Research >> Economics

Category: Research - Topic: Economics


August Manufacturing ISM expanded at 59
Posted: September 2, 2014 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in August for the 15th consecutive month, and the overall economy grew for the 63rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The August PMI® registered 59 percent, an increase of 1.9 percentage points from July's reading of 57.1 percent, indicating continued expansion in manufacturing. This month's PMI® reflects the highest reading since March 2011 when the index registered 59.1 percent. The New Orders Index registered 66.7 percent, an increase of 3.3 percentage points from the 63.4 percent reading in July, indicating growth in new orders for the 15th consecutive month. The Production Index registered 64.5 percent, 3.3 percentage points above the July reading of 61.2 percent. The Employment Index grew for the 14th consecutive month, registering 58.1 percent, a slight decrease of 0.1 percentage point below the July reading of 58.2 percent. Inventories of raw materials registered 52 percent, an increase of 3.5 percentage points from the July reading of 48.5 percent, indicating growth in inventories following one month of contraction. The August PMI® is led by the highest recorded New Orders Index since April 2004 when it registered 67.1 percent. At the same time, comments from the panel reflect a positive outlook mixed with caution over global geopolitical unrest.

Of the 18 manufacturing industries, 17 are reporting growth in August in the following order: Plastics & Rubber Products; Furniture & Related Products; Fabricated Metal Products; Apparel, Leather & Allied Products; Wood Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Paper Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Chemical Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components. The only industry reporting contraction in August is Textile Mills.


Construction Spending increased 1.8% in July
Posted: September 2, 2014 at 10:00 AM (Tuesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during July 2014 was estimated at a seasonally adjusted annual rate of $981.3 billion, 1.8 percent (±1.6%) above the revised June estimate of $963.7 billion. The July figure is 8.2 percent (±2.3%) above the July 2013 estimate of $906.6 billion. During the first 7 months of this year, construction spending amounted to $535.4 billion, 7.9 percent (±1.5%) above the $496.3 billion for the same period in 2013.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $701.7 billion, 1.4 percent (±0.8%) above the revised June estimate of $692.2 billion. Residential construction was at a seasonally adjusted annual rate of $358.1 billion in July, 0.7 percent (±1.3%)* above the revised June estimate of $355.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $343.6 billion in July, 2.1 percent (±0.8%) above the revised June estimate of $336.6 billion.

PUBLIC CONSTRUCTION
In July, the estimated seasonally adjusted annual rate of public construction spending was $279.6 billion, 3.0 percent (±3.0%)* above the revised June estimate of $271.5 billion. Educational construction was at a seasonally adjusted annual rate of $63.5 billion, 1.6 percent (±4.9%)* above the revised June estimate of $62.5 billion. Highway construction was at a seasonally adjusted annual rate of $84.8 billion, 6.9 percent (±7.7%)* above the revised June estimate of $79.3 billion.


Paychex-IHS Small Business Jobs Index decreased to 100.99 in August
Posted: September 2, 2014 at 08:30 AM (Tuesday)

While the Paychex | IHS Small Business Jobs Index grew 0.20 percent in the past 12 months through August, the national index decreased to 100.99, as the pace of small business employment growth slowed slightly. August marks the third decline for the index in the past four months. Strong small business employment growth propelled the Mountain region into the lead among regions. Wisconsin surpassed Washington, taking over as the top performing state. Among the metro areas, Dallas continues to hold the top spot, now for the third consecutive month.

Although the Paychex | IHS Small Business Jobs Index continues to show positive year-over-year growth, the short-term trend has declined 0.16 percent in the past three months. As most other employment indicators accelerated over the summer, it appears that small businesses may have been on the front end of that trend, in the spring, with the index reaching its peak level in April 2014.

The index continues to show positive, long-term gains. However, that growth has slowed in the past several months.

The August 2014 Paychex | IHS Small Business Jobs Index fell 0.11 percent from last month as the pace of employment growth slowed slightly. The record employment growth rate set in April 2014 has declined three of the past four months.


University of Michigan Consumer Confidence increased in August to 82.5
Posted: August 29, 2014 at 10:00 AM (Friday)

Consumers reported that their finances had improved due to more jobs, higher wages, and gains in wealth. Indeed, consumers judged their current financial situation more favorably than anytime since the start of the Great Recession. While past gains have usually been associated with optimism about future gains, consumers remained skeptical about their future financial prospects. Most of the August gains were driven by rising stock prices and wages among households in the top third of the income distribution, while those in the bottom two-thirds reported slightly less positive gains than in July. To be sure, all households have benefited from the resurgent economy. The data indicate that consumption spending will grow at a 2.5% pace in the year ahead.

Gap in Finances Widens
A growing divide in personal finances across income groups was found in the latest survey. Among households with incomes in the top third, 59% reported being better off, compared with just 36% with incomes in the bottom two-thirds. Net income gains were reported by 34% among the top third in incomes, compared with no net gains in the bottom two-thirds. Moreover, net wealth gains were cited by 22% with incomes the top third, while just 2% cited net wealth gains in the bottom two-thirds. Importantly, these gaps have widened in the past year.

Less Optimism about Future Prospects
People do not expect as much financial progress during the year ahead as in the past year. Among households with incomes in the top third, just 39% expect to improve financially, significantly less than the 59% who reported recent financial progress, and only 27% expect improvement among those with incomes in the bottom two thirds, well below the 36% who reported recent financial gains.

Consumer Sentiment Index
The Sentiment Index was 82.5 in the August 2014 survey, just above the 81.8 in July and slightly above last August’s 82.1. Over the past nine months, the Sentiment Index has remained largely unchanged, in the narrow range between 80.0 and 82.5. The renewed strength in the past year was focused on Current Conditions (+4.8%), while the Expectations Index fell by a slightly larger amount (-3.3%).

The stability in consumer expectations during the past nine months has helped to insulate the economy from much larger swings in business investments. At the same time, the problem is that confidence has been unable to rise above those modestly positive levels. This reflects the ability of the Fed to raise asset prices, which has primarily benefitted upper income households, and their inability to prompt wage increases, which has prevented the reestablishment of a more broadly based optimism. A weakened trend in equity and home prices in the absence of resurgent wages would threaten the modest pace of consumer spending now expected.


Chicago Purchasing Managers Index surged 11.7 points to 64.3 in August
Posted: August 29, 2014 at 09:45 AM (Friday)

The Chicago Business Barometer surged 11.7 points to 64.3 in August, regaining all the lost ground seen in July, and pointing to continued strength in the US economy.

Strong growth in the Barometer and three of its key components in August followed a sharp slowdown in July. As expected, it appears that the July lull was temporary and that the momentum exhibited in the Chicago Report in the second quarter has carried through to Q3.

Strong gains in Production, New Orders and Order Backlogs lifted the Barometer in August to the highest since May. Production posted the largest monthly increase on record, rising over 20 points to the highest in nearly ten years. Both New Orders and Order Backlogs rose sharply unwinding all and more of July’s weakening, with the latter moving well out of contraction.

Employment was the only component of the Barometer to fall, although it remained well above the neutral 50 level and continues to point to firm demand for labour.

With expectations for strong future demand, firms built stocks at the fastest pace for eight years. Inventories of finished goods jumped above 60 to the highest since October 2006, coupled with a fourth consecutive monthly increase in Supplier Delivery Times.

Prices Paid also inched up above 60 amid strong demand, although at this level it doesn’t point to a severe inflationary threat.

Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said, “We had speculated that July’s downturn would prove temporary rather than signal the start of a downward trend. The sharp bounceback in August, with growth in output at the highest for nearly ten years, suggests that growth in the US economy will continue apace in Q3.“


Personal Income increased 0.2%, Spending decreased 0.1%
Posted: August 29, 2014 at 08:30 AM (Friday)

Personal income increased $28.6 billion, or 0.2 percent, and disposable personal income (DPI) increased $17.7 billion,or 0.1 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $13.6 billion, or 0.1 percent. In June, personal income increased $67.1 billion, or 0.5 percent, DPI increased $62.9 billion, or 0.5 percent, and PCE increased $50.5 billion, or 0.4 percent, based on revised estimates.

Real DPI increased 0.1 percent in July, compared with an increase of 0.3 percent in June. Real PCE decreased 0.2 percent, in contrast to an increase of 0.2 percent.


Kansas City Fed Manufacturing Activity slowed slightly in August
Posted: August 28, 2014 at 11:00 AM (Thursday)

Growth in Tenth District manufacturing activity slowed slightly in August, but producer’ expectations for future activity remained solid. Price indexes indicated little change from the previous month , but expectations for future growth were slightly lower.

The month-over-month composite index was 3 in August, down from 9 in July and 6 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The overall slowing in manufacturing activity occurred at nondurable goods producers, while durable goods production increased somewhat. Most month-over-month indexes fell compared to July’s readings. The production index fell from 11 to 4 , and the shipments and new orders indexes also declined but remained above zero. The employment index was -4, the first negative result in 10 months, while the order backlog index remained relatively steady at -5. The inventory indexes were mixed , with materials slightly lower and finished goods considerably higher than in July.

Year-over-year factory indexes were mostly lower. The composite year-over-year index was unchanged at 13, while production index dropped from 24 to 8, its lowest level in seven months. The shipments, new orders, and order backlog indexes also fell. In contrast, the capital expenditures index rose from 10 to 14, after falling last month. The raw materials and finished good inventory indexes both increased considerably over last month.

Future factory indexes were mixed in August. The future composite index edged up from 15 to 17, and the future production, new orders, and order backlog indexes also rose. The future new orders for exports index increased to its highest level in seven months, while the future shipments index decreased from 28 to 20. The future employment index fell moderately, from 23 to 15, and the future capital expenditures index also declined. Both future inventories indexes increased moderately after being in negative territory last month.

Price indexes were once again mixed this month. The month-over-month raw materials price moved up slightly, while the finished goods price index was somewhat lower. The year-over-year finished goods price index eased from 37 to 35, but the raw materials price index remained unchanged. The future raw materials price index continued to edge lower from 46 to 43, and the future finished goods price index also decreased, indicating fewer firms plan to pass cost increases through to customers.


Pending Home Sales Index climbed 3.3% in July
Posted: August 28, 2014 at 10:00 AM (Thursday)

Pending home sales rebounded in July and have now risen in four of the last five months, according to the National Association of Realtors®. All major regions experienced healthy gains except for the Midwest, which saw a slight decline.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but is still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.

Lawrence Yun, NAR chief economist, says favorable housing conditions are behind July’s higher contract activity. “Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 20121,” he said. “The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer.”

Yun adds, “More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market.”

The PHSI in the Northeast jumped 6.2 percent to 89.2 in July, and is 8.3 percent above a year ago. In the Midwest the index marginally fell 0.4 percent to 104.6 in July, and is 6.4 percent below July 2013.

Pending home sales in the South increased 4.2 percent to an index of 119.0 in July, and is now 1.0 percent below a year ago. The index in the West rose 4.0 percent in July to 99.5, but remains 6.0 percent below July 2013.

Yun expects existing-homes sales to be down 2.1 percent this year to 4.98 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.


DJ-BTMU U.S. Business Barometer unch%
Posted: August 28, 2014 at 10:00 AM (Thursday)

For the week ending August 16 2014, the DJ-BTMU U.S. Business Barometer remained at 98.4 as negative performances of consumption indexes were cancelled out by gains in production indexes. Chain store sales fell by a sharp 1.3 percent, extending the weakening trend to two weeks. MBA’s purchase index also dropped 0.4 percent this week. As to the production side, all indexes except coal and steel production reported significant gains. For instance, auto production and electric output surged 2.4 and 1.8 percent, respectively.

On a year-over-year basis, the barometer showed a gain of 1.2 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.5. Its year-over-year growth rate was 1.1 percent.


2Q2014 GDP preliminary estimate increased 4.2%
Posted: August 28, 2014 at 08:30 AM (Thursday)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 4.0 percent. With this second estimate for the second quarter, the general picture of economic growth remains the same; the increase in nonresidential fixed investment was larger than previously estimated, while the increase in private inventory investment was smaller than previously estimated.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Real GDP increased 4.2 percent in the second quarter after decreasing 2.1 percent in the first. This upturn in the percent change in real GDP primarily reflected upturns in exports and in private inventory investment, accelerations in PCE and in nonresidential fixed investment, and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration in imports.


Weekly Initial Unemployment Claims Decrease 14,000 to 298,000
Posted: August 28, 2014 at 08:30 AM (Thursday)

In the week ending August 23, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 298,000 to 299,000. The 4-week moving average was 299,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 300,750 to 301,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 16, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 16 was 2,527,000, an increase of 25,000 from the previous week's revised level. The previous week's level was revised up 2,000 from 2,500,000 to 2,502,000. The 4-week moving average was 2,524,250, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised up by 500 from 2,527,500 to 2,528,000.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 27, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 2.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 22, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 11 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 56 percent of total applications, the highest level since March 2014, from 55 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.0 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28 percent from 4.29 percent, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.22 percent from 4.18 percent, with points increasing to 0.28 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.98 percent, the lowest since June 2013, from 3.99 percent, with points increasing to 0.13 from 0.03 (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 3.47 percent from 3.44 percent, with points increasing to 0.34 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 3.10 percent, with points increasing to 0.52 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence increased in August to 92.4
Posted: August 26, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased in July, improved further in August. The Index now stands at 92.4 (1985=100), up from 90.3 in July. The Present Situation Index increased to 94.6 from 87.9, while the Expectations Index edged down to 90.9 from 91.9 in July.

Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers’ spirits. Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings. Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market.

Consumers’ appraisal of current conditions continued to improve through August. Those saying business conditions are “good” edged up to 23.9 percent from 23.3 percent, while those claiming business conditions are “bad” declined to 21.5 percent from 22.8 percent. Consumers’ assessment of the job market was also more positive. Those stating jobs are “plentiful” increased to 18.2 percent from 15.6 percent, while those claiming jobs are “hard to get” declined marginally to 30.6 percent from 30.9 percent.

Consumers were slightly less optimistic in August about the short-term outlook. The percentage of consumers expecting business conditions to improve over the next six months held steady at 20.4 percent, while those expecting business conditions to worsen fell to 10.2 percent from 12.1 percent. Consumers, however, were somewhat mixed about the outlook for the labor market. Those anticipating more jobs in the months ahead fell to 17.0 percent from 18.7 percent, although those anticipating fewer jobs also declined to 15.8 percent from 16.6 percent. Fewer consumers expect their incomes to grow, 15.5 percent in August versus 17.7 percent in July, while those expecting a drop in their incomes rose marginally to 11.9 percent from 11.1 percent.


Richmond Fed's Current Activity Index climbed to a reading of 12
Posted: August 26, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity continued to improve in August, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders picked up this month. Although manufacturing employment and average wages rose at a slower pace this month, the average workweek lengthened.

