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Category: Research - Topic: Economics



Treasury International Capital Data for October 2017
Posted: December 15, 2017 at 04:00 PM (Friday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for October 2017. The sum total in October of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $151.2 billion. Of this, net foreign private inflows were $154.8 billion, and net foreign official outflows were $3.7 billion.

Foreign residents increased their holdings of long-term U.S. securities in October; net purchases were $7.5 billion. Net purchases by private foreign investors were $25.6 billion, while net sales by foreign official institutions were $18.1 billion.U.S. residents decreased their holdings of long-term foreign securities, with net sales of $15.7 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $23.2 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 $7.9 billion in October.

Foreign residents increased their holdings of U.S. Treasury bills by $33.0 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $47.6 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $95.7 billion.


Industrial Production moved up 0.2%
Capacity Utilization increased to 77.1%

Posted: December 15, 2017 at 09:15 AM (Friday)

Industrial production moved up 0.2 percent in November after posting an upwardly revised increase of 1.2 percent in October. Manufacturing production also rose 0.2 percent in November, its third consecutive monthly gain. The output of utilities dropped 1.9 percent. The index for mining increased 2.0 percent, as oil and gas extraction returned to normal levels after being held down in October by Hurricane Nate. Excluding the post-hurricane rebound in oil and gas extraction, total industrial production would have been unchanged in November. Total industrial production was 106.4 percent of its 2012 average in November and was 3.4 percent above its year-earlier level. Capacity utilization for the industrial sector was 77.1 percent in November, a rate that is 2.8 percentage points below its long-run (1972–2016) average.


Empire State Manufacturing Survey Conditions continued to grow at a solid clip in December
Posted: December 15, 2017 at 08:30 AM (Friday)

Business activity continued to grow at a solid clip in New York State, according to firms responding to the December 2017 Empire State Manufacturing Survey. The headline general business conditions index, at 18.0, remained close to last month’s level. The new orders index and the shipments index both showed sustained strong gains, with the former holding steady at 19.5 and the latter edging up to 22.4. Delivery times were slightly longer than last month, and inventory levels were stable. Labor market indicators pointed to a small increase in employment but no change in hours worked. Both input prices and selling prices rose at a somewhat faster pace than last month. Indexes assessing the six-month outlook suggested that firms remained optimistic about future business conditions.

Growth Continues
Manufacturing firms in New York State reported that business activity continued to expand strongly. The general business conditions index was little changed at 18.0. Thirty-seven percent of respondents reported that conditions had improved over the month, while 19 percent reported that conditions had worsened. The new orders index held steady at 19.5, and the shipments index rose four points to 22.4—readings that indicated ongoing solid growth in orders and shipments. The unfilled orders index moved down four points to -8.7, reflecting a decline in unfilled orders. The delivery time index climbed into positive territory, indicating that delivery times lengthened, and the inventories index fell to 1.4, a sign that inventory levels were steady.

Price Increases Pick Up
The index for number of employees fell six points to 5.1, a level suggesting a small increase in employment levels. The average workweek index was zero, indicating that hours worked were unchanged. Prices increased at a faster pace than last month: the prices paid index climbed five points to 29.7, and the prices received index edged up two points to 11.6.

Firms Remain Optimistic about Future Conditions
Looking ahead, firms remained optimistic about the six-month outlook, though to a somewhat lesser extent than in November. The index for future business conditions fell three points to 46.6. After advancing to its highest level in several years last month, the index for future new orders declined thirteen points to 41.1. The index for future number of employees rose eight points to 29.0, its highest level in nearly a year, and the capital expenditures index climbed nine points to 34.1, a multiyear high.


Business Inventories down 0.1% in October
Posted: December 14, 2017 at 10:00 AM (Thursday)

The combined value of distributive trade sales and manufacturers’ shipments for October, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,400.8 billion, up 0.6 percent (±0.2 percent) from September 2017 and was up 6.5 percent (±0.3 percent) from October 2016.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,885.7 billion, down 0.1 percent (±0.1 percent)* from September 2017, but were up 3.5 percent (±0.3 percent) from October 2016.

The total business Inventories/Sales Ratio based on seasonally adjusted data at the end of October was 1.35. The October 2016 ratio was 1.39.


U.S. Import Price Index increased 0.7% in November
Posted: December 14, 2017 at 08:30 AM (Thursday)

U.S. import prices rose 0.7 percent in November, the U.S. Bureau of Labor Statistics reported today, after ticking up 0.1 percent in October. Higher prices for fuel drove the increase in November and nonfuel prices recorded no change. U.S. export prices increased 0.5 percent in November following a 0.1-percent advance the previous month.

Imports
All Imports: Import prices advanced 0.7 percent in November following rises of 0.1 percent in October and 0.8 percent in September. Higher fuel prices were the main contributor to the overall advance in import prices for November. The import price index increased 3.1 percent over the past 12 months. U.S. import prices have not recorded an over-the-year decline since a 0.2-percent drop in October 2016.

Fuel Imports: The import price index for fuels rose 7.6 percent in November, after a 0.2-percent increase in October. Rising prices for import petroleum and natural gas contributed to the increase. Petroleum prices advanced 7.2 percent in November, the largest monthly rise since the index increased 7.5 percent in October 2016. Natural gas prices rose 26.3 percent, the first monthly advance since the index increased 8.0 percent in April and the largest rise since the index advanced 28.0 percent in July 2016. Import fuel prices rose 22.2 percent over the past year driven by a 24.1-percent increase in petroleum prices. In contrast, import prices for natural gas decreased 5.6 percent for the year ended in November.

All Imports Excluding Fuel: Nonfuel import prices recorded no change in November following a 0.1 percent rise in October. Lower prices for foods, feeds, and beverages offset higher prices for nonfuel industrial supplies and materials, consumer goods, and automotive vehicles. Import capital goods prices recorded no change in November. The price index for nonfuel imports advanced 1.4 percent between November 2016 and November 2017. The 12-month increase was driven by higher prices for nonfuel industrial supplies and materials, capital goods, and consumer goods which more than offset lower prices for automotive vehicles and foods, feeds, and beverages. The last over-the-year decline in nonfuel import prices was a 0.2-percent decrease for the 12-month period ended November 2016.


U.S. Retail Sales for November Increase 0.8%, Ex-Auto up 1.0%
Posted: December 14, 2017 at 08:30 AM (Thursday)

Advance estimates of U.S. retail and food services sales for November 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.7 billion, an increase of 0.8 percent (±0.5 percent) from the previous month, and 5.8 percent (±0.7 percent) above November 2016. Total sales for the September 2017 through November 2017 period were up 5.2 percent (±0.5 percent) from the same period a year ago. The September 2017 to October 2017 percent change was revised from up 0.2 percent (±0.5 percent)* to up 0.5 percent (±0.2 percent).

Retail trade sales were up 0.8 percent (±0.5 percent) from October 2017, and were up 6.3 percent (±0.7 percent) from last year. Gasoline Stations were up 12.2 percent (±1.4 percent) from November 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 10.7 percent (±2.1 percent) from last year.


Weekly Initial Unemployment Claims Decrease 11,000 to 225,000
Posted: December 14, 2017 at 08:30 AM (Thursday)

In the week ending December 9, the advance figure for seasonally adjusted initial claims was 225,000, a decrease of 11,000 from the previous week's unrevised level of 236,000. The 4-week moving average was 234,750, a decrease of 6,750 from the previous week's unrevised average of 241,500. Claims taking procedures continue to be disrupted in the Virgin Islands. The claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending December 2, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 2 was 1,886,000, a decrease of 27,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 1,908,000 to 1,913,000. The 4-week moving average was 1,918,500, an increase of 4,500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 1,912,750 to 1,914,000.


FOMC target funds rate increased at 1.25% - 1.50%, balance sheet reduction continues
Posted: December 13, 2017 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Hurricane-related disruptions and rebuilding have affected economic activity, employment, and inflation in recent months but have not materially altered the outlook for the national economy. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

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

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

Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.


Consumer Price Index 0.4% in November, Ex Fd & Engy rose 0.1%
Posted: December 13, 2017 at 08:30 AM (Wednesday)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent.

The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase. The gasoline index increased 7.3 percent, and the other energy component indexes also rose. The food index was unchanged in November, with the index for food at home declining slightly.

The index for all items less food and energy increased 0.1 percent in November. The shelter index continued to rise, and the indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November.

The all items index rose 2.2 percent for the 12 months ending November. The index for all items less food and energy rose 1.7 percent, a slight decline from the 1.8-percent increase for the period ending October. The energy index rose 9.4 percent over the last 12 months, and the food index rose 1.4 percent.

Food
The food index remained unchanged in November. The index for food at home declined 0.1 percent, with four of the six major grocery store food group indexes falling. The index for nonalcoholic beverages, which was unchanged in October, fell 0.6 percent in November. The fruits and vegetables index declined 0.5 percent in November after being unchanged in October. The index for meats, poultry, fish, and eggs fell 0.3 percent, and the cereals and bakery products index declined 0.2 percent.

The index for other food at home rose in November, increasing 0.4 percent. The index for dairy and related products, which declined 0.3 percent in October, increased 0.3 percent in November. The index for food away from home also increased in November, rising 0.2 percent.

The food at home index increased 0.6 percent over the last 12 months. The index for meat, poultry, fish, and eggs rose 1.4 percent over the span, the largest increase among the six groups. The indexes for dairy and related products and for nonalcoholic beverages were unchanged over the last 12 months, and the index for cereals and bakery products declined 0.8 percent. The index for food away from home rose 2.4 percent over the last 12 months.

Energy
The energy index rose 3.9 percent in November after falling 1.0 percent the prior month. The gasoline index rose 7.3 percent in November after declining in October. (Before seasonal adjustment, gasoline prices rose 2.6 percent in November.)The other major energy component indexes also increased, with the electricity index increasing 0.5 percent and the index for natural gas rising 0.6 percent.

The energy index increased 9.4 percent over the past 12 months, with all of the major component indexes rising over the span. The fuel oil index rose 18.6 percent and the gasoline index increased 16.5 percent. The index for natural gas advanced 3.6 percent, and the electricity index rose 2.5 percent.

All items less food and energy
The index for all items less food and energy increased 0.1 percent in November after rising 0.2 percent in October. The shelter index rose 0.2 percent, with the rent index increasing 0.3 percent and the index for owners' equivalent rent rising 0.2 percent. The index for lodging away from home fell 1.3 percent in November after rising in each of the three prior months.

The index for used cars and trucks increased 1.0 percent in November, and the index for motor vehicle insurance rose 0.8 percent. The index for new vehicles, which declined in September and October, rose 0.3 percent in November. The indexes for wireless phones services, alcoholic beverages, and tobacco also increased in November.

The index for medical care was unchanged in November, with the index for prescription drugs increasing 0.6 percent and the hospital services index rising 0.1 percent, but the physicians' services index declining 0.8 percent. The indexes for recreation and for personal care were also both unchanged in November.

The apparel index fell in November; its 1.3-percent decline was its largest decrease since September 1998. The index for airline fares fell 2.4 percent in November after rising the prior month. The index for household furnishings and operations also declined, falling 0.1 percent.

The index for all items less food and energy increased 1.7 percent over the last 12 months. The 12-month change in the shelter index remained at 3.2 percent, and the index for motor vehicle insurance rose 8.0 percent over the span. The indexes for used cars and trucks, apparel, new vehicles, and airline fares all declined over the past year.

Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.2 percent over the last 12 months to an index level of 246.669 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.3 percent over the last 12 months to an index level of 240.666 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.1 percent over the last 12 months. For the month, the index was unchanged on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.


Real Average Hourly Earnings decreased 0.2% in November
Posted: December 13, 2017 at 08:30 AM (Wednesday)

Real average hourly earnings for all employees decreased 0.2 percent from October to November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.2 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 increased 0.1 percent over the month due to the decrease in real average hourly earnings combined with a 0.3-percent increase in the average workweek.

Real average hourly earnings increased 0.2 percent, seasonally adjusted, from November 2016 to November 2017. The increase in real average hourly earnings combined with a 0.6-percent increase in the average workweek resulted in a 0.8-percent increase in real average weekly earnings over this period.

