 2.0 percent (±0.7%) above last year. Motor vehicle and parts dealers were up 8.2 percent (±3.0%) from May 2014 and food services and drinking places were up 8.2 percent (±3.3%) from last year.


Weekly Initial Unemployment Claims Increase 2,000 to 279,000
Posted: June 11, 2015 at 08:30 AM (Thursday)

In the week ending June 6, the advance figure for seasonally adjusted initial claims was 279,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 276,000 to 277,000. The 4-week moving average was 278,750, an increase of 3,750 from the previous week's revised average. The previous week's average was revised up by 250 from 274,750 to 275,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending May 30, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 30 was 2,265,000, an increase of 61,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 2,196,000 to 2,204,000. The 4-week moving average was 2,226,750, an increase of 10,500 from the previous week's revised average. The previous week's average was revised up by 2,000 from 2,214,250 to 2,216,250.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: June 10, 2015 at 07:00 AM (Wednesday)

Mortgage applications increased 8.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 5, 2015. The previous week's results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 8.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 10 percent from one week earlier. The unadjusted Purchase Index increased 20 percent compared with the previous week and was 15 percent higher than the same week one year ago.

"Mortgage application volume rebounded strongly in the week following the Memorial Day holiday, indicating that the holiday had a larger impact on business activity than originally assumed. Comparing volume over the past two weeks, purchase activity is up over 6 percent, while refinance activity is down 5 percent. Strong job gains in May and initial signs of wage growth are supporting the purchase market," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity remained unchanged at 49 percent of total applications from previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.3 percent of total applications.

The FHA share of total applications decreased to 14.3 percent from 14.9 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.0 percent the week prior. The USDA share of total applications increased to 1.1 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.17 percent, its highest level since November 2014, from 4.02 percent, with points increasing to 0.38 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.15 percent, its highest level since October 2014, from 4.01 percent, with points increasing to 0.37 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 30-year fixed-rate mortgages backed by the FHA increased to 3.90 percent, its highest level since November 2014, from 3.77 percent, with points decreasing to 0.19 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.37 percent, its highest level since November 2014, from 3.27 percent, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.06 percent from 2.97 percent, with points remaining unchanged from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings were 5.4 million in April
Posted: June 9, 2015 at 10:00 AM (Tuesday)

The number of job openings rose to 5.4 million on the last business day of April, the highest since the series began in December 2000, the U.S. Bureau of Labor Statistics reported today. The number of hires was little changed at 5.0 million in April and the number of separations was little changed at 4.9 million. Within separations, the quits rate was 1.9 percent and the layoffs and discharges rate was 1.3 percent, both little different from the previous month. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings rose to 5.4 million on the last business day of April, the highest point since the series began in December 2000. The job openings rate for April 2015 was 3.7 percent. The number of job openings increased for total private and was essentially unchanged for government. At the industry level, job openings rose over the month in health care and social assistance but fell in arts, entertainment, and recreation. In the regions, job openings increased in the West.

The number of job openings (not seasonally adjusted) increased over the 12 months ending in April for total nonfarm, total private, and government. Job openings increased over the year for many industries with the largest changes occurring in professional and business services and in health care and social assistance. Job openings decreased over the year in mining and logging and in arts, entertainment, and recreation. The number of job openings increased over the year in all four regions.


Wholesale Inventories up 0.4% in April
Posted: June 9, 2015 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that April 2015 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $448.3 billion, up 1.6 percent (+/-0.7) from the revised March level, but were down 3.3 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised downward $0.6 billion or 0.1 percent. April sales of durable goods were up 1.2 percent (+/-0.7%) from last month and were up 2.4 percent (+/-1.6%) from a year ago. Sales of electrical and electronic goods were up 3.2 percent from last month and sales of motor vehicle and motor vehicle parts and supplies were up 3.2 percent. Sales of nondurable goods were up 2.0 percent (+/-0.7%) from March, but were down 8.2 percent (+/-1.6%) from last April. Sales of farm product raw materials were up 7.4 percent from last month and sales of petroleum and petroleum products were up 4.9 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $576.9 billion at the end of April, up 0.4 percent (+/-0.4%) from the revised March level and were up 4.5 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised upward $0.2 billion. April inventories of durable goods were up 0.1 percent (+/-0.4%) from last month and were up 6.6 percent (+/-1.6%) from a year ago. Inventories of lumber and other construction materials were up 3.4 percent from last month, while inventories of computer and computer peripheral equipment and software were down 3.1 percent. Inventories of nondurable goods were up 0.8% (+/-0.5%) from March and were up 1.1 percent (+/-1.6%) from last April. Inventories of paper and paper products were up 3.9 percent from last month and inventories of apparel, piece goods, and notions were up 2.7 percent.

The April inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.29. The April 2014 ratio was 1.19.


NFIB Small Business Optimism Index increased 1.4 points to 98.3
Posted: June 9, 2015 at 07:30 AM (Tuesday)

The Index of Small Business Optimism increased 1.4 points to 98.3 in spite of 5 months of lousy growth. May is the best reading since the 100.4 December reading but nothing to write home about. The 42 year average is 98.0, a bit lower than the 99.5 average through 2007. Eight of the 10 Index components posted improvements. Overall, the Index remained in a holding pattern, a few points below the pre-recession average, although at the 42 year average, and showing no tendency to “break out” into a stronger pattern of economic growth.

Real GDP declined in Q1 following a not very impressive 2014Q4. Special events (weather, dock strike, oil patch weakness) certainly subtracted a point or so from growth, but the fundamental economy did not have enough strength to survive the shocks and that remains the problem. The second quarter did not get off to a good start, growth of course will look better because the denominator is lower in Q1. It looks like trade will be a positive for Q2 as the deficit fell - that will help. Financial markets are driven by “Fed guessing”. In spite of the poor first quarter performance, growth for the 12 months through March 31 was approaching 3 percent, very inconsistent with current Federal Reserve policy, as are current labor market indicators. The Fed’s reticence to move, the continual delays, are negatives for growth, generating considerable uncertainty. A move toward “normalization” would be welcome to the real economy and to savers. The Fed should give up managing asset prices.

The NFIB May survey results confirm that the economy is moving ahead, but at an uninspiring pace. Owners do what is necessary, hire workers when needed, to keep up with growth mostly powered by population growth. Growth is not inspired, owners remain generally pessimistic about a pickup in the economy of any consequence. None of its top issues will be address over the next few years, the Administration is focused on global warming polices that with certainty will depress growth in the near-term for sure.

Owners report that the labor market is, from an historical perspective,getting very tight. Owner complaints about “finding qualified workers” are rising, job openings are near 42 year record high levels, and job creation plans remain solid. Over 80 percent of those hiring or trying to hire in May reported few nor no qualified applicants. This is inconsistent with current Fed policy, which has no impact on the supply of qualified workers.

In spite of the poor first quarter performance, there is no recession in the cards, absent a huge unpredictable negative shock. Reports of positive sales and profit trends auger well for the second half, credit is not a problem and rates are still low (although everyone already has their low rate loan). Capital spending has still not picked up any strength, a firmer record of spending growth will be required (not lower interest rates). But “replacement” demand continues and the need for it grows with time and technological advance.

NFIB data do not look forward much beyond the third quarter, and that appears to be “more of the same”, maybe a slightly faster pace of “plodding”.


Employment Trends Index Increased in May to 128.60
Posted: June 8, 2015 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in May. The index now stands at 128.60, up from 128.10 (a downward revision) in April. The change represents a 5.1 percent gain in the ETI compared to a year ago.

“In the past six months, the Employment Trends Index has been growing at a 3.5 percent annual rate, which is solid, but slower than the rates of the past two years. We therefore expect employment to grow by about 200,000 new jobs per month, rather than the spectacular 250,000-300,000 we experienced in 2014,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board. “Given that the labor force is barely expanding, job growth of about 200,000 per month will be sufficient to continue rapidly lowering the unemployment rate.”

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


Consumer Credit Increased at an annual rate of 7.25%
Posted: June 5, 2015 at 03:00 PM (Friday)

In April, consumer credit increased at a seasonally adjusted annual rate of 7-1/4 percent. Revolving credit increased at an annual rate of 11-1/2 percent, while nonrevolving credit increased at an annual rate of 5-3/4 percent.


May Employment increased by 280,000
Unemployment Rate essentially unchanged at 5.5%

Posted: June 5, 2015 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline.

In May, both the unemployment rate (5.5 percent) and the number of unemployed persons (8.7 million) were essentially unchanged. Both measures have shown little movement since February.

Among the major worker groups, the unemployment rates for adult men (5.0 percent), adult women (5.0 percent), teenagers (17.9 percent), whites (4.7 percent), blacks (10.2 percent), Asians (4.1 percent), and Hispanics (6.7 percent) showed little or no change in May.

The number of unemployed new entrants edged up by 103,000 in May but is about unchanged over the year. Unemployed new entrants are those who never previously worked.

The number of persons unemployed for less than 5 weeks decreased by 311,000 to 2.4 million in May, following an increase in April. The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.5 million in May and accounted for 28.6 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 849,000.

In May, the civilian labor force rose by 397,000, and the labor force participation rate was little changed at 62.9 percent. Since April 2014, the participation rate has remained within a narrow range of 62.7 percent to 62.9 percent. The employment-population ratio, at 59.4 percent, was essentially unchanged in May.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged at 6.7 million in May and has shown little movement in recent months. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In May, 1.9 million persons were marginally attached to the labor force, down by 268,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 563,000 discouraged workers in May, down by 134,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 280,000 in May, compared with an average monthly gain of 251,000 over the prior 12 months. In May, job gains occurred in professional and business services, leisure and hospitality, and health care. Employment in mining continued to decline.

