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Texas Manufacturing Activity declined in May
Posted: May 31, 2016 at 10:30 AM (Tuesday)

Texas factory activity declined in May after two months of increases, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 5.8 to -13.1, hitting its lowest reading in a year.

Other measures of current manufacturing activity also reflected contraction this month. The new orders index fell more than 20 points to -14.9 after pushing into positive territory last month. The growth rate of orders index has been negative since late 2014 and fell to -14.7 in May after climbing to near zero in April. The capacity utilization and shipments indexes returned to negative territory after two months of positive readings, coming in at yearlong lows of -11.0 and -11.5, respectively.

Perceptions of broader business conditions were more pessimistic this month. The general business activity index declined from -13.9 to -20.8, and the company outlook index fell 10 points to -16.1.

Latest readings on employment and workweek length indicated a fifth consecutive month of contraction in May. The employment index moved down three points to -6.7. Sixteen percent of firms noted net hiring, and 22 percent noted net layoffs in May. The hours worked index posted a double-digit decline from its April reading, coming in at -11.8.

Price pressures were mixed, and wages continued to rise. Input costs rose for a second month in a row, as the raw materials prices index pushed up to 12.4, its highest level since October 2014. The pace of decline in selling prices has slowed in recent months according to the finished goods prices index, which edged up for a third month in a row and came in at -3.3 in May. Meanwhile, the wages and benefits index stayed positive and rose from 16.7 to 21.8, suggesting a slightly accelerated rise in compensation.

Expectations regarding future business conditions were mixed in May. The index of future general business activity fell 2 points to -1.8, while the index measuring future company outlook remained positive but moved down to 4.4 this month. Indexes for future manufacturing activity fell but remained solidly positive.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected May 17–25, and 111 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.


Consumer Confidence declined further in May to 92.6
Posted: May 31, 2016 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had decreased in April, declined further in May. The Index now stands at 92.6 (1985=100), down from 94.7 in April. The Present Situation Index decreased from 117.1 to 112.9, while the Expectations Index declined from 79.7 to 79.0 in May.

“Consumer confidence declined slightly in May, primarily due to consumers rating current conditions less favorably than in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Expectations declined further, as consumers remain cautious about the outlook for business and labor market conditions. Thus, they continue to expect little change in economic activity in the months ahead.”

Consumers’ assessment of current conditions weakened in May. The percentage stating business conditions are “good” improved from 24.2 percent to 25.9 percent. However, those saying business conditions are “bad” also increased, from 18.2 percent to 21.6 percent. Consumers’ appraisal of the labor market was less favorable. The proportion claiming jobs are “plentiful” was virtually unchanged at 24.3 percent, however those claiming jobs are “hard to get” increased from 22.8 percent to 24.4 percent.

Consumers were less optimistic about the short-term outlook than last month. Those expecting business conditions to improve over the next six months increased from 13.8 percent to 15.1 percent, but those expecting business conditions to worsen also rose, from 10.8 percent to 11.6 percent.

Consumers’ outlook for the labor market was less favorable. Those anticipating more jobs in the months ahead was virtually unchanged at 12.8 percent, but those anticipating fewer jobs increased from 16.7 percent to 18.1 percent. The proportion of consumers expecting their incomes to increase improved from 15.8 percent to 16.2 percent, while the proportion expecting a reduction in income remained steady at 12.4 percent.


Chicago Purchasing Managers Index fell 1.1 points to 49.3 in May
Posted: May 31, 2016 at 09:45 AM (Tuesday)

The MNI Chicago Business Barometer fell 1.1 points to 49.3 in May from 50.4 in April, the lowest level since February and the sixth time it has been in contraction over the past 12 months.

Following the decline in April, the latest results show activity stumbling in the second quarter, following only moderate growth in Q1. Barring a solid revival in June, Q2 could be the weakest outturn since Q4 2015 given the April-May average of just 49.9.

The Barometer’s decline was led by a 6.6 point fall in Production and was accompanied by a mild setback in New Orders, with both falling below 50. While these were the only components that fell between April and May, out of the five components which make up the Barometer, four of them were in contraction. Only Supplier Deliveries was above 50.

Production fell to the lowest level since February, while New Orders declined to the lowest since December 2015. In contrast, Order Backlogs bounced back 9.0 points, although failed to recoup all of April’s large loss, and remained below 50 for the 16th consecutive month. Employment rose marginally but also remained in contraction where it has been in ten of the past 12 months.

Inventories tumbled by 11.7 points to 37.9 in May, the lowest since November 2009 and the seventh consecutive month in contraction. The weakness in inventories could signify uncertainty about future business growth. Supporting this, a special question posed to the Chicago panel in May showed that 68.7% of respondents did not plan to increase business investment over the next six months.

Supplier Deliveries were unchanged on the month following a solid rise in April that left the indicator at the highest since October 2014 and suggesting there have been some bottlenecks in the supply chain. Time to source production materiel lengthened to the highest since August 2014 while that for capital equipment was the largest since June 2006.

Prices Paid fell slightly having picked up by more than 10.0 points in April.

Chief Economist of MNI Indicators Philip Uglow said, “While expectations are that growth in the US economy will bounce back in Q2, the evidence from the MNI Chicago Report shows activity weakening from an already low level. Firms ran down stocks at the fastest pace for more than 6 years in May, and while a rebuilding over the coming months could support output, the underlying message appears to be that businesses are not confident about the outlook for growth.”


S&P/Case-Shiller Home Price Indices gained 0.7% in March
Posted: May 31, 2016 at 09:00 AM (Tuesday)

S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for March 2016 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR
The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, reported a 5.2% annual gain in March, down from 5.3% the previous month. The 10-City Composite and the 20-City Composites’ year-over-year gains remained unchanged at 4.7% and 5.4%, respectively, from the prior month.

Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities with another month of annual price increases. Portland led the way with a 12.3% year-over-year price increase, followed by Seattle with 10.8%, and Denver with a 10.0% increase. Ten cities reported greater price increases in the year ending March 2016 versus the year ending February 2016.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.7% in March. The 10-City Composite recorded a 0.8% month-over-month increase while the 20-City Composite posted a 0.9% increase in March. After seasonal adjustment, the National Index recorded a 0.1% month-over-month increase, the 10-City Composite posted a 0.8% increase, and the 20-City Composite reported a 0.9% month-over-month increase. After seasonal adjustment, six cities saw prices rise, one city was unchanged, and 13 cities experienced negative monthly price changes.

“Home prices are continuing to rise at a 5% annual rate, a pace that has held since the start of 2015,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than two percent of the number of households in the U.S., the lowest percentage seen since the mid-1980s.

“Price movements vary across the country. The Pacific Northwest and the west continue to be the strongest regions. Seattle, Portland, Oregon and Denver had the largest year-over-year price increases. These cities also saw some of the largest declines in unemployment rates among the 20 cities included in the S&P/Case-Shiller Indices. The northeast and upper mid-west regions were at the other end of the ranking. The four cities with the smallest year-over-year prices gains were Washington DC, Chicago, New York, and Cleveland. The unemployment rates in Chicago and Cleveland rose from March 2015 to March 2016.”

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.2% annual gain in March 2016. The 10-City and 20-City Composites reported year-over-year increases of 4.7% and 5.4%.

As of March 2016, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 10.5-12.5%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 35.7% and 37.6%.


Personal Income increased 0.4%, Spending increased 1.0%
Posted: May 31, 2016 at 08:30 AM (Tuesday)

Personal income increased $69.8 billion, or 0.4 percent, and disposable personal income (DPI)
increased $63.5 billion, or 0.5 percent, in April, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $119.2 billion, or 1.0 percent. In March,
personal income increased $56.7 billion, or 0.4 percent, DPI increased $49.6 billion, or 0.4 percent,
and PCE increased $3.7 billion, or less than 0.1 percent, based on revised estimates.

Real DPI increased 0.2 percent in April, compared with an increase of 0.3 percent in March.
Real PCE increased 0.6 percent, in contrast to a decrease of less than 0.1 percent.


Paychex-IHS Small Business Jobs Index declined to 100.59 in May
Posted: May 31, 2016 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index declined 0.18 percent in May, from 100.77 to 100.59, following steady results in March and April. Altogether, however, the pace of small business employment growth has increased 0.22 percent since the start of 2016. At 101.72, East South Central jumped to the top spot among regions, gaining 0.40 percent, the best one-month growth rate. Washington remained the top-ranked state index, with its fifth consecutive increase in 2016. Continuing to hold the top spot among metro areas, Seattle’s index increased for the fifth straight month, hitting a record level in May, 104.97. After holding steady in April, small business growth slowed in every industry sector analyzed in May.