Production and nonsupervisory employees
Real average hourly earnings for production and nonsupervisory employees decreased 0.2 percent from October to November, seasonally adjusted. This result stems from a 0.2-percent increase in average hourly earnings being more than offset by a 0.5-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Real average weekly earnings decreased 0.3 percent over the month due to the decrease in real average hourly earnings combined with no change in average weekly hours.

From November 2016 to November 2017, real average hourly earnings were unchanged, seasonally adjusted. The unchanged real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.3-percent increase in real average weekly earnings over this period.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: December 13, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 8, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 10 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 52.4 percent of total applications, its highest level since January 2017, from 51.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent of total applications.

The FHA share of total applications increased to 11.8 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.20 percent from 4.19 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.11 percent from 4.16 percent, with points unchanged at 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since April 2017, 4.13 percent, from 4.11 percent, with points decreasing to 0.39 from 0.40 (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 its highest level since March 2017, 3.61 percent, from 3.59 percent, with points decreasing to 0.44 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.42 percent from 3.48 percent, with points increasing to 0.48 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Producer Price Index advanced 0.4% in November, ex Fd & Engy up 0.3%
Posted: December 12, 2017 at 08:30 AM (Tuesday)

The Producer Price Index for final demand increased 0.4 percent in November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices also moved up 0.4 percent in both October and September. On an unadjusted basis, the final demand index rose 3.1 percent for the 12 months ended in November, the largest advance since a 3.1-percent increase for the 12 months ended January 2012.

In November, three-fourths of the rise in the final demand index is attributable to a 1.0-percent increase in prices for final demand goods. The index for final demand services climbed 0.2 percent.

The index for final demand less foods, energy, and trade services rose 0.4 percent in November, the largest advance since increasing 0.6 percent in April. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 2.4 percent.

Final Demand
Final demand goods: The index for final demand goods jumped 1.0 percent in November, the largest advance since a 1.0-percent increase in January. Over three-fourths of the broad-based November rise can be traced to prices for final demand energy, which climbed 4.6 percent. The indexes for final demand goods less foods and energy and for final demand foods both advanced 0.3 percent.

Product detail: Over two-thirds of the November increase in the index for final demand goods is attributable to prices for gasoline, which jumped 15.8 percent. The indexes for light motor trucks, pharmaceutical preparations, beef and veal, residential electric power, and jet fuel also moved higher. In contrast, prices for processed young chickens fell 5.7 percent. The indexes for ethanol and commercial electric power also declined. (See table 4.)

Final demand services: Prices for final demand services advanced 0.2 percent in November, the third consecutive rise. Leading the November increase, the index for final demand services less trade, transportation, and warehousing moved up 0.4 percent. Prices for final demand transportation and warehousing services climbed 0.6 percent. Conversely, margins for final demand trade services decreased 0.3 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1 percent. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; food and alcohol retailing; chemicals and allied products wholesaling; and apparel, footwear, and accessories retailing also moved higher. In contrast, margins for machinery and equipment wholesaling declined 1.9 percent. The indexes for fuels and lubricants retailing and for bundled wired telecommunication access services also fell.


NFIB Small Business Optimism Index gained 3.7 points to 107.5 in November
Posted: December 12, 2017 at 07:00 AM (Tuesday)

OPTIMISM INDEX
The Index of Small Business Optimism gained 3.7 points to 107.5 in November, the second highest reading in the 44-year history of the NFIB surveys (108.0 in July 1983). Eight of the 10 Index components posted a gain and two declined, as Job Openings fell from its record high level and Capital Spending Plans declined 1 point. Eighty percent of the gain in the Index was accounted for by expectations about future business conditions and real sales gains, and the environment for business expansion. Overall, a good environment for better than average economic growth in the fourth quarter.

LABOR MARKETS
After several solid quarters, job creation slowed in the small business sector as business owners reported a seasonally adjusted average employment change per firm of 0.0 workers. Thirteen percent (down 1 point) reported increasing employment an average of 3.0 workers per firm and 10 percent (down 1 point) reported reducing employment an average of 2.9 workers per firm (seasonally adjusted). Fifty-two percent reported hiring or trying to hire (down 7 points), but forty-four percent (85 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill.

Eighteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (down 2 points), second only to taxes. This is the top ranked problem for those in construction (33 percent) and manufacturing (22 percent), getting more votes than taxes and the cost of regulations. Thirty percent of all owners reported job openings they could not fill in the current period, down 5 points from the record high level reached in July and October. Eleven percent reported using temporary workers, down 3 points. A seasonally adjusted net 24 percent plan to create new jobs, up 6 points to a record high reading. Hiring plans were strongest in professional services, manufacturing and construction.

CREDIT MARKETS
Four percent of owners reported that all their borrowing needs were not satisfied, unchanged and historically low. Thirty-two percent reported all credit needs met (up 3 points) and 48 percent said they were not interested in a loan, down 5 points. Only 2 percent reported that financing was their top business problem compared to 22 percent citing taxes, 16 percent citing regulations and red tape, and 18 percent the availability of qualified labor. In short, credit availability and cost is not an issue and hasn’t been for many years. Thirty percent of all owners reported borrowing on a regular basis (unchanged). The average rate paid on short maturity loans was down 30 basis points at 5.7 percent, little changed even as the Federal Reserve has been raising rates. Overall, loan demand remains steady, even with cheap money.

SALES AND INVENTORIES
The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months compared to the prior three months was a net negative 5 percent, a 6-point decline from October. Consumer spending slowed in November, especially at “brick and mortar” establishments. Seasonally adjusted, the net percent of owners expecting higher real sales volumes gained 13 points, rising to a net 34 percent of owners, consistent with reported surges in consumer sentiment from the University of Michigan and the Conference Board.

The net percent of owners reporting inventory increases fell 2 points to a net negative 2 percent (seasonally adjusted). Even though sales were weak, owners still reduced their current inventory stocks. The net percent of owners viewing current inventory stocks as “too low” gained 3 points to a net negative 2 percent, a more positive view of current stocks. The net percent of owners planning to add to inventory rose 3 points to a net 7 percent, a solid figure that is supportive of fourth quarter growth. The 7 percent readings from September and November are the best since 2006.

COMPENSATION AND EARNINGS
Reports of higher worker compensation were unchanged at a net 27 percent, historically very strong all year. Owners complain at record rates of labor quality issues, with 85 percent of those hiring or trying to hire reporting few or no qualified applicants for their open positions. Eighteen percent selected “finding qualified labor” as their top business problem, far more than cite weak sales. Plans to raise compensation fell 4 points in frequency to a net 17 percent, still a solid number, but a surprise as labor markets seem to be getting tighter. The frequency of reports of positive profit trends improved 2 points to a net negative 12 percent reporting quarter on quarter profit improvements, a solid reading historically, among the best since 2007.

CAPITAL SPENDING
Fifty-nine percent reported capital outlays, unchanged. Of those making expenditures, 40 percent reported spending on new equipment (down 1 point), 29 percent acquired vehicles (up 5 points), and 16 percent improved or expanded facilities (unchanged). Six percent acquired new buildings or land for expansion (down 1 point) and 13 percent spent money for new fixtures and furniture (up 1 point). Twenty-six percent plan capital outlays in the next few months, down only 1 point from October.

INFLATION
The net percent of owners raising average selling prices rose 2 points to a net 10 percent seasonally adjusted. Clearly, inflation is not “breaking out” across the country as the Federal Reserve hoped, but the percent of owners raising prices, net of those reducing, has doubled since January, a slow crawl to higher inflation. Seasonally adjusted, a net 23 percent plan price hikes (up 1 point), although far fewer will report actually doing so in the following months.

COMMENTARY
President Trump promised that we would get tired of “winning” in his term, a logical perspective because the Republicans have majorities in both houses of Congress and the Presidency. There has been important success on regulatory relief and in restructuring the judiciary, and they are now close to enacting tax reform as the year winds down.

The Federal Open Market Committee (FOMC) which conducts monetary policy is undergoing a major facelift. Although the appointment of Powell is viewed as replacing Yellen with “Yellen”, that is not the case. Mr. Powell has extensive financial market experience, something few FOMC members possess, which will help guide policy decisions. The Federal Reserve charter calls for governors that represent the business sector, but such appointments are rare, dominated instead by academic economists. Two other new appointees are less philosophically disposed to the notion of government running the economy (rather than markets). More positions will open in the near future and these will be filled with governors who place a different emphasis on the goal of creating inflation, an anathema to most small-business owners. The Federal Reserve will boost rates again in December, but that will leave the Federal Funds rate at about half of the level that history would suggest. The Federal Reserve is still in control of rates and bond investors bet on the Fed, not markets.

The NFIB indicators clearly anticipate further upticks in economic growth, perhaps pushing up toward 4 percent GDP growth for the fourth quarter. This is a dramatically different picture than owners presented during the 2009-16 weak recovery under President Obama. The change in the management team dramatically improved expectations. There is still much uncertainty about health care and taxes, but it appears that owners believe that whatever Congress finally comes up with will be an improvement and so they remain positive.


Job Openings little changed at 6.0 million in October
Posted: December 11, 2017 at 10:00 AM (Monday)

The number of job openings was little changed at 6.0 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, hires increased to 5.6 million and separations were little changed at 5.2 million. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.2 percent and 1.1 percent, respectively. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job Openings
On the last business day of October, there were 6.0 million job openings, little changed from September. Job openings have been at or near record high levels since June. The job openings rate was 3.9 percent in October. The number of job openings edged down for total private and was little changed for government. Job openings increased in accommodation and food services (+94,000), construction (+48,000), and real estate and rental and leasing (+40,000). Job openings decreased in wholesale trade (-90,000), finance and insurance (-47,000), information (-32,000), and nondurable goods manufacturing (-26,000). The number of job openings was little changed in all four regions. (See table 1.)

Hires

The number of hires increased to 5.6 million in October (+232,000), and the hires rate was 3.8 percent. The number of hires increased to 5.2 million for total private (+247,000) and was little changed for government. At the industry level, the number of hires increased in other services (+55,000) and health care and social assistance (+45,000). Hires decreased for state and local government, excluding education (-32,000). The number of hires increased in the Northeast region. (See table 2.)

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

The number of total separations was little changed at 5.2 million in October. The total separations rate was 3.5 percent. The number of total separations was little changed for total private and for government. Total separations increased in finance and insurance (+40,000) and in mining and logging (+11,000). Total separations decreased in accommodation and food services (-78,000), information (-32,000), and state and local government, excluding education (-21,000). The number of total separations decreased in the Northeast region. (See table 3.)

The number of quits was unchanged at 3.2 million in October. The quits rate was 2.2 percent. The number of quits was little changed for total private, for government, and in all industries. In the regions, the number of quits increased in the South and decreased in the Midwest. (See table 4.)

There were 1.6 million layoffs and discharges in October, little changed from September. The layoffs and discharges rate was 1.1 percent in October. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level increased in finance and insurance (+37,000) and in mining and logging (+7,000). Layoffs and discharges decreased in construction (-69,000) and in state and local government, excluding education (-15,000). The number of layoffs and discharges decreased in the Northeast region. (See table 5.)

The number of other separations edged up in October to 367,000. Other separations edged up for total private and was little changed for government. Other separations increased in professional and business services (+53,000), construction (+20,000), and educational services (+5,000). Other separations decreased in information (-9,000). The number of other separations increased in the South region. (See table 6.)

Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in October, hires totaled 64.3 million and separations totaled 62.2 million, yielding a net employment gain of 2.1 million. These totals include workers who may have been hired and separated more than once during the year.


Employment Trends Index decreased in November to 135.88
Posted: December 11, 2017 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) decreased in November, after a sharp increase in October. The index now stands at 135.88, down from 136.23 (an upward revision) in October. The change represents a 4.7 percent gain in the ETI compared to a year ago.

“The decline in the Employment Trends Index in November comes after one of the largest monthly increases ever last month. The ETI is still on an upward trend and suggests that employment is likely to continue to grow in the months ahead,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The US economy has been accelerating in recent quarters, leading to strong labor demand that is unlikely to slow down in the coming months.”

