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Philadelphia April Outlook Suggest Slightly Improved Labor Conditions
Posted: April 17, 2014 at 10:00 AM (Thursday)

Manufacturing activity in the region increased in April, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment all remained positive and increased from their readings in March. Price pressures remain modest. The survey’s indicators of future activity reflected optimism about continued expansion over the next six months, although the indicators have fallen from higher readings in recent months.

Indicators Signal Growth This Month
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 9.0 in March to 16.6 this month, its highest reading since last September. The index has now increased for two consecutive months, following the weather-influenced negative reading in February. The new orders and current shipments indexes also moved higher this month, increasing 9 points and 17 points, respectively.

Indicators suggest slightly improved labor market conditions this month. The employment index remained positive for the 10th consecutive month and increased 5 points, suggesting overall improvement. The percentage of firms reporting increases in employment (20 percent) edged out the percentage reporting decreases (13 percent). The workweek index was also positive for the second consecutive month, edging 2 points higher.

Price Pressures Are Relatively Moderate
The survey’s price diffusion indexes continue to suggest overall moderate rates of increase. The prices received index was unchanged at 4.3. Nearly 76 percent of the firms reported no change in their final goods prices, and the percentage of firms reporting increases (13 percent) was only slightly greater than the percentage reporting decreases (9 percent). The prices paid index edged slightly lower, to 11.3, its third consecutive month of decline. Seventeen percent of the firms reported higher input prices, down from 19 percent in March.

Indicators for the Future Remain Positive
Firms remain optimistic about the growth of overall manufacturing activity for the next six months. The future general activity index remained positive; however, the index decreased nearly 9 points from its reading in March (see Chart). Indexes for future new orders and shipments also edged lower. The future new orders index decreased 3 points, while the future shipments index decreased 8 points. Firms’ responses about future employment continued to reflect overall confidence about future conditions. The percentage of firms expecting employment growth (27 percent) was greater than the percentage expecting employment declines (11 percent). The index, however, decreased 13 points, exactly reversing a 13-point increase in March.

In special questions this month, firms were asked about regional factors influencing their location decisions. Firms were also asked to rank, by relevance, each factor influencing their decision to remain in the region. According to the firms’ responses, the three most reported factors influencing the decision were (1) the availability of skilled labor; (2) the cost of labor; and (3) taxes, subsidies, and regulation. About 30 percent of the firms responding indicated that the cost of energy and the proximity to customers and distribution channels were also very or most relevant. The three most reported categories above, plus the cost of energy, were also reported to have become more important than other factors in recent years.

Summary
The April Business Outlook Survey suggests that activity in the region’s manufacturing sector continued on a path of growth this month. Firms reported increases in overall activity, new orders, shipments, and employment this month. Price pressures remained moderate. The survey’s future activity indexes, on balance, indicate that firms expect continued growth and employment increases over the next six months.


DJ-BTMU U.S. Business Barometer rose by 0.3%
Posted: April 17, 2014 at 10:00 AM (Thursday)

For the week ending April 5 2014, the DJ-BTMU U.S. Business Barometer rose by 0.3 percent following a sharp increase in the prior week. Most of the increase in consumption indexes stemmed from chain store sales, rising by 1.5 percent following a 3.6 percent increase. On the production side, steel production drove up the index, increasing by 3.9 percent. Auto production and electric output decreased by 9.6 percent and 3.9 percent, respectively, yet were more than offset by the increase in steel production. Other indexes generally showed slight changes.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, increased by 0.1 percent for the fifth consecutive week. Its year-over-year growth rate was 0.3 percent.


Weekly Initial Unemployment Claims Increase 2,000 to 304,000
Posted: April 17, 2014 at 08:30 AM (Thursday)

In the week ending April 12, the advance figure for seasonally adjusted initial claims was 304,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 300,000 to 302,000. The 4-week moving average was 312,000, a decrease of 4,750 from the previous week's revised average. This is the lowest level for this average since October 6, 2007 when it was 302,000. The previous week's average was revised up by 500 from 316,250 to 316,750.


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

Reports from the twelve Federal Reserve Districts suggest economic activity increased in most regions of the country since the previous report. The expansion was characterized as modest or moderate by the Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco Districts. Chicago reported that economic growth had picked up, and New York and Philadelphia indicated that business activity had rebounded from weather-related slowdowns earlier in the year. The Cleveland and St. Louis Districts both reported a decline in economic activity.

Consumer spending increased in most Districts, as weather conditions improved and foot traffic returned. Auto sales were up in the New York, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, and San Francisco Districts, but they were little changed from a year earlier in Kansas City and Cleveland. In addition, assessments of tourism were generally positive, particularly for the Districts of Philadelphia, Richmond, and Minneapolis, where ski resorts had record seasons. Summer bookings were also solid in several Districts. Activity was mixed at non-financial services firms, with the Boston, Philadelphia, Minneapolis, and Kansas City Districts reporting increased demand. In the Boston District, for example, advertising and consulting were strong. The Richmond District indicated that revenues at non-retail services firms were flat, and St. Louis said firms' planned activity declined on net.