The average workweek for all employees on private nonfarm payrolls remained at 34.5 hours in May. The manufacturing workweek was unchanged at 40.7 hours, and factory overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.

In May, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $24.96. Over the year, average hourly earnings have risen by 2.3 percent. Average hourly earnings of private sector production and nonsupervisory employees rose by 6 cents to $20.97 in May.

The change in total nonfarm payroll employment for March was revised from +85,000 to +119,000, and the change for April was revised from +223,000 to +221,000. With these revisions, employment gains in March and April combined were 32,000 more than previously reported. Over the past 3 months, job gains have averaged 207,000 per month.


DJ-BTMU U.S. Business Barometer declined by 0.4%
Posted: June 4, 2015 at 10:00 AM (Thursday)

For the week ending May 23 2015, the BTMU U.S. Business Barometer declined by 0.4 percent to 98.2. This week’s barometer was driven by weak performance in auto and truck production, which decreased by 4.9 and 6.2 percent respectively. Along similar lines, chain store sales fell by 0.4 percent. On the other hand, MBA purchase index rose by 1.2 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, fell to 98.4. Its year-over-year growth rate was 0.5 percent.


Weekly Initial Unemployment Claims Decrease 8,000 to 276,000
Posted: June 4, 2015 at 08:30 AM (Thursday)

In the week ending May 30, the advance figure for seasonally adjusted initial claims was 276,000, a decrease of 8,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 282,000 to 284,000. The 4-week moving average was 274,750, an increase of 2,750 from the previous week's revised average. The previous week's average was revised up by 500 from 271,500 to 272,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 23, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 23 was 2,196,000, a decrease of 30,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 11, 2000 when it was 2,161,000. The previous week's level was revised up 4,000 from 2,222,000 to 2,226,000. The 4-week moving average was 2,214,250, a decrease of 8,250 from the previous week's revised average. This is the lowest level for this average since November 25, 2000 when it was 2,211,250. The previous week's average was revised up by 1,250 from 2,221,250 to 2,222,500.


1Q2015 Productivity Growth Decreased 3.1%
Posted: June 4, 2015 at 08:30 AM (Thursday)

Nonfarm business sector labor productivity decreased at a 3.1 percent annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 1.6 percent and hours worked increased 1.6 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decline in productivity follows a decline of 2.1 percent in the fourth quarter of 2014. From the first quarter of 2014 to the first quarter of 2015, productivity increased 0.3 percent, reflecting increases in output and hours worked of 3.2 percent and 2.8 percent, respectively.

Unit labor costs in the nonfarm business sector increased 6.7 percent in the first quarter of 2015, reflecting a 3.3 percent increase in hourly compensation and a 3.1 percent decline in productivity. Unit labor costs increased 1.8 percent over the last four quarters.

Manufacturing sector labor productivity decreased 1.0 percent in the first quarter of 2015, as output decreased 1.1 percent and hours worked edged down 0.1 percent. Productivity decreased 3.3 percent in the durable manufacturing sector and increased 1.5 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.5 percent, as output increased 3.8 percent and hours increased 2.3 percent. Unit labor costs in manufacturing increased 3.4 percent in the first quarter of 2015 and increased 0.2 percent from the same quarter a year ago.

Preliminary first quarter 2015 measures were announced today for the nonfinancial corporate sector. Productivity decreased 1.2 percent in the first quarter of 2015 and increased 1.7 percent over the last four quarters.

Revised measures

In the first quarter of 2015, nonfarm business productivity fell 3.1 percent, a greater decline than was reported in the preliminary estimate. The revised estimate reflects a 1.4 percentage point downward revision to output and a small downward revision to hours. Unit labor costs were revised up as the result of a 1.2 percentage point downward revision to productivity and a 0.2 percentage point upward revision to hourly compensation. In the manufacturing sector, productivity in the first quarter declined 1.0 percent, slightly less than the preliminary estimate. Unit labor costs increased 3.4 percent, rather than 2.7 percent as previously reported, due to a 0.9 percentage point upward revision to hourly compensation.

In the fourth quarter of 2014, the 2.1 percent decrease in nonfarm business productivity was unrevised from the May 6 release, while manufacturing productivity was revised slightly up. For both sectors, an upward revision to hourly compensation accounted for the upward revision to unit labor costs.


Challenger Layoffs declined to 41,034 in May
Posted: June 4, 2015 at 07:30 AM (Thursday)

After reaching a three year high in April, planned job cuts announced by U.S.-based firms declined sharply in May, falling by 33 percent to 41,034, according the latest report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The latest tally on employer downsizing activity comes on the heels of the 61,582 planned job cuts announced in April. That was the highest monthly total since 61,887 layoffs were recorded in May 2012.

Last month’s total was 23 percent lower than a year ago, when 52,961 planned job cuts were announced in May.

To date, employers have announced 242,830 in 2015. That is 13 percent more than the 214,600 job cuts announced in the first five months of 2014.

Job cut announcements related to falling oil prices appear to be ebbing. In May, just over 1,000 planned layoffs were attributed to the drop in oil. In contrast, April saw 20,675 job cuts blamed on oil prices.

Oil prices are starting to stabilize. Exploration and extraction companies responded quickly to the drop in prices, but they are likely to be careful about cutting too deeply, as they will need workers on hand when demand inevitably increases. Unless, there is another severe drop in the price of oil, we probably will not see another surge in oil-related job cuts this year.

In May, the heaviest downsizing occurred in the financial sector, where announced job cuts will impact 5,539 workers. The bulk of these cuts came from banking giant JP Morgan Chase, which announced that the number of tellers working in its branches will shrink by 5,000 over the next 18 months.

Overall, financial cuts total 14,853 in 2015, which is 28 percent fewer than the 20,581 job cuts announced in the sector during the first five months of 2014.

The government was the second leading job-cut sector in May, having announced 5,539 layoffs during the month. Most of these originated from one employer; the state of Massachusetts, which announced plans to trim its payroll by 4,500 workers in an effort to close a $1.8 billion budget gap.

A lot of states were undoubtedly hoping that economic recovery would solve their budget woes, most of which can be traced back to overwhelmed pension systems. For most states, these dreams have failed to materialize. At least 16 states, including Massachusetts, Maryland, Illinois, Wisconsin, and Washington are expected to experience budget shortfalls over the next year or two.

We could definitely see an upswing in state layoffs over the next few months, if more of these financially troubled state governments follow in Massachusetts’ footsteps.


Beige Book: Economic Activity continues to expand across most regions
Posted: June 3, 2015 at 02:00 PM (Wednesday)

Reports from the twelve Federal Reserve Districts suggest overall economic activity expanded during the reporting period from early April to late May. Activity in the Richmond, Chicago, Minneapolis, and San Francisco Districts was characterized as growing at a moderate pace, while the New York, Philadelphia, and St. Louis Districts cited modest growth. Contacts in the Boston District reported mixed conditions, and the Cleveland and Kansas City Districts indicated a slight pace of expansion. Compared to the previous report, the pace of growth slowed slightly in the Dallas District but held steady in the Atlanta District. Outlooks among respondents were generally optimistic, with growth expected to continue at a modest to moderate pace in several districts.

Manufacturing activity generally held steady or increased over the reporting period, except for in the Dallas District where it was slightly weaker and in the Kansas City District where it fell markedly. Strength was seen in transportation equipment manufacturing, while continued weakness was reported in primary and fabricated metals products and energy-related industries. Most districts reported an uptick in retail spending, and outlooks were positive, with retailers expecting continued sales growth in 2015. Overall vehicle sales rose, particularly for trucks and SUVs which auto dealers in some districts attributed to lower gasoline prices. Travel and tourism expanded across most reporting districts, except for the New York and Kansas City Districts.

Demand for nonfinancial services increased, and staffing firms reported steady or higher activity. Port activity was strong in the Richmond, Atlanta, and Dallas Districts, but reports on other freight and transportation services activity were mixed. Most districts said residential and commercial real estate activity and construction improved since the last report. Home prices continued rising and low home inventories continued to constrain sales activity in some areas of the country. Overall loan demand increased, with particular strength noted in the New York District. Credit quality and delinquency rates were stable or improved. Credit standards were mostly unchanged, except for scattered reports of easing in the Philadelphia, St. Louis, Atlanta, and San Francisco Districts.

The agricultural sector improved as significant rainfall alleviated the dry spell or improved growing conditions in several districts. However, drought conditions persisted in the San Francisco District and the outbreak of the avian flu severely impacted poultry producers in the Chicago and Minneapolis Districts. Oil and natural gas activity continued to decline in most districts, except for Cleveland where the rig count leveled off. Coal production was flat to down.

Employment levels were up slightly over the reporting period, with some reports of layoffs. Wages rose slightly. Prices were stable or ticked up, although manufacturers in some districts cited lower input prices.


ISM Non-Manufacturing Index grew slower at 55.7%
Posted: June 3, 2015 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in May for the 64th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 55.7 percent in May, 2.1 percentage points lower than the April reading of 57.8 percent. This represents continued growth in the non-manufacturing sector although at a slower rate. The Non-Manufacturing Business Activity Index decreased to 59.5 percent, which is 2.1 percentage points lower than the April reading of 61.6 percent, reflecting growth for the 70th consecutive month at a slower rate. The New Orders Index registered 57.9 percent, 1.3 percentage points lower than the reading of 59.2 percent registered in April. The Employment Index decreased 1.4 percentage points to 55.3 percent from the April reading of 56.7 percent and indicates growth for the 15th consecutive month. The Prices Index increased 5.8 percentage points from the April reading of 50.1 percent to 55.9 percent, indicating prices increased in May for the third consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth in May. Overall there has been a slight slowing in the rate of growth for the non-manufacturing sector. Respondents’ comments are mostly positive about business conditions and indicate economic growth will continue.