Manufacturers anticipated stronger business conditions during the next six months. Firms expected faster growth in shipments and new orders in the six months ahead. Additionally, survey participants looked for increased capacity utilization and expected order backlogs to grow more quickly. Expectations were for longer vendor lead times.

Survey participants' outlook for the months ahead also included faster growth in average wages and the average workweek, with a pickup in hiring.

Prices of raw materials and finished goods rose at slower pace in August compared to last month. In contrast, manufacturers expected faster growth in prices paid and prices received over the next six months.

Overall, manufacturing conditions continued to improve in August. The composite index for manufacturing climbed to a reading of 12, the highest reading since March 2011. The index for shipments gained seven points and the new orders index advanced eight points, finishing at readings of 10 and 13, respectively. Manufacturing employment grew more slowly this month; the employment indicator slipped two points to a reading of 11.

Backlogs rose at a faster pace this month; the index jumped to a reading of 15. Additionally, capacity utilization grew at a faster pace, pushing the index up 13 points ending at 17. Vendor lead time lengthened, moving the index to 16 from a reading of 12 last month. Finished goods inventories rose at a faster pace compared to a month ago. The index gained four points, ending at 16. In contrast, raw materials inventories increased at a slower rate compared to last month. That gauge moved to 17 from 21.


S&P/Case-Shiller Home Price Indices gained 1.0% in June
Posted: August 26, 2014 at 09:00 AM (Tuesday)

Data through June 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show a sustained slowdown in price increases. The National Index gained 6.2% in the 12 months ending June 2014 while the 10-City and 20-City Composites gained 8.1%; all three indices saw their rates slow considerably from last month. Every city saw its year-over-year return worsen.

The National Index, now being published monthly, gained 0.9% in June. The 10- and 20-City Composites increased 1.0%. New York led the cities with a return of 1.6% and recorded its largest increase since June 2013. Chicago, Detroit and Las Vegas followed at +1.4%. Las Vegas posted its largest monthly gain since last summer.

The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 6.2% annual gain in June 2014. The 10- and 20-City Composites posted year-over-year increases of 8.1%.

Home price gains continue to ease as they have since last fall. For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators – starts, existing home sales and builders’ sentiment – are positive. Taken together, these point to a more normal housing sector.

The monthly National Index rose 0.9% in June. While all 20 cities saw higher home prices over the last 12 months, all experienced slower gains. In San Francisco, the pace of price increases halved since late last summer. The Sun Belt cities – Las Vegas, Phoenix, Miami and Tampa – all remain a third or more below their peak prices set almost a decade ago.

Bargain basement mortgage rates won’t continue forever; recent improvements in the labor markets and comments from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first quarter of 2015. Rising mortgage rates won’t send housing into a tailspin, but will further dampen price gains.

As of June 2014, average home prices across the United States are back to their levels posted in the spring of 2005. The National Index was up 0.9% over May 2014 and 6.2% above June 2013.

As of June 2014, average home prices across the United States are back to their autumn 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 17%. The recovery from the March 2012 lows is 27.8% and 28.5% for the 10-City and 20-City Composites.

All 20 cities saw their year-over-year rates weaken in June. For the second consecutive month, San Francisco saw its rate decelerate by almost three percentage points – from 18.4% in April to 12.9% in June. Phoenix showed its smallest year-over-year gain of 6.9% since March 2012. Cleveland showed a marginal increase of 0.8% over the last 12 months while Las Vegas led with a gain of 15.2%.

All cities reported price increases for the third consecutive month; it would have been a fourth had New York not declined 0.4% in March. San Francisco posted its eighth consecutive price increase but showed its smallest gain of 0.3% since February. Five cities – Detroit, Las Vegas, New York, Phoenix and San Diego – posted larger gains in June than in May. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value.


New Orders for Durable Goods Increased 22.6%, Ex-Trans Up 0.8%
Posted: August 26, 2014 at 08:30 AM (Tuesday)

New orders for manufactured durable goods in July increased $55.3 billion or 22.6 percent to $300.1 billion, the U.S. Census Bureau announced today. This increase, up five of the last six months, was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 2.7 percent June increase. Excluding transportation, new orders decreased 0.8 percent. Excluding defense, new orders increased 24.9 percent. Transportation equipment, also up five of the last six months, drove the increase, $56.6 billion or 74.2 percent to $133.0 billion.

Shipments of manufactured durable goods in July, up five of the last six months, increased $8.0 billion or 3.3 percent to $248.9 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.2 percent June increase. Transportation equipment, up two consecutive months, led the increase, $5.6 billion or 7.9 percent to $76.3 billion.

Unfilled orders for manufactured durable goods in July, up fifteen of the last sixteen months, increased $59.2 billion or 5.4 percent to $1,158.5 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.0 percent June increase. Transportation equipment, up ten of the last eleven months, led the increase, $56.7 billion or 8.3 percent to $738.4 billion.

Inventories of manufactured durable goods in July, up fifteen of the last sixteen months, increased $2.1 billion or 0.5 percent to $401.9 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.5 percent June increase. Transportation equipment, also up fifteen of the last sixteen months, led the increase, $0.7 billion or 0.5 percent to $129.6 billion.

Nondefense new orders for capital goods in July increased $51.5 billion or 60.8 percent to $136.3 billion. Shipments increased $1.1 billion or 1.4 percent to $79.1 billion. Unfilled orders increased $57.2 billion or 8.6 percent to $725.2 billion. Inventories increased $2.3 billion or 1.2 percent to $184.2 billion.

Defense new orders for capital goods in July decreased $1.5 billion or 15.3 percent to $8.6 billion. Shipments increased $0.2 billion or 1.7 percent to $9.6 billion. Unfilled orders decreased $1.0 billion or 0.6 percent to $159.5 billion. Inventories decreased $0.2 billion or 1.0 percent to $23.8 billion.

Revised seasonally adjusted June figures for all manufacturing industries were: new orders, $505.6 billion (revised from $503.2 billion); shipments, $501.7 billion (revised from $499.8 billion); unfilled orders, $1,099.3 billion (revised from $1,098.5 billion); and total inventories, $654.1 billion (revised from $653.8 billion).


ICSC Chain Store Sales inecreased by 0.6% in Aug 23 Wk
Posted: August 26, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 4.2% for the week ending August 23 - relative to the prior year. On a week-over-week basis, sales increased 0.6%.

"According to the ICSC-GS consumer tracking survey business was strong across the board - especially for wholesale clubs, apparel stores, discounters, dollar stores, and furniture stores - as consumers continued their back-to-school shopping," said Michael Niemira, ICSC research consultant. "I expect sales for August to show a healthy gain of 4-5% - a notable improvement over the 3.6% gain in August 2013," he added


Texas Manufacturing Activity Expands but at a Slower Pace
Posted: August 25, 2014 at 10:30 AM (Monday)

Texas factory activity increased again in August, albeit at a slower pace than in recent months, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 19.1 to 6.8, indicating output growth slowed from July.

Other measures of current manufacturing activity also reflected notably slower growth in August. The new orders index fell 11 points to 2.2 after surging in July. The capacity utilization index also posted a sharp decline, moving down from 18 to 3.6. The shipments index experienced the largest fall, from 22.8 to 6.4, reaching its lowest reading in eight months.

Perceptions of broader business conditions were less optimistic this month. The general business activity index remained positive but fell to a five-month low of 7.1. The company outlook fell from 11.3 to 1.5, due to a smaller share of firms noting an improved outlook in August than in July.

Labor market indicators reflected continued employment growth and longer workweeks. The August employment index posted a third robust reading, holding steady at 11.1. Twenty-one percent of firms reported net hiring compared with 10 percent reporting net layoffs. The hours worked index slipped from 6.3 to 2.9, indicating a smaller rise in hours worked than last month.

Upward pressure on input prices continued at about the same pace in August as in July, while pressure increased for selling prices and wages. The raw materials price index held fairly steady at 26.4. The finished goods price index edged up from 7.3 to 9.1, reaching its highest level in six months. The wages and benefits index rose 5 points to 23.7, also posting a six-month high.

Expectations regarding future business conditions remained optimistic in August. The index of future general business activity inched down 1 point to 18.7, while the index of future company outlook rose 6 points to 30.1. Indexes for future manufacturing activity showed mixed movements in August but remained in solidly positive territory.


New Home Sales in July at annual rate of 412,000
Posted: August 25, 2014 at 10:00 AM (Monday)

Sales of new single-family houses in July 2014 were at a seasonally adjusted annual rate of 412,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.4 percent (±11.9%) below the revised June rate of 422,000, but is 12.3 percent (±17.1%) above the July 2013 estimate of 367,000.

The median sales price of new houses sold in July 2014 was $269,800; the average sales price was $339,100. The seasonally adjusted estimate of new houses for sale at the end of July was 205,000. This represents a supply of 6.0 months at the current sales rate.


Chicago Fed National Activity picked up in July
Posted: August 25, 2014 at 08:30 AM (Monday)

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.39 in July from +0.21 in June. Three of the four broad categories of indicators that make up the index made positive contributions to the index in July, and two of the four categories increased from June.

The index’s three-month moving average, CFNAI-MA3, increased to +0.25 in July from +0.16 in June, marking its fifth consecutive reading above zero. July’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, increased to +0.31 in July from +0.21 in June. Fifty-three of the 85 individual indicators made positive contributions to the CFNAI in July, while 32 made negative contributions. Forty-eight indicators improved from June to July, while 36 indicators deteriorated and one was unchanged. Of the indicators that improved, nine made negative contributions.

Production-related indicators made a contribution of +0.31 to the CFNAI in July, up from +0.05 in June. Manufacturing production rose 1.0 percent in July after rising 0.3 percent in June, and manufacturing capacity utilization rose to 77.8 percent in July from 77.2 percent in the previous month.

Employment-related indicators contributed +0.13 to the CFNAI in July, down from +0.26 in June. The unemployment rate increased to 6.2 percent in July from 6.1 percent in June; however, average weekly initial unemployment insurance claims decreased to 293,500 in July from 315,000 in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI ticked down to +0.05 in July from +0.06 in June.

The contribution of the consumption and housing category to the CFNAI edged up to –0.10 in July from –0.15 in June. Housing starts rose to 1,093,000 annualized units in July from 945,000 in June, and housing permits increased to 1,052,000 annualized units in July from 973,000 in the previous month.

The CFNAI was constructed using data available as of August 21, 2014. At that time, July data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The June monthly index was revised to +0.21 from an initial estimate of +0.12. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the June monthly index was due primarily to the former.


Philadelphia July Outlook Suggests continuing growth
Posted: August 21, 2014 at 10:31 AM (Thursday)

Indicators for the August Business Outlook Survey suggest that the region’s manufacturing sector is continuing to grow. The survey’s indicator for general activity was higher this month, but indicators for new orders, shipments, and employment, while positive, fell from their readings in July. The survey’s broad indicators of future activity increased, suggesting that firms remain optimistic about continued growth over the next six months.

Activity Index Highest Since 2011

The diffusion index of current general activity increased from a reading of 23.9 in July to 28.0 this month. The index has increased for three consecutive months and is at its highest reading since March 2011 (see Chart). The new orders and shipments indexes remained positive but fell to near their levels in June. The new orders index decreased 20 points, while the shipments index decreased 18 points.

The current indicators for labor market conditions suggested continued modest expansion in employment. The employment index remained positive for the 14th consecutive month but declined 3 points from its reading in July. The percentage of firms reporting increases in employment (25 percent) exceeded the percentage reporting decreases (16 percent). The workweek index was positive for the sixth consecutive month and increased 1 point.

Price Pressures Moderate

Nearly 30 percent of the firms reported higher input prices this month, but this was lower than the 36 percent that reported input price increases last month. The prices paid index decreased nearly 10 points from July to its lowest reading in three months. The prices received index, which reflects firms’ own final goods prices, also decreased, from 16.8 to 4.2. The 12 percent of firms reporting higher prices was notably lower than the 21 percent reporting higher prices last month. Over 79 percent of the firms reported steady prices for their own products this month.

Six-Month Indicators Improve

Most of the survey’s broad indicators of future growth showed improvement this month. The future general activity index increased 8 points and is at its highest reading since June 1992 (see Chart). The index has increased for four consecutive months. The future indexes for new orders and shipments also improved this month, increasing 5 and 10 points, respectively. Firms remained relatively optimistic with respect to employment growth, although the future employment index fell 4 points. Nearly 37 percent of the firms are expecting growth in their employment levels over the next six months, but 12 percent of the firms expect employment reductions.

While most broad indicators of future growth have been improving, the survey’s future capital spending index has been slipping. Although the index decreased just 1 point this month, its reading, at 17.5, is now the lowest it has been in seven months.

In special questions this month, firms were asked qualitative questions about the effects of the Affordable Care Act (ACA) and how, if at all, they are making changes to their employment and compensation, including benefits (see Special Questions). Over 18 percent of the firms indicated that the number of workers they employ was lower because of the ACA; 3 percent indicated higher levels. The same percentage (18 percent) indicated that the proportion of part-time workers had increased. Regarding health insurance benefit coverage, 41 percent said their coverage was unchanged, but 52 percent indicated modifications to their offerings. Among those modifying their health insurance coverage, higher deductibles (91 percent), higher worker contributed premiums (88 percent), and higher out-of-pocket maximums (77 percent) were the most cited changes.

Summary

The August Business Outlook Survey suggests continued expansion of the region’s manufacturing sector, although some indicators returned to near their readings in June. Firms reported overall continued increases in general activity, new orders, shipments, and employment this month. The survey’s future activity continued to improve, indicating that firms expect continued growth in manufacturing over the next six months.


U.S. Leading Economic Index increased 0.9%
Posted: August 21, 2014 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.9 percent in July to 103.3 (2004 = 100), following a 0.6 percent increase in June, and a 0.6 percent increase in May.

The LEI improved sharply in July, suggesting that the economy is gaining traction and growth should continue at a strong pace for the remainder of the year. Although housing has been one of the weakest components this year, the sharp gain in building permits helped boost the LEI in July. Financial markets and labor market conditions have also supported recent gains, but business spending indicators remain soft and their contribution marginal.

The pace of economic activity remained reasonably strong in July. Although retail sales were a little disappointing, hiring and industrial activity improved. July’s increase in the LEI, coupled with its accelerating growth trend, points to stronger economic growth over the coming months.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in July to 109.6 (2004 = 100), following a 0.3 percent increase in June, and a 0.2 percent increase in May.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in July to 124.6 (2004 = 100), following a 0.5 percent increase in June, and a 0.4 percent increase in May.