"Following three months of consistently strong job growth, the Paychex | IHS Small Business Jobs Index declined 0.18 percent from the previous month to its lowest level of 2016,” said James Diffley, chief regional economist at IHS. “Nevertheless, at 100.59, the national index continues to indicate positive gains in small business employment."

"Following steady results during the past several months, it appears small businesses were not able to maintain the same level of employment growth in May," said Martin Mucci, president and CEO of Paychex. "It will be interesting to see how this trend plays out during the summer months when hiring traditionally increases among small businesses."


University of Michigan Consumer Confidence rebounded in May to 94.7
Posted: May 27, 2016 at 10:00 AM (Friday)

Consumer sentiment rebounded in May to its highest level in the last nine months. There have been only four times out of the last 110 monthly surveys that the Sentiment Index was higher. The renewed strength was due to increased jobs and incomes as well as low inflation and interest rates. In addition, homeowners more frequently reported gains in home values than anytime during the past decade. Overall, the data indicate that real consumption will grow by 2.5% in 2016 and by 2.7% in 2017.

Personal Finances
Consumers voiced quite positive assessments of their personal finances. Recently improved finances were cited by 49% in May, the highest level since early 2005. When asked to explain how their finances had changed, more consumers cited income gains than any time since late 2000, and fewer consumers complained that price increases since 2003. In addition, the highest percent of consumers since 2006 expected their financial situation to improve during the year ahead. This optimism is based on modest job increases as well as modest expected income gains—1.6% in May, which was higher than the annual average expected gain in the prior seven years.

Buying Plans Improve
Improved access to credit was cited by consumers as justification for their improved buying plans. The most favorable credit conditions were cited for vehicles since 2004 and for household durables since 2005. The biggest change for the housing market was how current home owners viewed home selling conditions. The May survey recorded the most positive views of home selling conditions in a decade, with the recent gains due to owners expecting to sell their homes for higher prices, high enough to avoid losses.

The Consumer Sentiment Index was 94.7 in the May 2016 survey, up from 89.0 in April and 90.7 last May’s survey. The Current Conditions Index rose to 109.9 in May, reaching its highest level since the last cyclical peak in January 2007. The Expectations Index rose to 84.9, significantly higher than last month’s 77.6, but barely above last May’s 84.2, and remained well below the January 2015 high of 91.0.

The gains in consumer confidence are all the more remarkable since they followed dismal reports on GDP and inflation. The renewed confidence is likely to encourage a higher labor force participation, acting to raise aggregate incomes and limit further declines in the unemployment rate. A growing sense of uncertainty, however, has also been recorded. The most important of source of this uncertainty is not whether the Fed will raise interest rates in the next few months, but the shape of government economic policies under a new president. This will temper consumer spending by acting to maintain a higher level of precautionary savings.


1Q2016 GDP preliminary estimate increased 0.8%
Posted: May 27, 2016 at 08:30 AM (Friday)

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 0.8 percent in the first quarter of 2016, according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 0.5 percent. With the second estimate for the first quarter, the decrease in private inventory investment was smaller than previously estimated.

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

The deceleration in real GDP in the first quarter primarily reflected a larger decrease in nonresidential fixed investment, a deceleration in PCE, and a downturn in federal government spending that were partly offset by an upturn in state and local government spending, and an acceleration in residential fixed investment.

Real gross domestic income (GDI) -- the value of the costs incurred and the incomes earned in the production of goods and services in the nation’s economy -- increased 2.2 percent in the first quarter, compared with an increase of 1.9 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.5 percent in the first quarter, compared with an increase of 1.7 percent (revised) in the fourth quarter.

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 1.0 percent in the first quarter, compared with an increase of 1.5 percent in the fourth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.2 percent in the first quarter, compared with an increase of 0.4 percent in the fourth. Excluding food and energy prices, the price index for gross domestic purchases increased 1.4 percent, compared with an increase of 1.0 percent.

Current-dollar GDP -- the market value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production -- increased 1.4 percent, or $64.7 billion, in the first quarter to a level of $18,229.5 billion. In the fourth quarter, current-dollar GDP increased 2.3 percent, or $104.6 billion.

The second estimate of the first quarter percent change in real GDP is 0.3 percentage point more than the advance estimate issued last month, primarily reflecting upward revisions to private inventory investment, to residential fixed investment, and to exports and a downward revision to imports.


April New Orders for Durable Goods increased 3.4%, Ex-Trans up 0.4%
Posted: May 26, 2016 at 08:30 AM (Thursday)

New orders for manufactured durable goods in April increased $7.7 billion or 3.4 percent to $235.9 billion, the U.S. Census Bureau announced today. This increase, up three of the last four months, followed a 1.9 percent March increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 3.7 percent. Transportation equipment, also up three of the last four months, led the increase, $7.1 billion or 8.9 percent to $87.1 billion.

Shipments
Shipments of manufactured durable goods in April, up following two consecutive monthly decreases, increased $1.5 billion or 0.6 percent to $232.5 billion. This followed a 0.8 percent March decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $1.0 billion or 1.3 percent to $80.9 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in April, up three of the last four months, increased $6.3 billion or 0.6 percent to $1,137.0 billion. This followed a virtually unchanged March increase. Transportation equipment, up two consecutive months, led the increase, $6.1 billion or 0.8 percent to $783.1 billion.

Inventories
Inventories of manufactured durable goods in April, down nine of the last ten months, decreased $0.7 billion or 0.2 percent to $384.4 billion. This followed a 0.2 percent March decrease. Machinery, down eight of the last nine months, led the decrease, $0.5 billion or 0.7 percent to $66.1 billion.

Capital Goods
Nondefense new orders for capital goods in April increased $5.4 billion or 7.8 percent to $73.6 billion. Shipments increased $0.4 billion or 0.6 percent to $71.4 billion. Unfilled orders increased $2.2 billion or 0.3 percent to $707.2 billion. Inventories decreased $0.2 billion or 0.1 percent to $172.4 billion. Defense new orders for capital goods in April increased $0.5 billion or 3.7 percent to $13.2 billion. Shipments decreased $0.4 billion or 4.1 percent to $9.6 billion. Unfilled orders increased $3.6 billion or 2.6 percent to $140.7 billion. Inventories increased $0.2 billion or 1.2 percent to $20.8 billion.

Revised and Recently Benchmarked March Data
Revised seasonally adjusted March figures for all manufacturing industries were: new orders, $451.4 billion (revised from $451.1 billion); shipments, $454.1 billion (revised from $455.3 billion); unfilled orders, $1,130.7 billion (revised from $1,129.5 billion); and total inventories, $621.1 billion (revised from $622.4 billion).


Weekly Initial Unemployment Claims Decrease 10,000 to 268,000
Posted: May 26, 2016 at 08:30 AM (Thursday)

In the week ending May 21, the advance figure for seasonally adjusted initial claims was 268,000, a decrease of 10,000 from the previous week's unrevised level of 278,000. The 4-week moving average was 278,500, an increase of 2,750 from the previous week's unrevised average of 275,750. There were no special factors impacting this week's initial claims. This marks 64 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 14, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 14 was 2,163,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,152,000 to 2,153,000. The 4-week moving average was 2,151,250, an increase of 8,500 from the previous week's revised average. The previous week's average was revised up by 250 from 2,142,500 to 2,142,750.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: May 25, 2016 at 07:00 AM (Wednesday)

Mortgage applications increased 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 May 20, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 0.4 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 17 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 53.7 percent of total applications from 54.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications. The average loan size for purchase applications reached a survey high at $307,700.

The FHA share of total applications increased to 12.7 percent from 12.5 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85 percent from 3.82 percent, with points increasing to 0.37 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 $417,000) increased to 3.82 percent from 3.74 percent, with points decreasing to 0.27 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.70 percent from 3.63 percent, with points decreasing to 0.27 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.06 percent from 3.02 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.09 percent from 2.94 percent, with points increasing to 0.31 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


New Home Sales in April at annual rate of 619,000
Posted: May 24, 2016 at 10:02 AM (Tuesday)

Sales of new single-family houses in April 2016 were at a seasonally adjusted annual rate of 619,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.6 percent (±15.4%) above the revised March rate of 531,000 and is 23.8 percent (±22.8%) above the April 2015 estimate of 500,000.