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


Help Wanted OnLine Labor Demand rose 83,100 to 5,445,000 in May
Posted: June 3, 2015 at 10:00 AM (Wednesday)

Online advertised vacancies rose 83,100 to 5,445,000 in May, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The April Supply/Demand rate stands at 1.59 unemployed for each advertised vacancy with a total of 3.2 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 8.5 million in April.

“Following a very strong January and February, the growth in online vacancies has been basically flat over the past three months,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “Still, even with the recent three-month pause, the 2015 growth rate has significantly outpaced the 2014 growth rate during the same time period.”

In May, the Professional category saw the most gains with the STEM categories of Computers (16,400) and Healthcare (19,700) showing the strongest improvements. The Services/Production category saw gains in Transportation (13,400) and Construction (6,700) but losses in Food (−6,700) and Sales and Related (−8,300). The significant drop in the US S/D rate has been helped by very strong employer demand, ranging from 4 to 5 million ads each month over the past 4 years, making it easier for the recession’s 15 million unemployed to find employment opportunities. With the recession’s unemployment numbers finally down significantly, the continued high employer demand at 5 million ads per month will make the job search for new entrants into the labor market much easier.


Goods and Services Deficit Decreased in April 2015
Posted: June 3, 2015 at 08:30 AM (Wednesday)

The Nation's international trade deficit in goods and services decreased to $40.9 billion in April from $50.6 billion in March (revised), as exports increased and imports decreased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $40.9 billion in April, down $9.7 billion from $50.6 billion in March, revised. April exports were $189.9 billion, $1.9 billion more than March exports. April imports were $230.8 billion, $7.8 billion less than March imports.

The April decrease in the goods and services deficit reflected a decrease in the goods deficit of $9.3 billion to $60.7 billion and an increase in the services surplus of $0.4 billion to $19.8 billion.

Year-to-date, the goods and services deficit increased $1.5 billion, or 0.9 percent, from the same period in 2014. Exports decreased $18.0 billion or 2.3 percent. Imports decreased $16.5 billion or 1.8 percent.


ADP National Employment Report increased by 201,000 in May
Posted: June 3, 2015 at 08:15 AM (Wednesday)

Private sector employment increased by 201,000 jobs from April to May according to the May ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Private sector employment increased by 201,000 jobs from April to May according to the May ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Goods-producing employment rose by 9,000 jobs in May, after adding just 1,000 in April. The construction industry had another good month in May adding 27,000 jobs, up from 24,000 last month. Meanwhile, manufacturing lost 5,000 jobs in May, after losing 8,000 in April.

Service-providing employment rose by 192,000 jobs in May, a strong rise from 164,000 in April. The ADP National Employment Report indicates that professional/business services contributed 28,000 jobs in May, down from April’s 35,000. Trade/transportation/utilities grew by 56,000, up from April’s 41,000. The 12,000 new jobs added in financial activities is double last month’s 6,000.

"The labor market moved back up to the 200,000 jobs added mark in May, a number which has been something of a bellwether for healthy employment growth,” said Carlos Rodriguez, president and chief executive officer of ADP. “We hope that the May number is the beginning of an upward trend going into the summer months.” Mark Zandi, chief economist of Moody’s Analytics, said, “The job market posted a solid gain in May.

Employment growth remains near the average of the past couple of years. At the current pace of job growth the economy will be back to full employment by this time next year. The only blemishes are the decline in mining jobs due to the collapse in oil prices and the decline in manufacturing due to the strong dollar.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: June 3, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 7.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 29, 2015. This week's results include an adjustment to account for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 17 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 14 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 49 percent of total applications, its lowest level since May 2014, from 51 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.

The FHA share of total applications increased to 14.9 percent from 14.5 percent the week prior. The VA share of total applications increased to 12.0 percent from 11.7 percent the week prior. The USDA share of total applications increased to 1.0 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.02 percent from 4.07 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.01 percent from 4.06 percent, with points increasing to 0.30 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 decreased to 3.77 percent from 3.83 percent, with points increasing to 0.21 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.27 percent from 3.29 percent, with points increasing to 0.33 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.97 percent from 3.04 percent, with points increasing to 0.50 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New orders for manufactured goods decreased 0.4% in April
Posted: June 2, 2015 at 10:00 AM (Tuesday)

New orders for manufactured goods in April, down eight of the last nine months, decreased $1.8 billion or 0.4 percent to $476.7 billion, the U.S. Census Bureau reported today. This followed a 2.2 percent March increase.

Shipments, following two consecutive monthly increases, were virtually unchanged at $482.4 billion. This followed a 0.5 percent March increase.

Unfilled orders, down four of the last five months, decreased $1.1 billion or 0.1 percent to $1,202.4 billion. This followed a 0.1 percent March increase. The unfilled orders-to-shipments ratio was 6.98, down from 6.99 in March.

Inventories, up two of the last three months, increased $0.6 billion or 0.1 percent to $649.0 billion. This followed a 0.1 percent March decrease. The inventories-to-shipments ratio was 1.35, up from 1.34 in March.

New orders for manufactured durable goods in April, down two of the last three months, decreased $2.3 billion or 1.0 percent to $234.4 billion, up from the previously published 0.5 percent decrease. This followed a 5.1 percent March increase. Transportation equipment, also down two of the last three months, led the decrease, $1.9 billion or 2.4 percent to $77.9 billion. New orders for manufactured nondurable goods increased $0.5 billion or 0.2 percent to $242.3 billion.

Shipments of manufactured durable goods in April, down three of the last four months, decreased $0.5 billion or 0.2 percent to $240.1 billion, down from the previously published 0.1 percent decrease. This followed a 1.5 percent March increase. Primary metals, down six of the last seven months,drove the decrease, $0.5 billion or 2.2 percent to $21.5 billion.

Shipments of manufactured nondurable goods, up two of the last three months, increased $0.5 billion or 0.2 percent to $242.3 billion. This followed a 0.4 percent March decrease. Chemical products, up following three consecutive monthly decreases, led the increase, $0.3 billion or 0.5 percent to $63.3 billion.

Unfilled orders for manufactured durable goods in April, down four of the last five months, decreased $1.1 billion or 0.1 percent to $1,202.4 billion, up from the previously published virtually unchanged decrease. This followed a 0.1 percent March increase. Machinery, down six of the last seven months, drove the decrease, $1.3 billion or 1.1 percent to $115.4 billion.

Inventories of manufactured durable goods in April, up twenty-four of the last twenty-five months, increased $0.8 billion or 0.2 percent to $401.6 billion, unchanged from the previously published increase. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a virtually unchanged March increase.

Transportation equipment, up sixteen of the last seventeen months, led the increase, $0.5 billion or 0.4 percent to $130.3 billion.

Inventories of manufactured nondurable goods, down eleven consecutive months, decreased $0.2 billion or 0.1 percent to $247.4 billion. This followed a 0.3 percent March decrease. Chemical products, down six consecutive months, drove the decrease, $0.4 billion or 0.4 percent to $81.5 billion.

By stage of fabrication, April materials and supplies were virtually unchanged in durable goods and increased 0.1 percent in nondurable goods. Work in process increased 0.2 percent in durable goods and increased 0.7 percent in nondurable goods. Finished goods increased 0.5 percent in durable goods and decreased 0.6 percent in nondurable goods.


Paychex-IHS Small Business Jobs Index decreased to 100.65 in May
Posted: June 2, 2015 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index decreased 0.17 percent in May, bringing the national index to 100.65. Year over year the national index declined 0.49 percent. Moderating from last month, the drop in the national index brought the three-month growth rate to -0.18 percent. The East North Central region surpassed the West North Central to become the top-ranked regional index. Indiana regained the lead among states tracked by the index with the best one-month and 12-month growth rates. Among the metro areas measured by the index, Dallas continued to lead, while Washington, D.C. showed the most improvement.

The Paychex | IHS Small Business Index dropped 0.17 percent in May, reverting to its January 2015 level. While the national index is well below the level set throughout most of 2014, small businesses are expanding to be sure, but at a rate consistent with the growth seen in 2012.

May's index results seem to be in line with the story of the overall economic recovery: moderate, but somewhat inconsistent growth. While it's not ideal to see the growth rate slowing, we'll need to see how this trend plays out over the long term.


New York Purchasing Managers Business Activity eased to 54.0 in May
Posted: June 2, 2015 at 08:30 AM (Tuesday)

New York City business activity moderated, according to the survey taken by the Institute for Supply Management-New York (ISM-NY).

Current Business Conditions eased to 54.0 in May, but this still marked the first back-to-back readings above the breakeven 50 line all year.

Future optimism fell to a 15-month low. The Six-Month Outlook pulled back to 61.8 in May.

Job growth came off a six-month high, but still posted the second highest reading in seven months. Employment registered 57.3 in May.

Purchase volume expanded at the quickest rate in four months. Quantity of Purchases improved to 60.5 in May.

The top line moderated, but forward guidance continued to expand briskly. Current Revenues came in at 55.6 in May, and Expected Revenues remained elevated at 80.6 in May.

Price pressures diminished. Prices Paid fell to 55.0 in May, and Prices Received dipped to 47.2 in May, the first decline in selling prices in 12 months.

*** Potential Business Opportunities/Impediments: For the second straight month, a more favorable composition for near-term prospects. Domestic demand again was the top opportunity, this time by a wide margin and wide majority. Other notable opportunities were interest rates and banking, suggesting an increased willingness for leveraging up. Cost of benefits remained the top impediment, while cost of labor diminished further. Other notable impediments were inflation and competition.