Existing-Home Sales rose 2.4% in July
Posted: August 21, 2014 at 10:00 AM (Thursday)

Existing-home sales increased in July to their highest annual pace of the year, and the ongoing decline in distressed sales reached an important milestone, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July from a slight downwardly-revised 5.03 million in June. Sales are at the highest pace of 2014 and have risen four consecutive months, but remain 4.3 percent below the 5.38 million-unit level from last July, which was the peak of 2013.

Sales momentum is slowly building behind stronger job growth and improving inventory conditions. The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market. More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.

Warning signs that affordability is likely to decline in upcoming years. Although interest rates have fallen in recent months, median family incomes are still lagging behind price gains, and mortgage rates will inevitably rise with the upcoming changes in monetary policy.

The median existing-home price for all housing types in July was $222,900, which is 4.9 percent above July 2013. This marks the 29th consecutive month of year-over-year price gains.

Total housing inventory at the end of July rose 3.5 percent to 2.37 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace. Unsold inventory is 5.8 percent higher than a year ago, when there were 2.24 million existing homes available for sale.

Distressed homes – foreclosures and short sales – accounted for 9 percent of July sales, down from 15 percent a year ago and the first time they were in the single-digits since NAR started tracking the category in October 2008. Six percent of July sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in July, while short sales were discounted 14 percent.

Yun says the deepest housing wounds suffered during the Great Recession are beginning to fully heal. “To put it in perspective, distressed sales represented an average of 36 percent of sales during all of 2009,” he said. “Fast-forward to today and rising home values are helping owners recover equity and strong job creation are assisting those who may have fallen behind on their mortgage due to unemployment or underemployment.”

All-cash sales in July were 29 percent of transactions, down from 32 percent in June and representing the lowest overall share since January 2013 (28 percent). Individual investors, who account for many cash sales, purchased 16 percent of homes in July, unchanged from last month and July 2013. Sixty-nine percent of investors paid cash in July.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell for the third consecutive month to 4.13 percent in July from 4.16 percent in June, and remains the lowest rate since June 2013 (4.07 percent).

The percent share of first-time buyers in July rose slightly for the second straight month to 29 percent (28 percent in June), but remain historically low.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, says the new credit scoring calculation recently announced by Fair Isaac Corp., or FICO, will improve access to homeownership. “NAR supports efforts to broaden access to credit for qualified homebuyers, especially those who have been shut out of the housing market or forced to pay higher interest rates because of flawed credit scores,” he said. “A solid credit score is necessary to keep borrowing costs down.”

The median time on market for all homes was 48 days in July, up from 44 days in June; it was 42 days on market in July 2013. Short sales were on the market for a median of 93 days in July, while foreclosures sold in 58 days and non-distressed homes typically took 45 days. Forty percent of homes sold in July were on the market for less than a month.

Single-family home sales increased 2.7 percent to a seasonally adjusted annual rate of 4.55 million in July from 4.43 million in June, but remain 4.2 percent below the 4.75 million pace a year ago. The median existing single-family home price was $223,900 in July, up 5.1 percent from July 2013.

Existing condominium and co-op sales remained unchanged in July from June at an annual rate of 600,000 units, and are 4.8 percent below the 630,000 unit pace a year ago. The median existing condo price was $215,000 in July, which is 3.3 percent higher than a year ago.


DJ-BTMU U.S. Business Barometer declined by 0.3%
Posted: August 21, 2014 at 10:00 AM (Thursday)

For the week ending August 9 2014, the DJ-BTMU U.S. Business Barometer declined by 0.3 percent to 98.4, after remaining flat the previous week. The decrease in this week’s barometer stemmed from weak performances in consumption indexes. Chain store sales and MBA’s purchase index fell by 1.4 and 1.0 percent, respectively. As to the production side, auto production reported solid gains, along with strong electric output; but it was partially offset by a drop of 5.7 percent in truck production.

On a year-over-year basis, the barometer showed a gain of 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 at 98.6. Its year-over-year growth rate was 1.2 percent.


Weekly Initial Unemployment Claims Decrease 14,000 to 298,000
Posted: August 21, 2014 at 08:30 AM (Thursday)

In the week ending August 16, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 311,000 to 312,000. The 4-week moving average was 300,750, an increase of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 295,750 to 296,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 9, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 9 was 2,500,000, a decrease of 49,000 from the previous week's revised level. This is the lowest level for insured unemployment since June 16, 2007 when it was 2,453,000. The previous week's level was revised up 5,000 from 2,544,000 to 2,549,000. The 4-week moving average was 2,527,500, a decrease of 2,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,528,250 to 2,529,500.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 20, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 15, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.4 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 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.4 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 11 percent lower than the same week one year ago.

“Interest rates dropped last week as a result of the ongoing turmoil in Ukraine and other international concerns, which in turn pushed mortgage rates lower,” said Mike Fratantoni, MBA’s Chief Economist. “Overall application volume for conventional mortgages increased. However, there was a 5.9 percent decline in the number of applications for government mortgages, with both purchase and refinance applications declining. Within the government sector, this decline was led by an 8 percent decline in unadjusted Department of Veterans Affairs applications, while Federal Housing Administration and Rural Housing Service unadjusted applications also fell by 5 percent and 3 percent respectively.”

The refinance share of mortgage activity increased to 55 percent of total applications from 54 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.29 percent from 4.35 percent, with points increasing to 0.26 from 0.22 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.18 percent from 4.24 percent, with points increasing to 0.23 from 0.19 (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 3.99 percent from 4.04 percent, while points remained unchanged at 0.03 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.44 percent from 3.48 percent, while points remained unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.10 percent from 3.24 percent, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Consumer Price Index increased 0.1% in July, Ex Fd & Engy up 0.1%
Posted: August 19, 2014 at 08:30 AM (Tuesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.

The all items index posted its smallest seasonally adjusted increase since February; the indexes for shelter and food rose, but were partially offset by declines in the energy index and the index for airline fares. The food index rose 0.4 percent in July, with the food at home index also rising 0.4 percent after being unchanged in June. The decrease in the energy index was its first since March and featured declines in the indexes of all the major energy components.

The index for all items less food and energy increased 0.1 percent in July, the same increase as in June. Along with the shelter index, the indexes for medical care, new vehicles, personal care, and apparel all increased in July. Along with the index for airline fares, the indexes for recreation, for used cars and trucks, for household furnishings and operations, and for tobacco all declined in July.

The all items index increased 2.0 percent over the last 12 months, a slight decline from the 2.1 percent figure for the 12 months ending June. The index for all items less food and energy rose 1.9 percent over the last 12 months, the same figure as for the 12 months ending June. The energy index has increased 2.6 percent, and the food index has risen 2.5 percent over the span.


Real Average Hourly Earnings were unchanged% in July
Posted: August 19, 2014 at 08:30 AM (Tuesday)

Real average hourly earnings for all employees was unchanged from June to July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an unchanged average hourly earnings, combined with a 0.1 percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings was unchanged over the month due to both the real average hourly earnings and the average workweek being unchanged.

Real average hourly earnings was unchanged, seasonally adjusted, from July 2013 to July 2014. The unchanged real average hourly earnings, combined with a 0.3 percent increase in the average workweek, resulted in a 0.3 percent increase in real average weekly earnings over this period.


July Housing Starts up 15.7%, Permits up 8.1%
Posted: August 19, 2014 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,052,000. This is 8.1 percent (±1.8%) above the revised June rate of 973,000 and is 7.7 percent (±1.8%) above the July 2013 estimate of 977,000. Single-family authorizations in July were at a rate of 640,000; this is 0.9 percent (±1.5%) above the revised June figure of 634,000. Authorizations of units in buildings with five units or more were at a rate of 382,000 in July.

HOUSING STARTS
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,093,000. This is 15.7 percent (±10.9%) above the revised June estimate of 945,000 and is 21.7 percent (±10.7%) above the July 2013 rate of 898,000. Single-family housing starts in July were at a rate of 656,000; this is 8.3 percent (±10.3%) above the revised June figure of 606,000. The July rate for units in buildings with five units or more was 423,000.

HOUSING COMPLETIONS
Privately-owned housing completions in July were at a seasonally adjusted annual rate of 841,000. This is 3.7 percent (±8.2%) above the revised June estimate of 811,000 and is 8.0 percent (±9.9%) above the July 2013 rate of 779,000. Single-family housing completions in July were at a rate of 635,000; this is 6.2 percent (±8.8%) above the revised June rate of 598,000. The July rate for units in buildings with five units or more was 199,000.


ICSC Chain Store Sales decreased by 1.3% in Aug 16 Wk
Posted: August 19, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.8% for the week ending August 16 - relative to the prior year. On a weekly basis, sales decreased 1.3% compared to the previous week.

"According to the ICSC-GS consumer tracking survey business was very strong over the past week for back-to-school categories - especially electronics and apparel," said Michael Niemira, ICSC research consultant. "Business was also strong for department, drug, discount, wholesale, and furniture stores. Looking ahead, I expect sales for August to show a healthy gain of 4-5% - a notable improvement over the 3.6% gain in August 2013," he added.


Builder Confidence rises 2 points in August to 55
Posted: August 18, 2014 at 10:00 AM (Monday)

Builder confidence in the market for newly built, single-family homes rose two points to 55 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for August, released today. This third consecutive monthly gain brings the index to its highest level since January.

As the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market. However, builders still face a number of challenges, including tight credit conditions for borrowers and shortages of finished lots and labor.

All three HMI components posted gains in August. The indices gauging current sales conditions and expectations for future sales each rose two points to 58 and 65, respectively. The index gauging traffic of prospective buyers increased three points to 42.

Each of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring. Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand.

Every region saw a gain in its three-month moving average HMI score in August. The Midwest posted a seven-point increase to 55 and the West registered a four-point gain to 56. The Northeast posted a two-point gain to 38 and the South was up one point to 52.


Forecasters Hold the Line on Projections for Growth
Posted: August 15, 2014 at 10:00 AM (Friday)

The outlook for growth in the U.S. economy over the next four years looks mostly unchanged from that of three months ago, according to 43 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The panel expects real GDP to grow at an annual rate of 3.0 percent this quarter and 3.1 percent next quarter. On an annual-average over annual-average basis, the forecasters see real GDP growing 2.1 percent in 2014, down from the previous estimate of 2.4 percent. The forecasters predict real GDP will grow 3.1 percent in 2015, 2.9 percent in 2016, and 2.8 percent in 2017.

Healthier conditions in the labor market accompany the nearly stable outlook for output growth. The forecasters predict the unemployment rate will be an annual average of 6.3 percent in 2014, before falling to 5.7 percent in 2015, 5.4 percent in 2016, and 5.3 percent in 2017. These projections are below those of the last survey.

The forecasters are also more optimistic about the employment outlook. They have revised upward their estimates of the growth in jobs in the next four quarters. The forecasters see nonfarm payroll employment growing at a rate of 228,600 jobs per month this quarter and 211,200 jobs per month next quarter. The forecasters' projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 204,800 in 2014 and 214,000 in 2015, as the table below shows.


Industrial Production increased 0.4%
Capacity Utilization edged up 0.1% to 79.2%

Posted: August 15, 2014 at 09:15 AM (Friday)

Industrial production increased 0.4 percent in July for its sixth consecutive monthly gain. Manufacturing output advanced 1.0 percent in July, its largest increase since February. The production of motor vehicles and parts jumped 10.1 percent, while output in the rest of the manufacturing sector rose 0.4 percent. The production at mines moved up 0.3 percent, its ninth consecutive monthly increase. The output of utilities dropped 3.4 percent, as weather that was milder than usual for July reduced demand for air conditioning. At 104.4 percent of its 2007 average, total industrial production in July was 5.0 percent above its year-earlier level. Capacity utilization for total industry edged up 0.1 percentage point to 79.2 percent in July, a rate 1.7 percentage points above its level of a year earlier and 0.9 percentage point below its long-run (1972–2013) average.


Treasury International Capital Data for June 2014
Posted: August 15, 2014 at 09:00 AM (Friday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for June 2014. The sum total in June of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $153.5 billion. Of this, net foreign private outflows were $156.9 billion, and net foreign official inflows were $3.4 billion.

Foreign residents decreased their holdings of long-term U.S. securities in June; net sales were $18.4 billion. Net sales by private foreign investors were $44.6 billion, while net purchases by foreign official institutions were $26.3 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $0.4 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign sales of long-term securities were $18.7 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign sales of long-term securities are estimated to have been $30.2 billion in June.

Foreign residents decreased their holdings of U.S. Treasury bills by $15.9 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $5.7 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $117.6 billion.


Producer Price Index rose 0.1% in July, ex Fd & Engy up 0.2%
Posted: August 15, 2014 at 08:30 AM (Friday)

The Producer Price Index for final demand rose 0.1 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a 0.4-percent advance in June and a 0.2-percent decline in May. On an unadjusted basis, the index for final demand climbed 1.7 percent for the 12 months ended in July. (See table A.)

In July, the 0.1-percent increase in final demand prices can be traced to the index for final demand services, which also rose 0.1 percent. Prices for final demand goods were unchanged.

Within intermediate demand, prices for processed goods advanced 0.1 percent, the index for unprocessed goods dropped 2.7 percent, and prices for services moved up 0.3 percent.


Empire State Manufacturing Survey Conditions improvement was less widespread
Posted: August 15, 2014 at 08:30 AM (Friday)

The August 2014 Empire State Manufacturing Survey indicates that business conditions continued to improve for New York manufacturers, but the improvement was less widespread than in the previous month. The headline general business conditions index retreated eleven points to 14.7, after reaching a four-year high in July. The new orders index slipped almost five points to 14.1, while the shipments index edged up a point to 24.6—a multiyear high. The unfilled orders index inched down one point to -8.0. The indexes for both prices paid and prices received were up slightly, indicating a marginal pickup in the pace of price increases. Labor market conditions were mixed, with the employment index declining slightly but the index for hours worked rising modestly. Most of the indexes for the six-month outlook rebounded sharply, after slipping in the July survey; a number of them reached multiyear highs, signaling increasingly widespread optimism about the near-term outlook.

General Business Conditions Index Retreats from Four-Year High

Business conditions improved for a fourth consecutive month for New York manufacturers, although the improvement was less widespread than last month’s, according to the August 2014 survey. The general business conditions index retreated eleven points to 14.7, after climbing to a four-year high in July. Thirty-one percent of respondents reported that conditions had improved over the month, while 17 percent reported that they had worsened. The new orders index slipped nearly five points to 14.1, but the shipments index edged up one point to 24.6—its highest level since March 2010. The unfilled orders index eased back to -8.0, pointing to a slow but steady lessening in backlogs. The delivery time index fell five points to -5.7, and the inventories index fell another 11 points to -14.8, pointing to a noteworthy drawdown of inventories.