Industrial Production increased 0.7%
Capacity Utilization increased to 79.2%

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

Industrial production increased 0.7 percent in March after having advanced 1.2 percent in February. The rise in February was higher than previously reported primarily because of stronger gains for durable goods manufacturing and for mining. For the first quarter as a whole, industrial production moved up at an annual rate of 4.4 percent, just slightly slower than in the fourth quarter of 2013. In March, the output of manufacturing rose 0.5 percent, the output of utilities increased 1.0 percent, and the output of mines gained 1.5 percent. At 103.2 percent of its 2007 average, total industrial production in March was 3.8 percent above its level of a year earlier. Capacity utilization for total industry increased in March to 79.2 percent, a rate that is 0.9 percentage point below its long-run (1972–2013) average but 1.2 percentage points higher than a year prior.


March Housing Starts up 0.8%, Permits down 2.4%
Posted: April 16, 2014 at 08:30 AM (Wednesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 990,000. This is 2.4 percent (±1.0%) below the revised February rate of 1,014,000, but is 11.2 percent (±1.1%) above the March 2013 estimate of 890,000. Single-family authorizations in March were at a rate of 592,000; this is 0.5 percent (±1.0%)* above the revised February figure of 589,000. Authorizations of units in buildings with five units or more were at a rate of 370,000 in March.

HOUSING STARTS
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 946,000. This is 2.8 percent (±14.7%)* above the revised February estimate of 920,000, but is 5.9 percent (±8.4%)* below the March 2013 rate of 1,005,000. Single-family housing starts in March were at a rate of 635,000; this is 6.0 percent (±15.5%)* above the revised February figure of 599,000. The March rate for units in buildings with five units or more was 292,000.

HOUSING COMPLETIONS
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 872,000. This is 0.2 percent (±13.2%)* below the revised February estimate of 874,000, but is 7.7 percent (±14.3%)* above the March 2013 rate of 810,000. Single-family housing completions in March were at a rate of 602,000; this is 3.8 percent (±12.6%)* below the revised February rate of 626,000. The March rate for units in buildings with five units or more was 258,000.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: April 16, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 4.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 11, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 16 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 52 percent of total applications from 51 percent the previous week. The adjustable-rate mortgage (ARM) share of activity 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) decreased to 4.47 percent from 4.56 percent, with points decreasing to 0.32 from 0.33 (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 4.39 percent from 4.49 percent, with points increasing to 0.18 from 0.14 (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 4.14 percent from 4.19 percent, with points decreasing to 0.06 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.54 percent from 3.62 percent, with points decreasing to 0.24 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.15 percent from 3.26 percent, with points decreasing to 0.41 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Builder Confidence Rose 1 point in March to 47
Posted: April 15, 2014 at 10:00 AM (Tuesday)

Builder confidence in the market for newly built, single-family homes rose one point to 47 in April from a downwardly revised March reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

Builder confidence has been in a holding pattern the past three months. Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.

Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable. While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor.

The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32. The component measuring expectations for future sales rose four points to 57.

The HMI three-month moving average was down in all four regions. The West fell nine points to 51 and the Midwest posted a four-point decline to 49 while the Northeast and South each dropped two points to 33 and 47, respectively.


Treasury International Capital Data for February 2014
Posted: April 15, 2014 at 09:00 AM (Tuesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2014. The sum total in February of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $167.7 billion. Of this, net foreign private inflows were $147.5 billion, and net foreign official inflows were $20.3 billion.

Foreign residents increased their holdings of long-term U.S. securities in February; net purchases were $84.8 billion. Net purchases by private foreign investors were $66.3 billion, while net purchases by foreign official institutions were $18.5 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $1.0 billion.

Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were $85.7 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $76.5 billion in February.

Foreign residents increased their holdings of U.S. Treasury bills by $2.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $4.6 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $86.7 billion.


Consumer Price Index increased 0.1% in March, Ex Fd & Engy up 0.1%
Posted: April 15, 2014 at 08:30 AM (Tuesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.5 percent before seasonal adjustment.

Increases in the shelter and food indexes accounted for most of the seasonally adjusted all items increase. The food index increased 0.4 percent in March, with several major grocery store food groups increasing notably. The energy index, in contrast, declined slightly in March as decreases in the gasoline and fuel oil indexes more than offset increases in the indexes for electricity and natural gas.

The index for all items less food and energy also rose 0.2 percent in March. Besides the 0.3 percent increase in the shelter index, the indexes for medical care, for apparel, for used cars and trucks, and for airline fares also increased. The indexes for household furnishings and operations and for recreation both declined in March.

The all items index increased 1.5 percent over the last 12 months; this compares to a 1.1 percent increase for the 12 months ending February. The index for all items less food and energy has increased 1.7 percent over the last 12 months, as has the food index. The energy index has risen slightly over the span, advancing 0.4 percent.