The median sales price of new houses sold in April 2016 was $321,100; the average sales price was $379,800. The seasonally adjusted estimate of new houses for sale at the end of April was 243,000. This represents a supply of 4.7 months at the current sales rate.


Richmond Fed's Current Activity Index dropped 9 points to a reading of -1
Posted: May 24, 2016 at 10:00 AM (Tuesday)

Fifth District manufacturing activity slowed in May, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and backlogs decreased, and order backlogs flattened this month. Manufacturing hiring rose modestly, while average wages continued to increase at a moderate pace. Prices of raw materials and finished goods rose more quickly in May, compared to last month.

Despite the soft current conditions, firms remained optimistic about future business conditions. Expectations in May were little changed from April readings. Firms expect moderate growth in shipments and in the volume of new orders in the six months ahead. In addition, manufacturers looked for rising backlogs of new orders. Producers anticipated a decline in capacity utilization and unchanged vendor lead times in the next six months.

Survey participants looked for modest growth in hiring during the next six months. Wage increases were expected to continue to be widespread. Producers anticipated little change in the average workweek. Looking ahead, manufacturers expected faster growth in prices paid and received.

Overall, manufacturing conditions softened in May. The composite index for manufacturing flattened to a reading of −1. The index for shipments dropped sharply, decreasing 22 points to end at −8. Additionally, the new orders index fell 18 points, leveling off at 0. The manufacturing employment index remained at a modest reading this month; the indicator moved down four points to end at 4.

Backlogs decreased in May, with the index settling 24 points lower at a reading of −13. The capacity utilization index also slipped 24 points this month, pulling the index down to a reading of −6. Vendor lead time lengthened modestly, with that indicator gaining four points to end at 6. Finished goods inventories rose across more firms compared to a month ago — the index gained five points, ending at a reading of 19. Growth in raw materials inventories also broadened in May, with that indicator adding 10 points to end the survey period at 25.


Philadelphia NonManufacturing Activity Continues Moderate Growth
Posted: May 24, 2016 at 08:30 AM (Tuesday)

The respondents to May’s Nonmanufacturing Business Outlook Survey continued to report moderate growth in current activity at their firms. The diffusion indexes for new orders and sales rose, while the index for full-time employment was little changed. However, responding firms reported a lower level of optimism about future activity at the firm level and in the region over the next six months than in the previous survey.

General Activity at the Firm Level Held Steady
The diffusion index for current activity at the firm level was little changed at 18.2 in May. The share of firms reporting no change rose nearly 9 points to 47 percent this month, while the share of firms reporting increases (34 percent) exceeded the share of firms reporting decreases (16 percent). The general activity index for the region declined from 13.5 in April to 4.6 in May, which is near the readings recorded at the beginning of the year. Twenty-one percent of the firms reported an increase in regional activity this month, while 59 percent reported no change.

Sales and New Orders Indexes Rose
The demand for firms’ services, as measured by the new orders and sales/revenues indexes, rose this month. The new orders index increased 9 points, to 23.1, in May. Thirty-seven percent of the firms reported increases in new orders, compared with 14 percent of the firms that reported decreases. The sales/revenues index experienced a sharper increase, rising 14 points, to 23.6. Forty-three percent of the respondents reported increases in sales this month, up from 32 percent last month.

Labor Market Conditions Remained Steady
Survey results suggest a relatively steady labor market. The full-time employment index increased 3 points, to 10.6. This index has remained near its current value since the start of this year. The part-time employment index edged up slightly to 11.2. The workweek index decreased 6 points, to 19.3, and the wages and benefit costs index fell 14 points, to 26.6.

Firms Reported Increases in Input Prices
The index for prices paid increased from 10.9 in April to 22.4 in May, which suggests that, on balance, firms experienced higher input costs. A larger share of firms reported increases in input prices this month (28 percent) compared with last month (20 percent), and a smaller share reported decreases in input prices this month (5 percent) compared with last month (9 percent). The prices received index fell 8 points, to 5.5. The share of firms reporting no change in prices received rose from 57 percent last month to 64 percent this month.

Capital Expenditures Held Steady
The equipment and software expenditures index held steady at 20.5. Twenty-five percent of the respondents reported increases in equipment and software spending, but a much larger share, 59 percent, reported no change. The index for expenditures on physical plant increased 2 points, to 18.2. Fifty-nine percent of the respondents reported no change in capital expenditures on plant in May, up from 47 percent in April.

Special Questions About the Future Rate of Inflation
In this month’s special questions, firms were asked about the future rate of inflation in the prices of their own products, in employee compensation, and in prices their employees and U.S. consumers will pay. The median forecast for the next four quarters was for an increase of 2 percent in their own prices and an increase of 2.5 percent in employee compensation. These values represent 1 and 0.5 point drops, respectively, from a similar survey conducted in February. Firms expect price increases for their employees and for U.S. consumers to be 2 percent over the next four quarters, unchanged from the February survey. For the average rate of inflation for U.S. consumers over the next 10 years, the median response was 2.5 percent, which also is unchanged.

Future Indicators Decreased
Although a large share of the respondents expected activity to increase or hold steady at their firms, the firm-level future general activity index decreased 17 points, to 39.1 (see Chart). In last month’s survey, 63 percent of the respondents expected activity to increase at their firms, and this share fell to 48 percent this month. The future activity index for the region also decreased, falling 10 points to 25.5. Nonetheless, only 9 percent of the respondents expect activity to decrease either at their own firms or in the region.

Summary
This month’s Nonmanufacturing Business Outlook Survey suggests relatively slow but steady expansion among the region’s nonmanufacturing firms. The indicators for general activity remained positive, but the diffusion index for current activity at the firm level remained below its historical average. In addition, the view conveyed by firms about growth over the next six months is less optimistic than was reported in April.


Existing-Home Sales rose 1.7% in April
Posted: May 20, 2016 at 10:00 AM (Friday)

Despite ongoing inventory shortages and faster price growth, existing-home sales sustained their recent momentum and moved higher for the second consecutive month, according to the National Association of Realtors®. A surge in sales in the Midwest and a decent increase in the Northeast offset smaller declines in the South and West.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.45 million in April from an upwardly revised 5.36 million in March. After last month's gain, sales are now up 6.0 percent from April 2015.

Lawrence Yun, NAR chief economist, says April's sales increase signals slowly building momentum for the housing market this spring. "Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home," he said. "Except for in the West — where supply shortages and stark price growth are hampering buyers the most — sales are meaningfully higher than a year ago in much of the country."

The median existing-home price for all housing types in April was $232,500, up 6.3 percent from April 2015 ($218,700). April's price increase marks the 50th consecutive month of year-over-year gains.

Total housing inventory at the end of April increased 9.2 percent to 2.14 million existing homes available for sale, but is still 3.6 percent lower than a year ago (2.22 million). Unsold inventory is at a 4.7-month supply at the current sales pace, up from 4.4 months in March.

"The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow," adds Yun.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage fell from 3.69 percent in March to 3.61 percent in April, which is the lowest since May 2013 (3.54 percent). The average commitment rate for all of 2015 was 3.85 percent.

Properties typically stayed on the market for 39 days in April (47 days in March), which is unchanged from a year ago but the shortest duration since June 2015 (34 days). Short sales were on the market the longest at a median of 120 days in April, while foreclosures sold in 51 days and non-distressed homes took 37 days. Forty-five percent of homes sold in April were on the market for less than a month — the highest since June 2015 (47 percent).

"Looking ahead, with demand holding steady and supply levels still far from sufficient, the market for entry-level and mid-priced homes will likely continue to be the most competitive heading into the summer months," says Yun.

The share of first-time buyers was 32 percent in April, up from 30 percent both in March and a year ago. First-time buyers in all of 2015 also represented an average of 30 percent.

At last week's 2016 REALTORS® Legislative Meetings & Trade Expo, U.S. Housing and Urban Development Secretary Julian Castro announced beneficial changes to FHA condo rules, which could help many first-time buyers, are moving forward and are currently at the Office of Management and Budget for review.

"Secretary Castro's update that the condo rule changes are in their final stages before implementation received great applause from Realtors® both at the forum and throughout the country," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "To ensure that purchasing a condo increasingly becomes a viable and affordable option for first-time buyers, NAR supports the ongoing efforts to eliminate unnecessary barriers holding back condo sales. We hope that progress on this condo rule means we'll see some much-needed changes in the near future."