Mixed News on Employment

Both price indexes edged up this month, suggesting a marginal pickup in the pace of price increases. The prices paid index rose two points to 27.3, and the prices received index inched up one point to 8.0. Labor market conditions were mixed but continued to improve overall. The index for number of employees slipped three points to 13.6, suggesting a slight pullback in the pace of hiring. However, the average workweek index rose six points to 8.0, signaling a slight increase in hours worked.

Increasingly Widespread Optimism

Despite the pullback in most of the survey’s indexes for current conditions, optimism about the near-term outlook grew increasingly widespread. The index for future general business conditions climbed eighteen points to 46.8—its highest level in two-and-a-half years. The future new orders index surged twenty-five points to 50.4, and the future shipments index soared thirty points to 54.5. The index for expected number of employees rose six points to 22.7, and the future average workweek index edged up to zero. The capital expenditures index jumped nine points to 18.2, and the technology spending index inched up to 12.5.


DJ-BTMU U.S. Business Barometer unch%
Posted: August 14, 2014 at 10:00 AM (Thursday)

For the week ending August 2 2014, the DJ-BTMU U.S. Business Barometer remained at 98.7 as positive and negative performances of both consumption and production indexes neutralized each other. MBA’s purchase index dropped by 1.3 percent, but it was entirely offset by gains in chain store sales and railroad freight car loadings. As to the production side, a sharp drop of 4.2 percent in electric output was offset by expansions in other production indexes, especially auto production.

On a year-over-year basis, the barometer showed a gain of 1.3 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.7 for three weeks in a row. Its year-over-year growth rate was 1.2 percent.


U.S. Import Price Index declined 0.2% in July
Posted: August 14, 2014 at 08:30 AM (Thursday)

U.S. import prices declined 0.2 percent in July, after increasing each of the 2 previous months, the U.S. Bureau of Labor Statistics reported today. The July decrease was driven by falling fuel prices. Prices for U.S. exports were unchanged in July following a 0.4-percent decrease in June. In July, declining agricultural prices offset higher nonagricultural prices.


Weekly Initial Unemployment Claims Increase 21,000 to 311,000
Posted: August 14, 2014 at 08:30 AM (Thursday)

In the week ending August 9, the advance figure for seasonally adjusted initial claims was 311,000, an increase of 21,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 289,000 to 290,000. The 4-week moving average was 295,750, an increase of 2,000 from the previous week's revised average. The previous week's average was revised up by 250 from 293,500 to 293,750. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 2, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 2 was 2,544,000, an increase of 25,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,518,000 to 2,519,000. The 4-week moving average was 2,528,250, an increase of 9,000 from the previous week's revised average. The previous week's average was revised up by 250 from 2,519,000 to 2,519,250.


Business Inventories up 0.4% in June
Posted: August 13, 2014 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for June, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,346.7 billion, up 0.3 percent (±0.2%) from May 2014 and were up 4.7 percent (±0.6%) from June 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,743.1 billion, up 0.4 percent (±0.1%) from May 2014 and up 5.8 percent (±0.4%) from June 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of June was 1.29. The June 2013 ratio was 1.28.


U.S. Retail Sales for July virtually unch%, Ex-Auto up 0.1%
Posted: August 13, 2014 at 08:30 AM (Wednesday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $439.8 billion, virtually unchanged (±0.5) from the previous month, and 3.7 percent (±0.9) above July 2013. Total sales for the May through July 2014 period were up 4.2 percent (±0.7) from the same period a year ago. The May to June 2014 percent change was unrevised from +0.2 percent (±0.2).

Retail trade sales were virtually unchanged (±0.5) from June 2014, and 3.4 percent (±0.7) above last year. Health and personal care stores were up 7.3 percent (±1.9) from July 2013 and auto and other motor vehicle dealers were up 6.4 percent (±3.2) from last year.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: August 13, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 8, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week to the lowest level since May 2014. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier to the lowest level since February 2014. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 10 percent lower than the same week one year ago. The seasonally adjusted Government Purchase Index fell by 1 percent to the lowest level since 2007.

The refinance share of mortgage activity decreased to 54 percent of total applications from 55 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.35 percent, with points unchanged at 0.22 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.24 percent from 4.26 percent, with points decreasing to 0.19 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.04 percent from 4.06 percent, with points increasing to 0.03 from 0.02 (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 3.48 percent from 3.51 percent, with points increasing to 0.30 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.24 percent from 3.32 percent, with points increasing to 0.45 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings were 4.7 million in June
Posted: August 12, 2014 at 10:00 AM (Tuesday)

There were 4.7 million job openings on the last business day of June, little changed from 4.6 million in May, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.5 percent) was little changed and the separations rate (3.3 percent) was unchanged in June. Within separations, the quits rate (1.8 percent) and the layoffs and discharges rate (1.2 percent) were unchanged. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

There were 4.7 million job openings in June, little changed from 4.6 million in May. In June, the number of job openings was little changed for total private and government. Over the month, the number of job openings was little changed for all industries and in all four regions.

Over the last 12 months, the movement of job openings has varied. From June 2013 to January 2014, the number of job openings was little changed, decreasing by 97,000. However, from January 2014 through June 2014, the number of job openings trended upward by an average 159,000 job openings per month, for a total increase of 797,000 openings.


ICSC Chain Store Sales decreased by 1.4% in Aug 9 Wk
Posted: August 12, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 3.2% for the week ending August 9 - relative to the prior year. On a weekly basis, sales decreased 1.4% compared to the previous week.

"Business was a bit more mixed this past week, with electronic stores leading the way from a performance standpoint," said Michael Niemira, ICSC research consultant. "The good news is that consumers are continuing to get a break at the pump, which will free up their ability to spend on back-to-school purchases. I expect sales for August to show a healthy gain of 4% to 5% - a notable improvement over the 3.6% gain in August 2013," he added.


NFIB Small Business Optimism Index rose 0.7 points to 95.7
Posted: August 12, 2014 at 07:30 AM (Tuesday)

The Index of Small Business Optimism rose 0.7 points in July to 95.7, not a “4 percent” GDP month for sure. There was little change in the 10 Index components other than outlook for expansion and business conditions which accounted for the small gain in the Index. Even though these improved, they remain historically low.

Job growth was anemic in July with 209,000 as a first guess by the BLS. But the media rejoiced calling it “not too hot, not too cold”, just right for the Federal Reserve and the stock market. Really? Well, financial markets don’t want a hot economy because interest rates will rise causing asset values fall. But the unemployment rate went up, not down although some excuse this as typical in a recovery when more re-enter the labor force. Total hours worked by all these workers barely increased. The Index of Total hours rose from 100.8 to 101.0, 2007=100. So, the total number of hours worked is virtually the same as in 2007, seven years later and after five years of “expansion”. Gains in part-time employment, offset by losses of full-time workers is not a good model for economic growth.

Clearly the stats are not acceptable to the Board of Governors, which recently reasserted the view that significant “accommodation” was still needed, this in spite of the volumes of empirical results that suggest that even historically low rates of interest aren’t enough to move the employment needle much if at all.

The denominator in the valuation model is as low as it can be. But it’s the numerator, expected profits and cash flow that is being crippled by current policies and high levels of uncertainty. A third of the owners who view the current period as a bad time to expand blame the political environment.

Year over year, GDP growth is running about 2.5 percent, been here, done that for too long now. Looking at the NFIB survey results for July, there is no evidence that economic activity is picking up in early Q3. Only job creation plans and job openings have reached growth levels from a historical perspective. But the actual reported job creation, though positive, is not strong. And capital spending and inventory investment both remain weak. Unfortunately, Q3 looks like more of the same.


Wholesale Inventories up 0.3% in June
Posted: August 8, 2014 at 10:00 AM (Friday)

The U.S. Census Bureau announced today that June 2014 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $454.4 billion, up 0.2 percent (+/-0.7)* from the revised May level and were up 6.5 percent (+/-1.8%) from the June 2013 level. The May preliminary estimate was revised upward $0.2 billion. June sales of durable goods were up 1.4 percent (+/-0.9%) from last month and were up 6.6 percent (+/-1.2%) from a year ago. Sales of nondurable goods were down 0.7 percent (+/-0.7%)* from May, but were up 6.5 percent (+/-3.2%) from last June. Sales of farm product raw materials were down 8.1 percent from last month.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $533.5 billion at the end of June, up 0.3 percent (+/-0.4%)* from the revised May level and were up 7.9 percent (+/-0.9%) from the June 2013 level. The May preliminary estimate was revised downward $0.9 billion or 0.2 percent. June inventories of durable goods were up 0.7 percent (+/-0.4%) from last month and were up 8.8 percent (+/-1.2%) from a year ago. Inventories of metals and minerals, except petroleum, were up 3.2 percent from last month and inventories of computer and computer peripheral equipment and software were up 1.8 percent. Inventories of nondurable goods were down 0.2 percent (+/-0.5%)* from May, but were up 6.4 percent (+/-1.1%) from last June. Inventories of farm product raw materials were down 5.3 percent from last month, while inventories of chemicals and allied products were up 2.6 percent.

The June inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.17. The June 2013 ratio was 1.16.


2Q2014 Productivity Growth Increased 2.5%
Posted: August 8, 2014 at 08:30 AM (Friday)

Nonfarm business sector labor productivity increased at a 2.5 percent annual rate during the second quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.7 percent and output increased 5.2 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2013 to the second quarter of 2014, productivity increased 1.2 percent as output and hours worked rose 3.2 percent and 2.0 percent, respectively.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.

In the first quarter of 2014, nonfarm business productivity decreased 4.5 percent--rather than falling 3.2 percent as reported June 4--reflecting a downward revision to output which was larger than a small downward revision to hours.


Consumer Credit Increased at an annual rate of 7.75%
Posted: August 7, 2014 at 03:00 PM (Thursday)

Consumer credit increased at a seasonally adjusted annual rate of 7-3/4 percent during the second quarter. Revolving credit increased at an annual rate of 5-1/2 percent, while nonrevolving credit increased at an annual rate of 8-3/4 percent. In June, consumer credit increased at an annual rate of 6-1/2 percent.


DJ-BTMU U.S. Business Barometer bounced back by 0.2%
Posted: August 7, 2014 at 10:00 AM (Thursday)

For the week ending July 26 2014, the DJ-BTMU U.S. Business Barometer bounced back by 0.2 percent to 98.7, after declining for two consecutive weeks. The recovery in this week’s barometer is largely driven by production indexes, in which truck production and electric output picked up by 11.5 and 6.3 percent, respectively, more than offsetting the 8.1 percent drop in auto production. As to the consumption side, chain store sales and MBA’s purchase index reported minor gains.

On a year-over-year basis, the barometer showed a gain of 1.2 percent, which compares to an average -3.3 percent decline over the Great Recession (ended in June 2009 according to the NBER). After flat lining in 2006, and declining from 2007 through 2009, the barometer bounced back in 2010 to rise by 3.4 percent, which was the strongest increase since 1994 (+4.0 percent), but not so impressive when compared to an -8.0 percent drop in 2009. The rate of increase for the 2013 slowed to 0.7 percent following 1.5 percent in 2012.

The smoothed version of the barometer, which attempts to account for weekly volatility, remained at 98.7 for two weeks in a row. Its year-over-year growth rate was 1.1 percent.


Weekly Initial Unemployment Claims Decrease 14,000 to 289,000
Posted: August 7, 2014 at 08:30 AM (Thursday)

In the week ending August 2, the advance figure for seasonally adjusted initial claims was 289,000, a decrease of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 302,000 to 303,000. The 4 - week moving average was 293,500, a decrease of 4,000 from the previous week's revised average. This is the lowest level for this average since February 25, 2006 when it was 290,750. The previous week's average was revised up by 250 from 297,250 to 297,500.

There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending July 26, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 26 was 2,518,000, a decrease of 24,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,539,000 to 2,542,000. The 4 - week moving average was 2,519,000, a decrease of 17,000 from the previous week's revised average. This is the lowest level for this average since July 7, 2007 when it was 2,509,250. The previous week's average was revised up by 750 from 2,535,250 to 2,536,000.


Goods and Services Deficit Decreased in June 2014
Posted: August 6, 2014 at 08:30 AM (Wednesday)

The Nation’s international trade deficit in goods and services decreased to $41.5 billion in June from $44.7 billion in May (revised), as exports increased and imports decreased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total June exports of $195.9 billion and imports of $237.4 billion resulted in a goods and services deficit of $41.5 billion, down from $44.7 billion in May, revised. June exports were $0.3 billion more than May exports of $195.6 billion. June imports were $2.9 billion less than May imports of $240.3 billion.

In June, the goods deficit decreased $3.0 billion from May to $60.3 billion, and the services surplus increased $0.1 billion from May to $18.7 billion. Exports of goods increased $0.1 billion to $136.9 billion, and imports of goods decreased $2.9 billion to $197.2 billion. Exports of services increased $0.1 billion to $59.0 billion, and imports of services were virtually unchanged at $40.2 billion.

The goods and services deficit increased $5.0 billion from June 2013 to June 2014. Exports were up $5.5 billion, or 2.9 percent, and imports were up $10.5 billion, or 4.6 percent.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: August 6, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 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 August 1, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 1.6 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 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 14 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 55 percent of total applications, the highest level since March 2014, from 53 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.35 percent from 4.33 percent, with points decreasing to 0.22 from 0.24 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.26 percent from 4.22 percent, with points increasing to 0.35 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.06 percent from 4.03 percent, with points increasing to 0.02 from 0.00 (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 3.51 percent from 3.47 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.32 percent from 3.31 percent, with points decreasing to 0.35 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


ISM Non-Manufacturing Index grew at 58.7%
Posted: August 5, 2014 at 10:00 AM (Tuesday)

Economic activity in the non-manufacturing sector grew in July for the 54th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 58.7 percent in July, 2.7 percentage points higher than the June reading of 56 percent. This represents continued growth in the Non-Manufacturing sector. This month's NMI® is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.4 percent, which is 4.9 percentage points higher than the June reading of 57.5 percent, reflecting growth for the 60th consecutive month at a faster rate. This is the highest reading for the index since February 2011 when the index registered 63.3 percent. The New Orders Index registered 64.9 percent, 3.7 percentage points higher than the reading of 61.2 percent registered in June. This represents the highest reading for the New Orders Index since August 2005 when it registered 65.3 percent. The Employment Index increased 1.6 percentage points to 56 percent from the June reading of 54.4 percent and indicates growth for the fifth consecutive month. The Prices Index decreased 0.3 percentage point from the June reading of 61.2 percent to 60.9 percent, indicating prices increased at a slightly slower rate in July when compared to June. According to the NMI®, 16 non-manufacturing industries reported growth in July. Respondents' comments indicate that stabilization and/or improving market conditions have positively affected the majority of the respective industries and businesses."