Empire State Manufacturing Survey Conditions Were Flat
Posted: April 15, 2014 at 08:30 AM (Tuesday)

The April 2014 Empire State Manufacturing Survey indicates that business activity was flat for New York manufacturers. The headline general business conditions index slipped four points to 1.3. The new orders index fell below zero to -2.8, pointing to a slight decline in orders, and the shipments index was little changed at 3.2. The unfilled orders index remained negative at -13.3, and the inventories index dropped ten points to -3.1. The prices paid index held steady at 22.5, indicating continued moderate input price increases, and the prices received index rose to 10.2, pointing to a pickup in selling price increases. Employment indexes showed a modest rise in employment levels and a slight increase in the average workweek. Indexes for the six-month outlook continued to convey a good deal of optimism about future conditions, and the capital expenditures index climbed seven points to 23.5, its highest level in several months.

Business Activity Flat
Business activity was flat for New York manufacturers, according to the April 2014 survey. The general business conditions index slipped four points to 1.3, with 26 percent of respondents reporting that conditions had improved over the month and 24 percent reporting that conditions had worsened. The new orders index dipped into negative territory, falling six points to -2.8—a sign that orders were slightly lower over the month. The shipments index was little changed at 3.2, pointing to a small increase in shipments, and the unfilled orders index remained negative at -13.3. The delivery time index fell six points to -9.2, indicating that delivery times quickened. The inventories index fell ten points to -3.1, suggesting a slight decline in inventory levels.

Selling Price Increases Pick Up
The prices paid index was little changed, and at 22.5, pointed to continued moderate input price increases. The prices received index climbed eight points to 10.2—evidence of a pickup in the pace of selling price increases. Employment indexes suggested modest improvement in labor market conditions. The index for number of employees inched up to 8.2, indicating a small increase in employment levels, and the average workweek index fell three points to 2.0, pointing to a slight increase in hours worked.

Six-Month Outlook Remains Optimistic
Indexes for the six-month outlook continued to convey a fair amount of optimism about future business conditions. The index for expected general business conditions advanced five points to 38.2. The index for future new orders fell for a second consecutive month, though it remained at a fairly high level of 32.7. The index for future prices paid fell ten points to 33.7, and the index for future prices received posted a similar decline, falling twelve points to 14.3. The index for expected number of employees climbed five points to 22.5, while the index for the expected average workweek fell to 1.0. The capital expenditures index rose seven points to 23.5, its highest level in several months, and the technology spending index moved up seven points to 14.3.


Real Average Hourly Earnings fell 0.3% in March
Posted: April 15, 2014 at 08:30 AM (Tuesday)

Real average hourly earnings for all employees fell 0.3 percent from February to March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease stems from unchanged average hourly earnings and a 0.2 percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings rose 0.3 percent over the month due to the 0.3 percent decrease in real average hourly earnings being more than offset by a 0.6 percent increase in the average workweek.

Real average hourly earnings rose 0.5 percent, seasonally adjusted, from March 2013 to March 2014. The increase in real average hourly earnings, combined with an unchanged average workweek, resulted in a 0.5 percent increase in real average weekly earnings over this period.


ICSC Chain Store Sales declined slightly by 0.3% in Apr 12 Wk
Posted: April 15, 2014 at 07:45 AM (Tuesday)

Warmer weather brought mixed results as some retail segments finally warmed up as others seemingly cooled down this past week. For the first fiscal week of April, retailers saw weekly sales decline slightly by 0.3%, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index. However, on a year-over-year basis sales improved to 2.3%--its strongest reading in more than two months.

"As temperatures turned seasonally warmer for the week, retail business was stronger for discounters, dollar stores, wholesale clubs, office, and furniture stores relative to the same week of the prior year, according to the ICSC-Goldman Sachs consumer channel tracking survey. But some segments lagged for the week, including drug, department and apparel stores," said Michael Niemira, ICSC vice president of research and chief economist. "Encouragingly, the year-over-year pace of sales advanced by its strongest rate since matching its February 18th performance and bodes well for April," Niemira added.

For April, ICSC Research forecasts that monthly comparable-store sales will increase by 3.5% to 4.0%. This is taking into account the potential for a weather drag on sales as mild spring weather appears will be slow to roll in, but accounts for the lift from the later Easter.


Business Inventories up 0.4% in February
Posted: April 14, 2014 at 10:00 AM (Monday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for February, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,311.8 billion, up 0.8 percent (±0.2%) from January 2014 and were up 1.8 percent (±0.5%) from February 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,715.6 billion, up 0.4 percent (±0.1%) from January 2014 and up 4.2 percent (±0.5%) from February 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of February was 1.31. The February 2013 ratio was 1.28.


U.S. Retail Sales for March increase 1.1%, Ex-Auto up 0.7%
Posted: April 14, 2014 at 08:30 AM (Monday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $433.9 billion, an increase of 1.1 percent (±0.5%) from the previous month, and 3.8 percent (±0.7%) above March 2013. Total sales for the January 2014 through March 2014 period were up 2.5 percent (±0.4%) from the same period a year ago. The January 2014 to February 2014 percent change was revised from +0.3 percent (±0.5%) to +0.7 percent (±0.2%).