All-cash sales were 24 percent of transactions in April, down from 25 percent in March and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in April (matching the lowest share since October 2015), down from 14 percent in both in March and a year ago. Sixty-nine percent of investors paid cash in April.

Distressed sales — foreclosures and short sales — declined for the second straight month to 7 percent in April, down from 8 percent last month and 10 percent a year ago. Five percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in April (16 percent in March), while short sales were discounted 10 percent (unchanged from March).
Single-family and Condo/Co-op Sales

Single-family home sales inched forward 0.6 percent to a seasonally adjusted annual rate of 4.81 million in April from 4.78 million in March, and are now 6.2 percent higher than the 4.53 million pace a year ago. The median existing single-family home price was $233,700 in April, up 6.2 percent from April 2015.

Existing condominium and co-op sales jumped 10.3 percent to a seasonally adjusted annual rate of 640,000 units in April from 580,000 in March, and are now 4.9 percent above April 2015 (610,000 units). The median existing condo price was $223,300 in April, which is 6.8 percent above a year ago.

Regional Breakdown
April existing-home sales in the Northeast climbed 2.8 percent to an annual rate of 740,000, and are now 17.5 percent above a year ago. The median price in the Northeast was $263,600, which is 4.1 percent above April 2015.

In the Midwest, existing-home sales soared 12.1 percent to an annual rate of 1.39 million in April, and are now 12.1 percent above April 2015. The median price in the Midwest was $184,200, up 7.7 percent from a year ago.

Existing-home sales in the South declined 2.7 percent to an annual rate of 2.19 million in April, but are still 4.3 percent above April 2015. The median price in the South was $202,800, up 6.5 percent from a year ago.

Existing-home sales in the West decreased 1.7 percent to an annual rate of 1.13 million in April, and are 3.4 percent lower than a year ago. The median price in the West was $335,000, which is 6.5 percent above April 2015.


U.S. Leading Economic Index increased 0.6% in April
Posted: May 19, 2016 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in April to 123.9 (2010 = 100), following no change in March, and a 0.1 percent increase in February.

“The U.S. LEI picked up sharply in April, with all components except consumer expectations contributing to the rebound from an essentially flat first quarter,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “Despite a slow start in 2016, labor market and financial indicators, and housing permits all point to a moderate growth trend continuing in 2016.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in April to 113.6 (2010=100), following no change in March, and a 0.2 percent increase in February.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in April to 121.5 (2010 = 100), following a 0.5 percent increase in March, and a 0.4 percent increase in February.


Philadelphia February Outlook Reported Continued Tenuous Growth in April
Posted: May 19, 2016 at 08:43 AM (Thursday)

Firms responding to the Manufacturing Business Outlook Survey continued to report tenuous growth this month. The indicator for general activity was essentially unchanged in May and remained slightly negative. Other broad indicators also reflected general weakness in business conditions. The indicator for employment improved but remained negative. Manufacturers’ forecasts of future activity tempered slightly from last month, overall, but continue to suggest confidence in future growth.

Current Indicators Remain Weak
The diffusion index for current activity was essentially unchanged at -1.8 this month. The index has registered a negative reading in eight of the last nine months (see Chart). The current new orders index decreased for the second consecutive month, from 0.0 to -1.9 this month. Conversely, the current shipments index rose 10 points; however, the percentage of firms reporting a decline in shipments narrowly exceeded the percentage reporting an increase. As with the other broad indicators this month, the unfilled orders and delivery time indexes both remained in negative territory. The indicator for inventories rose notably to its highest reading in nine months but still registered a negative reading.

The survey’s indicators of employment reflect similar weakness in May. Despite improving 15 points this month, the employment index registered its fifth consecutive negative reading, at -3.3. More than 69 percent of the firms reported no change in employment, but the percentage reporting decreases (17 percent) exceeded the percentage reporting increases (14 percent). After a sharp drop last month, the average workweek index ticked up 1 point but remained negative.

Prices for Inputs and Goods Rise Slightly
Firms reported increases in prices for their own goods, on balance. The prices received index doubled from last month, rising to 14.8. Slightly more than 20 percent of the respondents indicated increases in prices received; however, nearly 74 percent reported no change in prices received this month. Input prices also rose, on balance, as 24 percent of the firms noted increases. The prices paid index was positive for the second consecutive month, edging up from 13.2 to 15.7.

Outlook Remains Positive
The survey’s future indicators receded from last month’s readings but continue to suggest that the current weakness is expected to be temporary. The diffusion index for future general activity fell from a 15-month high of 42.2 in April to 36.1 in May. Despite the decrease, the future activity index remains above lower levels from the first months of the year (see Chart). Slightly more than 47 percent of the firms expect an increase in activity over the next six months, down from 51 percent last month, while 11 percent expect a decline. The future indexes for new orders and shipments also decreased but remained elevated, falling 9 points and 3 points, respectively. The future employment index edged down 2 points, to 12.0. Similar to last month, almost 23 percent of the surveyed firms expect to increase employment levels over the next six months. The indexes for future prices paid and received decreased 12 points each.

Firms Expect Their Own Price Increases to Match the Rate of Inflation
In this month’s special questions, firms were asked to forecast the changes in prices of their own products over the next four quarters. The median forecast was for an increase in their own prices of 2 percent, a rate of increase in line with the rate of inflation firms expect that the workers they employ regionally as well as the average U.S. consumer will face (see Special Questions). Firms expect their own per employee compensation costs (wages plus benefits) to rise by 3 percent over the same period. When asked about the average rate of inflation for consumers over the next 10 years, the firms’ median forecast was 2.5 percent. The median responses were unchanged from February, when the quarterly questions were last asked, with one exception: In February, the median price forecast for firms’ own prices was lower, at 1.3 percent.

Summary
This month’s Manufacturing Business Outlook Survey suggests essentially no growth of the region’s manufacturing sector. The survey’s indicators for general activity, new orders, shipments, and employment all remained negative. Though indicators for future conditions fell from last month, expectations for future growth continue to be positive.


Weekly Initial Unemployment Claims Decrease 16,000 to 278,000
Posted: May 19, 2016 at 08:30 AM (Thursday)

In the week ending May 14, the advance figure for seasonally adjusted initial claims was 278,000, a decrease of 16,000 from the previous week's unrevised level of 294,000. The 4-week moving average was 275,750, an increase of 7,500 from the previous week's unrevised average of 268,250. There were no special factors impacting this week's initial claims. This marks 63 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending May 7, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 7 was 2,152,000, a decrease of 13,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 2,161,000 to 2,165,000. The 4-week moving average was 2,142,500, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 1,000 from 2,137,250 to 2,138,250.


Chicago Fed National Activity picked up in April
Posted: May 19, 2016 at 08:30 AM (Thursday)

The index’s three-month moving average, CFNAI-MA3, decreased to –0.22 in April from –0.18 in March. April’s CFNAI-MA3 suggests that growth in national economic activity was somewhat below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to –0.17 in April from –0.22 in March. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in April, while 40 made negative contributions. Fifty-four indicators improved from March to April, while 31 indicators deteriorated. Of the indicators that improved, 16 made negative contributions.

The contribution from production-related indicators to the CFNAI rose to +0.19 in April from –0.39 in March. Industrial production increased by 0.7 percent in April after declining by 0.9 percent in March. The sales, orders, and inventories category made a neutral contribution to the CFNAI in April, up slightly from –0.01 in March.

The contribution from employment-related indicators to the CFNAI ticked up to –0.02 in April from –0.04 in March. The civilian unemployment rate was steady at 5.0 percent in April after ticking up in March. However, nonfarm payrolls increased by 160,000 in April after rising by 208,000 in the previous month.

The contribution of the personal consumption and housing category to the CFNAI edged up to –0.07 in April from –0.11 in March. Housing starts increased to 1,172,000 annualized units in April from 1,099,000 in March, and housing permits moved up to 1,116,000 annualized units in April from 1,077,000 in the previous month.

The CFNAI was constructed using data available as of May 17, 2016. At that time, April data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index value was revised to –0.55 from an initial estimate of –0.44, and the February monthly index value was revised to –0.20 from last month’s estimate of –0.38. Revisions to the monthly index value can be attributed to two main factors: revisions in previously published data and differences
between the estimates of previously unavailable data and subsequently published data. The revisions to both the March and February monthly index values were due primarily to the former.


Purchase Apps down, Refi's up in Latest MBA Weekly Survey
Posted: May 18, 2016 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 13, 2016.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier to the lowest level since February 2016. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 12 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 54.7 percent of total applications from 52.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5 percent of total applications.