November’s decrease in the ETI was fueled by negative contributions from three out of the eight components. From the largest negative contributor to the smallest, these were: Percentage of Firms with Positions Not Able to Fill Right Now, Initial Claims for Unemployment Insurance, and Ratio of Involuntarily Part-time to All Part-time Workers


Wholesale Inventories down 0.5% in October
Posted: December 8, 2017 at 10:00 AM (Friday)

October 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $484.6 billion, up 0.7 percent (±0.5 percent) from the revised September level and were up 8.4 percent (±0.9 percent) from the October 2016 level. The August 2017 to September 2017 percent change was revised from the preliminary estimate of up 1.3 percent (±0.4 percent) to up 1.4 percent (±0.4 percent).

Total Inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $605.3 billion at the end of October, down 0.5 percent (±0.4 percent) from the revised September level. Total inventories were up 3.9 percent (±0.5 percent) from the revised October 2016 level. The September 2017 to October 2017 percent change was revised from the advance estimate of down 0.4 percent (±0.4 percent)* to down 0.5 percent (±0.4 percent).

The October Inventories/Sales Ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.25. The October 2016 ratio was 1.30.


University of Michigan Consumer Confidence Preliminary December Results at 96.8
Posted: December 8, 2017 at 10:00 AM (Friday)

Consumer sentiment has remained quite favorable although it continued to slowly recede in early December from its October cyclical peak. Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve. Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes. Perhaps the most important changes in early December were higher income expectations as well as a higher expected inflation rate in 2018. Income gains have been slowly improving during the past year, and the data indicate that trend has continued. In contrast, the rise in inflation expectations in early December was a surprise, and confidence in this finding must await confirmation in the months ahead before any inferences are drawn. Buying plans for durables have improved in early December, largely due to attractive pricing, in contrast to the rise in the expected inflation rate. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018.


November Employment rose by 228,000
Unemployment Rate unchanged at 4.1%

Posted: December 8, 2017 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 228,000 in November, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in professional and business services, manufacturing, and health care.

Household Survey Data
The unemployment rate held at 4.1 percent in November, and the number of unemployed persons was essentially unchanged at 6.6 million. Over the year, the unemployment rate and the number of unemployed persons were down by 0.5 percentage point and 799,000, respectively.

Among the major worker groups, the unemployment rate for teenagers increased to 15.9 percent in November. The jobless rates for adult men (3.7 percent), adult women (3.7 percent), Whites (3.6 percent), Blacks (7.3 percent), Asians (3.0 percent), and Hispanics (4.7 percent) showed little change.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.6 million in November and accounted for 23.8 percent of the unemployed. Over the year, the number of long-term unemployed was down by 275,000.

The labor force participation rate remained at 62.7 percent in November and has shown no clear trend over the past 12 months. The employment-population ratio, at 60.1 percent, changed little in November and has shown little movement, on net, since early this year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.8 million, was essentially unchanged in November but was down by 858,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

In November, 1.5 million persons were marginally attached to the labor force, down by 451,000 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 469,000 discouraged workers in November, down by 122,000 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 1.0 million persons marginally attached to the labor force in November had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment increased by 228,000 in November. Employment continued to trend up in professional and business services, manufacturing, and health care. Employment growth has averaged 174,000 per month thus far this year, compared with an average monthly gain of 187,000 in 2016.

Employment in professional and business services continued on an upward trend in November (+46,000). Over the past 12 months, the industry has added 548,000 jobs.

In November, manufacturing added 31,000 jobs. Within the industry, employment rose in machinery (+8,000), fabricated metal products (+7,000), computer and electronic products (+4,000), and plastics and rubber products (+4,000). Since a recent low in November 2016, manufacturing employment has increased by 189,000.

Health care added 30,000 jobs in November. Most of the gain occurred in ambulatory health care services (+25,000), which includes offices of physicians and outpatient care centers. Monthly employment growth in health care has averaged 24,000 thus far in 2017, compared with an average increase of 32,000 per month in 2016.

Within construction, employment among specialty trade contractors increased by 23,000 in November and by 132,000 over the year.

Employment in other major industries, including mining, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours in November. In manufacturing, the workweek was unchanged at 40.9 hours, and overtime remained at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In November, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.55. Over the year, average hourly earnings have risen by 64 cents, or 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 5 cents to $22.24 in November.

The change in total nonfarm payroll employment for September was revised up from +18,000 to +38,000, and the change for October was revised down from +261,000 to +244,000. With these revisions, employment gains in September and October combined were 3,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 170,000 over the last 3 months.


Consumer Credit Increased at an annual rate of 6.50%
Posted: December 7, 2017 at 03:00 PM (Thursday)

In October, consumer credit increased at a seasonally adjusted annual rate of 6-1/2 percent. Revolving credit increased at an annual rate of 10 percent, while nonrevolving credit increased at an annual rate of 5-1/4 percent.


Weekly Initial Unemployment Claims Decrease 2,000 to 236,000
Posted: December 7, 2017 at 08:30 AM (Thursday)

In the week ending December 2, the advance figure for seasonally adjusted initial claims was 236,000, a decrease of 2,000 from the previous week's unrevised level of 238,000. The 4-week moving average was 241,500, a decrease of 750 from the previous week's unrevised average of 242,250.

Claims taking procedures continue to be disrupted in the Virgin Islands. Claims taking process in Puerto Rico has still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 25 was 1,908,000, a decrease of 52,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 1,957,000 to 1,960,000. The 4-week moving average was 1,912,750, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 750 from 1,911,000 to 1,911,750.


Challenger Layoffs Increased to 35,038 in November
Posted: December 7, 2017 at 07:00 AM (Thursday)

U.S.-based employers announced 35,038 job cuts in November, up 30 percent from the same month last year, when 26,936 job cuts were announced. Employers have announced 17 percent more cuts than in October 2017, when 29,831 cuts were announced, according to a report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

So far this year, 386,347 job cuts have been announced, 22 percent fewer than the 493,288 cuts announced through November 2016. This is the highest monthly total since April, when 36,602 cuts were announced. November caps the lowest year-to-date total since 376,057 cuts were announced through November 1997.

“While job-cut announcements have remained low all year, major M&A activity, such as the CVS/Aetna deal and the possibility of Amazon buying generic pharmaceutical manufacturers, could lead to a spate of large-scale job-cut announcements to open 2018, especially at Pharmaceutical, Retail, and Health Care companies,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

In fact, companies in the Pharmaceutical sector have announced 13,254 job cuts so far this year, 48 percent more than the 8,981 cuts announced in the same period last year. Meanwhile, Retail continues to lead all industries in job cuts, with 74,665 cuts announced through November, a 28.8 percent increase from 2016, when the number of cuts reported through the same month was 57,969.

Likewise, the Health Care sector announced 7,011 job cuts in November, bringing the year-to-date total to 38,145, a 123.9 percent increase from the 17,030 cuts announced through November 2016.
The Services sector has announced the third highest number of cuts behind Retail and Health Care this year, with 32,836, 3,920 of which occurred in November. That is 243 percent more cuts than the 9,584 announced in the same period last year.

Industrial manufacturing has announced 19,986 cuts in 2017, 37 percent fewer than the 31,656 cuts announced through November last year. Consumer Products companies announced 59.2 percent more job cuts since last year, with a total of 15,985 payroll cuts announced this year, compared to 10,035 recorded through November last year.

Meanwhile, holiday hiring announcements are slightly behind last year’s totals. Companies have announced 608,129 seasonal hires so far this year, 2 percent fewer than the 620,700 announced last year, according to Challenger tracking.

However, total hiring announcements reached 1,092,436, the highest number on record.
“Employers have reported a lack of skilled workers to fill demand in many industries. In this tight labor market, those with the requisite skills and training have a leg up over the competition,” said Challenger.

“Opportunities exist for job seekers. It remains to be seen whether the recent tax reform bill will have a significant impact on job growth or announced cuts. It may make it easier for companies to combine, which generally leads to eliminating redundancies,” added Challenger.

For the 32nd consecutive year, job-seeking Americans will be able to obtain free advice from the professional career transition coaches at global outplacement firm Challenger, Gray & Christmas, Inc., which will suspend normal business operations for two days over the holidays to provide the service.
The annual job-search call-in will be held on Wednesday, December 27, and Thursday, December 28, from 9:00 a.m. to 5:00 p.m. CT. The phone number is 312-422-5010.


Help Wanted OnLine Labor Demand increased 137,100 to 4,700,900 in November
Posted: December 6, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies increased 137,100 to 4,700,900 in November, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The October Supply/Demand rate stands at 1.43 unemployed for each advertised vacancy, with a total of 2.0 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 6.5 million in October.

The Professional occupational category saw gains in Education, Training, and Library (15.9), Healthcare Practitioners and Technical (15.1), and Business and Financial (11.8). The Services/Production occupational category saw gains in Building and Grounds Cleaning and Maintenance (6.4) and Food Preparation and Serving (5.9)


3Q2017 Productivity Growth increased 3.0%
Posted: December 6, 2017 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity increased 3.0 percent during the third quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as output increased 4.1 percent and hours worked increased 1.1 percent. The productivity increase was the largest since the third quarter of 2014, when output per hour increased 4.4 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2016 to the third quarter of 2017, productivity increased 1.5 percent, reflecting a 3.0-percent increase in output and a 1.5-percent increase in hours worked.

Unit labor costs in the nonfarm business sector declined 0.2 percent in the third quarter of 2017, as the 3.0-percent increase in productivity was greater than a 2.7-percent increase in hourly compensation. Unit labor costs decreased 0.7 percent over the last four quarters.

Manufacturing sector labor productivity fell 4.4 percent in the third quarter of 2017, as output decreased 1.1 percent and hours worked increased 3.5 percent. This was the largest quarterly decline in manufacturing sector productivity since the fourth quarter of 2008 (-5.4 percent). Productivity decreased 4.7 percent in the durable goods manufacturing sector and 4.4 percent in the nondurable goods sector in the third quarter of 2017. Over the last four quarters, total manufacturing sector productivity increased 0.3 percent, as output increased 1.5 percent and hours worked increased 1.2 percent. Unit labor costs in manufacturing increased 4.8 percent in the third quarter of 2017 and rose 0.3 percent from the same quarter a year ago.

Preliminary third-quarter 2017 measures of productivity and costs were announced for the nonfinancial corporate sector. Productivity was unchanged in the third quarter of 2017 and increased 0.2 percent over the last four quarters. Unit labor costs increased 2.5 percent in the third quarter of 2017 and increased 0.6 percent over the last four quarters.

Revised measures
Measures released today are based on more recent source data than were available for the preliminary report. Regular updates of source data from the BLS, the Bureau of Economic Analysis (BEA), and the Board of Governors of the Federal Reserve System are reflected in data for the second and third quarters of 2017.

Table B1 presents revised and previous productivity and related measures for the nonfarm business, business, and manufacturing sectors for the third quarter of 2017. Revised quarterly and annual series for all sectors in recent years appear in tables 1-6. Historical annual indexes for the manufacturing sectors appear in appendix tables 1-3.

In the third quarter of 2017, nonfarm business labor productivity increased 3.0 percent--the same as the preliminary estimate; output and hours worked were both revised up by 0.3 percentage points. Unit labor costs were revised from a 0.5-percent increase to a 0.2-percent decline for the third quarter of 2017. In the manufacturing sector, productivity decreased 4.4 percent rather than declining 5.0 percent as previously reported, as an upward revision to output was greater than an upward revision to hours worked. Unit labor costs increased 4.8 percent, a smaller increase than the preliminary estimate.

Table B2 shows previous and revised productivity and related measures for the nonfarm business, business, manufacturing and nonfinancial corporate sectors for the second quarter of 2017.

In the second quarter of 2017, nonfarm business labor productivity, output, and hours were unrevised. Unit labor costs decreased 1.2 percent, rather than increasing 0.3 percent as previously reported. In the manufacturing sector, productivity was revised up 0.2 percentage point to an increase of 3.6 percent, due to a slight upward revision to output. Unit labor costs decreased 1.2 percent instead of a decline of 1.0 percent. Second-quarter 2017 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity increased 3.3 percent rather than 4.4 percent as reported on November 2. Unit labor costs decreased 3.0 percent rather than the preliminary estimate of a 2.3-percent decline.