May Manufacturing ISM expanded at 52.8
Posted: June 1, 2015 at 10:00 AM (Monday)

Economic activity in the manufacturing sector expanded in May for the 29th consecutive month, and the overall economy grew for the 72nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The May PMI® registered 52.8 percent, an increase of 1.3 percentage points over the April reading of 51.5 percent. The New Orders Index registered 55.8 percent, an increase of 2.3 percentage points from the reading of 53.5 percent in April. The Production Index registered 54.5 percent, 1.5 percentage points below the April reading of 56 percent. The Employment Index registered 51.7 percent, 3.4 percentage points above the April reading of 48.3 percent, reflecting growing employment levels from April. Inventories of raw materials registered 51.5 percent, an increase of 2 percentage points from the April reading of 49.5 percent. The Prices Index registered 49.5 percent, 9 percentage points above the April reading of 40.5 percent, indicating lower raw materials prices for the seventh consecutive month. Comments from the panel carry a positive tone in terms of an improving economy, increasing demand, and improving flow of goods through the West Coast ports. Also noted; however, are continuing concerns over the price of the US dollar and challenges affecting markets related to oil and gas industries.

Of the 18 manufacturing industries, 14 are reporting growth in May in the following order: Apparel, Leather & Allied Products; Furniture & Related Products; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Printing & Related Support Activities; Fabricated Metal Products; Machinery; Miscellaneous Manufacturing; and Chemical Products. The two industries reporting contraction in May are: Textile Mills; and Computer & Electronic Products.


Construction Spending increased 2.2% in April
Posted: June 1, 2015 at 10:00 AM (Monday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during April 2015 was estimated at a seasonally adjusted annual rate of $1,006.1 billion, 2.2 percent (±1.5%) above the revised March estimate of $984.0 billion. The April figure is 4.8 percent (±2.0%) above the April 2014 estimate of $960.3 billion. During the first 4 months of this year, construction spending amounted to $288.7 billion, 4.1 percent (±1.5%) above the $277.3 billion for the same period in 2014.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $725.2 billion, 1.8 percent (±1.2%) above the revised March estimate of $712.1 billion. Residential construction was at a seasonally adjusted annual rate of $353.1 billion in April, 0.6 percent (±1.3%)* above the revised March estimate of $351.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $372.1 billion in April, 3.1 percent (±1.2%) above the revised March estimate of $361.0 billion.

PUBLIC CONSTRUCTION
In April, the estimated seasonally adjusted annual rate of public construction spending was $280.9 billion, 3.3 percent (±2.8%) above the revised March estimate of $271.9 billion. Educational construction was at a seasonally adjusted annual rate of $63.3 billion, 3.6 percent (±4.3%)* above the revised March estimate of $61.2 billion. Highway construction was at a seasonally adjusted annual rate of $87.1 billion, 8.5 percent (±9.0%)* above the revised March estimate of $80.3 billion.


Personal Income increased 0.4%, Spending decreased less than 0.1%
Posted: June 1, 2015 at 08:30 AM (Monday)

Personal income increased $59.4 billion, or 0.4 percent, and disposable personal income (DPI) increased $48.8 billion, or 0.4 percent, in April, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $2.6 billion, or less than 0.1 percent. In March, personal income increased $4.0 billion, or less than 0.1 percent, DPI increased $0.5 billion, or less than 0.1 percent, and PCE increased $65.6 billion, or 0.5 percent, based on revised estimates.

Real DPI increased 0.3 percent in April, in contrast to a decrease of 0.2 percent in March. Real PCE decreased less than 0.1 percent, in contrast to an increase of 0.4 percent.


University of Michigan Consumer Confidence down in May to 90.7
Posted: May 29, 2015 at 10:00 AM (Friday)

Consumer optimism retreated in May as consumers adopted more modest prospects for a rebound following the economy’s dismal 1st quarter performance. The decline was widespread among all age and income subgroups as well as across all parts of the country. Despite the May decline, the Sentiment Index has averaged 94.6 during the first five months of 2015. The last year that the Sentiment Index was higher was 2004, when it averaged 95.2. Overall, the latest data are still consistent with a 3% annual growth rate in personal consumption expenditures during 2015.

Spring’s Economic Revival Falls Short
Consumers more frequently reported hearing unfavorable than favorable news about the economy in the May 2015 survey. Consumers judged the pace of growth to have remained sluggish and did not anticipate the same rapid revival in the economy as happened last year. Importantly, half of all consumers still thought the economic outlook was favorable. The main drawback to the slower pace of growth was that consumers anticipated only marginal future reductions in the rate of unemployment.

Personal Finances Still Expected to Improve There was a slight decline in the number of households who reported improved finances in the May survey, largely due to a slower pace of income gains. Nonetheless, consumers remained quite optimistic about their future financial situation as they anticipated income gains twice as large as they did in last May’s survey. Overall, 86% of all households anticipated their financial situation would be the same or improve during the year ahead, while just 12% of all households expected their finances to worsen.

The Consumer Sentiment Index was 90.7 in the May 2015 survey, down from April’s 95.9 but significantly above last May’s 81.9. The Current Conditions Index was 100.8 in May, between the 107.0 in April and last May’s 94.5. The Expectations Index fell to 84.2 in the May 2015 survey from 88.8 in April, but was still substantially above last May’s
73.7.

Price perceptions for a wide range of goods have grown less positive despite low overall inflation. This reflects a downward revision in what consumers judge to be affordable prices due to the lower income growth rates they now expect. While low interest rates continue to boost home and vehicle purchases, smaller retail purchases have not benefitted from low rates. The modest pace of income growth now expected by consumers will increase smaller retail purchases as long as consumers do not anticipate significant increases in interest rates that cause anticipatory buying of homes and vehicles which will act to limit other retail sales gains.”


Chicago Purchasing Managers Index fell 6.1 points to 46.2 in May
Posted: May 29, 2015 at 09:45 AM (Friday)

The Chicago Business Barometer fell sharply back into contraction in May, reversing all of April’s gain and casting doubt on the strength of the widely expected bounceback in the US economy in the second quarter.

The Barometer fell 6.1 points to 46.2 in May from 52.3 in April. All five components of the Barometer weakened with three dropping by more than 10% and all of them now below the 50 breakeven mark.

April’s positive move had suggested that the first quarter slowdown was transitory and had been impacted by the cold snap and port strikes. May’s weakness points to a more fundamental slowdown with the Barometer running only slightly above February’s 5½-year low of 45.8. The three month average, although little changed on the month at 48.3, is significantly down from 61.3 in Q4 2014 and barring a sharp rebound in June points to continued sluggish growth in the second quarter. The only positive that can be taken from the May results was that comments from the survey panel suggest weakness was not broad based across all sectors.

The decline was led by a 13.8% fall in New Orders to 47.5 from 55.1 in April, pushing it into contraction for the third time this year. In line with the lower order intake, both Production and Employment Indicators suffered double-digit losses in percentage terms between April and May, with the latter falling to the lowest since April 2013. Order Backlogs declined more moderately, remaining in contraction for the fourth consecutive month.

There was further evidence that the period of oil driven softer prices has run its course. Prices Paid jumped sharply back into expansion in May to the highest since December.

Inventory growth eased slightly in May, but remains high relative to other measures in the survey. Results from a special question asked this month show that a significant proportion of our panel see their current inventory level as too high, a potential weight on growth ahead and indicative of the current weak demand situation. 42% of companies said their current inventory level was too high compared with 12% in a comparable question asked in November 2014. 53.2% said stock levels were about right, with less than 5% reporting them as too low.

Chief Economist of MNI Indicators Philip Uglow said, “We had thought that the April bounce was consistent with a partial return to normal following the weather and port related slowdown in the first quarter. The latest data for May, however, suggest that this was a false dawn and that sluggish activity has carried through to the second quarter.”


1Q2015 GDP preliminary estimate decreased 0.7%
Posted: May 29, 2015 at 08:30 AM (Friday)

Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- decreased at an annual rate of 0.7 percent in the first quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.2 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 0.2 percent. With the second estimate for the first quarter, imports increased more and private inventory investment increased less than previously estimated.

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

The second estimate of the first-quarter percent change in real GDP is 0.9 percentage point, or $40.7 billion, less than the advance estimate issued last month, primarily reflecting an upward revision to imports and downward revisions to private inventory investment and to personal consumption expenditures that were partly offset by an upward revision to residential fixed investment.


Pending Home Sales Index increased 3.4% in April
Posted: May 28, 2015 at 10:00 AM (Thursday)

Pending home sales rose in April for the fourth straight month and reached their highest level in nine years, according to the National Association of Realtors®. Led by the Northeast and Midwest, all four major regions saw increases in April.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 3.4 percent to 112.4 in April from a slight upward revision of 108.7 in March and is now 14.0 percent above April 2014 (98.6) — the largest annual increase since September 2012 (15.1 percent). The index has now increased year-over-year for eight consecutive months and is at its highest level since May 2006 (112.5).

The steady gains in contract activity each month this year highlight the fact that buyer demand is strong. Realtors® are saying foot traffic remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas. Homeowners looking to sell this spring appear to be in the driver's seat, as there are more buyers competing for a limited number of homes available for sale. As a result, home prices are up and accelerating in many markets.

Following April's decline in existing-home sales, Yun expects a rebound heading into the summer, but the likelihood of meaningful gains will depend on a much-needed boost in inventory and evidence of moderating price growth now that interest rates have started to rise.

The housing market can handle interest rates well above 4 percent as long as inventory improves to slow price growth and underwriting standards ease to normal levels so that qualified buyers — especially first-time buyers — are able to obtain a mortgage.