The FHA share of total applications decreased to 12.6 percent from 13.0 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.7 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 3.82 percent, with points unchanged at 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate was unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 3.74 percent, with points decreasing to 0.29 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.63 percent from 3.64 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.02 percent from 3.06 percent, with points increasing to 0.38 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.94 percent from 2.93 percent, with points increasing to 0.30 from 0.22 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Industrial Production increased 0.7%
Capacity Utilization decreased to 75.4%

Posted: May 17, 2016 at 09:15 AM (Tuesday)

Industrial production increased 0.7 percent in April after decreasing in the previous two months. Manufacturing output rose 0.3 percent after declining the same amount in March. The index for utilities jumped 5.8 percent in April, as the demand for electricity and natural gas returned to a more normal level after being suppressed by warmer-than-usual weather in March. Mining production fell 2.3 percent in April, and it has decreased more than 1 1/2 percent per month, on average, over the past eight months. At 104.1 percent of its 2012 average, total industrial production in April was 1.1 percent below its year-earlier level. Capacity utilization for the industrial sector increased 0.5 percentage point in April to 75.4 percent, a rate that is 4.6 percentage points below its long-run (1972–2015) average


Consumer Price Index increased 0.4% in April, Ex Fd & Engy up 0.2%
Posted: May 17, 2016 at 08:30 AM (Tuesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.1 percent before seasonal adjustment.

The seasonally adjusted all items increase was broad-based, with the indexes for food, energy, and all items less food and energy all rising in April. The food index rose 0.2 percent after declining in March, with the food at home index increasing slightly. The index for energy increased 3.4 percent, with the gasoline index rising 8.1 percent, and the indexes for fuel oil and natural gas also advancing.

The index for all items less food and energy increased 0.2 percent in April. The shelter index rose 0.3 percent, as did the index for medical care, and the indexes for motor vehicle insurance, airline fares, recreation, and education increased as well. Several other component indexes increased slightly, including those for alcoholic beverages, tobacco, and personal care. In contrast, the indexes for household furnishings and operations, apparel, new vehicles, used cars and trucks, and communication all declined.

The all items index rose 1.1 percent for the 12 months ending April, a larger increase than the 0.9-percent increase for the 12 months ending March. The index for all items less food and energy rose 2.1 percent over the last 12 months, compared to a 2.2-percent rise for the 12 months ending March. The food index has risen 0.9 percent over the last 12 months, and the energy index has declined 8.9 percent.


Real Average Hourly Earnings increased 0.2% in April
Posted: May 17, 2016 at 08:30 AM (Tuesday)

Real average hourly earnings for all employees increased 0.2 percent from February to March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings being partially offset by a 0.1-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

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

Real average hourly earnings increased 1.4 percent, seasonally adjusted, from March 2015 to March 2016. This increase in real average hourly earnings combined with a 0.3-percent decrease in the average workweek resulted in a 1.1-percent increase in real average weekly earnings over this period.


April Housing Starts up 6.6%, Permits up 3.6%
Posted: May 17, 2016 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,116,000. This is 3.6 percent (±1.3%) above the revised March rate of 1,077,000, but is 5.3 percent (±1.3%) below the April 2015 estimate of Single-family authorizations in April were at a rate of 736,000; this is 1.5 percent (±0.8%) above the revised March figure of 725,000. Authorizations of units in buildings with five units or more were at a rate of 348,000 in April.

HOUSING STARTS
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,172,000. This is 6.6 percent (±10.2%)* above the revised March estimate of 1,099,000, but is 1.7 percent (±10.1%)* below the April 2015 rate of 1,192,000. Single-family housing starts in April were at a rate of 778,000; this is 3.3 percent (±12.1%)* above the revised March figure of 753,000. The April rate for units in buildings with five units or more was 373,000.

HOUSING COMPLETIONS
Privately-owned housing completions in April were at a seasonally adjusted annual rate of 933,000. This is 11.0 percent (±12.3%)* below the revised March estimate of 1,048,000 and is 7.4 percent (±10.6%)* below the April 2015 rate of 1,008,000. Single-family housing completions in April were at a rate of 691,000; this is 3.6 percent (±12.6%)* below the revised March rate of 717,000. The April rate for units in buildings with five units or more was 232,000.


Treasury International Capital Data for March 2016
Posted: May 16, 2016 at 04:00 PM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2016. The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $98.3 billion. Of this, net foreign private outflows were $51.5 billion, and net foreign official outflows were $46.9 billion.

Foreign residents increased their holdings of long-term U.S. securities in March; net purchases were $64.7 billion. Net purchases by private foreign investors were $83.0 billion, while net sales by foreign official institutions were $18.3 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $13.4 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $78.1 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 $64.6 billion in March.

Foreign residents increased their holdings of U.S. Treasury bills by $9.0 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $1.8 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $164.7 billion.


Builder Confidence remained unchanged at a level of 58 in May
Posted: May 16, 2016 at 10:00 AM (Monday)

Builder confidence in the market for newly-built single-family homes remained unchanged in May at a level of 58 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Builder confidence has held steady at 58 for four straight months, which indicates that the single-family housing sector remains in positive territory,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “However, builders are facing an increasing number of regulations and lot supply constraints.”

The HMI components measuring sales expectations in the next six months increased three points to 65, while the component charting current sales conditions and the index gauging buyer traffic both held steady at 63 and 44, respectively.

“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” said NAHB Chief Economist Robert Dietz. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”

Looking at the three-month moving averages for regional HMI scores, the South and Midwest both registered one-point gains to 59 and 58, respectively. The West remained unchanged at 67 and the Northeast fell three points to 41.


Empire State Manufacturing Survey Conditions Worsen in May
Posted: May 16, 2016 at 08:30 AM (Monday)

The May 2016 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index turned negative, falling nineteen points to -9.0. The new orders and shipments indexes also fell below zero, pointing to a decline in both orders and shipments. Survey results indicated that inventory levels were lower and delivery times shorter. The prices paid index edged down to 16.7—a sign that moderate input price increases were continuing—and the prices received index fell below zero, suggesting a small drop in selling prices. Employment levels appeared to be little changed, while the average workweek index pointed to a decline in hours worked. The six-month outlook was somewhat less optimistic than last month, and the capital spending index plummeted to 3.1, its lowest reading in more than two years.

Business Conditions Worsen
Business activity contracted for New York manufacturing firms, according to the May 2016 survey. Following a brief foray into positive territory in March and April, the general business conditions index fell back below zero, declining nineteen points to -9.0. Nineteen percent of respondents reported that conditions had improved over the month, while 28 percent reported that conditions had worsened. The new orders index also turned negative, its seventeen-point drop to -5.5 signaling a decrease in orders. The shipments index, down twelve points to -1.9, showed that shipments were flat, and the unfilled orders index fell to -6.3. The delivery time index, at -6.3, pointed to shorter delivery times, and the inventories index, at -7.3, suggested that inventory levels were lower.

Employment Levels Hold Steady, While the Workweek Declines
The prices paid index edged down three points to 16.7, an indication that input prices continued to increase at a moderate pace. The prices received index fell six points, to -3.1, as selling prices moved slightly lower. Employment levels remained fairly steady, with the index for number of employees showing little change at 2.1, while the average workweek index declined ten points to -8.3—evidence that the average workweek was shorter this month.

Capital Spending Index Falls Sharply
Indexes for the six-month outlook generally suggested that firms were somewhat less optimistic about future conditions than they were in April. The index for future business conditions was little changed at 28.5, while the index for future new orders fell fourteen points to 22.4. Future employment indexes conveyed an expectation that employment levels and the average workweek would rise modestly over the next six months. The capital expenditures index fell nineteen points to 3.1, its lowest level in more than two years, and the technology spending index fell to 6.3.


Business Inventories up 0.3% in March
Posted: May 13, 2016 at 01:31 PM (Friday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,289.2 billion, up 0.3 percent (±0.2%) from February 2016, but was down 1.7 percent (±0.5%) from March 2015.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,818.6 billion, up 0.4 percent (±0.1%) from February 2016 and were up 1.5 percent (±0.5%) from March 2015.

The total business inventories/sales ratio based on seasonally adjusted data at the end of March was 1.41. The March 2015 ratio was 1.37.