There were historical revisions to manufacturing output and all related measures--including productivity--back to 1987 to reflect revised output indexes constructed by the BLS using an improved methodology for estimating the sectoral output of manufacturing industries. A new technique for benchmarking output estimates to the Economic Census was an important component of the revisions, and the period between Census years 2007 and 2012 saw the largest revisions. For more complete information see www.bls.gov/mfp/sectoraloutputrevisions.htm.

Revisions to labor productivity mirrored revisions to output; hours worked were not revised. A large upward revision to the change in the annual manufacturing productivity index from 2008 to 2009 was more than offset by downward revisions in adjacent years, and the average annual rate of growth from 2007 to 2012 was revised down from 2.9 percent to 1.2 percent. The average annual rate of manufacturing productivity growth during the current business cycle from 2007 to 2016 was revised down from 1.6 percent to 0.9 percent, and the long-term rate for the entire series from 1987 to 2016 is now 2.8 percent, compared to the previous estimate of 3.2 percent.


ADP National Employment Report increased by 190,000 jobs in November
Posted: December 6, 2017 at 08:15 AM (Wednesday)

Private sector employment increased by 190,000 jobs from October to November according to the November ADP National Employment Report®.

“The labor market continues to grow at a solid pace,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase it will become increasingly difficult for employers to attract and retain skilled talent.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is red hot, with broad-based job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology, brick-and-mortar retailing being the best example. There is a mounting threat that the job market will overheat next year.”


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: December 6, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 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 December 1, 2017. The prior week's results included an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 38 percent compared with the previous week and was 8 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to its highest level since September 2017, 51.6 percent of total applications, from 48.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to its lowest level since January 2017, 5.7 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.8 percent the week prior. The VA share of total applications decreased to 10.7 percent from 11.0 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.19 percent from 4.20 percent, with points increasing to 0.40 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.16 percent from 4.14 percent, with points increasing to 0.28 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.11 percent from 4.07 percent, with points increasing to 0.40 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.59 percent from 3.57 percent, with points increasing to 0.48 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.48 percent from 3.42 percent, with points decreasing to 0.46 from 0.58 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Paychex-IHS Small Business Jobs Index Decline Slightly to 99.86 in November
Posted: December 5, 2017 at 01:17 PM (Tuesday)

The Paychex | IHS Markit Small Business Employment Watch shows a modest decline in both small business job and wage growth for November. The Small Business Jobs Index decreased 0.03 percent for the month, 0.10 for the quarter, and 0.52 percent for the year to 99.86. The national index has now been below 100 for five consecutive months. Monthly small business wage growth has slowed since reaching a high of nearly three percent in August. Hourly earnings in November stand at $26.09, a gain of 2.77 percent ($0.70) year-over year.

“Though the monthly declines this year have been small, they have been persistent,” said James Diffley, chief regional economist at IHS Markit. “At 99.86, the Small Business Jobs Index indicates employment growth, though steady, is now at the slowest pace since 2011.”

“Although we have seen slight monthly declines in employment growth, the rate of job growth, while still positive, has generally leveled off over the last quarter,” said Martin Mucci, Paychex president and CEO. “It is encouraging to see that hours worked in Florida are back on the rise after recent monthly slowdowns following the hurricanes.”


Down 0.03 percent from October to 99.86, November’s Small Business Jobs Index marks the ninth consecutive monthly decline for small business job growth

Hourly earnings in November were $26.09, up 2.77 percent ($0.70) year-over-year and slowing slightly for the fourth consecutive month

Following sizable declines in hours worked in recent months due to Hurricane Irma, Florida rebounded significantly in November, led by increases in Construction and Manufacturing


ISM Non-Manufacturing Index decreased to 57.4% in November
Posted: December 5, 2017 at 10:00 AM (Tuesday)

Economic activity in the non-manufacturing sector grew in November for the 95th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 57.4 percent, which is 2.7 percentage points lower than the October reading of 60.1 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.8 percentage point lower than the October reading of 62.2 percent, reflecting growth for the 100th consecutive month, at a slightly slower rate in November. The New Orders Index registered 58.7 percent, 4.1 percentage points lower than the reading of 62.8 percent in October. The Employment Index decreased 2.2 percentage points in November to 55.3 percent from the October reading of 57.5 percent. The Prices Index decreased by 2 percentage points from the October reading of 62.7 percent to 60.7 percent, indicating prices increased in November for the sixth consecutive month. According to the NMI®, 16 non-manufacturing industries reported growth. The rate of growth has lessened in the non-manufacturing sector after two very strong months of growth. Comments from the survey respondents indicate that the economy and sector will continue to grow for the remainder of the year.

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


Goods and Services Deficit Increased in October 2017
Posted: December 5, 2017 at 08:30 AM (Tuesday)

The nation's international trade deficit in goods and services increased to $48.7 billion in October from $44.9 billion in September (revised), as exports decreased and imports increased. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $48.7 billion in October, up $3.8 billion from $44.9 billion in September, revised. October exports were $195.9 billion, down less than $0.1 billion from September exports. October imports were $244.6 billion, $3.8 billion more than September imports.

The October increase in the goods and services deficit reflected an increase in the goods deficit of $3.8 billion to $69.1 billion and a decrease in the services surplus of less than $0.1 billion to $20.3 billion.
Year-to-date, the goods and services deficit increased $49.1 billion, or 11.9 percent, from the same period in 2016. Exports increased $97.5 billion or 5.3 percent. Imports increased $146.6 billion or 6.5 percent.


New orders for manufactured goods decreased 0.1% in October
Posted: December 4, 2017 at 10:00 AM (Monday)

New orders for manufactured goods in October, down following two consecutive monthly increases, decreased $0.3 billion or 0.1 percent to $479.6 billion, the U.S. Census Bureau reported today. This followed a 1.7 percent September increase. Shipments, up ten of the last eleven months, increased $2.7 billion or 0.6 percent to $484.2 billion. This followed a 1.1 percent September increase. Unfilled orders, down three of the last four months, decreased $0.2 billion or virtually unchanged to $1,135.1 billion. This followed a 0.3 percent September increase. The unfilled orders-to-shipments ratio was 6.68, unchanged from September. Inventories, up eleven of the last twelve months, increased $1.2 billion or 0.2 percent to $661.6 billion. This followed a 0.6 percent September increase. The inventories-to-shipments ratio was 1.37, unchanged from September.

New Orders
New orders for manufactured durable goods in October, down following two consecutive monthly increases, decreased $1.9 billion or 0.8 percent to $237.4 billion, up from the previously published 1.2 percent decrease. This followed a 2.4 percent September increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.4 billion or 4.2 percent to $77.4 billion. New orders for manufactured nondurable goods increased $1.6 billion or 0.7 percent to $242.2 billion.

Shipments
Shipments of manufactured durable goods in October, up five of the last six months, increased $1.1 billion or 0.4 percent to $242.0 billion, up from the previously published 0.1 percent increase. This followed a 1.2 percent September increase. Primary metals, up three of the last four months, led the increase, $0.3 billion or 1.6 percent to $19.9 billion. Shipments of manufactured nondurable goods, up six of the last seven months, increased $1.6 billion or 0.7 percent to $242.2 billion. This followed a 1.0 percent September increase. Petroleum and coal products, up four consecutive months, led the increase, $1.2 billion or 2.6 percent to $46.2 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in October, down three of the last four months, decreased $0.2 billion or virtually unchanged to $1,135.1 billion, unchanged from the previously published decrease. This followed a 0.3 percent September increase. Transportation equipment, also down three of the last four months, drove the decrease, $1.8 billion or 0.2 percent to $770.0 billion.

Inventories
Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $0.6 billion or 0.2 percent to $404.2 billion, up from the previously published 0.1 percent increase. This followed a 0.6 percent September increase. Primary metals, also up fifteen of the last sixteen months, led the increase, $0.3 billion or 0.8 percent to $34.0 billion. Inventories of manufactured nondurable goods, up five consecutive months, increased $0.5 billion or 0.2 percent to $257.3 billion. This followed a 0.7 percent September increase. Chemical products, up three of the last four months, drove the increase, $0.9 billion or 1.0 percent to $84.1 billion. By stage of fabrication, October materials and supplies decreased 0.4 percent in durable goods and decreased 0.3 percent in nondurable goods. Work in process increased 1.0 percent in durable goods and decreased 0.3 percent in nondurable goods. Finished goods decreased 0.4 percent in durable goods and increased 0.9 percent in nondurable goods.


New York Purchasing Managers Business Activity rose to 58.1 in November
Posted: December 4, 2017 at 08:30 AM (Monday)

New York City purchasing managers reported across the board increases according to the survey taken by the Institute for Supply Management-New York. All Signs Point ‘Up’.

New York Metro
Current Business Conditions were at 58.1 in November, up from 51.6 in October. In October, Current Business Conditions increased for the first time since July, and in November they reached a four-month high. The Six-Month Outlook increased to 69.7 in November, up from 62.6 in October. This month marks the first two consecutive months of increases since November and December of 2016. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, was 64.6 in November, reaching the highest level since August 2015. Quantity of Purchases reached an eight-month high of 56.3 after October’s 14-month low of 45.0. News for the top line and forward guidance were both positive in November. Current Revenues came in at an eight-month high of 64.3 in November, up nearly 20 points from 45.5 in October. Expected Revenues were at 71.4 in November, tying with November 2015 and reaching a 15-month high. Prices Paid increased slightly to 62.5 in November from 60.0 in October, but it was enough to reach a 12-month high and less than the significant increase to Current Revenues.


Construction Spending increased 1.4% in October
Posted: December 1, 2017 at 10:00 AM (Friday)

Construction spending during October 2017 was estimated at a seasonally adjusted annual rate of $1,241.5 billion, 1.4 percent (±1.5 percent)* above the revised September estimate of $1,224.6 billion. The October figure is 2.9 percent (±1.6 percent) above the October 2016 estimate of $1,206.6 billion. During the first 10 months of this year, construction spending amounted to $1,029.6 billion, 4.1 percent (±1.2 percent) above the $988.8 billion for the same period in 2016.

Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $949.9 billion, 0.6 percent (±0.8 percent)* above the revised September estimate of $943.8 billion. Residential construction was at a seasonally adjusted annual rate of $517.7 billion in October, 0.4 percent (±1.3 percent)* above the revised September estimate of $515.4 billion. Nonresidential construction was at a seasonally adjusted annual rate of $432.2 billion in October, 0.9 percent (±0.8 percent) above the revised September estimate of $428.4 billion.

Public Construction
In October, the estimated seasonally adjusted annual rate of public construction spending was $291.6 billion, 3.9 percent (±2.6 percent) above the revised September estimate of $280.7 billion. Educational construction was at a seasonally adjusted annual rate of $79.0 billion, 10.9 percent (±2.5 percent) above the revised September estimate of $71.2 billion. Highway construction was at a seasonally adjusted annual rate of $86.8 billion, 1.1 percent (±6.3 percent)* above the revised September estimate of $85.9 billion.


November Manufacturing ISM expanded slower to 58.2
Posted: December 1, 2017 at 10:00 AM (Friday)

Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 102nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee: "The November PMI® registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. The New Orders Index registered 64 percent, an increase of 0.6 percentage point from the October reading of 63.4 percent. The Production Index registered 63.9 percent, a 2.9 percentage point increase compared to the October reading of 61 percent. The Employment Index registered 59.7 percent, a decrease of 0.1 percentage point from the October reading of 59.8 percent. The Supplier Deliveries Index registered 56.5 percent, a 4.9 percentage point decrease from the October reading of 61.4 percent. The Inventories Index registered 47 percent, a decrease of 1 percentage point from the October reading of 48 percent. The Prices Index registered 65.5 percent in November, a 3 percentage point decrease from the October level of 68.5, indicating higher raw materials prices for the 21st consecutive month. Comments from the panel reflect expanding business conditions, with New Orders and Production leading gains, employment expanding at a slower rate, order backlogs stable and expanding, and export orders all continuing to grow in November. Supplier deliveries continued to slow (improving), but at slower rates, and inventories continued to contract during the period. Price increases continued, but at a slower rate. The Customers’ Inventories Index improved but remains at low levels."