After falling four straight months, the PHSI in the Northeast bounced back solidly (10.1 percent) to 88.3 in April, and is now 9.4 percent above a year ago. In the Midwest the index increased 5.0 percent to 113.0 in April, and is 13.3 percent above April 2014.

Pending home sales in the South rose 2.3 percent to an index of 129.4 in April and are 14.8 percent above last April. The index in the West inched 0.1 percent in April to 103.8, and is 16.4 percent above a year ago.

Total existing-home sales in 2015 are forecast to be around 5.24 million, an increase of 6.1 percent from 2014. The national median existing-home price for all of this year is expected to increase around 6.7 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.


DJ-BTMU U.S. Business Barometer picked up by 0.1%
Posted: May 28, 2015 at 10:00 AM (Thursday)

For the week ending May 16 2015, the BTMU U.S. Business Barometer picked up by 0.1 percent to 98.6. This week’s barometer was driven by production indexes. Auto and truck production rose by 4.8 and 6.3 percent, respectively. Along similar lines, steel production and electric output increased by 2.0 and 2.4 percent respectively. As to the consumption side, chain store sales and MBA’s purchase index fell by 1.2 and 3.7 percent, respectively.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, fell to 98.6. Its year-over-year growth rate was 0.7 percent.


Weekly Initial Unemployment Claims Increase 70,000 to 282,000
Posted: May 28, 2015 at 08:30 AM (Thursday)

In the week ending May 23, the advance figure for seasonally adjusted initial claims was 282,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 274,000 to 275,000. The 4-week moving average was 271,500, an increase of 5,000 from the previous week's revised average. The previous week's average was revised up by 250 from 266,250 to 266,500. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending May 16, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 16 was 2,222,000, an increase of 11,000 from the previous week's unrevised level of 2,211,000. The 4-week moving average was 2,221,250, a decrease of 8,500 from the previous week's unrevised average of 2,229,750. This is the lowest level for this average since November 25, 2000 when it was 2,211,250.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 27, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 22, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index was essentially unchanged 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 51 percent of total applications from 52 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.4 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.07 percent from 4.04 percent, with points increasing to 0.35 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.06 percent from 4.04 percent, with points increasing to 0.29 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 3.83 percent from 3.80 percent, with points increasing to 0.16 from 0.06 (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 3.29 percent from 3.26 percent, with points decreasing to 0.24 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 3.04 percent from 2.99 percent, with points increasing to 0.48 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Texas Manufacturing Activity Declined again in May
Posted: May 26, 2015 at 10:30 AM (Tuesday)

Texas factory activity declined again in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell to -13.5, its lowest reading in six years.

Other measures of current manufacturing activity reflected continued contraction in May. The new orders index held steady at -14.1, and the growth rate of orders index held steady at -15.2, marking the fifth and seventh negative reading in a row for these indexes. The capacity utilization index edged down to -11.6. The shipments index fell nearly 8 points to -13.2, with more than 30 percent of firms noting lower shipment volumes in May than in April.

Perceptions of broader business conditions worsened further this month. The general business activity index fell to -20.8 in May, its lowest reading since June 2009. The company outlook index moved down to -10.5, also hitting a low not seen since summer 2009.

Labor market indicators reflected employment declines and shorter workweeks. The May employment index declined 10 points to -8.2, after rebounding slightly above zero last month. Twelve percent of firms reported net hiring, compared with 21 percent reporting net layoffs. The hours worked index fell from -5 to -11.6.

Changes in prices and wages were mixed in May. Downward pressure on input costs abated, as the raw materials prices index pushed up toward zero, coming in at -1.7. The finished goods prices index edged down to -8.7, its fifth negative reading in a row and suggestive of falling selling prices. Meanwhile, the wages and benefits index remained positive and little changed at 14.7.

Expectations regarding future business conditions improved in May. The index of future general business activity surged 11 points to 4.9, and the index of future company outlook jumped 10 points to 15.1. Indexes for future manufacturing activity also moved up markedly, pushing further into solid positive territory.


New Home Sales in April at annual rate of 517,000
Posted: May 26, 2015 at 10:00 AM (Tuesday)

Sales of new single-family houses in April 2015 were at a seasonally adjusted annual rate of 517,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.8 percent (±15.8%) above the revised March rate of 484,000 and is 26.1 percent (±15.4%) above the April 2014 estimate of 410,000.

The median sales price of new houses sold in April 2015 was $297,300; the average sales price was $341,500. The seasonally adjusted estimate of new houses for sale at the end of April was 205,000. This represents a supply of 4.8 months at the current sales rate.


Consumer Confidence increased moderately in May to 95.4
Posted: May 26, 2015 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had declined in April, increased moderately in May. The Index now stands at 95.4 (1985=100), up from 94.3 in April. The Present Situation Index increased from 105.1 last month to 108.1 in May. The Expectations Index edged down to 86.9 from 87.1 in April.

“Consumer confidence improved modestly in May, after declining sharply in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “After a three-month slide, the Present Situation Index increased, propelled by a more positive assessment of the labor market. Expectations, however, were relatively flat following a steep decline in April. While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.”

Consumers’ assessment of current-day conditions improved in May. Those saying business conditions are “good” edged down from 25.5 percent to 25.2 percent. However, those claiming business conditions are “bad” also decreased from 19.2 percent to 17.4 percent. Consumers were mixed in their assessment of the job market. Those stating jobs are “plentiful” increased from 19.0 percent to 20.7 percent, while those claiming jobs are “hard to get” rose from 25.9 percent to 27.3 percent.

Consumers’ optimism about the short-term outlook edged down in May. The percentage of consumers expecting business conditions to improve over the next six months inched up from 15.4 percent to 15.6 percent, while those expecting business conditions to worsen also increased, from 9.1 percent to 10.8 percent. Consumers’ outlook for the labor market, however, improved. Those anticipating more jobs in the months ahead increased from 13.8 percent to 14.6 percent, while those anticipating fewer jobs declined from 16.4 percent to 15.5 percent. The proportion of consumers expecting growth in their incomes was unchanged at 17.4 percent, while the proportion expecting a decline increased slightly from 10.8 percent to 11.1 percent.


Philadelphia Nonmanufacturing Activity improved in May
Posted: May 26, 2015 at 10:00 AM (Tuesday)

The pace of regional nonmanufacturing activity improved in May, according to firms responding to this month's Nonmanufacturing Business Outlook Survey. The survey's indicators for general activity and sales rose, while the indicator for new orders fell. Employment indicators were mixed, but future activity indicators were strong, as responding firms remain highly optimistic about activity over the next six months.

Nonmanufacturing Activity Continued to Expand
The diffusion index for current activity at the firm level increased 9 points in May, to 52.3. Sixty-eight percent of the respondents reported increasing activity at their own firms this month, up from 59 percent last month. Responding firms were positive about general activity in the region; the diffusion index for current activity for the region rose more than 13 points, to 54.5. Sixty-one percent of the respondents indicated increasing activity in the region compared with 7 percent that indicated decreasing activity.
New Orders and Sales or Revenues Remained Positive

The new orders index edged down almost 9 points, to 27.3, in May. The percentage of firms reporting increases in new orders fell from 46 percent last month to 43 percent this month, and 16 percent of the firms reported decreases in new orders, compared with 10 percent that reported decreases in new orders last month. The sales/revenues index increased 5 points to 43.2. The percentage of firms reporting increases in sales or revenues was more than three times greater than the percentage of firms reporting decreases (61 percent versus 18 percent).
Employment Conditions Holding Steady

Survey results suggest steady conditions for labor market demand in May. Although the full-time employment index fell more than 9 points in May, a majority of the respondents reported no change to full-time staff levels. The part-time employment index increased 4 points, from 23.1 in April to 27.3 in May. In addition, more firms reported increases in part-time staff this month compared with last month, and fewer firms reported decreases. The workweek index decreased less than 1 point to 22.7 in May, as almost 60 percent of the firms reported no change in their average workweek.
Firms Reported Higher Prices Received

Fewer firms reported increases in input prices this month, as the prices paid index dropped more than 6 points, to 11.4, in May (see Chart 2 below). The share of firms reporting no change in input prices stands at roughly 59 percent. The prices received index rose 31 points, to 36.4. The percentage of respondents reporting increases in prices received rose from 18 percent to 41 percent, and the percentage of respondents reporting decreases fell from 13 percent to 5 percent.

Firms Increased Spending on Equipment and Software
Roughly the same share of firms reported increases in capital expenditures for equipment and software this month (33 percent in April versus 32 percent in May), and the corresponding diffusion index was little changed at 25. The index for capital expenditures on physical plant rose 13 points, to 18.2, as the share of firms reporting increased capital expenditures on physical plant rose from 18 percent in April to 25 percent in May.
Future Indicators Remain Strong

Optimism about future activity over the next six months both at individual firms and in the region remained strong and widespread. None of the respondents expect activity six months from now to decrease at their own firms, and only 2 percent expect a decline in the region. With 77 percent of the respondents expecting activity to increase at their firms, the firm-level future general activity index increased 3 points, from 74.4 in April to 77.3 in May (see Chart 1 above). The future general activity index for the region fell 3 points but remains at a high level of 79.5.

In this month's Special Questions, firms were surveyed about plans for hiring over the next year and about recent trends in compensation and wages. A majority of firms are planning to increase employment over the next year, and many firms reported increasing wages to retain and attract qualified workers.

Summary
Results from the May Nonmanufacturing Business Outlook Survey suggest continued expansion in the region among nonmanufacturing firms. Index readings for general activity at both the company and regional levels and sales and revenues improved from last month's readings. Firms remained optimistic about future growth.