Retail trade sales were up 1.1 percent (±0.5%) from February 2014, and 3.7 percent (±0.7%) above last year. Auto and other motor vehicle dealers were up 9.5 percent (±3.2%) from March 2013 and nonstore retailers were up 7.8 percent (±2.5%) from last year.


Producer Price Index increased 0.5% in March, ex Fd & Engy up 0.1%
Posted: April 11, 2014 at 08:30 AM (Friday)

The Producer Price Index for final demand advanced 0.5 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This increase followed a decline of 0.1 percent in February and a rise of 0.2 percent in January. On an unadjusted basis, the index for final demand moved up 1.4 percent for the 12 months ended in March, the largest 12-month advance since a 1.7-percent increase in August 2013.

In March, the 0.5-percent increase in final demand prices can be traced to the index for final demand services, which rose 0.7 percent. Prices for final demand goods were unchanged.


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

For the week ending March 29 2014, the DJ-BTMU U.S. Business Barometer surged 0.6 percent from last week, reaching the highest level of 98.1 since January 4 2014. The biggest factor that contributed to this week’s barometer was chain store sales, which climbed by 3.6 percent. After the adverse weather lasted for the last few months, chain store sales finally started to show some recovery. On the production side, electric output increased by 2.8 percent, yet, was offset by a decrease in lumber production. Other indexes only showed slight increases and decreases.

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, increased by 0.1 percent for the fourth consecutive week. Its year-over-year growth rate was 0.2 percent.


U.S. Import Price Index increased 0.6% in March
Posted: April 10, 2014 at 08:30 AM (Thursday)

U.S. import prices advanced 0.6 percent in March, after a 0.9-percent increase in February, the U.S. Bureau of Labor Statistics reported today. Higher fuel prices and nonfuel prices each contributed to the rise in import prices in March. U.S. export prices increased 0.8 percent in March following a 0.7-percent advance the previous month.


Weekly Initial Unemployment Claims Decrease 32,000 to 300,000
Posted: April 10, 2014 at 08:30 AM (Thursday)

In the week ending April 5, the advance figure for seasonally adjusted initial claims was 300,000, a decrease of 32,000 from the previous week's revised level. The last time initial claims were this low was May 12, 2007 when they were 297,000. The previous week's level was revised up by 6,000 from 326,000 to 332,000. The 4-week moving average was 316,250, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 1,500 from 319,500 to 321,000.


Wholesale Inventories up 0.5% in February
Posted: April 9, 2014 at 10:00 AM (Wednesday)

The U.S. Census Bureau announced today that February 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 $436.1 billion, up 0.7 percent (+/-0.4%) from the revised January level and were up 3.1 percent (+/-1.6%) from the February 2013 level. The January preliminary estimate was revised downward $0.1 billion. February sales of durable goods were up 0.1 percent (+/-0.5%) from last month and were up 2.9 percent (+/-1.1%) from a year ago. Sales of nondurable goods were up 1.2 percent (+/-0.5%) from January and were up 3.3 percent (+/-2.6%) from last February. Sales of petroleum and petroleum products were up 4.0 percent from last month and sales of beer, wine, and distilled alcoholic beverages were up 1.9 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $518.3 billion at the end of February, up 0.5 percent (+/-0.4%) from the revised January level and were up 4.7 percent (+/-0.7%) from the February 2013 level. The January preliminary estimate was revised upward $0.3 billion or 0.1 percent. February inventories of durable goods were up 0.7 percent (+/-0.4%) from last month and were up 5.9 percent (+/-1.1%) from a year ago. Inventories of professional and commercial equipment and supplies were up 1.4 percent from last month and inventories of machinery, equipment, and supplies were up 1.4 percent. Inventories of nondurable goods were up 0.1 percent (+/-0.5%) from January and were up 2.9 percent (+/-1.2%) from last February. Inventories of farm product raw materials were up 2.7 percent from last month, while inventories of petroleum and petroleum products were down 2.6 percent.

The February inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.19. The February 2013 ratio was 1.17.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 9, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 4, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and is at its lowest level since the end of 2013. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index also increased 3 percent compared with the previous week and was 14 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 51 percent of total applications from 53 percent the previous week and is at its lowest level since July 2009. 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 constant at 4.56 percent, with points increasing to 0.33 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate was unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.49 percent from 4.46 percent, with points decreasing to 0.14 from 0.27 (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 4.19 percent from 4.21 percent, with points increasing to 0.16 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 constant at 3.62 percent, with points increasing to 0.31 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 3.26 percent from 3.25 percent, with points increasing to 0.5 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings were 4.2 million in February
Posted: April 8, 2014 at 10:00 AM (Tuesday)

There were 4.2 million job openings on the last business day of February, up from January, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) and separations rate (3.2 percent) were unchanged in February. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.