INDUSTRY PERFORMANCE

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


New orders for manufactured goods increased 1.1%
Posted: August 5, 2014 at 10:00 AM (Tuesday)

New orders for manufactured goods in June, up four of the last five months, increased $5.7 billion or 1.1 percent to $503.2 billion, the U.S. Census Bureau reported today. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.6 percent May decrease. Excluding transportation, new orders increased 1.1 percent.

Shipments, up four of the last five months, increased $2.5 billion or 0.5 percent to $499.8 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.1 percent May decrease.

Unfilled orders, up fourteen of the last fifteen months, increased $10.4 billion or 1.0 percent to $1,098.5 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.7 percent May increase. The unfilled orders-to-shipments ratio was 6.52, unchanged from May.

Inventories, up nineteen of the last twenty months, increased $1.8 billion or 0.3 percent to $653.8 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.8 percent May increase. The inventories-to-shipments ratio was 1.31, unchanged from May.


ICSC Chain Store Sales increased by 0.2% in Aug 2 Wk
Posted: August 5, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 0.2% for the week ending August 2 - relative to its prior week. On a year-over-year basis, sales accelerated rapidly by 4.5% compared to the same week of the prior year.

"The fiscal month sustained a strong pace of 4.1% overall," noted Michael Niemira, ICSC research consultant. "There were 12 states that had a sales tax holiday during the week, which helped propel back-to-school sales. As a result, I expect sales for July to increase by better than 4%," he added.


Employment Trends Index increased in July to 120.31
Posted: August 4, 2014 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in July. The index now stands at 120.31, up from 119.92 (an upward revision) in June. This represents a 6.6 percent gain in the ETI compared to a year ago.

The six-month growth rate in the Employment Trends Index is the strongest in over two years, suggesting solid job growth is likely to continue in the coming months. The pickup in economic activity in recent months will likely increase the need and willingness of employers to accelerate hiring.

July’s increase in the ETI was driven by positive contributions from five of its eight components. In order from the largest positive contributor to the smallest, these were: Initial Claims for Unemployment Insurance, Job Openings, Industrial Production, Number of Temporary Employees, and Real Manufacturing and Trade Sales.


New York Purchasing Managers Business Activity jumped to 68.1 in July
Posted: August 4, 2014 at 08:30 AM (Monday)

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

Current Business Conditions were 68.1 in July, the highest level since November 2013. Future optimism rose to a five-month high. The Six-Month Outlook came in at 70.7 in July.

Job growth accelerated to the best reading in five months. Employment improved to 59.5 in July.

Purchase volume expanded at a more moderate pace than last month. Quantity of Purchases eased to 54.8 in July. Prices Paid increased at the fastest rate in four months, at 64.3 in July.

We introduce the Prices Received index with this Report, a measure of selling prices by regional firms. Prices Received was stuck in neutral at 50.0 in July for a second straight month.

The top line and forward guidance both eased versus last month. Current Revenues were 61.8 in July, and Expected Revenues were 72.2 in July.

Potential Business Opportunities/Impediments: Both parts of labor compensation – cost of benefits and cost of labor – topped the table for impediments, with regulations and inflation also tied for second. The strongest opportunities came from management skills, domestic demand, foreign demand and skilled labor.


University of Michigan Consumer Confidence dipped in July to 81.8
Posted: August 1, 2014 at 10:08 AM (Friday)

More rapid job creation, higher wages, and gains in household wealth have eased the financial strains on households as well as supported more favorable buying plans for vehicles and household durables. While consumers considered their current financial situation to now be in the best shape since the start of the Great Recession, those gains have not caused consumers to confidently expect a continuation of robust growth in the year ahead. Nonetheless, confidence is sufficiently high to expand consumption by an annual rate of 2.5% in 2014.

Current Finances Improve
When consumers were asked to explain in their own words how their financial situation had changed, one in three households mentioned that their income had recently increased. While more work meant higher incomes, the gains were also due to higher wages. This was the most positive assessment of current income trends since the May 2007 survey. Complaints about higher prices, however, also rose, cited by one-in-five households in July. Unfortunately, the recent gains did not prompt more consumers to expect higher income gains in the year ahead. Just over one-in-four anticipated being better off financially, with half expecting no income gain at all.

Housing Market Slows
The slowdown in home price appreciation and uptick in inflation has had a significant impact on home sales. The median annual increase in home values expected by homeowners was just 0.4% in the July survey, well below the expected inflation rate. Although a resurgent housing market has been an important factor for recoveries in the past, investments in homes are no longer expected to post strong inflation-adjusted gains. This leaves housing demand more vulnerable to even small changes in the pace of home appreciation and the inflation rate.

Consumer Sentiment Index
The Sentiment Index was 81.8 in the July 2014 survey, slightly below the 82.5 in June and the 85.1 recorded last July. During the first half of 2014, the Sentiment Index remained remarkably stable, averaging 81.9, with the July figure nearly identical to that average. Current Conditions Index was 97.4, up from June’s 96.6, while the Expectations Index slid to 71.8 from 73.5 in June and 76.5 last July.

Despite the recent gains in jobs and wages, consumers have yet to interpret these gains as an indication that more robust growth in jobs and wages will be forthcoming in the future. The slow and uneven pace of the recovery in jobs and incomes during the past five years has made consumers unwilling to put much stock in favorable economic forecasts until repeatedly confirmed by positive realizations. What may have been termed a skeptical viewpoint in an earlier era, is now regarded as a more practical “show-me” state of mind. This show-me attitude is particularly strong among moderate income families and middle aged householders.


Construction Spending decreased 1.8% in June
Posted: August 1, 2014 at 10:00 AM (Friday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2014 was estimated at a seasonally adjusted annual rate of $950.2 billion, 1.8 percent (±1.8%) below the revised May estimate of $967.8 billion. The June figure is 5.5 percent (±2.3%) above the June 2013 estimate of $900.3 billion. During the first 6 months of this year, construction spending amounted to $445.1 billion, 7.8 percent (±1.6%) above the $413.0 billion for the same period in 2013.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $685.5 billion, 1.0 percent (±1.0%) below the revised May estimate of $692.0 billion. Residential construction was at a seasonally adjusted annual rate of $355.9 billion in June, 0.3 percent (±1.3%) below the revised May estimate of $357.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $329.5 billion in June, 1.6 percent (±1.0%) below the revised May estimate of $335.0 billion.

PUBLIC CONSTRUCTION
In June, the estimated seasonally adjusted annual rate of public construction spending was $264.7 billion, 4.0 percent (±3.0%) below the revised May estimate of $275.7 billion. Educational construction was at a seasonally adjusted annual rate of $59.7 billion, 4.9 percent (±5.6%) below the revised May estimate of $62.8 billion. Highway construction was at a seasonally adjusted annual rate of $75.3 billion, 10.4 percent (±7.4%) below the revised May estimate of $84.0 billion.


July Manufacturing ISM expanded at 57.1
Posted: August 1, 2014 at 10:00 AM (Friday)

Economic activity in the manufacturing sector expanded in July for the 14th consecutive month, and the overall economy grew for the 62nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The July PMI® registered 57.1 percent, an increase of 1.8 percentage points from June's reading of 55.3 percent, indicating expansion in manufacturing for the 14th consecutive month. The New Orders Index registered 63.4 percent, an increase of 4.5 percentage points from the 58.9 percent reading in June, indicating growth in new orders for the 14th consecutive month. The Production Index registered 61.2 percent, 1.2 percentage points above the June reading of 60 percent. Employment grew for the 13th consecutive month, registering 58.2 percent, an increase of 5.4 percentage points over the June reading of 52.8 percent. Inventories of raw materials registered 48.5 percent, a decrease of 4.5 percentage points from the June reading of 53 percent, contracting after five months of consecutive growth. Comments from the panel are generally positive, while some indicate concern over global geopolitical situations."

Of the 18 manufacturing industries, 17 are reporting growth in July in the following order: Furniture & Related Products; Textile Mills; Apparel, Leather & Allied Products; Printing & Related Support Activities; Plastics & Rubber Products; Paper Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Machinery; Chemical Products; Miscellaneous Manufacturing; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Primary Metals; Transportation Equipment; and Computer & Electronic Products. The only industry reporting contraction in July is Wood Products.


July Employment increased by 209,000
Unemployment Rate ticked up to 6.2%

Posted: August 1, 2014 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, retail trade, and construction.

Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7 million) changed little in July. Over the past 12 months, the unemployment rate and the number of unemployed persons have declined by 1.1 percentage points and 1.7 million, respectively.

Among the major worker groups, the unemployment rate for adult women increased to 5.7 percent and the rate for blacks edged up to 11.4 percent in July, following declines for both groups in the prior month. The rates for adult men (5.7 percent), teenagers (20.2 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little or no change in July. The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.2 million in July. These individuals accounted for 32.9 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.1 million.

The civilian labor force participation rate, at 62.9 percent, changed little in July. The participation rate has been essentially unchanged since April. The employment-population ratio, at 59.0 percent, was unchanged over the month but has edged up by 0.3 percentage point over the past 12 months.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 7.5 million, was unchanged in July. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In July, 2.2 million persons were marginally attached to the labor force, down by 236,000 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 741,000 discouraged workers in July, down by 247,000 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 1.4 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment increased by 209,000 in July, the same as its average monthly gain over the prior 12 months. In July, employment grew in professional and business services, manufacturing, retail trade, and construction.

In July, the average workweek for all employees on private nonfarm payrolls was 34.5 hours for the fifth straight month. The manufacturing workweek decreased by 0.2 hour in July to 40.9 hours, and factory overtime edged down by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fifth consecutive month.

In July, average hourly earnings for all employees on private nonfarm payrolls edged up by 1 cent to $24.45. Over the past 12 months, average hourly earnings have risen by 2.0 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $20.61.

The change in total nonfarm payroll employment for May was revised from +224,000 to +229,000, and the change for June was revised from +288,000 to +298,000. With these revisions, employment gains in May and June were 15,000 higher than previously reported.


Personal Income increased 0.4%, Spending increased 0.3%
Posted: August 1, 2014 at 08:30 AM (Friday)

Personal income increased $56.7 billion, or 0.4 percent, and disposable personal income (DPI) increased $51.5 billion, or 0.4 percent, in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $51.7 billion, or 0.4 percent. In May, personal income increased $57.4 billion, or 0.4 percent, DPI increased $55.0 billion, or 0.4 percent, and PCE increased $39.8 billion, or 0.3 percent, based on revised estimates.

Real DPI increased 0.2 percent in June, the same increase as in May. Real PCE increased 0.2 percent in June, compared with an increase of 0.1 percent in May.


DJ-BTMU U.S. Business Barometer declined by 0.3%
Posted: July 31, 2014 at 10:00 AM (Thursday)

For the week ending July 19 2014, the DJ-BTMU U.S. Business Barometer declined by 0.3 percent to 98.5, extending the weakening trend to two weeks. The decrease in this week’s barometer is mainly driven by production indexes, in which electric output plummeted by a sharp 10.2 percent as well as truck production (-4.3 percent). As to the consumption side, chain store sales dropped by 0.4 percent, although it was partially cancelled out by minor gains in MBA’s purchase index and railroad freight car loadings.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, fell by a modest 0.1 percent. Its year-over-year growth rate dropped to 0.9 percent.


Chicago Purchasing Managers Index dropped 10.0 points to 52.6 in July
Posted: July 31, 2014 at 09:45 AM (Thursday)

The Chicago Business Barometer dropped 10.0 points to 52.6 in July, significantly down from May’s seven month high of 65.5, led by a collapse in Production and the ordering components, all of which have been strong since last fall.

A monthly fall of this magnitude has not been seen since October 2008 and left the Barometer at its lowest level since June 2013.

In spite of the sharp decline this month, feedback from purchasing managers was that they saw the downturn as a lull rather than the start of a new downward trend. This was especially so given the recent strong performance and the fact that Employment managed to increase further in July. Nonetheless, following a strong Q2, this was clearly a poor start to Q3 and as such tempers some of the increased optimism in recent months.

Production’s large decline in July left the indicator barely in expansionary territory and at a two year low, although this followed a very strong run with output above 70 in June. New Orders, the most heavily weighted component of the barometer, saw its biggest monthly set back since November 2013.

Order Backlogs, which have expanded in every month since last October, fell into contraction in July.

The rise in the Employment component in July appeared to be somewhat of an anomaly, although one reading of it suggests that panellists expect the lull in output and orders to prove temporary.

Growth in inventories eased in July from a seven month high in June, while Prices Paid fell for the second consecutive month but remained well above 50.

Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said, “The surprise fall in the Chicago Business Barometer in July, following a strong second quarter, naturally raises questions about the sustainability of the recovery. Some feedback from panellists points to this being a temporary setback, although we’ll need to see the August data to judge to what extent this is a blip“.


Weekly Initial Unemployment Claims Increase 23,000 to 302,000
Posted: July 31, 2014 at 08:30 AM (Thursday)

In the week ending July 26, the advance figure for seasonally adjusted initial claims was 302,000, an increase of 23,000 from the previous week's revised level. The previous week's level was revised down by 5,000 from 284,000 to 279,000. The 4-week moving average was 297,250, a decrease of 3,500 from the previous week's revised average. This is the lowest level for this average since April 15, 2006 when it was 296,000. The previous week's average was revised down by 1,250 from 302,000 to 300,750.

There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending July 19, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 19 was 2,539,000, an increase of 31,000 from the previous week's revised level. The previous week's level was revised up 8,000 from 2,500,000 to 2,508,000. The 4-week moving average was 2,535,250, a decrease of 9,000 from the previous week's revised average. This is the lowest level for this average since October 13, 2007 when it was 2,527,500. The previous week's average was revised up by 2,000 from 2,542,250 to 2,544,250.


Employment Cost Index up 0.7% in 2Q2014
Posted: July 31, 2014 at 08:30 AM (Thursday)

Compensation costs for civilian workers increased 0.7 percent, seasonally adjusted, for the 3-month period ending June 2014, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.6 percent, and benefits (which make up the remaining 30 percent of compensation) increased 1.0 percent.


Challenger Layoffs jumped 49% in July
Posted: July 31, 2014 at 07:30 AM (Thursday)

The unexpectedly large layoffs announced by Microsoft helped push July job cuts to the second highest level of the year. In all, U.S.-based employers reported plans to reduce payrolls by 46,887 during the month, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July total was up 49 percent from June’s 31,434 job cuts, which was the fewest number of cuts announced, year to date. It was 24 percent higher than the 37,701 cuts recorded in July 2013. The only month to see more job cuts so far this year was May, when job cuts reached 52,961. Employers have announced 292,921 job cuts, to date. That is 1.3 percent fewer than the 296,633 job cuts announced in the first seven months of 2013.