Richmond Fed's Current Activity Index gained 4 points to a reading of 1
Posted: May 26, 2015 at 10:00 AM (Tuesday)

Manufacturing activity flattened in May, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders leveled off, while the backlog of orders declined further compared to last month. Hiring edged up, while the average workweek increased slightly. However, average wage growth accelerated this month.

Despite the soft conditions this month, manufacturers continued to look for improved business conditions in the next six months. Expectations were for solid growth in shipments and in the volume of new orders in the six months ahead. In addition, survey participants looked for increased capacity utilization and expected order backlogs to grow more quickly. However, producers looked for little change in vendor lead times.

Manufacturers' outlook for the months ahead included faster growth in the number of employees and average wages than in the current month. In addition, they expected modest growth in the length of the average workweek.

Prices of raw materials rose at a somewhat faster pace in May compared to last month. However, price growth slowed for finished goods. Manufacturers expected faster growth in prices paid and in prices received during the next six months.

Manufacturing activity remained soft this month, with several components flattening. The composite index for manufacturing moved to 1 following April's reading of −3, while the shipments index leveled off to −1 from −6. In addition, the index for new orders gained eight points, reaching a nearly flat reading of 2. Manufacturing hiring continued to grow at a modest pace this month. The May indicator slipped four points to a reading of 3.

Capacity utilization increased this month. The index moved up 11 points to a reading of 7. Backlogs decreased, pulling that index down two points to −10. Vendor lead time lengthened, pushing the index to 6 from a reading of −6. Finished goods inventories rose more quickly than a month ago. The index gained three points to finish at 21. Additionally, raw materials inventories rose at a slightly faster rate. That gauge also moved up three points, ending at 22.


S&P/Case-Shiller Home Price Indices increase 0.8% in March
Posted: May 26, 2015 at 09:00 AM (Tuesday)

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

Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year increases in March. The 10-City Composite gained 4.7% year-over-year, while the 20-City Composite gained 5.0% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 versus a 4.2% increase in February 2015.

San Francisco and Denver reported the highest year-over-year gains, with price increases of 10.3% and 10.0%, respectively, over the last 12 months. San Francisco’s 10.3% annual gain is its first double digit year-over-year increase since July 2014. Dallas reported a 9.3% year-over-year gain to round out the top three cities. Ten cities reported higher price increases in the year ended March 2015 over the year ended February 2015. Tampa led the way with a reported increase of 1.4%. Ten cities saw their prices decrease annually, led by Cleveland, down 1.2% in the year ending March 2015.

Month-over-Month
The National index increased again in March with a 0.8% increase for the month. Both the 10- and 20-City Composites increased significantly, reporting 0.8% and 0.9% month-over-month increases, respectively. Of the 19 cities reporting increases, San Francisco led all cities with an increase of 3.0%. Seattle followed next with a reported increase of 2.3%. Cleveland reported an increase of 0.4%, its first positive month-over-month increase since August 2014. New York was the only city to report a negative month-over-month change with a -0.1% decrease for March 2015.

Analysis
Home prices have enjoyed year-over-year gains for 35 consecutive months. The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices. The longest run of gains is in Detroit at 45 months, the shortest is New York with 27 months. However, the pace has moderated in the last year; from August 2013 to February 2014, the national index gained more than 10% year-over-year, compared to 4.1% in this release.

Given the long stretch of strong reports, it is no surprise that people are asking if we’re in a new home price bubble. The only way you can be sure of a bubble is looking back after it’s over. The average 12 month rise in inflation adjusted home prices since 1975 is about 1.0% per year compared to the current 4.1% pace, arguing for a bubble. However, the annual rate of increase halved in the last year, as shown in the first chart. Home prices are currently rising more quickly than either per capita personal income (3.1%) or wages (2.2%), narrowing the pool of future home-buyers. All of this suggests that some future moderation in home prices gains is likely. Moreover, consumer debt levels seem to be manageable. There is a rebound in home prices, not bubble and not a reason to be fearful.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015. The 10- and 20-City Composites reported year-over-year increases of 4.7% and 5.0%.

As of March 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 15-16%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 29.8% and 30.7%.


April New Orders for Durable Goods Decreased 0.5%, Ex-Trans up 0.5%
Posted: May 26, 2015 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in April decreased $1.2 billion or 0.5 percent to $235.5 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 5.1 percent March increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 0.2 percent. Transportation equipment, also down two of the last three months, drove the decrease, $2.0 billion or 2.5 percent to $77.9 billion.

Shipments of manufactured durable goods in April, down three of the last four months, decreased $0.1 billion or 0.1 percent to $240.5 billion. This followed a 1.5 percent March increase. Primary metals, down six of the last seven months, drove the decrease, $0.5 billion or 2.1 percent to $21.6 billion.

Unfilled orders for manufactured durable goods in April, down four of the last five months, decreased $0.3 billion, or virtually unchanged, to $1,203.1 billion. This followed a 0.1 percent March increase. Machinery, down six of the last seven months, drove the decrease, $0.9 billion or 0.7 percent to $115.7 billion.

Inventories of manufactured durable goods in April, up twenty-four of the last twenty-five months, increased $0.9 billion or 0.2 percent to $401.5 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a virtually unchanged March increase. Transportation equipment, up sixteen of the last seventeen months, led the increase, $0.6 billion or 0.5 percent to $130.3 billion.

Nondefense new orders for capital goods in April increased $0.3 billion or 0.3 percent to $81.2 billion. Shipments increased $1.3 billion or 1.6 percent to $80.2 billion. Unfilled orders increased $1.1 billion or 0.1 percent to $763.3 billion. Inventories increased $0.3 billion or 0.2 percent to $177.4 billion. Defense new orders for capital goods in April decreased $0.9 billion or 9.5 percent to $8.4 billion. Shipments decreased $0.3 billion or 2.8 percent to $9.5 billion. Unfilled orders decreased $1.0 billion or 0.7 percent to $151.4 billion. Inventories increased $0.5 billion or 2.5 percent to $21.7 billion.

Revised and recently benchmarked seasonally adjusted March figures for all manufacturing industries were: new orders, $478.5 billion (revised from $477.8 billion); shipments, $482.4 billion (revised from $482.7 billion); unfilled orders, $1,203.5 billion (revised from $1,202.6 billion); and total inventories, $647.8 billion (revised from $648.4 billion).


Consumer Price Index increased 0.1% in April, Ex Fd & Engy rose 0.3%
Posted: May 22, 2015 at 08:30 AM (Friday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 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 declined 0.2 percent before seasonal adjustment.

The index for all items less food and energy rose 0.3 percent in April and led to the slight increase in the seasonally adjusted all items index. The index for shelter rose, as did the indexes for medical care, household furnishings and operations, used cars and trucks, and new vehicles. In contrast, the indexes for apparel and airline fares declined in April.

The energy index declined in April, while the food index was unchanged. The indexes for gasoline, natural gas, and fuel oil all declined, while the electricity index was unchanged. The food at home index declined for the second month in a row, offsetting an increase in the index for food away from home. Major grocery store food group indexes were mixed.

The all items index declined 0.2 percent for the 12 months ending April. This represented a slightly larger decrease than the 0.1-percent decline for the 12 months ending March. The decline was driven by the energy index, which fell 19.4 percent over the last 12 months, with all the major components declining except electricity. The food index rose 2.0 percent over the last year, and the index for all items less food and energy rose 1.8 percent.


Real Average Hourly Earnings unchanged% in April
Posted: May 22, 2015 at 08:30 AM (Friday)

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

Real average weekly earnings were unchanged over the month due to no change in both real average hourly earnings and the average workweek.

Real average hourly earnings increased by 2.3 percent, seasonally adjusted, from April 2014 to April 2015. This increase in real average hourly earnings, combined with no change in the average workweek, resulted in a 2.3-percent increase in real average weekly earnings over this period.


Kansas City Fed Manufacturing Activity declined more sharply in May
Posted: May 21, 2015 at 11:00 AM (Thursday)

Tenth District manufacturing activity declined more sharply in May than in previous months and producers’ expectations also fell, with both reaching their lowest levels since mid-2009. However, most price indexes increased slightly, reversing a recent trend of decline. In a special question about hiring plans, the majority of firms indicated they were planning to either leave employment levels unchanged or increase them slightly over the next twelve months.

The month-over-month composite index was -13 in May, down from -7 in April and -4 in March. The last time the composite index was lower was in April 2009. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slower growth was mostly attributable to declines in durable goods manufacturing, including a continued decline in aircraft production and further weakness in metals and machinery. In addition, several nondurable goods plants also reported sluggish activity, particularly for plastics and food production. Production fell most sharply in energy-producing states like Oklahoma and New Mexico, but it was also down in most other District states. The majority of other month-over-month indexes also decreased from the previous month. The production index contracted from -2 to -13, and the shipments and new orders indexes also fell. The order backlog, employment, and new orders for exports indexes edged higher but still remained well below zero. The finished goods inventory index increased from -1 to 0, while the raw materials inventory index dropped into negative territory.

Year-over-year factory indexes were mixed but remained negative overall. The composite year-over-year index inched lower from -3 to -5, and the production, shipments, new orders, and order backlog indexes also became more negative. The employment index rose from -8 to 0, while the capital expenditures and new orders for exports indexes were basically unchanged. The finished goods inventory index increased from 4 to 6, but the raw materials inventory index eased slightly.

Most future factory indexes fell in May, with the notable exception of employment. The future composite index decreased from 6 to 0, and the future production, shipments, and capital expenditures indexes also edged lower. The future new orders index dropped from 21 to 2, its lowest level since May 2009, and the future order backlog index moved into negative territory. In contrast, the future employment index rebounded from -2 to 7, and the future new orders for exports indexes rose slightly from -6 to -2. The future finished goods inventory index eased from -2 to -5, while the future raw materials inventory index increased somewhat.