There were 4.2 million job openings in February, up from 3.9 million in January. The number of openings rose for total private and was little changed for government. The number of job openings increased in retail trade and in professional and business services, while the number of job openings decreased in arts, entertainment, and recreation. The South region experienced a rise in job openings in February.

The number of job openings (not seasonally adjusted) increased over the year for total nonfarm and total private and was little changed for government. Over the year, the number of job openings increased in three industries and decreased in three industries. The Midwest and West regions experienced an increase in the number of job openings over the 12 months ending in February.


ICSC Chain Store Sales rose by 1.5% in Apr 5 Wk
Posted: April 8, 2014 at 07:45 AM (Tuesday)

U.S. chain-store sales rose 1.5 percent year on year for the week that ended on April 5, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Comparable-store sales also rose 1.5 percent from the previous week.

“Weekly sales -- adjusted for the shift in Easter -- rose this past week as customer foot traffic and spending appeared to have improved in the latter part of the month,” said Michael Niemira, ICSC's vice president of research and chief economist. “With the 2014 celebration Easter (April 20) later than in 2013, the holiday spending ramp-up will likely be seen over the upcoming two weeks."

ICSC Research anticipates that chain-store sales will have increased 3 percent in March when data collection has completed on April 10. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.


NFIB Small Business Optimism Index rose 2 points to 93.4
Posted: April 8, 2014 at 07:30 AM (Tuesday)

The latest Small Business Optimism Index rose 2 points to 93.4, mostly reversing the February decline but failing once again to breach the 95 ceiling that has capped the Index during the recovery. Six of the Index components improved, two were unchanged, and two were lower. The net percent of owners planning to create new jobs did fall 2 points but remained positive even if weak. The outlook for real sales gains accounted for about half of the improvement with inventory satisfaction and inventory investment plans accounting for most of the rest. However, throughout this recovery these types of increases have generally gone nowhere. As long as Washington continues to ignore policies that could restore the middle class growth and job creation will continue to be subpar.

First quarter GDP growth is looking pretty slow at just under 2 percent. Weather, trade deficits, and pessimistic consumers and business owners are all taking a toll on spending growth. Uncertainty remains elevated. Consequently, hiring will remain muted compared to previous expansions. There is lots of talk about this looking more like a “new normal”, that the nature of job requirements changed dramatically in the recession.

Certainly firms trimmed all the fat and then some in the last 6 years, but technological change wasn’t that dramatic since 2008. Many of the “long term unemployed” would find jobs in an economy with 500,000 more housing starts and a consumer base more willing to spend on services. Washington is floundering and the economy is following suit.

The President is pushing for a 39 percent increase in the minimum wage to address income inequality, to stimulate the economy and help the poor. None of this will occur as jobs will be lost according to a mountain of research and the CBO’s recent report. Certainly not much stimulus there, and most of the increased wage payments will go to families well above the poverty level which is no help for the poor. In addition to fewer jobs, prices will increase to cover the higher labor costs as owners will be paying more for the same work with no extra output. So for every dollar a minimum wage worker receives, it will come out of the pockets of the customers they serve, no increase in spendable income overall. In 2000, firms paid more than the minimum wage to fast food workers because demand was strong and workers generated sales that justified the higher pay. When demand fades, workers can earn less but have a job – unless the minimum wage compels the employer to fire the worker.

The President’s budget contains a billion dollars for “climate change” while the unemployment rate is 6.7 percent and millions can’t find work. The policies that could restore the middle class status of millions by providing job opportunities are not pursued. This will insure that growth and job creation continue to be sub-par.


Consumer Credit Increased at an annual rate of 6.50%
Posted: April 7, 2014 at 03:00 PM (Monday)

In February, consumer credit increased at a seasonally adjusted annual rate of 6-1/2 percent. Revolving credit decreased at an annual rate of 3-1/2 percent, while nonrevolving credit increased at an annual rate of 10 percent.


Employment Trends Index increased in March to 117.52
Posted: April 7, 2014 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in March. The index now stands at 117.52, up from 117.01 (an upward revision) in February. This represents a 5.1 percent gain in the ETI compared to a year ago.

“The increase in the Employment Trends Index in the first quarter is signaling solid job growth in the coming months,” said Gad Levanon, Director of Macroeconomic Research at The Conference Board. “With GDP forecasted to average 2.5 to 3.0 percent through the end of this year, there is little reason to expect employment growth to slow any time soon.”

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


February Employment increased by 192,000
Unemployment Rate was unchanged at 6.7%

Posted: April 4, 2014 at 08:32 AM (Friday)

Total nonfarm payroll employment rose by 192,000 in March, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in professional and business services, in health care, and in mining and logging.

In March, the number of unemployed persons was essentially unchanged at 10.5 million, and the unemployment rate held at 6.7 percent. Both measures have shown little movement since December 2013. Over the year, the number of unemployed persons and the unemployment rate were down by 1.2 million and 0.8 percentage point, respectively.