July job-cut news was dominated by Microsoft, which announced plans to reduce its workforce by as many as 18,000. That is the largest downsizing in the company’s history. It is also the largest layoff announcement this year, surpassing fellow tech giant Hewlett-Packard’s announced plans to shed as many as 16,000 workers from its payroll.

The combined cuts by H-P and Microsoft have helped make the computer industry the leading job-cut sector through July. Computer firms announced a total of 48,361 job cuts in the first seven months of 2014, 125 percent more than the 21,517 recorded during the same period a year ago.

A large portion of the Microsoft job cuts were related to its acquisition of Nokia in 2013. However, like Hewlett-Packard, the tech giant is attempting to streamline in order to become more nimble and competitive in an industry that is constantly changing. Both companies were slow to react to the shift from PCs to mobile and simply do not want to get caught flat-footed again. In order to do that, both companies had to flatten the bureaucracy and foster a more entrepreneurial approach to decision making.

The 48,361 job cuts announced by computer firms this year is 85 percent more than the second-ranked retail industry, which has announced 29,046 job cuts this year, including 2,183 in July. The year-to-date retail total is down 16 percent from a year ago (34,694).

The large job cuts in the computer industry are certainly not a sign of a stalling economy. The fact is, these are companies that are trying to adjust to where the growth is occurring. The economy is on an upward trajectory, as evidenced by the fact that 18 of the 28 industries we track have seen job cuts decline this year. Even among those with increased job cuts, the year-to-date totals are relatively low by historical standards.

As layoffs continue to decline, along with unemployment rates, perhaps the biggest threat to economic growth going forward is the shortage of skilled workers. Some industries and some regions of the country are already experiencing labor shortages. Houston, for example, has flourished thanks to a resurgence in the energy markets, but worries over a shrinking talent pool has area businesses partnering with junior colleges, high schools and social service agencies to prepare workers for the skilled trade jobs being created by the thousands.

In Detroit, demand for accountants is leading to increased salaries, referral and signing bonuses, and generous perks. Candidates are being wined and dined and taken to sporting events by senior partners in the big accounting firms, according to a recent article in Crain’s Detroit Business.

Granted, there are still several major metropolitan areas still struggling with high unemployment, but jobless rates are falling around the country and barring any shock to the economy over the next five to 10 years, labor shortages are likely to spread.


FOMC target funds rate still 0 - 1/4%, QE now $25 bil
Posted: July 30, 2014 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in June indicates that growth in economic activity rebounded in the second quarter. Labor market conditions improved, with the unemployment rate declining further. However, a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has moved somewhat closer to the Committee's longer-run objective. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in August, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $10 billion per month rather than $15 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $15 billion per month rather than $20 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee's sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate.

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

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

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Stanley Fischer; Richard W. Fisher; Narayana Kocherlakota; Loretta J. Mester; Jerome H. Powell; and Daniel K. Tarullo. Voting against was Charles I. Plosser who objected to the guidance indicating that it likely will be appropriate to maintain the current target range for the federal funds rate for "a considerable time after the asset purchase program ends," because such language is time dependent and does not reflect the considerable economic progress that has been made toward the Committee's goals.


Help Wanted OnLine Labor Demand dropped 15,500 in July
Posted: July 30, 2014 at 10:00 AM (Wednesday)

Online advertised vacancies showed a small drop of 15,500 to 5,044,600 in July, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The June Supply/Demand rate stands at 1.9 unemployed for each advertised vacancy with a total of 4.4 million more unemployed workers than the number of advertised vacancies. The number of unemployed was 9.5 million in June.

Labor demand continues to be at historically high levels with employer demand running at about 5 million ads each month. While the average monthly increases have become more modest since early 2013, the overall trend has helped lower unemployment levels and reduced the U.S. Supply/Demand rate from a peak of 5.2 in June 2009 to 1.9 in June 2014.

In July, professional occupations showed a small gain in Computer and Math (13,400) and Community and Social Services (3,500) but a drop in Healthcare (-8,300). The Services/Production occupations showed losses with Office and Administration (-15,700) and Installation and Repair (-9,600).


2Q2014 GDP advance estimate increased 4.0%
Posted: July 30, 2014 at 08:30 AM (Wednesday)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.0 percent in the second quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 10). The "second" estimate for the second quarter, based on more complete data, will be released on August 28, 2014.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

For the first quarter of 2014, real GDP is now estimated to have declined 2.1 percent; in the previously published estimates, first-quarter GDP was estimated to have declined 2.9 percent. The 0.8 percentage point upward revision to the percent change in first-quarter real GDP primarily reflected upward revisions to private inventory investment, to nonresidential fixed investment, and to PCE.


ADP National Employment Report increased by 281,000 in July
Posted: July 30, 2014 at 08:15 AM (Wednesday)

Private sector employment increased by 218,000 jobs from June to July according to the July ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Goods-producing employment rose by 16,000 jobs in July, down from 43,000 jobs gained in June. The construction industry added 12,000 jobs over the month, less than half last month’s gain. Meanwhile, manufacturing added 3,000 jobs in July, less than one-third the number of jobs added in June.

Service-providing employment rose by 202,000 jobs in July, down from 238,000 in June. The ADP National Employment Report indicates that professional/ business services contributed 61,000 jobs in July, down from 79,000 in June. Expansion in trade/transportation/utilities grew by 52,000, down slightly from June’s 56,000. The 9,000 new jobs added in financial activities was down 25% from last month’s number.

Although down from June, the July jobs number marks the fourth straight month of employment gains above 200,000.

The July employment gain was softer than June, but remains consistent with a steadily improving job market. At the current pace of job growth unemployment will quickly decline. Layoffs are still receding and hiring and job openings are picking up. If current trends continue, the economy will return to full employment by late 2016.

Payroll growth for businesses with 49 or fewer employees increased by 84,000 jobs in July. That’s down from 126,000 in June. Job growth was also down over the month for medium-sized and large firms. Employment among medium-sized companies with 50-499 employees rose by 92,000, down from 112,000 in June. Employment at large companies – those with 500 or more employees – increased by 41,000, down slightly from the previous month. Companies with 500-999 employees added 14,000, on par with June’s 15,000.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: July 30, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 25, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 0.2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 12 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 53 percent of total applications from 54 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.33 percent, with points increasing to 0.24 from 0.23 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.22 percent from 4.21 percent, with points increasing to 0.23 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 4.03 percent, with points decreasing to 0.00 from 0.15 (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 remained unchanged at 3.47 percent, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.31 percent from 3.21 percent, with points increasing to 0.40 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence increased in July to 90.9
Posted: July 29, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had improved in June, increased in July. The Index now stands at 90.9 (1985=100), up from 86.4 in June. The Present Situation Index increased to 88.3 from 86.3, while the Expectations Index rose to 92.7 from 86.4 in June.

Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007 (95.2). Strong job growth helped boost consumers’ assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations. Recent improvements in consumer confidence, in particular expectations, suggest the recent strengthening in growth is likely to continue into the second half of this year.

Consumers’ assessment of current conditions improved in July. Those claiming business conditions are “good” edged down to 22.7 percent from 23.4 percent, while those stating business conditions are “bad” was virtually unchanged at 22.7 percent. Consumers’ appraisal of the job market was more favorable. Those saying jobs are “plentiful” increased to 15.9 percent from 14.6 percent, while those claiming jobs are “hard to get” remained unchanged at 30.7 percent.

Consumers’ expectations were more optimistic in July. The percentage of consumers expecting business conditions to improve over the next six months increased to 20.2 percent from 18.4 percent, while those expecting business conditions to worsen held steady at 11.5 percent. Consumers were more positive about the outlook for the labor market. Those anticipating more jobs in the months ahead increased to 19.1 percent from 16.3 percent, while those anticipating fewer jobs declined to 16.4 percent from 18.4 percent. Slightly more consumers expect their incomes to grow, 17.3 percent in July versus 16.7 percent in June, while those expecting a drop in their incomes declined to 11.0 percent from 11.4 percent.


S&P/Case-Shiller Home Price Indices gained 1.1% in May
Posted: July 29, 2014 at 09:00 AM (Tuesday)

Data through May 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show the Composite Indices increased at a slower pace. The 10-City Composite gained 9.4% year-over-year and the 20-City 9.3%, down significantly from the +10.9% and +10.8% returns reported last month. All cities with the exception of Charlotte and Tampa saw their annual rates decelerate.

In the month of May, the 10- and 20-City Composites posted gains of 1.1%. For the second consecutive month, all twenty cities posted increases. Charlotte posted its highest monthly increase of 1.4% in over a year. Tampa gained 1.8%, followed by San Francisco at +1.6% and Chicago at +1.5%. Phoenix and San Diego were the only cities to gain less than one percent with increases of 0.4% and 0.5%, respectively.

In May 2014, the 10-City and 20-City Composites posted year-over-year increases of 9.4% and 9.3%, respectively.

Home prices rose at their slowest pace since February of last year. The 10- and 20-City Composites posted just over 9%, well below expectations. Month-to-month, all cities are posting gains before seasonal adjustment; after seasonal adjustment 14 of 20 were lower.

Year-over-year, nine cities – Las Vegas (16.9%), San Francisco (15.4%), Miami (13.2%), San Diego (12.4%), Los Angeles (12.3%), Detroit (11.9%), Atlanta (11.2%), Tampa (10.2%) and Portland (10.0%) – posted double-digit increases in May 2014. The Sun Belt continues to lead with seven of the top eight performing cities. Eighteen of 20 cities had lower year-over-year numbers than last month; San Francisco and San Diego saw their year-over-year figures decelerate by about three percentage points.

Housing has been turning in mixed economic numbers in the last few months. Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.

As of May 2014, average home prices across the United States are back to their summer 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 17-18%. The recovery from the March 2012 lows is 26.5% and 27.3% for the 10-City and 20-City Composites.

While all cities continue to post year-over-year increases, gains weakened in May. Charlotte was the only MSA to see its annual rate improve; it posted 4.7% year-over-year in May versus 4.5% in April. Tampa held steady with a gain of 10.2%. Despite seeing their rates decrease by two to three percentage points, Las Vegas remained the top performing city with a return of +16.9%, followed by San Francisco at +15.4%.

All cities reported increases month-over-month with nine cities – Charlotte, Cleveland, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York and Tampa – showing larger increases in May than in April. Charlotte posted its largest monthly gain since April 2013 while Minneapolis, New York and Tampa showed their highest since August 2013. New York showed the most improvement with a gain of 1.0% in May versus 0.1% in April. Boston posted +1.1% in May, down from +2.9% in April. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value.


Paychex-IHS Small Business Jobs Index increased to 101.11 in July
Posted: July 29, 2014 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index grew 0.34 percent in the 12 months leading up through July. The national index increased to 101.11, inching closer to its record high of 101.26 achieved in April 2014. Among the regions, the West North Central jumped to the top of the regional index with the highest monthly increase. Washington continues to lead the states, while Michigan shows impressive improvement in employment conditions. Dallas holds the top spot among metro areas for the second straight month, with Houston gaining ground and taking over the number two spot.

The Paychex | IHS Small Business Jobs Index begins the second half of the year with an increase over June, adding to the recent favorable indicators of economic gains in 2014.

July's index results show that small business employment growth is picking up once again, continuing the long-term trend we’ve been seeing for some time now.

At 101.11, the July 2014 national index is higher than any value it had achieved through 2013. Aided by consistently strong 12-month growth rates in the Mountain and West North Central regions, the national index has increased 0.34 percent since July 2013.


ICSC Chain Store Sales increased by 0.2% in Jul 26 Wk
Posted: July 29, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index increased 0.2% for the week ending July 26 - relative to its prior week. On a year-over-year basis, sales accelerated rapidly by 4.6% compared to the same week of the prior year.

"There was impressive strength in business for department, apparel, and electronic stores which were all helped by back-to-school shopping," noted Michael Niemira, ICSC research consultant. "With the very strong end to the month, I expect sales for July to now come in on the high end of the original forecast, and increase by 4%," he added.


Texas Manufacturing Activity Picks up Pace Again
Posted: July 28, 2014 at 10:30 AM (Monday)

Texas factory activity increased again in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 15.5 to 19.1, indicating output grew at a faster pace than in June.

Other measures of current manufacturing activity reflected significantly stronger growth in July. The new orders index doubled from 6.5 to 13. The capacity utilization index also posted a strong rise, moving to 18 from 9.2 in June. The shipments index rose 12 points to 22.8, reaching its highest level since January 2013. The July readings for these indexes were all more than twice their 10-year averages, suggesting notably robust manufacturing growth.

Perceptions of broader business conditions were more optimistic this month. The general business activity index edged up from 11.4 to 12.7, pushing to its highest level in 10 months. The company outlook index rose 3 points to 11.3.

Labor market indicators reflected continued employment growth and longer workweeks. The July employment index posted a second robust reading, although it edged down from 13.1 to 11.4. Twenty-five percent of firms reported net hiring compared with 14 percent reporting net layoffs. The hours worked index edged up from 4.7 to 6.3, indicating a slightly stronger rise in hours worked than last month.

Upward pressure on prices and wages continued at about the same pace in July as in June. The raw materials price index came in at 25.4, less than a two-point change from the 27.3 June reading. The finished goods price index held steady at 7.3, and the wages and benefits index remained at 18.8. All three July index readings were very close to their 10-year averages.

Expectations regarding future business conditions remained optimistic in July. The index of future general business activity inched up to 19.8, while the index of future company outlook fell to 24.4 after reaching a multiyear high of 33.8 in June. Indexes for future manufacturing activity showed mixed movements in July but remained in solidly positive territory.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected July 15–23, and 115 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.


Pending Home Sales Index declined 1.1% in June
Posted: July 28, 2014 at 10:00 AM (Monday)

After three consecutive months of solid gains, pending home sales slowed modestly in June, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 1.1 percent to 102.7 in June from 103.8 in May, and is 7.3 percent below June 2013 (110.8). Despite June’s decrease, the index is above 100 – considered an average level of contract activity – for the second consecutive month after failing to reach the mark since November 2013 (100.7).

The housing market is stabilizing, but ongoing challenges are impeding full sales potential. Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved. However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.

Despite these headwinds, Yun ultimately expects a slight uptick in sales during the second half of the year. The good news is that price appreciation has decreased to its slowest pace since March 20121 behind much needed increases in inventory. With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether or not it makes sense to buy or continue renting.

The PHSI in the Northeast fell 2.9 percent to 83.8 in June, and is 3.2 percent below a year ago. In the Midwest the index rose 1.1 percent to 106.6, but remains 5.5 percent below June 2013.