Of the 18 manufacturing industries, 14 reported growth in November, in the following order: Paper Products; Machinery; Transportation Equipment; Computer & Electronic Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Chemical Products; Furniture & Related Products; Fabricated Metal Products; Miscellaneous Manufacturing; and Primary Metals. Two industries reported contraction during the period: Wood Products; and Petroleum & Coal Products.


Chicago Purchasing Managers Index eased to 63.9 in November
Posted: November 30, 2017 at 10:00 AM (Thursday)

The MNI Chicago Business Barometer eased to 63.9 in November, down from 66.2 in October, to stand at the lowest level in three months. Despite receding from October’s six-and-a-half year high, optimism among businesses recorded the fourth highest outturn this year. The Barometer has expanded for 21 straight months and is poised to see out 2017 in solid fashion.

Output expanded at a robust rate in November, as businesses continued to benefit from healthy domestic conditions and an abating of the disruption brought about by the recent adverse weather. New Orders, although retreating from October’s four- month high, remained in good health. Of the Barometer’s other three sub-components, Order Backlogs was the only other to also lose ground during the month.

Backlogs have generally trended upwards for much of 2017, culminating in a 43-year high last month. Though partially driven by healthy demand, the gains notched in more recent months were also explained by a carryover of orders after the recent storms. As the associated disruption continued to wind down, coupled with softer new orders, backlogs eased to a three-month low.

Companies faced longer supplier lead times in November and there was evidence that this, along with solid demand, led them to stockpile goods. The Supplier Deliveries indicator expanded at the fastest pace for more than thirteen years while the Inventories indicator climbed to an eight-month high.

After slipping into contraction territory for only the fourth time this year in October, the Employment Indicator returned to expansion in November. The tight labour market has meant firms have had difficulties recruiting adequately trained personnel. This month, although firms did add to their workforces, there was again evidence of them turning to temporary workers, with some unable to secure skilled workers due to their current pay structure.

This month’s special question asked businesses to predict the effect of a further hike in interest rates on their activities. The majority of firms, exactly three-in-four, saw it having no material impact while only 23% said it would harm their business. One more hike has been pencilled in before the turn of the year by the Federal Reserve and the minutes from the most recent policy meeting revealed many policymakers felt a further rise in rates in the near-term was “warranted”.

Inflationary pressures at the factory gate remained elevated in November, with the Prices Paid indicator at the third-highest level this year. Firms reported a wide range of input prices failing to edge down from heightened levels, some initially induced by the hurricanes a few months ago.

“Despite November’s fall, the MNI Chicago Business Barometer remains on track to deliver the first full year of expansion in three years. Firms seem to have navigated through the worst of the bad weather conditions in recent months, though supplier deliveries rising to a thirteen-year high and persistent, high input costs suggests the effects are yet to fully dissipate away,” said Jamie Satchi, Economist at MNI Indicators.


Personal Income increased 0.4%, Spending increased 0.3%
Posted: November 30, 2017 at 08:30 AM (Thursday)

Personal income increased $65.1 billion (0.4 percent) in October according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $66.1 billion (0.5 percent) and personal consumption expenditures (PCE) increased $34.4 billion (0.3 percent).

Real DPI increased 0.3 percent in October and Real PCE increased 0.1 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The increase in personal income in October primarily reflected increases in wages and salaries and personal interest income.

The $13.1 billion increase in real PCE in October reflected an increase of $11.4 billion in spending for goods and a $2.7 billion increase in spending for services (table 7). Within goods, other nondurable goods, which includes prescription drugs and recreational items, was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for other services, which includes passenger fares for foreign travel and communication services.

Personal outlays increased $38.7 billion in October. Personal saving was $457.3 billion in October and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.2 percent.


Weekly Initial Unemployment Claims Decrease 1,000 to 238,000
Posted: November 30, 2017 at 08:30 AM (Thursday)

In the week ending November 25, the advance figure for seasonally adjusted initial claims was 238,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 239,000 to 240,000. The 4-week moving average was 242,250, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 239,750 to 240,000. Claims taking procedures continue to be disrupted in the Virgin Islands.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 18, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 18 was 1,957,000, an increase of 42,000 from the previous week's revised level. The previous week's level was revised up 11,000 from 1,904,000 to 1,915,000. The 4-week moving average was 1,911,000, an increase of 18,250 from the previous week's revised average. The previous week's average was revised up by 2,750 from 1,890,000 to 1,892,750.


Beige Book: Economic Activity continued to increase at a modest to moderate pace
Posted: November 29, 2017 at 02:00 PM (Wednesday)

Economic activity continued to increase at a modest to moderate pace in October and mid-November, according to anecdotal reports from contacts across the 12 Federal Reserve Districts. There was a slight improvement in the outlook among contacts in reporting Districts. Pre-holiday reports of consumer spending on retail and autos were mixed but largely flat; still, the outlook for holiday sales was generally optimistic. Many Districts highlighted growth in the transportation sector, although the New York District reported a slight softening and the San Francisco District noted that Northern California wildfires temporarily reduced shipping volumes. Residential real estate activity remained constrained, with most Districts reporting little growth in sales or construction. By contrast, nonresidential activity was consistent with previous reports of slight growth. Loan demand was steady to moderately stronger. All Districts reported that manufacturing activity expanded during the reporting period, with most describing growth as moderate. Among reporting Districts, manufacturing contacts predominantly expected activity to continue to pick up, although the Philadelphia and St. Louis Districts noted signs of a slowdown.

Employment and Wages
Employment growth has increased since the previous report, with most Districts characterizing growth as modest to moderate. Reports of tightness in the labor market were widespread. Most Districts reported employers were having difficulties finding qualified workers across various skill levels, and several Districts reported that an inability to find workers with the required skills was a key factor restraining hiring plans. Wage growth was modest or moderate in most Districts. Wage increases were most notable for professional, technical, and production positions that remain difficult to fill. Many Districts reported that employers were raising wages as well as increasing their use of signing bonuses and other nonwage benefits to retain or attract employees.

Prices
Price pressures have strengthened since the last report. Most Districts reported modest to moderate growth in selling prices and moderate increases in non-labor input costs. In particular, construction-material costs rose in most regions, with many Districts citing increased lumber costs and/or increases in demand for materials due to hurricane rebuilding efforts. Residential real estate prices generally increased as well. There were also reports of increases in costs in the transportation sector. Additionally, several Districts noted input cost increases in manufacturing. In many cases, these increases in transportation and manufacturing were passed through to consumers. Fuel prices also rose, with multiple Districts reporting upward pressure on oil and natural gas prices. However, agricultural price pressures remain mixed.

Highlights by Federal Reserve District

Boston
Economic activity continued to expand at a modest to moderate pace according to responding manufacturers, retailers, and staffing services firms. Labor markets remained tight and some employers reported modest wage increases. Price changes, if any, were limited. Respondents' outlooks continued to be positive.

New York
Economic activity continued to expand moderately, while labor markets have remained tight. Input prices continued to rise moderately, and selling prices rose modestly. Housing markets and commercial real estate markets have been mixed but generally stable.

Philadelphia
Overall, economic activity continued at a modest pace of growth, in particular for manufacturing, nonfinancial services, and tourism. Residential and nonresidential construction and real estate activity increased slightly, while auto sales and non-auto retail sales declined slightly. On balance, wages and prices continued to grow modestly, while employment resumed a modest pace of growth.

Cleveland
Business activity increased from that of the previous reporting period, but the overall pace of growth was moderate. Upward pressure increased further on wages, non-labor input costs, and selling prices. Retailers noted a boost in store traffic. Capacity constraints in freight transportation tightened. The first-time home-buyer market may be negatively impacted by rising costs and low inventory.

Richmond
The regional economy continued to grow at a moderate rate, overall. Manufacturing and transportation activity remained strong. Retailers were optimistic about the upcoming holiday shopping season. Residential home sales rose only modestly due to low inventories. Labor markets tightened further, which drove up wages for some workers. Price growth remained modest, overall.

Atlanta
Economic conditions modestly improved since the previous report. Tightness in the labor market persisted and wages grew modestly. Non-labor costs remained little changed. Retail sales increased across most of the District. Tourism activity was mostly positive. Home sales were flat to down, and home prices improved slightly. Manufacturers indicated that activity modestly increased. Credit was available.

Chicago
Economic activity increased slightly. Employment and manufacturing production increased modestly, while consumer spending, business spending, and construction and real estate activity increased slightly. Wages rose modestly and prices rose slightly. Financial conditions were little changed. Crop yields were below last year's records.

St. Louis
Economic conditions have improved at a modest pace since our previous report. Labor market conditions remain tight, as most firms reported raising starting wages and salaries as a way to attract new workers. The outlook among firms surveyed in mid-November was generally optimistic. Though slightly weaker than the outlook from our mid-August survey, it is a modest improvement from the outlook one year ago.

Minneapolis
Economic activity in the Ninth District grew modestly. Employment continued to grow, though constrained by tight labor and some isolated softness, including plant closures. Several indicators suggested that conditions in South Dakota were improving. Manufacturing remained upbeat, and commercial and residential real estate saw growth. Agriculture continued to struggle, as strong harvests were not expected to offset low commodity prices.

Kansas City
Economic activity in the Tenth District increased moderately. Manufacturing and other business services expanded at a strong to moderate pace, and energy activity continued to increase modestly. Consumer spending was mostly flat, with moderate growth expected. Agricultural conditions weakened but at a slower pace, and many respondents noted increased hiring plans.

Dallas
Economic activity grew moderately, and business had mostly returned to normal after Hurricane Harvey. The manufacturing sector remained a bright spot, and nonfinancial services activity continued to expand. Growth in the energy sector subsided, but there was increased optimism for 2018. Retail sales remained strong and auto sales were still elevated, but the initial post-hurricane surge had begun to recede. Labor shortages persisted, and there were widespread reports of increased wages.

San Francisco
Economic activity in the Twelfth District continued to expand at a moderate pace. Sales of retail goods grew moderately, and growth in the consumer and business services sectors remained strong. Conditions in the manufacturing sector remained solid. Activity in residential real estate markets remained robust, while conditions in the commercial sector were strong. Lending activity grew at a moderate pace.


Pending Home Sales Index rose 3.5% in October
Posted: November 29, 2017 at 10:00 AM (Wednesday)

Pending home sales rebounded strongly in October following three straight months of diminishing activity, but still continued their recent slide of falling behind year ago levels, according to the National Association of Realtors®. All major regions except for the West saw an increase in contract signings last month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.5 percent to 109.3 in October from a downwardly revised 105.6 in September. The index is now at its highest reading since June (110.0), but is still 0.6 percent below a year ago.

Lawrence Yun, NAR chief economist, says pending sales in October were primarily driven higher by a big jump in the South, which saw a nice bounce back after hurricane-related disruptions in September. “Last month's solid increase in contract signings were still not enough to keep activity from declining on an annual basis for the sixth time in seven months,” he said. “Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market.”

According to Yun, the supply and affordability headwinds seen most of the year have not abated this fall. Although homebuilders are doing their best to ramp up production of single-family homes amidst ongoing labor and cost challenges, overall activity still drastically lags demand. Further exacerbating the inventory scarcity is the fact that homeowners are staying in their homes longer. NAR's 2017 Profile of Home Buyers and Sellers – released last month – revealed that homeowners typically stayed in their home for 10 years before selling (an all-time survey high). Prior to 2009, sellers consistently lived in their home for a median of six years before selling.

“Existing inventory has decreased every month on an annual basis for 29 consecutive months, and the number of homes for sale at the end of October was the lowest for the month since 1999,” said Yun. “Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand.”

With two months of data remaining for the year, Yun forecasts for existing-home sales to finish at around 5.52 million, which is an increase of 1.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 6 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast inched forward 0.5 percent to 95.0 in October, but is still 1.9 percent below a year ago. In the Midwest the index increased 2.8 percent to 105.8 in October, but remains 0.9 percent lower than October 2016.