Among the major worker groups, the unemployment rate for adult women increased to 6.2 percent in March, and the rate for adult men decreased to 6.2 percent. The rates for teenagers (20.9 percent), whites (5.8 percent), blacks (12.4 percent), and Hispanics (7.9 percent) showed little or no change. The jobless rate for Asians was 5.4 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more), at 3.7 million, changed little in March; these individuals accounted for 35.8 percent of the unemployed. The number of long-term unemployed was down by 837,000 over the year.

Both the civilian labor force and total employment increased in March. The labor force participation rate (63.2 percent) and the employment-population ratio (58.9 percent) changed little over the month. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 7.4 million in March. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work.

Total nonfarm payroll employment rose by 192,000 in March. Job growth averaged 183,000 per month over the prior 12 months. In March, employment grew in professional and business services, in health care, and in mining and logging.

The change in total nonfarm payroll employment for January was revised from +129,000 to +144,000, and the change for February was revised from +175,000 to +197,000. With these revisions, employment gains in January and February were 37,000 higher than previously reported.


ISM Non-Manufacturing Index grew at 53.1%
Posted: April 3, 2014 at 10:00 AM (Thursday)

Economic activity in the non-manufacturing sector grew in March for the 50th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 53.1 percent in March, 1.5 percentage points higher than February's reading of 51.6 percent. The Non-Manufacturing Business Activity Index decreased to 53.4 percent, which is 1.2 percentage points lower than the reading of 54.6 percent reported in February, reflecting growth for the 56th consecutive month but at a slower rate. The New Orders Index registered 53.4 percent, 2.1 percentage points higher than the reading of 51.3 percent registered in February. The Employment Index increased 6.1 percentage points to 53.6 percent from the February reading of 47.5 percent and indicates substantial growth after one month of contraction. The Prices Index increased 4.6 percentage points from the February reading of 53.7 percent to 58.3 percent, indicating prices increased at a faster rate in March when compared to February. According to the NMI®, 13 non-manufacturing industries reported growth in March. Despite the affects of weather on many of the respective businesses, the majority of respondents indicate that business conditions are improving. The respondents also project better business activity and economic conditions as weather conditions continue to improve.

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


DJ-BTMU U.S. Business Barometer was unch%
Posted: April 3, 2014 at 10:00 AM (Thursday)

For the week ending March 22 2014, the DJ-BTMU U.S. Business Barometer remained at the same level, 97.5, from the prior week as production and consumption indexes cancelled out each other. Production indexes contributed positively to this week’s barometer after weakening for two consecutive weeks; lumber production and electric output rose by more than 2 percent, respectively. However, these increases were offset by consumption indexes where chain store sales declined by 1.5 percent. Other indexes showed changes more-or-less by 1 percent.

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, increased slightly by 0.1 percent following a flat reading in the previous week. Its year-over-year growth rate was 0.2 percent.


Weekly Initial Unemployment Claims Increase 16,000 to 326,000
Posted: April 3, 2014 at 08:30 AM (Thursday)

In the week ending March 29, the advance figure for seasonally adjusted initial claims was 326,000, an increase of 16,000 from the previous week's revised figure of 310,000. The 4-week moving average was 319,500, an increase of 250 from the previous week's revised average of 319,250.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 22, an increase of 0.1 percentage point from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 22 was 2,836,000, an increase of 22,000 from the preceding week's revised level of 2,814,000. The 4-week moving average was 2,842,250, a decrease of 13,500 from the preceding week's revised average of 2,855,750.


Goods and Services Deficit Increased in February 2014
Posted: April 3, 2014 at 08:30 AM (Thursday)

The Nation’s international trade deficit in goods and services increased to $42.3 billion in February from $39.3 billion in January (revised), as exports decreased and imports increased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total February exports of $190.4 billion and imports of $232.7 billion resulted in a goods and services deficit of $42.3 billion, up from $39.3 billion in January, revised. February exports were $2.0 billion less than January exports of $192.5 billion. February imports were $1.0 billion more than January imports of $231.7 billion.

In February, the goods deficit increased $2.2 billion from January to $61.7 billion, and the services surplus decreased $0.8 billion from January to $19.4 billion. Exports of goods decreased $2.0 billion to $131.7 billion, and imports of goods increased $0.2 billion to $193.4 billion. Exports of services were virtually unchanged at $58.7 billion, and imports of services increased $0.8 billion to $39.3 billion.

The goods and services deficit decreased $1.0 billion from February 2013 to February 2014. Exports were up $3.6 billion, or 1.9 percent, and imports were up $2.6 billion, or 1.1 percent.


Challenger Layoffs lower by 18% in March
Posted: April 3, 2014 at 07:30 AM (Thursday)

New figures released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc. show employers announced the fewest first-quarter job cuts in 19 years, providing further evidence that the economy continues to gain strength as it enters the sixth year of recovery.

The first quarter closed with 34,399 March job cuts, the second lowest monthly total since January 2013. The only month to see fewer cuts during that period was December, when just 30,623 job cuts were announced. The March total was 18 percent lower than the 41,835 planned job cuts reported in February and 30 percent lower than a year ago when March job cuts totaled 49,255.