Most price indexes rose modestly in May, although month-over-month indexes were still negative. The month-over-month finished goods price index increased from -10 to -4, while the raw materials price index was basically unchanged. The year-over-year finished goods price index edged up from 12 to 14, while the raw materials price index was stable. The future raw materials price index rose from 8 to 15, and the future finished goods price index also increased moderately.


U.S. Leading Economic Index increased 0.7% in April
Posted: May 21, 2015 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index®(LEI) for the U.S. increased 0.7 percent in April to 122.3 (2010 = 100), following a 0.4 percent increase in March, and a 0.2 percent decline in February.

April’s sharp increase in the LEI seems to have helped stabilize its slowing trend, suggesting the paltry economic growth in the first quarter may be temporary. However, the growth of the LEI does not support a significant strengthening in the economic outlook at this time. The improvement in building permits helped to drive the index up this month, but gains in other components, in particular the financial indicators, have been somewhat more muted.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in April to 112.0 (2010 = 100), following a 0.1 percent decline in March, and a 0.2 percent increase in February.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.1 percent in April to 116.6 (2010 = 100), following a 0.5 percent increase in March, and a 0.2 percent increase in February.


Existing-Home Sales declined 3.3% in April
Posted: May 21, 2015 at 10:00 AM (Thursday)

Despite properties typically selling faster than at any time since July 2013, existing–home sales slowed in April but remained above an annual sales pace of five million for the second straight month, according to the National Association of Realtors®. All major regions except for the Midwest experienced sales declines in April.

Total existing-home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, declined 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Despite the monthly decline, sales have increased year–over–year for seven consecutive months and are still 6.1 percent above a year ago.

Sales in April failed to keep pace with the robust gain seen in March. April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices. However, the overall data and feedback we're hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.

Total housing inventory at the end of April increased 10.0 percent to 2.21 million existing homes available for sale, but is still 0.9 percent below a year ago (2.23 million). Unsold inventory is at a 5.3–month supply at the current sales pace, up from 4.6 months in March.

The median existing–home price3 for all housing types in April was $219,400, which is 8.9 percent above April 2014. This marks the 38th consecutive month of year–over–year price gains and is the largest since January 2014 (10.1 percent).

With demand far exceeding supply, properties sold in April faster (39 days) than at any time since July 2013 (42 days) and the second shortest time (37 days in June 2013) since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 180 days in April, while foreclosures sold in 50 days and non–distressed homes took 38 days. Nearly half (46 percent) of homes sold in April were on the market for less than a month.

Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace. To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012.

The percent share of first–time buyers remained at 30 percent in April for the second consecutive month. First–time buyers represented 29 percent of all buyers in April 2014.

According to Freddie Mac, the average commitment rate for a 30–year, conventional, fixed–rate mortgage remained below 4.00 percent for the fifth straight month, falling in April to 3.67 percent from 3.77 percent in March.

Closings for some home sales could drag after August 1 and into the fall as lenders transition to the new closing procedures and documentation required by the Consumer Financial Protection Bureau's Real Estate Settlement and Procedures Act and Truth in Lending Act, or RESPA–TILA, integrated disclosure rule. There likely will be bumps in the closing process while all parties get used to the new requirements. We hope that the move away from the HUD–1 is smooth, but even if only 10 percent of transactions experience closing issues, that's as many as 40,000 transactions a month.

Polychron — testifying before Congress on May 14 — advocated for a grace period through the end of 2015, which would delay enforcement of the new rules to the slower winter months.

All–cash sales were 24 percent of transactions in April, unchanged from March and down considerably from a year ago (32 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in April, unchanged from last month and down from 18 percent in April 2014. Seventy–one percent of investors paid cash in April.

Distressed sales — foreclosures and short sales — were 10 percent of sales in April, unchanged from March and below the 15 percent share a year ago. Seven percent of April sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in April (16 percent in March), while short sales were also discounted 14 percent (16 percent in March).

Single–family and Condo/Co–op Sales
Single–family home sales declined 3.7 percent to a seasonally adjusted annual rate of 4.43 million in April from 4.60 million in March, but are still 6.5 percent above the 4.16 million pace a year ago. The median existing single–family home price was $221,200 in April, up 10.0 percent from April 2014.

Existing condominium and co–op sales were at a seasonally adjusted annual rate of 610,000 units in April (unchanged from March) and are 3.4 percent higher than April 2014 (590,000 units). The median existing condo price was $206,100 in April, which is 0.4 percent higher than a year ago.

Regional Breakdown
April existing–home sales in the Northeast declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. The median price in the Northeast was $253,200, which is 3.6 percent higher than April 2014.

In the Midwest, existing–home sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13.0 percent above April 2014. The median price in the Midwest was $173,700, up 11.4 percent from a year ago.

Existing–home sales in the South declined 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. The median price in the South was $189,400, up 8.5 percent from a year ago.

Existing–home sales in the West decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. The median price in the West was $318,700, which is 10.0 percent above April 2014.


Philadelphia Fed March Outlook Continues to Suggest Slight Growth
Posted: May 21, 2015 at 10:00 AM (Thursday)

Manufacturing activity in the region increased modestly in May, according to firms responding to this month’s Manufacturing Business Outlook Survey. Indicators for general activity, new orders, and shipments were positive but remain at low readings. Employment increased at the reporting firms, but the employment index moderated compared with April. Firms reported continued price reductions in May, with indicators for prices of inputs and the firms’ own products remaining negative. The survey’s indicators of future activity suggest that firms expect continuing growth in the manufacturing sector over the next six months.

Indicators Suggest Slight Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 7.5 in April to 6.7 in May. The index has remained in a single-digit range for the first five months of this year (see Chart 1). The demand for manufactured goods, as measured by the survey’s current new orders index, edged 3 points higher this month, with less than one-third of the firms reporting higher new orders in May compared with April. The current shipments index also increased 3 points to a reading of 1.

Firms’ responses suggest some weakening in labor market conditions this month compared with April. The percentage of firms reporting an increase in employees in May (19 percent) exceeded the percentage reporting a decrease (13 percent). The current employment index, however, fell 5 points, to 6.7. Firms reported an overall modest decrease in the workweek: The percentage of firms reporting a shorter workweek (25 percent) was greater than the percentage reporting a longer workweek (19 percent).

Notable Share of Firms Report Price Reductions
Input prices continued to fall for many of the reporting manufacturers: The prices paid index fell 7 points, to -14.2, its third consecutive negative reading and seventh consecutive monthly decline in the diffusion index (see Chart 2). Although 75 percent of the firms reported that input prices were unchanged, the percentage of firms reporting price reductions (19 percent) exceeded the percentage reporting price increases (5 percent). With respect to prices received for manufactured goods, the largest percentage of firms (76 percent) reported no change in prices. The percentage of firms reporting price reductions for their own products (15 percent) exceeded the percentage reporting price increases (9 percent) for the fifth consecutive month.
Future Indexes Remain Below Last Year’s Levels

Overall, firms remain optimistic about business and employment conditions over the next six months, although not at levels seen for most of last year. The diffusion index for future activity edged down slightly, from 35.5 in April to 33.9 in May, remaining well below the readings in 2014 (see Chart 1). Individual future indicators were little changed. The future index for shipments fell 2 points, while the future new orders index increased 1 point. About 32 percent of the firms expect expansion in their workforce over the next six months, while 11 percent expect a reduction. The future employment index edged slightly higher this month, to 21.5.

In this month’s special questions, firms were surveyed about plans for hiring over the next year and about recent trends in compensation and wages. Although more than half of the firms are planning to increase employment over the next year, many firms reported increasing wages to retain and attract qualified workers. Over one-fifth of the firms reported increasing difficulty in filling openings over the past 12 months (see Special Questions).
Summary

The Manufacturing Business Outlook Survey suggests modest expansion of the region’s manufacturing sector in May. The indicators for general activity and new orders both suggest expansion, but at a continued modest pace. Firms reported an increase in employment this month. A notable share of respondents continued to report downward price pressures for inputs. For their own manufactured products, more firms reported price decreases than reported price increases, although the majority reported steady prices. Indicators reflecting firms’ expectations for the next six months were near steady this month, and firms remained optimistic about future employment growth.


DJ-BTMU U.S. Business Barometer declined by 0.2%
Posted: May 21, 2015 at 10:00 AM (Thursday)

For the week ending May 9 2015, the BTMU U.S. Business Barometer declined by 0.3 percent to 98.5. This week’s barometer was driven by weak performance in chain stores sales, which slipped by 1.7 percent. Along similar lines, steel production and railroad freight car loadings fell by 2.5 and 2.1 percent, respectively. On the other hand, electric output and coal production rose by 4.4 and 2.3 percent, respectively.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, fell to 98.7. Its year-over-year growth rate was 0.7 percent.


Weekly Initial Unemployment Claims Increase 10,000 to 274,000
Posted: May 21, 2015 at 08:30 AM (Thursday)

In the week ending May 16, the advance figure for seasonally adjusted initial claims was 274,000, an increase of 10,000 from the previous week's unrevised level of 264,000. The 4-week moving average was 266,250, a decrease of 5,500 from the previous week's unrevised average of 271,750. This is the lowest level for this average since April 15, 2000 when it was 266,250. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 9, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 9 was 2,211,000, a decrease of 12,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 11, 2000 when it was 2,161,000. The previous week's level was revised down by 6,000 from 2,229,000 to 2,223,000. The 4-week moving average was 2,229,750, a decrease of 29,000 from the previous week's revised average. This is the lowest level for this average since November 25, 2000 when it was 2,211,250. The previous week's average was revised down by 1,500 from 2,260,250 to 2,258,750.