Forecasters Predict Weaker Outlook for Growth, but Stronger Outlook for Employment
Posted: May 13, 2016 at 10:00 AM (Friday)

The economy looks slightly weaker now than it did three months ago, according to 42 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict real GDP will grow at an annual rate of 2.1 percent this quarter and 2.4 percent next quarter. On an annual-average over annual-average basis, real GDP will grow 1.7 percent in 2016, down 0.4 percentage point from the previous estimate of 2.1 percent. For 2017, real GDP is estimated to grow 2.4 percent, unchanged from the previous survey. The forecasters predict real GDP will grow 2.4 percent in 2018 and 2.2 percent in 2019, down 0.3 percentage point and 0.1 percentage point, respectively, from the previous survey’s estimates.

The outlook for unemployment remains mostly unchanged from the previous survey. The forecasters predict that the unemployment rate will average 4.8 percent in 2016, before falling to 4.6 percent in 2017, 2018, and 2019.

The forecasters see some improvement on the employment front. They have revised their estimates upward for job gains in 2016 and 2017. The forecasters see nonfarm payroll employment growing at a rate of 189,800 jobs per month this quarter, 191,800 jobs per month next quarter, 176,000 jobs per month in the fourth quarter of 2016, 181,600 jobs per month in the first quarter of 2017, and 166,500 jobs per month in the second quarter of 2017. The forecasters’ projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 212,400 in 2016 and 178,400 in 2017, as the table below shows. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)


Producer Price Index rose 0.2% in April, ex Fd & Engy up 0.3%
Posted: May 13, 2016 at 08:30 AM (Friday)

The Producer Price Index for final demand rose 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in March and 0.2 percent in February. On an unadjusted basis, the final demand index was unchanged for the 12 months ended in April.

In April, prices for final demand services edged up 0.1 percent, and the index for final demand goods advanced 0.2 percent.

The index for final demand less foods, energy, and trade services moved up 0.3 percent in April following no change in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services rose 0.9 percent.


U.S. Retail Sales for April decrease 1.3%, Ex-Auto up 0.8%
Posted: May 13, 2016 at 08:30 AM (Friday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $453.4 billion, an increase of 1.3 percent (±0.5%) from the previous month, and 3.0 percent (±0.7%) above April 2015. Total sales for the February 2016 through April 2016 period were up 2.8 percent (±0.5%) from the same period a year ago. The February 2016 to March 2016 percent change was revised from down 0.4 percent (±0.5%)* to down 0.3 percent (±0.2%).

Retail trade sales were up 1.4 percent (±0.5%) from March 2016, and up 2.7 percent (±0.5%) from last year. Nonstore retailers were up 10.2 percent (±1.2%) from April 2015, while gasoline stations were down 9.4 percent (±1.6%) from last year.


MUFG U.S. Business Barometer remained flat%
Posted: May 12, 2016 at 10:00 AM (Thursday)

For the week ending April 30 2016, the MUFG U.S. Business Barometer remained flat at 98.0, as gains in some indexes were cancelled out by losses in others. Chain store sales, for example, declined by 1.0 percent after rising for three consecutive weeks. Likewise, auto and coal production dropped by 2.7 and 7.1 percent, respectively. On the other hand, electric output and railroad freight car loadings rose by 2.3 and 1.0 percent, respectively. Lumber and steel production also reported minor gains.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, remained flat at 98.0. Its year-over-year growth rate was -0.7 percent.


U.S. Import Price Index rose 0.3% in April
Posted: May 12, 2016 at 08:30 AM (Thursday)

The price index for U.S. imports rose 0.3 percent in April following a 0.3-percent increase in March, the U.S. Bureau of Labor Statistics reported today. The increases in both April and March were led by higher fuel prices. U.S. export prices increased 0.5 percent in April, after recording no change the previous month. Both agricultural and nonagricultural export prices contributed to the April advance.


Weekly Initial Unemployment Claims Increase 20,000 to 294,000
Posted: May 12, 2016 at 08:30 AM (Thursday)

In the week ending May 7, the advance figure for seasonally adjusted initial claims was 294,000, an increase of 20,000 from the previous week's unrevised level of 274,000. This is the highest level for initial claims since February 28, 2015 when it was 310,000. The 4-week moving average was 268,250, an increase of 10,250 from the previous week's unrevised average of 258,000. There were no special factors impacting this week's initial claims. This marks 62 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending April 30, unchanged from the previous week's revised rate. The previous week's rate was revised up by 0.1 from 1.5 to 1.6 percent. The advance number for seasonally adjusted insured unemployment during the week ending April 30 was 2,161,000, an increase of 37,000 from the previous week's revised level. This is the highest level for insured unemployment since April 2, 2016 when it was 2,176,000. The previous week's level was revised up 3,000 from 2,121,000 to 2,124,000. The 4-week moving average was 2,137,250, a decrease of 3,750 from the previous week's revised average. This is the lowest level for this average since November 11, 2000 when it was 2,119,750. The previous week's average was revised up by 750 from 2,140,250 to 2,141,000.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: May 11, 2016 at 07:19 AM (Wednesday)

Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 6, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 0.5 percent from the previous week. The seasonally adjusted Purchase Index increased 0.4 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 14 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 52.8 percent of total applications from 52.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

The FHA share of total applications decreased to 13.0 percent from 13.5 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.5 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since April 2016, 3.82 percent, from 3.87 percent, with points decreasing to 0.34 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.74 percent from 3.79 percent, with points remaining unchanged from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.64 percent from 3.69 percent, with points decreasing to 0.25 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.06 percent from 3.13 percent, with points decreasing to 0.33 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.93 percent from 2.91 percent, with points decreasing to 0.22 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 6, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 0.5 percent from the previous week. The seasonally adjusted Purchase Index increased 0.4 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 14 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 52.8 percent of total applications from 52.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

The FHA share of total applications decreased to 13.0 percent from 13.5 percent the week prior. The VA share of total applications increased to 11.7 percent from 11.5 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since April 2016, 3.82 percent, from 3.87 percent, with points decreasing to 0.34 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.74 percent from 3.79 percent, with points remaining unchanged from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.64 percent from 3.69 percent, with points decreasing to 0.25 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.06 percent from 3.13 percent, with points decreasing to 0.33 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.93 percent from 2.91 percent, with points decreasing to 0.22 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings little changed at 5.8 million in March
Posted: May 10, 2016 at 10:00 AM (Tuesday)

The number of job openings was little changed at 5.8 million on the last business day of March, the U.S. Bureau of Labor Statistics reported today. Hires edged down to 5.3 million while separations were little changed at 5.0 million. Within separations, the quits rate was 2.1 percent, and the layoffs and discharges rate was 1.2 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

Job openings were little changed at 5.8 million in March. The job openings rate was 3.9 percent. The number of job openings was little changed in March for total private and edged up for government. Job openings increased in professional and business services (+124,000), transportation, warehousing, and utilities (+35,000), and nondurable goods manufacturing (+29,000). Job openings decreased in retail trade (-80,000), educational services (-36,000), and wholesale trade (-35,000). The number of job openings was little changed in all four regions.


Wholesale Inventories up 0.1% in March
Posted: May 10, 2016 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that March 2016 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 $430.7 billion, up 0.7 percent (+/-0.5%) from the revised February level, but were down 2.0 percent (+/-1.4%) from the March 2015 level. The February preliminary estimate was virtually unchanged. March sales of durable goods were down 0.2 percent (+/-0.7%)* from last month and were down 0.4 percent (+/-1.9%)* from a year ago. Sales of hardware, and plumbing and heating equipment and supplies were down 2.2 percent from last month. Sales of nondurable goods were up 1.6 percent (+/-0.7%) from February, but were down 3.5 percent (+/-1.9%) from last March. Sales of petroleum and petroleum products were up 13.5 percent from last month and sales of farm product raw materials were up 2.7 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $583.6 billion at the end of March, up 0.1 percent (+/-0.4%)* from the revised February level and were up 0.3 percent (+/-1.6%)* from the March 2015 level. The February preliminary estimate was revised downward $0.5 billion or 0.1 percent. March inventories of durable goods were down 0.1 percent (+/-0.4%)* from last month and were down 2.2 percent (+/-1.6%) from a year ago. Inventories of metals and minerals, except petroleum were down 2.0 percent from last month, while inventories of motor vehicle and motor vehicle parts and supplies were up 1.0 percent. Inventories of nondurable goods were up 0.5 percent (+/-0.7%)* from February and were up 4.6 percent (+/-1.9%) from last March. Inventories of petroleum and petroleum products were up 3.3 percent from last month and inventories of drugs and druggists' sundries were up 2.0 percent.

The March inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.36. The March 2015 ratio was 1.32.