Through the first quarter of 2014, employers announced 121,341 job cuts, down 16 percent from the 145,041 cuts tracked during the first three months of 2013. The first-quarter total was virtually unchanged from the previous quarter, when 121,667 job cuts were recorded.

The first quarter total was the lowest quarterly total since Q2 of 2013 (113,891). Even more significant, however, is the fact that it is the lowest Q1 total since 1995, when 97,716 job cuts were announced.

The first quarter typically experiences some of the heaviest job cutting of the year. Since we began tracking planned layoffs in 1989, the first quarter is only slightly lower than the fourth quarter when it comes to the pace of downsizing, with an average job-cut total of just over 205,000. Employers are well below that pace this year, suggesting that layoffs continue to decline in a recovery that is approaching its five-year anniversary.

First quarter job cuts were led by the retail sector, where employers announced 18,231 job cuts through the first three months of 2014, including 2,989 in March. The financial sector follows closely with 15,306 job cuts announced over the first three months of 2014.

Neither retail nor financial firms saw the heaviest job cuts last month, however. The top job-cutting sector in March was health care, which announced plans to reduce payrolls by 5,768, bringing its year-to-date total to 10,984, which ranks fourth among all industries.

We continue to see downsizing in the health care sector, as hospitals adjust to lower Medicare reimbursements and cutbacks in Medicaid funding. There has also been a surge in job cuts among the workers hired to sign-up Americans for health insurance under the Affordable Care Act. With the sign-up period ending on March 31, call centers around the country have been purging their payrolls of these temporary employees.

Call center workers are also being impacted by a series of layoffs announced by wireless carrier Sprint. While Sprint is struggling to keep up with AT&T and Verizon, at least some of the recent cuts appear to be the result of smarter consumers. A company spokesperson told one news outlet that many of the call center reductions reflect customers' growing familiarity with smartphones as well as simplified rate plans which have resulted in fewer customer service calls.

Job cuts within the telecommunications industry have risen sharply this year. The 11,277 job cuts announced by these firms, to date, ranks third among all industries and marks a 225 percent increase from the 3,471 telecommunications job cuts recorded in the first three months of 2013.


New orders for manufactured goods increased 1.6%
Posted: April 2, 2014 at 10:00 AM (Wednesday)

New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $7.5 billion or 1.6 percent to $488.8 billion, the U.S. Census Bureau reported today. This followed a 1.0 percent January decrease. Excluding transportation, new orders increased 0.7 percent.

Shipments, also up following two consecutive monthly decreases, increased $4.5 billion or 0.9 percent to $493.5 billion. This followed a 0.7 percent January decrease.

Unfilled orders, up twelve of the last thirteen months, increased $2.9 billion or 0.3 percent to $1,062.5 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a slight January increase. The unfilled orders-to-shipments ratio was 6.50, down from 6.52 in January.

Inventories, up fourteen of the last fifteen months, increased $4.1 billion or 0.7 percent to $642.1 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.2 percent January increase. The inventories-to-shipments ratio was 1.30, unchanged from January.


New York Purchasing Managers Business Activity slowed to 52.0
Posted: April 2, 2014 at 08:30 AM (Wednesday)

March 2014 Report on Business at 52.0 - March Goes Out Like A Lamb

Melville, NY - New York City business activity eased for a second straight month, according to the survey taken by the Institute for Supply Management - New York, Inc.

Current Business Conditions were 52.0 in March, the slowest rate of expansion in nine months.

Future Optimism backed off a four-year high. The Six Month Outlook fell to a five month low of 65.6 in March.

Job growth cooled after last month's foray into unchartered territory. Employment was 57.8 in March.

Purchase volume grew more slowly. Quantity of Purchases came in at 52.3 in March.

Prices Paid crested at 65.2 in March, after a three year high. But this still reflected elevated input costs.

The pulse moderated for the top line and forward guidance. Current Revenues were 58.7 in March, and Expected Revenues were 66.7 in March.


ADP National Employment Report increased by 191,000
Posted: April 2, 2014 at 08:15 AM (Wednesday)

Private sector employment increased by 191,000 jobs from February to March according to the March 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 28,000 jobs in March, slightly faster than an upwardly revised pace of 25,000 in February. Most of the gains came from the construction industry which added 20,000 jobs over the month; compared to an average of 16,000 during the prior three months. Manufacturers added 5,000 jobs in March, the same as February.

Service-providing employment rose by 164,000 jobs in March, up from the upwardly revised 153,000 in February. The ADP National Employment Report indicates that professional/ business services contributed the most to growth in service-providing industries, adding 53,000 jobs, slightly more than the 49,000 in February. Expansion in trade/transportation/utilities grew by 36,000, about equal to the 37,000 jobs added in February. The 5,000 new jobs in financial activities mark the strongest pace of growth in the industry since November 2013.

The 191,000 U.S. private sector jobs added in March is slightly above the twelve-month average. Hopefully, this could be a sign there is more growth to come.