Pending home sales in the South dipped 2.4 percent to an index of 113.8 in June, and is 4.3 percent below a year ago. The index in the West inched 0.2 percent in June to 95.7, but remains 16.7 percent below June 2013.

Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million, compared to 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and in 2015.


New Orders for Durable Goods Increased 0.7%, Ex-Trans Up 0.8%
Posted: July 25, 2014 at 08:30 AM (Friday)

New orders for manufactured durable goods in June increased $1.8 billion or 0.7 percent to $239.9 billion, the U.S. Census Bureau announced today. This increase, up four of the last five months, followed a 1.0 percent May decrease. Excluding transportation, new orders increased 0.8 percent. Excluding defense, new orders increased 0.7 percent. Machinery, up following two consecutive monthly decreases, led the increase, $0.9 billion or 2.4 percent to $37.3 billion.

Shipments of manufactured durable goods in June, up four of the last five months, increased $0.3 billion or 0.1 percent to $238.2 billion. This followed a 0.1 percent May decrease. Transportation equipment, up following two consecutive monthly decreases, drove the increase, $0.5 billion or 0.7 percent to $70.2 billion.

Unfilled orders for manufactured durable goods in June, up fourteen of the last fifteen months, increased $8.7 billion or 0.8 percent to $1,096.8 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.7 percent May increase. Transportation equipment, up nine of the last ten months, led the increase, $4.9 billion or 0.7 percent to $681.0 billion.

Inventories of manufactured durable goods in June, up fourteen of the last fifteen months, increased $1.6 billion or 0.4 percent to $399.7 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.0 percent May increase. Transportation equipment, also up fourteen of the last fifteen months, led the increase, $0.9 billion or 0.7 percent to $128.8 billion.

Nondefense new orders for capital goods in June increased $1.5 billion or 1.8 percent to $82.3 billion. Shipments increased $0.9 billion or 1.2 percent to $76.6 billion. Unfilled orders increased $5.6 billion or 0.8 percent to $667.2 billion. Inventories increased $0.1 billion or 0.1 percent to $181.8 billion. Defense new orders for capital goods in June increased $0.2 billion or 2.5 percent to $9.7 billion. Shipments decreased $0.1 billion or 0.6 percent to $9.4 billion. Unfilled orders increased $0.3 billion or 0.2 percent to $159.8 billion. Inventories increased $0.5 billion or 2.1 percent to $24.1 billion.

Revised seasonally adjusted May figures for all manufacturing industries were: new orders, $497.0 billion (revised from $497.7 billion); shipments, $496.7 billion (revised from $498.3 billion); unfilled orders, $1,088.1 billion (revised from $1,087.4 billion); and total inventories, $652.0 billion (revised from $651.5 billion).


Kansas City Fed Manufacturing Activity edged higher in July
Posted: July 24, 2014 at 11:00 AM (Thursday)

Growth in Tenth District manufacturing activity edged higher in July, and producers’ optimism for future activity increased. Several firms continued to note difficulties with retaining certain types of workers, particularly machinists and welders. Price indexes were mixed, with most recording little change from the previous month.

The month-over-month composite index was 9 in July, up from 6 in June but slightly lower than 10 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The growth in manufacturing activity occurred mostly at durable goods-producing plants, particularly machinery products, while nondurable goods-producers reported fairly flat activity. Most other month-over-month indexes also increased. The production index climbed from 2 to 11, and the shipments, new orders, and employment indexes also rose considerably. In contrast, the order backlog index fell into negative territory for the first time in four months. Both inventory indexes were basically unchanged.

Year-over-year factory indexes were mixed. The composite year-over-year index moderated somewhat from 15 to 13, and the new orders and order backlog indexes also edged lower. The capital expenditures index fell from 19 to 10, its lowest level in nine months, and the new orders for exports index slipped from -2 to -3. In contrast, the production, shipments, and employment indexes moved slightly higher. The finished goods inventory index decreased from 7 to 0, and the raw materials inventory index also eased.

Future factory indexes increased slightly from last month. The future composite index edged up from 12 to 15, and the future production, shipments, new orders, and order backlog indexes also rose. The future employment index jumped from 14 to 23, its highest level in six months, and the future employee workweek index reached nearly a five-year high. The future capital expenditures index grew for the second straight month, while the future new orders for exports index remained unchanged. Both future inventories indexes fell into negative territory.

Price indexes were mixed after easing last month. The month-over-month raw materials price index edged down from 25 to 19, while the finished goods price index moved slightly higher. The year-over-year finished goods price index rose from 30 to 37, but the raw materials price index was basically unchanged. The future raw materials price index eased from 49 to 46, and the future finished goods price index also edged lower, indicating fewer firms plan to pass recent cost increases through to customers.


New Home Sales in June at annual rate of 406,000
Posted: July 24, 2014 at 10:00 AM (Thursday)

Sales of new single-family houses in June 2014 were at a seasonally adjusted annual rate of 406,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.1 percent (±12.3%) below the revised May rate of 442,000 and is 11.5 percent (±14.4%) below the June 2013 estimate of 459,000.

The median sales price of new houses sold in June 2014 was $273,500; the average sales price was $331,400. The seasonally adjusted estimate of new houses for sale at the end of June was 197,000. This represents a supply of 5.8 months at the current sales rate.


DJ-BTMU U.S. Business Barometer dropped by 0.6%
Posted: July 24, 2014 at 10:00 AM (Thursday)

For the week ending July 12 2014, the DJ-BTMU U.S. Business Barometer dropped by 0.6 percent following a solid 0.9 percent gain in the previous week. The decrease in this week’s barometer is explained by weak performances in both consumption and production indexes. MBA’s purchase index dipped by 7.6 percent in line with railroad freight car loadings’ weak trend. As to the production side, auto and truck production plummeted sharply by 19.1 and 14.0 percent, respectively, after strong increases in the prior week.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, rose by a modest 0.1 percent. Its year-over-year growth rate remained at 1.0 percent.


Weekly Initial Unemployment Claims Decrease 19,000 to 284,000
Posted: July 24, 2014 at 08:30 AM (Thursday)

In the week ending July 19, the advance figure for seasonally adjusted initial claims was 284,000, a decrease of 19,000 from the previous week's revised level. This is the lowest level for initial claims since February 18, 2006 when they were 283,000. The previous week's level was revised up by 1,000 from 302,000 to 303,000. The 4-week moving average was 302,000, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since May 19, 2007 when it was 302,000. The previous week's average was revised up by 250 from 309,000 to 309,250.

There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending July 12, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 12 was 2,500,000, a decrease of 8,000 from the previous week's revised level. This is the lowest level for insured unemployment since June 16, 2007 when it was 2,453,000. The previous week's level was revised up 1,000 from 2,507,000 to 2,508,000. The 4-week moving average was 2,542,250, a decrease of 17,000 from the previous week's revised average. This is the lowest level for this average since October 13, 2007 when it was 2,527,500. The previous week's average was revised up by 250 from 2,559,000 to 2,559,250.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: July 23, 2014 at 08:30 AM (Wednesday)

Mortgage applications increased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 18, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 0.3 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 15 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 54.4 percent of total applications, the highest level since March 2014, from 53.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.33 percent, with points increasing to 0.23 from 0.20 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.21 percent, the lowest level since May 2013, from 4.23 percent, with points decreasing to 0.20 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.03 percent from 4.04 percent, with points increasing to 0.15 from 0.02 (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 3.47 percent from 3.41 percent, with points increasing to 0.28 from 0.23 (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 3.21 percent from 3.17 percent, with points decreasing to 0.32 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Existing-Home Sales climbed 2.6% in June
Posted: July 22, 2014 at 10:00 AM (Tuesday)

Existing-home sales increased in June and reached an annual pace of 5 million sales for the first time since October 2013, while rising inventory continues to push overall supply towards a more balanced market, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May. Sales are at the highest pace since October 2013 (5.13 million), but remain 2.3 percent below the 5.16 million-unit level a year ago.

Housing fundamentals are moving in the right direction. Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices. On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages – particularly in the West – are still putting upward pressure on prices.

Stagnant wage growth is holding back what should be a stronger pace of sales. Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month,” he said. “However, the lack of wage increases is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability.

Total housing inventory at the end of June rose 2.2 percent to 2.30 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5 percent higher than a year ago, when there were 2.16 million existing homes available for sale.

The median existing-home price for all housing types in June was $223,300, which is 4.3 percent above June 2013. This marks the 28th consecutive month of year-over-year price gains.

Distressed homes – foreclosures and short sales – accounted for 11 percent of June sales, down from 15 percent in June 2013. Eight percent of June sales were foreclosures and 3 percent were short sales.

Foreclosures sold for an average discount of 20 percent below market value in June, while short sales were discounted 11 percent.

The percent share of first-time buyers continues to underperform historically, rising slightly to 28 percent in June (27 percent in May), but remain at an overall average of 28 percent over the past year.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said Realtors® are reporting that some prospective buyers who have above average credit scores but low down payments are deterred from homeownership by the high cost of FHA mortgage insurance. “Access to affordable credit continues to hamper young, prospective first-time buyers,” added Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped for the second consecutive month to 4.16 percent in June from 4.19 percent in May, and is the lowest since last June (4.07 percent).

Properties sold faster for the sixth consecutive month in June; highlighting the fact that inventory is still lagging relative to demand. The median time on market for all homes was 44 days in June, down from 47 days in May; it was 37 days on market in June 2013. Short sales were on the market for a median of 120 days in June, while foreclosures sold in 54 days and non-distressed homes typically took 42 days. Forty-two percent of homes sold in June were on the market for less than a month.

For the third consecutive month – as well as the average of the previous 12 months – all-cash sales in June were 32 percent of transactions, up from 31 percent in June 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in June, unchanged from May; they were 17 percent in June 2013. Sixty-nine percent of investors paid cash in June.

Single-family home sales rose 2.5 percent to a seasonally adjusted annual rate of 4.43 million in June from 4.32 million in May, but remain 2.9 percent below the 4.56 million pace a year ago. The median existing single-family home price was $224,300 in June, up 4.5 percent from June 2013.

Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in June from 590,000 in May, and are 1.7 percent above the 600,000 unit pace a year ago. The median existing condo price was $215,700 in June, which is 3.2 percent higher than a year ago.


Richmond Fed's Current Activity Index moved up to a reading of 7
Posted: July 22, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity grew moderately in July, according to the most recent survey by the Federal Reserve Bank of Richmond.* The volume of new orders was flat compared to June, and shipments grew on pace with a month ago. Manufacturing employment picked up, while growth in the average workweek slowed slightly and wages rose more quickly in comparison to last month.

Manufacturers were optimistic about future business conditions. Firms expected faster growth in shipments and new orders in the six months ahead. Additionally, producers looked for backlogs to build more quickly and anticipated faster growth in capacity utilization. Expectations were for shorter vendor lead times.

Survey participants expected faster growth in the number of employees along with solid growth in wages and a pickup in the average workweek. Prices of raw materials and finished goods rose at a somewhat faster pace in July compared to last month. Additionally, manufacturers expected slightly faster growth in prices paid and prices received over the next six months than they anticipated a month ago.

Overall, manufacturing conditions strengthened. The composite index for manufacturing moved up to a reading of 7 following last month's reading of 4. The index for shipments gained one point, ending at 3. New orders grew at the same pace as a month ago, with that index finishing at a reading of 5. Manufacturing employment picked up this month; the July indicator advanced nine points to a reading of 13.

Vendor lead time lengthened, moving the index to 12 from a reading of 2, and the backlog of orders index flattened to 0 from −4. The capacity utilization gauge slipped three points this month to end at 4. Finished goods inventories built up at a faster pace. The index gained four points, ending at 12. Raw materials inventories grew more quickly compared to last month. That gauge moved to 21 from 14


Consumer Price Index increased 0.3% in June, Ex Fd & Engy up 0.1%
Posted: July 22, 2014 at 08:30 AM (Tuesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.1 percent before seasonal adjustment.

In contrast to the broad-based increase last month, the June seasonally adjusted increase in the all items index was primarily driven by the gasoline index. It rose 3.3 percent and accounted for two-thirds of the all items increase. Other energy indexes were mixed, with the electricity index rising, but the indexes for natural gas and fuel oil declining. The food index decelerated in June, rising only slightly, with the food at home index flat after recent increases.

The index for all items less food and energy also decelerated in June, increasing 0.1 percent after a 0.3 percent increase in May. The indexes for shelter, apparel, medical care, and tobacco all increased in June, and the index for household furnishings and operations rose for the first time in a year. However, the index for new vehicles declined after recent increases, and the index for used cars and trucks also fell.

The all items index increased 2.1 percent over the last 12 months, the same figure as for the 12 months ending May. The index for all items less food and energy rose 1.9 percent over the last 12 months, a slight decline from the 2.0 percent figure last month. The index for energy increased 3.2 percent over the span, and the food index rose 2.3 percent.


Real Average Hourly Earnings were unchanged% in June
Posted: July 22, 2014 at 08:30 AM (Tuesday)

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

Real average weekly earnings was unchanged over the month due to both real average hourly earnings and the average workweek being unchanged.

Real average hourly earnings declined 0.1 percent, seasonally adjusted, from June 2013 to June 2014. The decrease in real average hourly earnings, combined with an unchanged average workweek, resulted in a 0.1 percent decline in real average weekly earnings over this period.


ICSC Chain Store Sales decreased by 0.4% in Jul 19 Wk
Posted: July 22, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index decreased slightly by 0.4% for the week ending July 19 - relative to its prior week. On a year-over-year basis, sales increased by 2.8% compared to the same week of the prior year.

"Unseasonably cool weather acted as a drag on consumer demand for summer-clearance items this week as average temperatures for the country were considerably cooler than this same week last year," noted Michael Niemira, ICSC research consultant. "However, the cooler temps will have gotten consumers into the Back-to-School shopping mindset. Looking ahead to July sales, I expect the strong trend to continue, with comp-store sales posting a 3-4% increase," he added.


Chicago Fed National Activity decelerated slightly in June
Posted: July 21, 2014 at 08:30 AM (Monday)

Led by slower growth in production-related indicators, the Chicago Fed National Activity Index (CFNAI) edged down to +0.12 in June from +0.16 in May. Two of the four broad categories of indicators that make up the index made nonpositive contributions to the index in June, but two of the four categories increased from May.

The index’s three-month moving average, CFNAI-MA3, decreased to +0.13 in June from +0.28 in May, marking its fourth consecutive reading above zero. June’s CFNAI-MA3 suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.18 in June from +0.33 in May. Forty-four of the 85 individual indicators made positive contributions to the CFNAI in June, while 41 made negative contributions. Forty indicators improved from May to June, while 43 indicators deteriorated and two were unchanged. Of the indicators that improved, 12 made negative contributions.