NFIB Small Business Optimism Index rose 1 point in April to 93.6
Posted: May 10, 2016 at 07:00 AM (Tuesday)

The Index of Small Business Optimism increased 1.0 points after months of (small) declines, rising to 93.6. Five of the 10 Index components posted a gain, four were unchanged and one posted a small decline. Owners remain very pessimistic about the economy. It was a relief though to see the Index turn up, ending a long string of declines. However, it’s still down from December 2014 when the Index hit an expansion high of 100. Half of the gain came in the two labor market components, an encouraging development.

After logging a disappointing 1.4 percent growth rate in the fourth quarter, the preliminary growth estimate for the first quarter this year was 0.5 percent. The capital stock of the U.S. is barely producing more output even with population growth of nearly 1 percent annually. Yet the valuation of these assets is at record high levels as is the market valuation of bonds, thanks to the efforts of the Federal Reserve Bank. This is a contradiction that begs to be resolved, either by a significant growth in output or a decline in the valuation of these assets. The Fed seems inclined to try to prevent this, targeting financial markets (wealth effects) rather than the real economy. Interest rates are more than low enough, but expected “cash flows” in the numerator are weak, as reflected in the weak optimism expressed by business owners and supported by Fed inaction.

The Federal Reserve continues to send out a message of economic weakness, indicating that the economy is too weak to be able to handle a 25 basis point increase in the Federal Funds rate. This reinforces the uncertainty felt on Main Street and supports the reluctance to spend and hire reflected in the NFIB measures. The Fed has been trying for years to reach its targets of “maximum employment” and 2 percent inflation without success. There is no cheerleader for the economy.

Measures of consumer optimism are also weak, offering no hope of significant gains in spending as the savings rate increases. There is no exuberance to be found, a flatness in optimism pervades the economy, consistent with the plodding growth characterizing this recovery.

There is no leadership in Washington, no articulation of a path to a better future, no evidence that policy-making is coordinated or focused on promoting growth or job creation. Important government institutions are mired in scandal and inaction, voters have lost confidence (20 percent of consumers think government policy is “good”, 41 percent think it is “poor”). The prospects that strong, unifying leadership will emerge after the election appear to be poor.


Employment Trends Index increased in April to 128.28
Posted: May 9, 2016 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in April, after decreasing in March. The index now stands at 128.28, up from 126.42 in March. The change represents a 1.4 percent gain in the ETI compared to a year ago.

“Despite the April bounce back in the Employment Trends Index, its growth has slowed in recent months, suggesting that job growth will also slow,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “Employers have become more cautious as economic growth remains moderate and profits decline. Looking ahead, we anticipate job growth will remain below 200,000 a month.”

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


Consumer Credit Increased at an annual rate of 10.00%
Posted: May 6, 2016 at 03:00 PM (Friday)

Consumer credit increased at a seasonally adjusted annual rate of 6-1/2 percent during the first quarter. Revolving credit increased at an annual rate of 6 percent, while nonrevolving credit increased at an annual rate of 6-1/2 percent. In March, consumer credit increased at an annual rate of 10 percent.


April Employment increased by 160,000
Unemployment Rate flat at 5.0%

Posted: May 6, 2016 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 160,000 in April, and the unemployment rate was unchanged at 5.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, and financial activities. Job losses continued in mining.

In April, the unemployment rate held at 5.0 percent, and the number of unemployed persons was little changed at 7.9 million. Both measures have shown little movement since August.

Among the major worker groups, the unemployment rate for Hispanics increased to 6.1 percent in April, while the rates for adult men (4.6 percent), adult women (4.5 percent), teenagers (16.0 percent), Whites (4.3 percent), Blacks (8.8 percent), and Asians (3.8 percent) showed little or no change.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 150,000 to 2.1 million in April. These individuals accounted for 25.7 percent of the unemployed.

In April, the labor force participation rate decreased to 62.8 percent, and the employment-population ratio edged down to 59.7 percent.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) was about unchanged in April at 6.0 million and has shown little movement since November. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In April, 1.7 million persons were marginally attached to the labor force, down by 400,000 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 568,000 discouraged workers in April, down by 188,000 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 1.1 million persons marginally attached to the labor force in April had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment increased by 160,000 in April. Over the prior 12 months, employment growth had averaged 232,000 per month. In April, employment gains occurred in professional and business services, health care, and financial activities, while mining continued to lose jobs.

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

In April, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents to $25.53, following an increase of 6 cents in March. Over the year, average hourly earnings have risen by 2.5 percent. In April, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $21.45.

The change in total nonfarm payroll employment for February was revised from +245,000 to +233,000, and the change for March was revised from +215,000 to +208,000. With these revisions, employment gains in February and March combined were 19,000 less than previously reported. Over the past 3 months, job gains have averaged 200,000 per month.


MUFG U.S. Business Barometer bounced back by 0.2%
Posted: May 5, 2016 at 10:00 AM (Thursday)

For the week ending April 23 2016, the MUFG U.S. Business Barometer bounced back by 0.2 percent to 98.0. Although this week’s barometer went up, it was characterized by mixed performances in both consumption and production indexes. Chain store sales increased again by 0.5 percent, extending the rise for two consecutive weeks. However, MBA’s purchase index and railroad freight car loadings recorded losses. As to the production side, auto and coal production reported the biggest gains, but they were partially offset by losses in steel production and electric output.

On a year-over-year basis, the barometer declined by 1.0 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained flat at 97.9. Its year-over-year growth rate was -0.9 percent.


Weekly Initial Unemployment Claims Increase 17,000 to 274,000
Posted: May 5, 2016 at 08:30 AM (Thursday)

In the week ending April 30, the advance figure for seasonally adjusted initial claims was 274,000, an increase of 17,000 from the previous week's unrevised level of 257,000. The 4-week moving average was 258,000, an increase of 2,000 from the previous week's unrevised average of 256,000. There were no special factors impacting this week's initial claims. This marks 61 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending April 23, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 23 was 2,121,000, a decrease of 8,000 from the previous week's unrevised level of 2,129,000. This is the lowest level for insured unemployment since November 4, 2000 when it was 2,110,000. The 4-week moving average was 2,140,250, a decrease of 17,000 from the previous week's unrevised average of 2,157,250. This is the lowest level for this average since November 11, 2000 when it was 2,119,750.


Challenger Layoffs increased to 65,141 in April
Posted: May 5, 2016 at 07:30 AM (Thursday)

The pace of downsizing increased in April, as US-based employers announced workforce reductions totaling 65,141 during the month, according to the latest report released Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The April figure represents a 35 percent increase over March, when employers announced 48,207 planned layoffs. Last month’s job cuts were 5.8 percent higher than the 61,582 recorded in April 2015.

Employers have announced a total of 250,061 planned job cuts through the first four months of 2016. That is up 24 percent from the 201,796 job cuts tracked during the same period a year ago. It is the highest January-April total since 2009, when the opening four months of the year saw 695,100 job cuts.

“We continue to see large scale layoffs in the energy sector, where low oil prices are driving down profits. However, we are also seeing heavy downsizing activity in other areas, such as computers and retail, where changing consumer trends are creating a lot of volatility,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

The energy sector announced another 19,759 job cuts in April, bringing the year-to-date total to 72,660. That is up 26 percent from the 57,556 energy-sector job cuts announced in the first four months of 2015.

Computer firms announced 16,923 job cuts during the month; the highest total among all industries. That total includes 12,000 from chipmaker Intel, which is shifting away from the traditional desktop and laptop market and toward the mobile market.

To date, computer firms have announced 33,925 job cuts, up 262 percent from a year ago, when job cuts in the sector totaled just 9,368 through the first four months of the year.

“For all intents and purposes, the economy remains strong. The nation’s payrolls have experienced 66 consecutive months of net job gains, a trend that is likely to continue with the new report out Friday. The unemployment rate is at five percent, with a growing number of metropolitan areas at three percent or lower. Yet, job cuts are trending upward,” noted Challenger.

“However, it is not unusual to see heavy job cuts a strong economy. In December 1998, near the height of the dot.com boom, we recorded more than 103,000 planned workforce reductions. The fact is, companies are constantly retooling, and sometimes the best time to do that is when the economy is strong,” said Challenger.

A prime example of this dichotomy is IBM, where unconfirmed reports estimate as many as 14,000 layoffs in the first quarter (which is not included in any Challenger reports, due to the speculative nature of the figure). While the company has said little about the job cuts, it issued a statement touting 70,000 new hires in 2015 along with 25,000 open positions worldwide.