Chicago Fed National Activity increased slightly in April
Posted: May 21, 2015 at 08:30 AM (Thursday)

The index’s three-month moving average, CFNAI-MA3, increased slightly to –0.23 in April from –0.27 in March. April’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below 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, which is also a three-month moving average, was unchanged at –0.12 in April. Thirty-eight of the 85 individual indicators made positive contributions to the CFNAI in April, while 47 made negative contributions. Forty-six indicators improved from March to April, while 37 indicators deteriorated and two were unchanged. Of the indicators that improved, 19 made negative contributions.

The contribution from production-related indicators to the CFNAI was unchanged at –0.16 in April. Industrial production decreased 0.3 percent in April for the second straight month. The sales, orders, and inventories category made a neutral contribution to the CFNAI in April, down slightly from +0.01 in March.

Employment-related indicators contributed +0.08 to the CFNAI in April, up from –0.08 in March. Nonfarm payrolls increased by 223,000 in April, following a gain of 85,000 in the previous month; and the unemployment rate edged down to 5.4 percent in April from 5.5 percent in March.

The contribution of the personal consumption and housing category to the CFNAI increased to –0.06 in April from –0.12 in March. Housing starts moved up to 1,135,000 annualized units in April from 944,000 in March. In addition, housing permits increased to 1,143,000 annualized units in April from 1,038,000 in the previous month.

The CFNAI was constructed using data available as of May 19, 2015. At that time, April data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index was revised to –0.36 from an initial estimate of –0.42. Revisions to the monthly index can be
attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the March monthly index was due primarily to the former.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 20, 2015 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 15, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier, to the lowest level since April. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 11 percent higher than the same week one year ago.

"Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week. Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11 percent higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates," said Mike Fratantoni, MBA's Chief Economist.

The refinance share of mortgage activity increased to 52 percent of total applications from 51 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.04 percent, its highest level since December 2014, from 4.00 percent, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.04 percent from 3.99 percent, with points decreasing to 0.25 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.80 percent from 3.76 percent, with points decreasing to 0.06 from 0.14 (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 3.26 percent from 3.23 percent, with points decreasing to 0.30 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.99 percent from 3.00 percent, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


April Housing Starts up 20.2%, Permits up 10.1%
Posted: May 19, 2015 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,143,000. This is 10.1 percent (±2.2%) above the revised March rate of 1,038,000 and is 6.4 percent (±2.1%) above the April 2014 estimate of Single-family authorizations in April were at a rate of 666,000; this is 3.7 percent (±0.9%) above the revised March figure of 642,000. Authorizations of units in buildings with five units or more were at a rate of 444,000 in April.

HOUSING STARTS
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,135,000. This is 20.2 percent (±14.4%) above the revised March estimate of 944,000 and is 9.2 percent (±10.6%)* above the April 2014 rate of 1,039,000. Single-family housing starts in April were at a rate of 733,000; this is 16.7 percent (±10.6%) above the revised March figure of 628,000. The April rate for units in buildings with five units or more was 389,000.

HOUSING COMPLETIONS
Privately-owned housing completions in April were at a seasonally adjusted annual rate of 986,000. This is 20.4 percent (±14.1%) above the revised March estimate of 819,000 and is 19.4 percent (±15.2%) above the April 2014 rate of 826,000. Single-family housing completions in April were at a rate of 688,000; this is 14.5 percent (±12.4%) above the revised March rate of 601,000. The April rate for units in buildings with five units or more was 288,000.


Builder Confidence Falls 2 Points in May to 54
Posted: May 18, 2015 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes in May dropped two points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. It is a nine-point increase from the May 2014 reading of 45.

Despite this month’s slight dip, builder confidence in the new home market remains above the 50-point benchmark. Overall, the second quarter of 2015 is shaping up to be very solid.

Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home. On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.

The index’s components were mixed in May. The component charting sales expectations in the next six months rose one point to 64, the index measuring buyer traffic dropped a single point to 39, and the component gauging current sales conditions decreased two points to 59.

Looking at the three-month moving averages for regional HMI scores, the South and Midwest each rose one point to 57 and 55, respectively. The Northeast fell by one point to 41 and the West dropped three points to 55.


Treasury International Capital Data for March 2015
Posted: May 15, 2015 at 04:00 PM (Friday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2015. 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 outflow of $100.9 billion. Of this, net foreign private outflows were $90.5 billion, and net foreign official outflows were $10.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in March; net purchases were $31.2 billion. Net purchases by private foreign investors were $49.1 billion, while net sales by foreign official institutions were $17.8 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $13.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $17.6 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $1.6 billion in March.

Foreign residents increased their holdings of U.S. Treasury bills by $21.4 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $13.1 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $115.6 billion.


Forecasters See Stronger Quarterly Growth This Year Accompanied by Lower Unemployment
Posted: May 15, 2015 at 10:00 AM (Friday)

The outlook for growth over the next three quarters looks stronger now than it did three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia. Growth this quarter will be 3.3 percent at an annual rate, up from the previous estimate of 3.0 percent. Third-quarter growth will be 2.9 percent, an upward revision from the previous projection of 2.8 percent, while fourth-quarter growth will be 3.2 percent, up from 2.7 percent in the last survey. At the same time, surprisingly weak historical first-quarter growth is pulling down the survey’s current projection for growth in the annual-average level of real GDP in 2014, from 2.8 percent in the last survey to 2.4 percent in this survey.

The forecasters see an improved outlook for the unemployment rate over the next three years. The forecasters predict that the unemployment rate will be an annual average of 6.4 percent in 2014, before falling to 5.9 percent in 2015, 5.6 percent in 2016, and 5.5 percent in 2017. The projections for 2014, 2015, and 2016 are below those of the last survey.

On the jobs front, the forecasters have revised upward their estimates for job gains in 2014. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 196,500 in 2014, up from the previous estimate of 187,700, and 202,700 in 2015, as the table below shows.


Industrial Production decreased 0.3%
Capacity Utilization decreased to 78.2%

Posted: May 15, 2015 at 09:15 AM (Friday)

Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.


Empire State Manufacturing Survey Conditions Show A Slight Expansion
Posted: May 15, 2015 at 08:30 AM (Friday)

The May 2015 Empire State Manufacturing Survey indicates that business conditions improved slightly for New York manufacturers. The headline general business conditions index climbed four points to 3.1. The new orders index rose ten points to 3.9, and the shipments index was little changed at 14.9. Labor market indicators pointed to a small increase in employment levels but a slight decline in the average workweek. The prices paid index fell ten points to 9.4, its lowest level in nearly three years, and the prices received index edged down to 1.0, indicating that selling prices were flat. The index for future general business conditions fell noticeably, reflecting a positive but less favorable outlook than in April.

A Slight Expansion in Business Activity
The May general business conditions index advanced four points but, at 3.1, indicated that business conditions were only slightly better over the month. Thirty percent of respondents reported that conditions had improved, while 27 percent reported that conditions had worsened. The new orders index, positive for the first time since February, rose ten points to 3.9, indicating a small increase in orders. The shipments index was little changed at 14.9, suggesting that shipments continued to grow at a solid clip. The unfilled orders index, at -11.5, also remained close to last month’s level. The delivery time index fell to -10.4—a sign that delivery times shortened—and the inventories index rose to 7.3, pointing to an increase in inventory levels.

Price Indexes Fall
The indexes for both prices paid and prices received were lower this month. The prices paid index dropped ten points to 9.4, its lowest level in nearly three years, indicating that input price increases slowed. The prices received index retreated three points to 1.0, suggesting that selling prices were flat. Labor market conditions pointed to a small increase in employment but a slight dip in the length of the average workweek: the index for number of employees fell four points to 5.2, while the average workweek index, though up two points, remained negative at -2.1.

Optimism Wanes
The index for future general business conditions fell seven points to 29.8, suggesting a positive but less favorable outlook than last month. The future new orders index held steady at 33.9, and the index for future shipments was little changed at 31.8. All three of these indexes remain well below the levels seen throughout most of 2014. Both indexes for future prices fell, indicating that price increases were expected to be somewhat less widespread in the months ahead. The index for future employment fell six points, but at 16.7, it still suggested that employment levels were expected to rise. The capital expenditures index declined nine points to 15.6, and the technology spending index fell to 1.0.


DJ-BTMU U.S. Business Barometer declined by 0.2%
Posted: May 14, 2015 at 10:00 AM (Thursday)

For the week ending May 2 2015, the BTMU U.S. Business Barometer declined by 0.2 percent to 98.8. This week’s barometer was largely dragged down by weak performance in chain stores sales, which slipped by 1.0 percent after posting a gain of 0.8 percent in the previous week. Along similar lines, coal production and electric output fell by 5.8 and 0.6 percent, respectively. Other indexes, however, reported minor gains. For example, lumber production and railroad freight car loadings rose by 2.9 and 1.1 percent, respectively; although those gains were not enough to offset the losses.

On a year-over-year basis, the barometer showed a gain of 0.6 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.9. Its year-over-year growth rate was 0.8 percent.


Producer Price Index fell 0.4% in April, ex Fd & Engy down 0.1%
Posted: May 14, 2015 at 08:30 AM (Thursday)

The Producer Price Index for final demand fell 0.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.2 percent in March and decreased 0.5 percent in February. On an unadjusted basis, the index for final demand declined 1.3 percent for the 12 months ended in April.

In April, more than 70 percent of the decrease in final demand prices can be attributed to a 0.7 percent decline in the index for final demand goods. Prices for final demand services edged down 0.1 percent.

Within intermediate demand, prices for processed goods fell 1.1 percent, the index for unprocessed goods moved up 0.9 percent, and prices for services advanced 0.5 percent.


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

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

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