Pending home sales in the South jumped 7.4 percent to an index of 123.6 in October and are now 2.0 percent higher than last October. The index in the West decreased 0.7 percent in October to 101.6, and is now 4.4 percent below a year ago.


3Q2017 GDP preliminary estimate increased 3.3%
Posted: November 29, 2017 at 08:30 AM (Wednesday)

Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017, according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 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, the increase in real GDP was 3.0 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; nonresidential fixed investment, state and local government spending, and private inventory investment were revised up from the prior estimate.

Real gross domestic income (GDI) increased 2.5 percent in the third quarter, compared with an increase of 2.3 percent (revised) in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.9 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter.

The increase in real GDP in the third quarter reflected positive contributions from PCE, private inventory investment, nonresidential fixed investment, and exports that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP in the third quarter reflected an acceleration in private inventory investment, a downturn in imports, and smaller decreases in state and local government spending and in residential fixed investment that were partly offset by decelerations in PCE, in nonresidential fixed investment, and in exports.

Current-dollar GDP increased 5.5 percent, or $259.0 billion, in the third quarter to a level of $19,509.0 billion. In the second quarter, current-dollar GDP increased 4.1 percent, or $192.3 billion.

The price index for gross domestic purchases increased 1.8 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter (table 4). The PCE price index increased 1.5 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.4 percent, compared with an increase of 0.9 percent.


Updates to GDP
The percent change in real GDP was revised up from the advance estimate, reflecting upward revisions to nonresidential fixed investment, state and local government spending, and private inventory investment.

For the second quarter of 2017, the percent change in real GDI was revised from 2.9 percent to 2.3 percent based on newly available second-quarter tabulations from the BLS Quarterly Census of Employment and Wages program.

Corporate Profits
Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $91.6 billion in the third quarter, compared with an increase of $14.4 billion in the second quarter.

Profits of domestic financial corporations increased $60.6 billion in the third quarter, in contrast to a decrease of $33.8 billion in the second quarter. Profits of domestic nonfinancial corporations increased $12.5 billion, compared with an increase of $59.1 billion. Rest-of-the-world profits increased $18.6 billion, in contrast to a decrease of $10.8 billion. In the third quarter, receipts increased $23.1 billion, and payments increased $4.6 billion.


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

Mortgage applications decreased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 24, 2017. This week's results include an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 34 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week to its lowest level since January 2017. The seasonally adjusted Purchase Index increased 2 percent from one week earlier to its highest level since September 2017. The unadjusted Purchase Index decreased 32 percent compared with the previous week and was 6 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 48.7 percent of total applications from 49.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.2 percent of total applications.

The FHA share of total applications increased to 10.8 percent from 10.6 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.7 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.20 percent, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.14 percent from 4.16 percent, with points decreasing to 0.27 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.07 percent from 4.08 percent, with points decreasing to 0.37 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.57 percent from 3.56 percent, with points decreasing to 0.40 from 0.42 (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 3.42 percent from 3.31 percent, with points increasing to 0.58 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence increased further in November to 129.5
Posted: November 28, 2017 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had improved in October, increased further in November. The Index now stands at 129.5 (1985=100), up from 126.2 in October. The Present Situation Index increased from 152.0 to 153.9, while the Expectations Index rose from 109.0 last month to 113.3.

“Consumer confidence increased for a fifth consecutive month and remains at a 17-year high (Nov. 2000, 132.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market. Consumers are entering the holiday season in very high spirits and foresee the economy expanding at a healthy pace into the early months of 2018.”

Consumers’ assessment of current conditions improved moderately in November. The percentage saying business conditions are “good” increased from 34.4 percent to 34.9 percent, while those saying business conditions are “bad” declined from 13.5 percent to 12.7 percent. Consumers’ assessment of the labor market also improved. Those stating jobs are “plentiful” increased from 36.7 percent to 37.1 percent, while those claiming jobs are “hard to get” decreased slightly from 17.1 percent to 16.9 percent.

Consumers’ optimism about the short-term outlook was also more favorable in November. The percentage of consumers expecting business conditions to improve over the next six months increased slightly from 22.1 percent to 22.4 percent, while those expecting business conditions to worsen decreased from 7.0 percent to 6.5 percent.

Consumers’ outlook for the job market was also more upbeat than in October. The proportion expecting more jobs in the months ahead increased from 18.7 percent to 22.6 percent, while those anticipating fewer jobs declined from 11.6 percent to 11.0 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased marginally from 20.3 percent to 20.1 percent, while the proportion expecting a decrease was virtually unchanged at 7.6 percent.


Richmond Fed's Current Activity Index jumped from 12 to 30
Posted: November 28, 2017 at 10:00 AM (Tuesday)

Manufacturing firms reported robust growth in November, according to the latest survey by the Federal Reserve Bank of Richmond. The composite index jumped from 12 to 30, the highest it has been since 1993. This rise was bolstered by strengthening conditions across all three components of the index. While indicators of current wages and finished goods fell in November, both maintained positive values, dropping from 24 to 21 and 14 to 9, respectively.

District manufacturing firms remained optimistic that growth will continue in the coming six months. But a smaller share of firms raised their expectations than had in October in all areas, except for wages and capital expenditures.

Manufacturing firms reported stronger price growth in November, as growth rates for both prices paid and prices received reached a three-month high. They expect prices to continue to grow in the next six months but at a slightly lower rate.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.4% in September
Posted: November 28, 2017 at 09:00 AM (Tuesday)

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

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in September, up from 5.9% in the previous month. The 10-City Composite annual increase came in at 5.7%, up from 5.2% the previous month. The 20-City Composite posted a 6.2% year-over-year gain, up from 5.8% the previous month.

Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In September, Seattle led the way with a 12.9% year-over-year price increase, followed by Las Vegas with a 9.0% increase, and San Diego with an 8.2% increase. 13 cities reported greater price increases in the year ending September 2017 versus the year ending August 2017.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.4% in September. The 10-City and 20-City Composites reported increases of 0.5% and 0.4%, respectively. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in September. The 10-City and 20-City Composites posted 0.6% and 0.5% month-over-month increases, respectively. 15 of 20 cities reported increases in September before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.

ANALYSIS
“Home prices continued to rise across the country with the S&P CoreLogic Case-Shiller National Index rising at the fastest annual rate since June 2014,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Home prices were higher in all 20 cities tracked by these indices compared to a year earlier; 16 cities saw annual price increases accelerate from last month. Strength continues to be concentrated in the west with Seattle, Las Vegas, San Diego and Portland seeing the largest gains. The smallest increases were in Atlanta, New York, Miami, Chicago and Washington. Eight cities have surpassed their pre-financial crisis peaks.”

“Most economic indicators suggest that home prices can see further gains. Rental rates and home prices are climbing, the rent-to-buy ratio remains stable, the average rate on a 30-year mortgage is still under 4%, and at a 3.8-month supply, the inventory of homes for sale is still low. The overall economy is growing with the unemployment rate at 4.1%, inflation at 2% and wages rising at 3% or more. One dark cloud for housing is affordability – rising prices mean that some people will be squeezed out of the market.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 6.2% annual gain in September 2017. The 10-City and 20-City Composites reported year-over-year increases of 5.7% and 6.2%, respectively. As of September 2017, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


Texas Fed Manufacturing Activity Slows but Remains Solid in November
Posted: November 27, 2017 at 10:30 AM (Monday)

Texas factory activity continued to expand in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 10 points from its October reading but remained elevated at 15.1.

Other measures of manufacturing activity also pointed to November growth that was slightly slower than in October but still well above average. The new orders index moved down five points to 20.0, and the capacity utilization and shipments indexes similarly fell to 17.3 and 16.7, respectively. Meanwhile, the growth rate of orders index signaled a stronger pickup in demand, climbing six points to 18.1. This represents the index’s highest reading since 2010.

Perceptions of broader business conditions remained highly positive in November. The general business activity index came in at 19.4, down eight points from October. The company outlook index posted its 15th consecutive positive reading but dipped to 18.5.

Labor market measures suggested slower employment growth and longer workweeks this month. The employment index fell 10 points from October to 6.3, reflecting a more normal index level after several months of elevated readings. Nineteen percent of firms noted net hiring, compared with 13 percent noting net layoffs. The hours worked index edged down but remained positive at 11.5, indicating a continued lengthening of workweeks.

Upward pressure on prices and wages continued in November. The raw materials prices and finished goods prices indexes held steady at 32.2 and 15.1, respectively. The wages and benefits index moved down eight points to 14.2, slightly below the average reading for that index.
Expectations regarding future business conditions remained highly optimistic. The index of future general business activity held steady at 39.0, while the index of future company outlook edged up to 40.8. Other indexes for future manufacturing activity showed mixed movements but remained solidly in positive territory.


New Home Sales in October at annual rate of 667,000
Posted: November 27, 2017 at 10:00 AM (Monday)

New Home Sales
Sales of new single-family houses in October 2017 were at a seasonally adjusted annual rate of 685,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.2 percent (±18.0 percent)* above the revised September rate of 645,000 and is 18.7 percent (±23.5 percent)* above the October 2016 estimate of 577,000.

Sales Price
The median sales price of new houses sold in October 2017 was $312,800. The average sales price was $400,200.

For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of October was 282,000. This represents a supply of 4.9 months at the current sales rate.


University of Michigan Consumer Confidence dipped in November to 98.5
Posted: November 22, 2017 at 10:00 AM (Wednesday)

Consumer sentiment was slightly below last month's decade high, but has remained in the narrow positive range it has traveled since the start of the year, according to the University of Michigan Surveys of Consumers.

What has recently changed is the degree of certainty with which consumers now hold their economic expectations, said U-M economist Richard Curtin, director of the surveys. Inflation expectations have shown the smallest dispersion on record, and increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases.

To be sure, incomes are expected to increase only modestly, and unemployment is anticipated to decline only marginally from its current low, Curtin said. Given that the average level of consumer confidence in 2017 has been higher than anytime since 2004, it represents the best run-up to the holiday shopping season for retailers in a decade.

"In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation," Curtin said.

"Some caution is warranted given that the current expansion will soon be the second longest expansion since the mid-1800s, as well as the potential for significant changes in tax policies and new Fed leadership. Importantly, the data indicate that these changes in fiscal and monetary policies have yet had any noticeable impact on consumer expectations. The data still point toward real spending growth of 2.7 percent during 2018."

Favorable Personal Finances
Half of all consumers reported improved finances in November as they have throughout 2017, marking the best year since 2000. When asked to explain recent changes to their finances in their own words, on average during 2017, 37 percent cited income gains, also the highest proportion since 2000.

Income gains of 2.1 percent were anticipated in the year ahead across all households in the past two months, the highest since 2008. Moreover, household wealth benefited from increases in home and stock values during the past year.

Greater Certainty Benefits Discretionary Purchases
After asking their overall assessment of buying conditions for homes, vehicles and household durables, consumers are asked to explain their views. While references to prices and interest rates typically dominate their responses, increased certainty about future job and incomes has recently risen to its highest levels since 2000.

Future job and income prospects determine the willingness of households to draw down savings or increase debt to make discretionary purchases. To be sure, consumers still remain cautious about increasing their indebtedness as they still hold fast to the lessons learned in the Great Recession about its risks and potential consequences.

Consumer Sentiment Index
The Consumer Sentiment Index was 98.5 in the November 2017 survey, between the decade peak of 100.7 in October and last November's 93.8. The Current Conditions Index was 113.5 in November, below October's 116.5, which was the highest level since 2000. The Expectations Index was 88.9 in November, between last month's 90.5 and last year's 85.2.

Consumer sentiment narrowed its loss from mid-month, although it was still slightly below last month's decade peak. Overall, the Sentiment Index has remained largely unchanged since the start of the year at the highest levels since 2004. What has changed recently is the degree of certainty with which consumers hold their economic expectations. In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment, and inflation. Inflation expectations have shown the smallest dispersion on record, and increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases. To be sure, caution is warranted given that the current expansion will soon be the second longest expansion since the mid-1800s, as well as the potential for significant changes in tax policies and the new Fed leadership and Board members. Interestingly, the data indicate that neither changes in fiscal nor monetary policies have yet had any noticeable impact on consumer expectations. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018, and more importantly for retailers, the best run-up to the holiday shopping season in a decade.