The closest IBM came to confirming workforce reductions was to say that it is “aggressively transforming its business to lead in a new era of cognitive and cloud computing. This includes remixing skills to meet client requirements” in its official statement.

“We are at a stage in the recovery, where it is not unusual to see hiring and firing occur simultaneously across the economy and often within a single company. Like IBM and Intel, companies are shifting strategies that require them to cut in some places while adding in others,” said Challenger.


New orders for manufactured goods Increased 1.1% in March
Posted: May 4, 2016 at 10:00 AM (Wednesday)

New orders for manufactured goods in March, up two of the last three months, increased $5.0 billion or 1.1 percent to $458.4 billion, the U.S. Census Bureau reported today. This followed a 1.9 percent February decrease.

Shipments, up following eight consecutive monthly decreases, increased $2.2 billion or 0.5 percent to $464.7 billion. This followed a 0.8 percent February decrease. Unfilled orders, down three of the last four months, decreased $1.2 billion or 0.1 percent to $1,182.6 billion. This followed a 0.4 percent February decrease. The unfilled orders-to-shipments ratio was 7.01, down from 7.02 in February.

Inventories, up following eight consecutive monthly decreases, increased $1.1 billion or 0.2 percent to $635.1 billion. This followed a 0.5 percent February decrease. The inventories-to-shipments ratio was 1.37, unchanged from February.


Help Wanted OnLine Labor Demand increased 39,600 to 5,170,100 in April
Posted: May 4, 2016 at 10:00 AM (Wednesday)

Online advertised vacancies increased 39,600 to 5,170,100 in April, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The March Supply/Demand rate stands at 1.55 unemployed for each advertised vacancy with a total of 2.8 million more unemployed workers than the number of advertised vacancies. The number of unemployed was around 8.0 million in March.

“With employer demand showing little change since April 2015, the unemployment levels have now also flattened over the past six months,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “While both labor demand and unemployment levels remain in healthy ranges, we are now seeing a pause in the pattern of continued monthly improvements for these indicators that have been characteristic of the past few years.”

In April, the Professional category saw small gains in most occupational groups except a loss in Arts/Media (−9.2). The Services/Production category saw gains in Food (12.0) and Office/Admin (11.8) with losses in Sales (−15.6) and Transportation (−12.0).


ISM Non-Manufacturing Index grew at 55.7% in April
Posted: May 4, 2016 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in April for the 75th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 55.7 percent in April, 1.2 percentage points higher than the March reading of 54.5 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index decreased to 58.8 percent, 1 percentage point lower than the March reading of 59.8 percent, reflecting growth for the 81st consecutive month, at a slower rate in April. The New Orders Index registered 59.9 percent, 3.2 percentage points higher than the reading of 56.7 percent in March. The Employment Index increased 2.7 percentage points to 53 percent from the March reading of 50.3 percent and indicates growth for the second consecutive month. The Prices Index increased 4.3 percentage points from the March reading of 49.1 percent to 53.4 percent, indicating prices increased in April for the first time in three months. According to the NMI®, 13 non-manufacturing industries reported growth in April. The majority of the respondents’ comments reflect optimism about the business climate and the direction of the economy."

INDUSTRY PERFORMANCE
The 13 non-manufacturing industries reporting growth in April — listed in order — are: Information; Management of Companies & Support Services; Accommodation & Food Services; Wholesale Trade; Health Care & Social Assistance; Utilities; Finance & Insurance; Real Estate, Rental & Leasing; Construction; Agriculture, Forestry, Fishing & Hunting; Public Administration; Professional, Scientific & Technical Services; and Retail Trade. The four industries reporting contraction in April are: Other Services; Mining; Transportation & Warehousing; and Educational Services.


1Q2016 Productivity Growth Decreased 1.0%
Posted: May 4, 2016 at 08:30 AM (Wednesday)

Nonfarm business sector labor productivity decreased at a 1.0-percent annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 0.4 percent and hours worked increased 1.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2015 to the first quarter of 2016, productivity increased 0.6 percent.

Unit labor costs in the nonfarm business sector increased 4.1 percent in the first quarter of 2016, reflecting a 3.0-percent increase in hourly compensation and a 1.0-percent decrease in productivity. Unit labor costs increased 2.3 percent over the last four quarters.

Manufacturing sector labor productivity increased 1.9 percent in the first quarter of 2016, as output increased 0.7 percent and hours worked decreased 1.1 percent. Productivity increased 0.1 percent in the durable goods manufacturing sector and increased 4.4 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.5 percent, as output increased 0.7 percent and hours declined 0.8 percent. Unit labor costs in manufacturing decreased 1.2 percent in the first quarter of 2016 and rose 1.6 percent from the same quarter a year ago.

Preliminary fourth quarter and annual 2015 measures were announced today for the nonfinancial corporate sector. Productivity decreased 2.2 percent in the fourth quarter of 2015 and decreased 0.5 percent over the last four quarters. Annual average productivity increased 0.8 percent from 2014 to 2015. Unit profits of nonfinancial corporations fell 35.7 percent in the fourth quarter of 2015, which is the largest quarterly decline since a 41.8-percent decline in the fourth quarter of 2008. The measure has declined 15.2 percent over the last four quarters, which is the largest four-quarter decline since a 15.8 percent decline in the third quarter of 2009.

In the fourth quarter of 2015, nonfarm business sector productivity decreased 1.7 percent--a smaller decline than reported March 3--reflecting an upward revision to output. Unit labor costs increased 2.7 percent, a smaller increase than previously reported. Total manufacturing sector productivity decreased 1.0 percent in the fourth quarter of 2015, as output was revised down more than hours. Unit labor costs in the total manufacturing sector increased 3.6 percent during the quarter. There were also revisions to measures for the durable and nondurable manufacturing sectors.

There were historical revisions to manufacturing labor productivity. The annual average rate of productivity growth for 2015 was revised down from 1.3 percent to 0.2 percent and the rate for 2014 was revised down from 1.3 percent to negative 0.1 percent.


Goods and Services Deficit Decreased in March 2016
Posted: May 4, 2016 at 08:30 AM (Wednesday)

The Nation's international trade deficit in goods and services decreased to $40.4 billion in March from $47.0 billion in February (revised), as imports decreased more than exports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $40.4 billion in March, down $6.5 billion from $47.0 billion in February, revised. March exports were $176.6 billion, $1.5 billion less than February exports. March imports were $217.1 billion, $8.1 billion less than February imports.

The March decrease in the goods and services deficit reflected a decrease in the goods deficit of $6.0 billion to $58.5 billion and an increase in the services surplus of $0.5 billion to $18.1 billion.

Year-to-date, the goods and services deficit decreased $1.0 billion, or 0.8 percent, from the same period in 2015. Exports decreased $30.5 billion or 5.4 percent. Imports decreased $31.6 billion or 4.5 percent.


ADP National Employment Report increased by 156,000 jobs in April
Posted: May 4, 2016 at 08:15 AM (Wednesday)

Private sector employment increased by 156,000 jobs from March to April according to the April ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Payrolls for businesses with 49 or fewer employees increased by 93,000 jobs in April, about the same number as March. Employment at companies with 50-499 employees increased by 39,000 jobs, well off from last month’s 66,000. Employment at large companies – those with 500 or more employees – dropped off to 24,000 from March’s 35,000. Companies with 500-999 employees added 15,000 and companies with over 1,000 employees added just 9,000 this month.

Goods-producing employment dropped by 11,000 jobs in April, down from a downwardly revised 5,000 in March. The construction industry added 14,000 jobs, which was down from March’s 18,000. Meanwhile, manufacturing lost 13,000 jobs after being revised down to -3,000 the previous month.

Service-providing employment rose by 166,000 jobs in April, down from 189,000 in March. The ADP National Employment Report indicates that professional/business services contributed 27,000 jobs, down a bit from March’s 31,000. Trade/transportation/utilities grew by 25,000, well down from the 42,000 jobs added the previous month. Financial activities added just 4,000.

"Despite the softest overall monthly jobs added in three years, small businesses remained an engine for job growth in April,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Smaller businesses are less susceptible to global conditions, such as low commodity prices and the strong dollar, that may have caused larger businesses to ease up on hiring.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market appears to have stumbled in April. Job growth noticeably slowed, with some weakness across most sectors. One month does not make a trend, but this bears close watching as the financial market turmoil earlier in the year may have done some damage to business hiring.”


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

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

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