Employment-related indicators contributed +0.22 to the CFNAI in June, up from +0.14 in May. The unemployment rate decreased to 6.1 percent in June from 6.3 percent in May; and nonfarm payrolls rose by 288,000 in June after increasing by 224,000 in the previous month.

Production-related indicators made a neutral contribution to the CFNAI in June, down from +0.14 in May. Industrial production rose 0.2 percent in June after rising 0.5 percent in May, and manufacturing production increased 0.1 percent in June after increasing 0.4 percent in the previous month. The contribution of the sales, orders, and inventories category to the CFNAI remained at +0.04 in June.

The contribution from the consumption and housing category to the CFNAI edged up to –0.14 in June from –0.16 in May. Consumption indicators, on balance, improved, pushing the category’s contribution higher. However, housing starts decreased to 893,000 annualized units in June from 985,000 in May, and housing permits decreased to 963,000 annualized units in June from 1,005,000 in the previous month.

The CFNAI was constructed using data available as of July 17, 2014. At that time, June data for 50 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The May monthly index was revised to +0.16 from an initial estimate of +0.21, and the April monthly index was revised to +0.11 from last month’s estimate of –0.15. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revisions to the May and April monthly indexes were due primarily to the former.


U.S. Leading Economic Index increased 0.3%
Posted: July 18, 2014 at 10:00 AM (Friday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.3 percent in June to 102.2 (2004 = 100), following a 0.7 percent increase in May, and a 0.3 percent increase in April.

Broad-based increases in the LEI over the last six months signal an economy that is expanding in the near term and may even somewhat accelerate in the second half. Housing permits, the weakest indicator during this period, reflects some risk to this improving outlook. But favorable financial conditions, generally positive trends in the labor markets and the outlook for new orders in manufacturing have offset the housing market weakness over the past six months.

The CEI shows the pace of economic activity continued to expand moderately through June. Stronger consumer demand driven by sustained job gains and improving confidence remains the main source of improvement for the U.S. economy. In addition to a stronger housing market, more business investment could also provide an upside to the overall economy.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in June to 109.2 (2004 = 100), following a 0.3 percent increase in May, and a 0.2 percent increase in April.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.5 percent in June to 124.4 (2004 = 100), following a 0.3 percent increase in May, and a 0.4 percent increase in April.


Philadelphia July Outlook Reflect Continued Optimism
Posted: July 17, 2014 at 10:00 AM (Thursday)

Firms responding to the Business Outlook Survey indicated continued expansion in the region’s manufacturing sector in July. The survey’s indicators for general activity, new orders, shipments, and employment were all positive this month and increased from their readings in June. The survey’s indicators of future activity also increased or stayed at high levels, suggesting that firms remain optimistic about continued growth over the next six months.

Activity Index at Highest Level Since 2011

The diffusion index of current general activity increased from a reading of 17.8 in June to 23.9 this month. The index has remained positive for five consecutive months and is at its highest reading since March 2011 (see Chart). The current new orders and shipments indexes increased notably this month, increasing 17 points and 19 points, respectively. Both unfilled orders and delivery times indexes were positive for the second consecutive month, suggesting continued strengthening conditions.

The current indicators for labor market conditions also suggest improved conditions this month. The employment index remained positive, and, although it increased less than 1 point, it has improved for four consecutive months. The percentage of firms reporting increases in employment (24 percent) exceeded the percentage reporting decreases (12 percent). The workweek index was positive for the fifth consecutive month and increased 5 points.

Some Firms Report Higher Prices

About 36 percent of the firms reported higher input prices this month, near the level reported last month. The prices paid index changed little from its reading in June, although it had increased 24 points over the previous two months. The prices received index, which reflects firms’ own final goods prices, increased slightly, from 14.1 to 16.8. The percent of firms reporting higher prices (21 percent) exceeded the percentage reporting lower prices (4 percent), although 72 percent of the firms reported steady prices.

Indicators Reflect Continued Optimism

Most of the survey’s broad indicators of future growth showed improvement again this month. The future general activity index increased 6 points and is at its highest reading since last October (see Chart). The index has increased for three consecutive months. The future indexes for new orders and shipments moved in opposite directions this month, but both remained at very high readings. Firms remained relatively optimistic with respect to employment growth, although the future employment index fell 2 points. Nearly one-third of the firms are expecting growth in their employment levels over the next six months. Only 4 percent of the firms expect employment reductions.

In special questions this month, manufacturing firms were asked about the contribution of growth in export business over the past year (see Special Questions). Among the manufacturing firms that export, exports as a percentage of sales have increased at 39 percent of the firms; however, most of the firms (37 percent) indicated their export share had increased modestly. About 7 percent indicated that exports as a share of sales have decreased. Firms were also asked about the type of products being exported. Intermediate products represented the most cited type of products being exported (40 percent), followed by final business products (25 percent), capital goods (19 percent), and final consumer products (11 percent).

Summary

The July Business Outlook Survey suggests continued broad-based expansion of the region’s manufacturing sector. Firms reported continued increases in overall activity, new orders, shipments, and employment this month. The survey’s future activity indexes remained at high readings, indicating that firms expect continued growth, including employment increases, over the next six months.


DJ-BTMU U.S. Business Barometer rose by a robust 0.9%
Posted: July 17, 2014 at 10:00 AM (Thursday)

For the week ending July 5 2014, the DJ-BTMU U.S. Business Barometer advanced by a robust 0.9 percent from last week, reaching the highest level of 99.4 since the beginning of the Great Recession. This week’s barometer is driven by both consumption and production indexes. Chain store sales and MBA’s purchase index climbed by 1.6 and 3.7 percent, respectively. As to the production side, auto production jumped 28.4 percent to the highest level since January 4 this year.

On a year-over-year basis, the barometer showed a gain of 1.3 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, soared by another modest 0.2 percent. Its year-over-year growth rate remained at 1.0 percent.


June Housing Starts down 6.5%, Permits down 6.4%
Posted: July 17, 2014 at 08:30 AM (Thursday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 963,000. This is 4.2 percent (±1.5%) below the revised May rate of 1,005,000, but is 2.7 percent (±1.8%) above the June 2013 estimate of 938,000. Single-family authorizations in June were at a rate of 631,000; this is 2.6 percent (±1.4%) above the revised May figure of 615,000. Authorizations of units in buildings with five units or more were at a rate of 301,000 in June.

HOUSING STARTS
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 893,000. This is 9.3 percent (±10.3%) below the revised May estimate of 985,000, but is 7.5 percent (±14.4%) above the June 2013 rate of 831,000. Single-family housing starts in June were at a rate of 575,000; this is 9.0 percent (±10.1%) below the revised May figure of 632,000. The June rate for units in buildings with five units or more was 305,000.

HOUSING COMPLETIONS
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 789,000. This is 12.0 percent (±8.3%) below the revised May estimate of 897,000, but is 3.4 percent (±11.6%) above the June 2013 rate of 763,000. Single-family housing completions in June were at a rate of 586,000; this is 6.5 percent (±9.4%) below the revised May rate of 627,000. The June rate for units in buildings with five units or more was 198,000.


Weekly Initial Unemployment Claims Decrease 3,000 to 302,000
Posted: July 17, 2014 at 08:30 AM (Thursday)

In the week ending July 12, the advance figure for seasonally adjusted initial claims was 302,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 304,000 to 305,000. The 4-week moving average was 309,000, a decrease of 3,000 from the previous week's revised average. This is the lowest level for this average since June 2, 2007 when it was 307,500. The previous week's average was revised up by 500 from 311,500 to 312,000.

There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending July 5, 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 July 5 was 2,507,000, a decrease of 79,000 from the previous week's revised level. This is the lowest level for insured unemployment since June 30, 2007 when it was 2,501,000. The previous week's level was revised up 2,000 from 2,584,000 to 2,586,000. The 4-week moving average was 2,559,000, a decrease of 13,000 from the previous week's revised average. This is the lowest level for this average since October 20, 2007 when it was 2,544,500. The previous week's average was revised up by 750 from 2,571,250 to 2,572,000.


Beige Book: Economic Activity Continues to Expand at a Moderate Pace
Posted: July 16, 2014 at 02:00 PM (Wednesday)

All twelve Federal Reserve Districts indicated that economic activity continued to expand since the previous report. The pace of economic growth was characterized as moderate in New York, Chicago, Minneapolis, Dallas, and San Francisco, while the remaining Districts reported modest expansion. Compared to the previous reporting period, Boston and Richmond noted a slightly slower pace of growth. Most Districts were optimistic about the outlook for growth.
Overall consumer spending increased in every District. Retail sales grew modestly in most Districts, with increases that were generally similar to the previous reporting period. Vehicle sales remained stronger than non-auto retail sales, with Philadelphia, Richmond, Atlanta, and San Francisco indicating robust to very strong auto sales. Tourism activity expanded in all reporting Districts, with growth ranging from slight in Philadelphia to very strong in Boston. Hotel contacts described robust activity in the Boston, New York, Atlanta, and Minneapolis Districts, while Philadelphia and Richmond noted activity levels that were in line with seasonal norms.

Activity in the nonfinancial services sector continued to grow across all Districts at a modest to moderate pace. Many Districts reported positive growth for professional and business services, including healthcare consulting, advertising, engineering, accounting, and technology. Overall, transportation activity rose at a moderate pace since the previous survey period. Broad-based demand for trucking and rail services across the Districts increased, and the Richmond District reported strong growth in port container traffic, with increases in both imports and exports. Manufacturing activity expanded in all twelve Districts. Contacts in the metal and auto industries generally reported positive growth, while manufacturers in the Philadelphia, Cleveland, Richmond, and Chicago Districts reported increased demand for their products from the energy sector.

Reports on real estate activity varied across the Districts. Many Districts reported low inventories and increasing home prices, but demand was mixed. Boston, New York, and St. Louis reported home sales were below year-ago levels, while Chicago noted a decrease in home sales since the last survey period. Home sales in other Districts remained steady or increased. Multi-family sales and leasing activity were robust in the New York and Dallas Districts. Residential construction rose for single-family homes in the Cleveland, Chicago, Kansas City, and San Francisco Districts, while New York, Richmond, Atlanta, Chicago, Minneapolis, and San Francisco reported increases for multifamily construction. Commercial construction activity generally strengthened across the Districts, due to higher demand and low vacancy rates.

Loan volumes rose across the nation, with slight to moderate increases reported in most Districts. Credit quality remained stable or improved slightly in most Districts, while San Francisco noted a slight decline. Credit standards were generally unchanged, although Richmond noted an easing of cost terms for well-qualified commercial and industrial borrowers, and Philadelphia and Chicago mentioned that competitive pressures were leading some financial institutions to take on higher credit risks.

Among Districts reporting on agriculture, heavy rains improved soil moisture levels in the Atlanta, Chicago, Minneapolis, Kansas City, and Dallas Districts, while drought conditions persisted in San Francisco. Most fall crops were reported in good or better condition, and expectations of higher production lowered crop prices. Profitability improved for livestock operators in the Atlanta, Minneapolis, and Kansas City Districts due to high cattle and hog prices. Oil production expanded in the Minneapolis, Kansas City, and Dallas Districts, while natural gas and coal production remained relatively steady in reporting Districts.

Labor market conditions improved, as all twelve Districts reported slight to moderate employment growth. Several Districts continued to report some difficulty finding workers for skilled positions. Aside from higher wages to attract talent for these skilled positions, wage pressures remained modest in most Districts. Price pressures were generally contained, with most Districts reporting slight to modest price increases for both inputs and finished goods. Several Districts noted higher prices for meat, dairy products, construction materials, and some metals (namely steel, copper, and nickel).


Builder Confidence rises 4 points in July to 53
Posted: July 16, 2014 at 10:00 AM (Wednesday)

Builder confidence in the market for newly-built single-family homes reached an important milestone in July, rising four points to a reading of 53 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Any reading over 50 indicates that more builders view sales conditions as good than poor.

“This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.

“An improving job market goes hand-in-hand with a rise in builder confidence,” said NAHB Chief Economist David Crowe. “As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home.”

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

All three HMI components posted gains in July. The index gauging current sales conditions increased four points to 57, while the index measuring expectations for future sales rose six points to 64 and the index gauging traffic of prospective buyers increased three points to 39.

The HMI three-month moving average was up in all four regions, with the Northeast and Midwest posting a one-point and two-point gain to 35 and 48, respectively. The West registered a five-point gain to 52 while the South rose two points to 51.


Industrial Production increased 0.2%
Capacity Utilization unch at 79.1%

Posted: July 16, 2014 at 09:15 AM (Wednesday)

Industrial production increased 0.2 percent in June and advanced at an annual rate of 5.5 percent for the second quarter of 2014. In June, manufacturing output edged up 0.1 percent for its fifth consecutive monthly gain, while the production at mines moved up 0.8 percent and the output of utilities declined 0.3 percent. For the second quarter as a whole, manufacturing production rose at an annual rate of 6.7 percent, while mining output increased at an annual rate of 18.8 percent because of gains in the extraction of oil and gas; by contrast, the output of utilities fell at an annual rate of 21.4 percent following a weather-related increase of 15.6 percent in the first quarter. At 103.9 percent of its 2007 average, total industrial production in June was 4.3 percent above its level of a year earlier. The capacity utilization rate for total industry was unchanged in June at 79.1 percent, a rate that is 1.0 percentage point below its long-run (1972–2013) average.


Treasury International Capital Data for May 2014
Posted: July 16, 2014 at 09:00 AM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for May 2014. The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $35.5 billion. Of this, net foreign private inflows were $13.1 billion, and net foreign official inflows were $22.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in May; net purchases were $34.6 billion. Net purchases by private foreign investors were $10.2 billion, while net purchases by foreign official institutions were $24.4 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $15.2 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $19.4 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign acquisitions of long-term securities are estimated to have been $9.0 billion in May.

Foreign residents decreased their holdings of U.S. Treasury bills by $4.9 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $0.5 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $25.9 billion.


Producer Price Index rose 0.4% in June, ex Fd & Engy up 0.1%
Posted: July 16, 2014 at 08:30 AM (Wednesday)

The Producer Price Index for final demand rose 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a 0.2-percent decline in May and a 0.6-percent advance in April. On an unadjusted basis, the index for final demand moved up 1.9 percent for the 12 months ended in June.

In June, the 0.4-percent increase in final demand prices can be traced to a 0.5-percent advance in the index for final demand goods and a 0.3-percent rise in prices for final demand services.

Within intermediate demand, prices for processed goods advanced 0.4 percent, the index for unprocessed goods fell 0.9 percent, and prices for services moved up 0.6 percent.

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


Buy Economic Books at

The OneWall.com Book Shop

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


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

CFA Institute

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

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