Weekly Initial Unemployment Claims Decrease 13,000 to 239,000
Posted: November 22, 2017 at 08:30 AM (Wednesday)

In the week ending November 18, the advance figure for seasonally adjusted initial claims was 239,000, a decrease of 13,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 249,000 to 252,000. The 4-week moving average was 239,750, an increase of 1,250 from the previous week's revised average. The previous week's average was revised up by 750 from 237,750 to 238,500.

Claims taking procedures continue to be disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending November 11, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 11 was 1,904,000, an increase of 36,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 1,860,000 to 1,868,000. The 4-week moving average was 1,890,000, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 2,000 from 1,887,000 to 1,889,000.


October New Orders for Durable Goods decreased 1.2%, Ex-Trans up 0.4%
Posted: November 22, 2017 at 08:30 AM (Wednesday)

New Orders
New orders for manufactured durable goods in October decreased $2.8 billion or 1.2 percent to $236.0
billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly
increases, followed a 2.2 percent September increase. Excluding transportation, new orders increased 0.4
percent. Excluding defense, new orders decreased 0.8 percent. Transportation equipment, also down
following two consecutive monthly increases, drove the decrease, $3.5 billion or 4.3 percent to $77.1
billion.

Shipments
Shipments of manufactured durable goods in October, up five of the last six months, increased $0.3 billion
or 0.1 percent to $241.0 billion. This followed a 1.0 percent September increase. Primary metals, up three
of the last four months, led the increase, $0.3 billion or 1.5 percent to $19.9 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in October, down three of the last four months, decreased
$0.5 billion or virtually unchanged to $1,134.6 billion. This followed a 0.2 percent September increase.


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

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 17, 2017.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.1 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 5 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 49.9 percent of total applications from 51.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 percent of total applications.

The FHA share of total applications increased to 10.6 percent from 10.2 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.20 percent from 4.18 percent, with points increasing to 0.42 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.16 percent from 4.12 percent, with points increasing to 0.30 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since July 2017, 4.08 percent, from 4.05 percent, with points increasing to 0.42 from 0.40 (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 its highest level since March 2017, 3.56 percent, from 3.54 percent, with points decreasing to 0.42 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.31 percent from 3.41 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Existing-Home Sales increased 2.0% in October
Posted: November 21, 2017 at 10:00 AM (Tuesday)

Existing-home sales increased in October to their strongest pace since earlier this summer, but continual supply shortages led to fewer closings on an annual basis for the second straight month, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0 percent to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month's increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago.

Lawrence Yun, NAR chief economist, says sales activity in October picked up for the second straight month, with increases in all four major regions. "Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home," he said. "While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated."

Added Yun, "The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms."

The median existing-home price for all housing types in October was $247,000, up 5.5 percent from October 2016 ($234,100). October's price increase marks the 68th straight month of year-over-year gains.

Total housing inventory at the end of October decreased 3.2 percent to 1.80 million existing homes available for sale, and is now 10.4 percent lower than a year ago (2.01 million) and has fallen year-over-year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, which is down from 4.4 months a year ago.

Properties typically stayed on the market for 34 days in October, which is unchanged from last month and down from 41 days a year ago. Forty-seven percent of homes sold in October were on the market for less than a month.

Realtor.com®'s Market Hotness Index, measuring time on the market data and listings views per property, revealed that the hottest metro areas in October were San Jose-Sunnyvale-Santa Clara, Calif.; Vallejo-Fairfield, Calif.; San Francisco-Oakland-Hayward, Calif.; San Diego-Carlsbad, Calif.; and Boston-Cambridge-Newton, Mass.

"Listings — especially those in the affordable price range — continue to go under contract typically a week faster than a year ago, and even quicker in many areas where healthy job markets are driving sustained demand for buying," said Yun. "With the seasonal decline in inventory beginning to occur in most markets, prospective buyers will likely continue to see competitive conditions through the winter."

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.90 percent in October (matches highest rate since June) from 3.81 percent in September. The average commitment rate for all of 2016 was 3.65 percent.

First-time buyers were 32 percent of sales in October, which is up from 29 percent in September but down from 33 percent a year ago. NAR's 2017 Profile of Home Buyers and Sellers — released last month— revealed that the annual share of first-time buyers was 34 percent.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says the pending tax reform legislation in both the House and Senate is a direct attack on homeowners and homeownership, with the result being a tax increase on millions of middle-class homeowners in both large and small communities throughout the U.S.

"Making changes to the mortgage interest deduction, eliminating or capping the deduction for state and local taxes and modifying the rules on capital gains exemptions poses serious harm to millions of homeowners and future buyers," said Mendenhall. "With first-time buyers struggling to reach the market, Congress should not be creating disincentives to buy and sell a home. Furthermore, adding $1.5 trillion to the national debt will raise future borrowing costs for our children and grandchildren."

All-cash sales were 20 percent of transactions in October, unchanged from September and down from 22 percent a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in October, down from 15 percent last month and unchanged from a year ago.

Distressed sales — foreclosures and short sales — were 4 percent of sales in October, unchanged from last month and down from 5 percent year ago. Three percent of October sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales climbed 2.1 percent to a seasonally adjusted annual rate of 4.87 million in October from 4.77 million in September, but are still 1.0 percent under the 4.92 million pace a year ago. The median existing single-family home price was $248,300 in October, up 5.4 percent from October 2016.

Existing condominium and co-op sales increased 1.7 percent to a seasonally adjusted annual rate of 610,000 units in October (unchanged from a year ago). The median existing condo price was $236,800 in October, which is 6.9 percent above a year ago.

Regional Breakdown
October existing-home sales in the Northeast rose 4.2 percent to an annual rate of 740,000, (unchanged from a year ago). The median price in the Northeast was $272,800, which is 6.6 percent above October 2016.

In the Midwest, existing-home sales inched forward 0.8 percent to an annual rate of 1.31 million in October, but are still 1.5 percent below a year ago. The median price in the Midwest was $194,700, up 7.1 percent from a year ago.

Existing-home sales in the South increased 1.9 percent to an annual rate of 2.16 million in October, but are still 1.8 percent lower than a year ago. The median price in the South was $214,900, up 4.6 percent from a year ago.

Existing-home sales in the West grew 2.4 percent to an annual rate of 1.27 million in October, and are now 0.8 percent above a year ago. The median price in the West was $375,100, up 7.8 percent from October 2016.


Chicago Fed National Activity Points to a Pickup in Economic Growth in October
Posted: November 21, 2017 at 08:30 AM (Tuesday)

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.19 in October from –0.05 in September. Fifty-six of the 85 individual indicators made positive contributions to the CFNAI in October, while 29 made negative contributions. Forty-three indicators improved from September to October, while 42 indicators deteriorated. Of the indicators that improved, seven made negative contributions.

The contribution from production-related indicators to the CFNAI rose to +0.53 in October from +0.18 in September. Total industrial production increased 0.9 percent in October after moving up 0.4 percent in September. In addition, manufacturing industrial production increased 1.3 percent in October after moving up 0.4 percent in September. The sales, orders, and inventories category also made a positive contribution to the CFNAI in October, though the contribution edged down to +0.05 from +0.08 in September.

Employment-related indicators contributed +0.11 to the CFNAI in October, down slightly from +0.13 in September. Civilian employment decreased by 484,000 in October after increasing by 906,000 in September. However, the civilian unemployment rate moved down to 4.1 percent in October from 4.2 percent in the previous month, and nonfarm payrolls increased by 261,000 in October after increasing by 18,000 in September.

The contribution of the personal consumption and housing category to the CFNAI edged down to –0.04 in October from –0.02 in September. Consumption indicators deteriorated, on balance, pushing down the category’s overall contribution. However, housing starts increased to 1,290,000 annualized units in October from 1,135,000 in September, and housing permits increased to 1,297,000 annualized units in October from 1,225,000 in the previous month.

The CFNAI was constructed using data available as of November 20, 2017. At that time, October data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The September monthly index value was revised to +0.36 from an initial estimate of +0.17, and the August monthly index value was revised to –0.16 from last month’s estimate of –0.37. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to both the September and August monthly index values were primarily due to the former.

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.65 in October from +0.36 in September. One of the four broad categories of indicators that make up the index increased from September, but three of the four categories made positive contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, increased to +0.28 in October from +0.01 in September.


Philadelphia NonManufacturing Activity continued to expand in November
Posted: November 21, 2017 at 08:30 AM (Tuesday)

Respondents to this month’s Nonmanufacturing Business Outlook Survey reported that regional nonmanufacturing activity continued to expand, but with a slowing in the pace of growth. The indexes for current firm-level activity and sales/revenues fell but remained positive, while the index for new orders rose. The index for full-time employment also rose. The survey responses indicated overall price increases for inputs and flat prices for the respondents’ own products and services. The respondents remained optimistic about activity over the next six months.

Firms Report a Continuation in Growth
The index for general activity at the firm level edged down from 24.7 in October to 16.4 in November (see Chart). Although this index has declined for three consecutive months, it remained positive. Nearly 39 percent of the firms reported increases in activity this month, compared with 22 percent that reported a decrease in activity. The regional activity index also remained positive but fell 13 points to 19.3. This is the lowest reading for this indicator this year.

Other indicators for current activity suggest slower sales/revenues growth but an improvement in the pace of new orders. The sales/revenues index fell from 25.5 in October to 15.8 in November. More than 38 percent of the firms indicated higher sales/revenues, down from 48 percent in the prior month, while 22 percent of the firms reported a decrease, the same as the prior month. The new orders index rose 5 points to 16.5 in November. Nearly 35 percent of the firms indicated increases in new orders, up from 28 percent in the prior month, and 18 percent reported decreases.

Indicators for Employment Improve
The indicators of labor demand in the survey showed a general improvement in November. The index for full-time employment rose 4 points to 21.5, its highest reading since April. Almost 30 percent of the firms reported an increase in full-time employment, while 8 percent reported a decrease. Although the part-time employment indicator fell 4 points to 10.8, the average workweek index rose from 10.6 in October to 18.8 in November. The wage and benefit costs indicator increased 3 points to 43.4, with 46 percent of the firms reporting increases this month compared with 3 percent reporting decreases.

Firms Report Little Change in Prices Received
Firms reported increases in the prices paid for inputs and little change in prices received for their own products and services in November. The prices paid index fell 5 points but remained positive at 23.2. Nearly 25 percent of the firms reported increases in prices paid, while only 2 percent reported decreases. The prices received index fell to a near-zero value, with 68 percent of the respondents reporting no change and a roughly equal percentage reporting increases and decreases (8 percent).

Expectations for Near-Term Inflation Fall
In this month’s special questions, firms were asked to forecast the changes in the prices of their own products and services and for U.S. consumers over the next four quarters (see Special Questions). The median forecast was for an increase in their own prices of 2.0 percent, down slightly from 2.2 percent when the same question was last asked in August. Firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise at a 3.0 percent pace over the next year. When firms were asked about the average rate of inflation for U.S. consumers over the next year, the median response was 2.0 percent, down from 2.9 percent in August. The firms also provided a 10-year inflation forecast, and the median remained at 3.0 percent.

Firms Expect Growth to Continue
The respondents to this month’s survey remained optimistic in their outlook over the next six months. The diffusion index for future activity at the firm level rose 5 points to 42.8 (see Chart). Nonetheless, this indicator remained below its historical average (49.7) and has clearly retreated from a peak of 68 in January. Nearly 54 percent of the firms expect increases in activity at their firms over the next six months, while 11 percent expect a decline. The future regional activity index fell 12 points to 31.3.

Summary
Results from this month’s Nonmanufacturing Business Outlook Survey suggest continued business expansion. The indicators for firm-level general activity and sales/revenues edged down, while the indicator for new orders rose. Firms also reported increases in full-time employment and higher input prices. Forecasts for the next six months remain optimistic.


U.S. Leading Economic Index increased 1.2% in October
Posted: November 20, 2017 at 10:00 AM (Monday)

The Conference Board Leading Economic Index® (LEI)for the U.S. increased 1.2 percent in October to 130.4 (2010 = 100), following a 0.1 percent increase in September, and a 0.4 percent increase in August.

“The US LEI increased sharply in October, as the impact of the hurricanes dissipated,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in October to 116.2 (2010 = 100), following a 0.1 percent increase in September, and no change in August.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in October to 125.5 (2010 = 100), following no change in September, and a 0.2 percent increase in August.


Kansas City Fed Manufacturing Activity slowed slightly but remained solid in November
Posted: November 17, 2017 at 11:00 AM (Friday)

The pace of growth in Tenth District manufacturing activity slowed slightly but remained solid, and optimism remained high for future activity. Raw materials price indexes increased modestly, while most indexes for selling prices were little changed.

The month-over-month composite index was 16 in November, down from 23 in October and 17 in September (Tables 1 & 2, Chart 1). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased solidly at both durable and non-durable goods plants, particularly for food, plastics, computer and electronic products. Most month-over-month indexes eased somewhat from historically high levels in October. The production, shipments, new orders, and order backlog indexes all moderated slightly. The employment index slipped from 21 to 16, and the new orders for exports index fell into negative territory for the first time in 4 months. The finished goods inventory index dropped from 18 to 2, and the raw materials inventory index also decreased.

Most year-over-year factory indexes improved in November. The composite index edged higher from 34 to 37, and the production, shipments, order backlog, and employment indexes all moved higher. In contrast, the capital expenditures index inched lower from 21 to 19, and the new orders index fell slightly. The new orders for exports index was unchanged. The raw materials inventory index increased to 45, its highest reading in survey history, and the finished goods inventory index rose from 15 to 28.
Future factory activity expectations eased slightly from high levels. The future composite index inched lower from 32 to 27, and the future production, shipments, new orders, and order backlog also slowed slightly. The future capital expenditures index slipped from 22 to 20, while the future employment index was unchanged. The future raw materials inventory index dropped from 22 to 13, and the future finished goods inventory index decreased modestly.

Most price indexes were unchanged or slightly higher in November. The month-over-month finished goods and raw materials price indexes were mostly unchanged. The year-over-year finished goods price index edged higher from 33 to 35, and the year-over-year raw materials price index increased further. The future finished goods price index rose from 32 to 37, and the future raw materials price index jumped from 43 to 59.


October Housing Starts up 13.7%, Permits up 5.9%
Posted: November 17, 2017 at 08:30 AM (Friday)

Building Permits
Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,297,000. This is 5.9 percent (±1.4 percent) above the revised September rate of 1,225,000 and is 0.9 percent (±1.6 percent) above the October 2016 rate of 1,285,000. Single-family authorizations in October were at a rate of 839,000; this is 1.9 percent (±1.7 percent) above the revised September figure of 823,000. Authorizations of units in buildings with five units or more were at a rate of 416,000 in October.

Housing Starts
Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,290,000. This is 13.7 percent (±10.5 percent) above the revised September estimate of 1,135,000, but is 2.9 percent (±10.1 percent) below the October 2016 rate of 1,328,000. Single-family housing starts in October were at a rate of 877,000; this is 5.3 percent (±12.1 percent) above the revised September figure of 833,000. The October rate for units in buildings with five units or more was 393,000.

Housing Completions
Privately-owned housing completions in October were at a seasonally adjusted annual rate of 1,232,000. This is 12.6 percent (±12.2 percent) above the revised September estimate of 1,094,000 and is 15.5 percent (±11.7 percent) above the October 2016 rate of 1,067,000. Single-family housing completions in October were at a rate of 793,000; this is 2.6 percent (±11.1 percent) above the revised September rate of 773,000. The October rate for units in buildings with five units or more was 433,000.


Builder Confidence Rose 2 points to 68 in November
Posted: November 16, 2017 at 10:00 AM (Thursday)

Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in November on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest report since March, and the second highest on record since July 2005.

“November’s builder confidence reading is close to a post-recession high — a strong indicator that the housing market continues to grow steadily,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “However, our members still face supply-side constraints, such as lot and labor shortages and ongoing building material price increases.”

“Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory,” said NAHB Chief Economist Robert Dietz. “With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017.”

Two out of the three HMI components registered gains in November. The component gauging current sales conditions rose two points to 77 and the index measuring buyer traffic increased two points to 50. Meanwhile, the index charting sales expectations in the next six months dropped a single point to 77.

Looking at the three-month moving averages for regional HMI scores, the Northeast jumped five points to 54 and the South rose one point to 69. Both the West and Midwest remained unchanged at 77 and 63, respectively.


Industrial Production rose 0.9%
Capacity Utilization increased to 77.0%

Posted: November 16, 2017 at 09:15 AM (Thursday)

Industrial production rose 0.9 percent in October, and manufacturing increased 1.3 percent. The index for utilities rose 2.0 percent, but mining output fell 1.3 percent, as Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction. Even so, industrial activity was boosted in October by a return to normal operations after Hurricanes Harvey and Irma suppressed production in August and September.[1] Excluding the effects of the hurricanes, the index for total output advanced about 0.3 percent in October, and the index for manufacturing advanced about 0.2 percent.

With modest upward revisions for July through September, industrial production is now estimated to have only edged down 0.3 percent at an annual rate in the third quarter; the previously published estimate showed a decrease of 1.5 percent.

Total industrial production has risen 2.9 percent over the past 12 months; output in October was 106.1 percent of its 2012 average. Capacity utilization for the industrial sector was 77.0 percent, a rate that is 2.9 percentage points below its long-run (1972–2016) average.


U.S. Import Price Index increased 0.2% in October
Posted: November 16, 2017 at 08:30 AM (Thursday)

U.S. import prices advanced 0.2 percent in October, the U.S. Bureau of Labor Statistics reported today, after increasing 0.8 percent in September. U.S. export prices recorded no change in October, after increasing 0.7 percent in September.

Imports
All Imports: Import prices increased 0.2 percent in October, after rising 0.8 percent in September. The price index for all imports rose 1.6 percent over the past 3 months. Higher prices for fuel and nonfuel imports contributed to the overall rise in import prices for October. U.S. import prices increased 2.5 percent for the year ended in October.

Fuel Imports: The price index for fuel imports advanced 1.4 percent in October following a 5.5-percent rise in September. Fuel import prices increased 11.1 percent over the past 3 months. The October increase was driven by higher petroleum prices which advanced 1.7 percent, more than offsetting a 6.7-percent drop in natural gas prices. Fuel import prices rose 13.2 percent over the past 12 months; petroleum prices were the primary contributor, advancing 14.9 percent. Import prices for natural gas fell 18.2 percent over the past year.

All Imports Excluding Fuel: Prices for nonfuel imports rose 0.2 percent in October following a 0.3-percent advance in September. The increase in October was driven by nonfuel industrial supplies and materials prices which advanced 0.9 percent; higher prices for capital goods also contributed to the overall increase. Import prices for automotive vehicles; consumer goods; and foods, feeds, and beverages all declined in October limiting the monthly advance. The price index for nonfuel imports rose 1.4 percent over the past 12 months, the largest over-the-year increase since a 2.0-percent advance for the year ended March 2012.

All Exports: U.S. export prices recorded no change in October following 0.7-percent increases in September and August. The index has not recorded a decline since a 0.1-percent drop in June. Higher prices for agricultural exports were offset by lower prices for nonagricultural exports. The price index for exports advanced 2.7 percent over the past year.

Agricultural Exports: The price index for agricultural exports increased 1.9 percent in October, the largest monthly rise since a 2.5-percent advance in June 2016. Higher vegetable prices drove the October increase, more than offsetting lower prices for soybeans and meats. Agricultural export prices increased 3.5 percent over the past year. Increasing vegetable and meat prices were the primary contributors to the 12-month advance.

All Exports Excluding Agriculture: Nonagricultural export prices declined 0.3 percent in October following a 0.9-percent rise in September. In October, the index recorded the first monthly decline since a 0.4-percent decrease in May. Lower prices for nonagricultural industrial supplies and materials drove the decrease, and automotive prices also contributed to the overall decline. In contrast, capital goods and consumer goods prices increased in October. Despite the monthly decline in October, the price index for nonagricultural exports increased 2.5 percent over the past year. Higher nonagricultural industrial supplies and materials prices were the primary contributor to higher prices over the 12-month period.


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

Regional manufacturing activity continued to expand in November, according to results from this month’s Manufacturing Business Outlook Survey. The indexes for general activity and shipments fell from their October readings but remained positive, while the survey’s index for new orders rose. The employment index fell but remained elevated. Almost all of the future indicators rose, and firms continue to expect growth in both activity and employment over the next six months.

Current Activity Continues to Expand
The diffusion index for current manufacturing activity in the region remained positive but decreased from a reading of 27.9 in October to 22.7 in November (see Chart). The index has been positive for 16 consecutive months. Nearly 35 percent of the firms indicated increases in activity this month, down slightly from October. The shipments index fell 3 points to 21.7, while the new orders index rose 2 points to 21.4. Both the delivery times and unfilled orders indexes remained positive, suggesting longer delivery times and increases in unfilled orders. In addition, the inventories index turned negative, falling 15 points to -8.6.

Firms continued to report increases in employment, though at a slower pace relative to last month. While the current employment index has been positive for 12 consecutive months, it fell 8 points to 22.6 in November. Almost 28 percent of the responding firms reported increases in employment, while 5 percent of the firms reported decreases. The average workweek index also fell, dropping 6 points to 13.7. This index has been positive for 13 consecutive months.

Price Pressures Show Little Change
The survey’s prices paid index held relatively steady at 39.0, suggesting little change in input price pressures in November. Thirty-nine percent of the respondents reported higher input prices, while no firms reported decreases. Most firms (59 percent) reported no change in input prices. With respect to prices received for their own goods, 14 percent of the firms reported increases, and 6 percent reported decreases, up slightly from last month. The prices received index decreased 6 points this month, with 79 percent of the firms reporting no change in their own prices.

Firms Expect Growth to Continue
Almost all of the survey’s six-month indicators increased this month. The diffusion index for future general activity rose from 46.4 in October to 50.1 in November (see Chart). Almost 57 percent of the manufacturers expect increases in activity over the next six months, while 6 percent expect declines. The indexes for future new orders and shipments also rose: The future new orders index increased 13 points, while the future shipments index rose 3 points. The future employment diffusion index rose 3 points to 41.2. Forty-three percent of the firms expect to increase employment over the next six months.

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

Summary
Responses to the November Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. While the current activity and shipment indexes fell, they remained positive, and the new orders index rose. The employment indexes also continued to reflect growth in labor demand in the region’s manufacturing sector. Almost all of the indicators reflecting expectations for the next six months rose, suggesting that growth is expected to continue.


Weekly Initial Unemployment Claims Increase 10,000 to 249,000
Posted: November 16, 2017 at 08:30 AM (Thursday)

In the week ending November 11, the advance figure for seasonally adjusted initial claims was 249,000, an increase of 10,000 from the previous week's unrevised level of 239,000. The 4-week moving average was 237,750, an increase of 6,500 from the previous week's unrevised average of 231,250.

Claims taking procedures continue to be severely disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico and they are now processing backlogged claims.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending November 4, 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 November 4 was 1,860,000, a decrease of 44,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 29, 1973 when it was 1,805,000. The previous week's level was revised up 3,000 from 1,901,000 to 1,904,000. The 4-week moving average was 1,887,000, a decrease of 9,000 from the previous week's revised average. This is the lowest level for this average since January 12, 1974 when it was 1,881,000. The previous week's average was revised up by 750 from 1,895,250 to 1,896,000.


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

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for September 2017. The sum total in September of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $51.3 billion. Of this, net foreign private outflows were $17.3 billion, and net foreign official outflows were $34.0 billion.

Foreign residents increased their holdings of long-term U.S. securities in September; net purchases were $60.8 billion. Net purchases by private foreign investors were $59.5 billion, while net purchases by foreign official institutions were $1.3 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $20.1 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $80.9 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 $65.1 billion in September.

Foreign residents increased their holdings of U.S. Treasury bills by $7.6 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $2.4 billion. Banks' own net dollar-denominated liabilities to foreign residents decreased by $118.8 billion


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