The job market is coming out from its deep winter slumber. Job gains are consistent with the pace prior to the brutal winter. The gains are broad based across industries and business size classes. Even better numbers are likely in coming months as the weather warms.

Payroll growth for businesses with 49 or fewer employees slowed slightly in March, adding 72,000 jobs, down from 76,000 in February and an average of 83,000 during the past 12 months. In contrast, job growth accelerated over the month for both medium and large firms and was at its strongest since last November. Employment among medium-sized companies with 50-499 employees rose by 52,000 and employment at large companies – those with 500 or more employees – increased by 67,000.


Purchase Apps up, Refi's down in Latest MBA Weekly Survey
Posted: April 2, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 28, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index also increased 1 percent compared with the previous week and was 17 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased for the eighth straight week 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) was unchanged at 4.56 percent, with points increasing to 0.31 from 0.29 (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 4.46 percent from 4.45 percent, with points remaining constant at 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.21 percent from 4.16 percent, with points decreasing to 0.15 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 15-year fixed-rate mortgages was unchanged at 3.62 percent, with points decreasing to 0.23 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate was also unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.25 percent from 3.22 percent, with points increasing to 0.38 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


March Manufacturing ISM expanded at 53.7
Posted: April 1, 2014 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in March for the 10th consecutive month, and the overall economy grew for the 58th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The March PMI® registered 53.7 percent, an increase of 0.5 percentage point from February's reading of 53.2 percent, indicating expansion in manufacturing for the 10th consecutive month. The New Orders Index registered 55.1 percent, an increase of 0.6 percentage point from February's reading of 54.5 percent. The Production Index registered 55.9 percent, a substantial increase of 7.7 percentage points compared to February's reading of 48.2 percent. Employment grew for the ninth consecutive month, but at a lower rate by 1.2 percentage points, registering 51.1 percent compared to February's reading of 52.3 percent. Several comments from the panel reflect favorable demand and good business conditions, with some lingering concerns about the particularly adverse weather conditions across the country.

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


Construction Spending increase 0.1% in February
Posted: April 1, 2014 at 10:00 AM (Tuesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during February 2014 was estimated at a seasonally adjusted annual rate of $945.7 billion, 0.1 percent (±1.3%) above the revised January estimate of $944.6 billion. The February figure is 8.7 percent (±1.6%) above the February 2013 estimate of $869.9 billion.

During the first 2 months of this year, construction spending amounted to $128.0 billion, 8.9 percent (±1.6%) above the $117.5 billion for the same period in 2013.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $680.0 billion, 0.1 percent (±1.0%) above the revised January estimate of $679.1 billion. Residential construction was at a seasonally adjusted annual rate of $360.4 billion in February, 0.8 percent (±1.3%) below the revised January estimate of $363.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $319.6 billion in February, 1.2 percent (±1.0%) above the revised January estimate of $315.8 billion.

PUBLIC CONSTRUCTION
In February, the estimated seasonally adjusted annual rate of public construction spending was $265.7 billion, 0.1 percent (±2.1%) above the revised January estimate of $265.5 billion. Educational construction was at a seasonally adjusted annual rate of $59.5 billion, 1.2 percent (±4.9%) below the revised January estimate of $60.2 billion. Highway construction was at a seasonally adjusted annual rate of $85.6 billion, 1.4 percent (±5.4%) above the revised January estimate of $84.5 billion.


Paychex-IHS Small Business Jobs Index remaining at its recent peak of 101.15
Posted: April 1, 2014 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index grew 0.33 percent in the 12 months leading up to March, remaining at its recent peak of 101.15. The new, monthly index from Paychex, Inc.

Although it did not advance further in March, the Paychex | IHS Small Business Jobs Index remained at its recent peak level that was achieved following sharp gains in January and February. The 3-month gain was 0.40 percent.

With a budget agreement at long last in place in Washington, U.S. economic growth was expected to take off in 2014. The continued high level of the Paychex | IHS Small Business Jobs Index is further evidence of labor market stability and a return to job security for Americans in 2014.

With small businesses representing nearly 95 percent of employers in the U.S., tracking the hiring trends in this segment of the market is an important tool in gauging the overall health of the U.S. economy. Paychex is pleased to partner with IHS on what we believe will be the most timely and accurate barometer of small business employment in the U.S.

The Paychex | IHS Small Business Jobs Index remained at its peak of 101.15, achieved last month. It has increased consistently since October, and year-over-year gains of 0.33 percent in March are the largest since May 2013.


ICSC Chain Store Sales rose by 3.6% in Mar 29 Wk
Posted: April 1, 2014 at 07:45 AM (Tuesday)

The International Council of Shopping Centers (ICSC) and Goldman Sachs (GS) Weekly Chain Store Sales Index rose by a sharp 3.6% on a week-over-week basis ending March 29. Sales on a year-over-year basis were hampered by yet another bout of adverse seasonal weather, posting a 0.6% increase.

"According to Weather Trends International, the average national temperature was 4.0 degrees Fahrenheit cooler than normal for the past week marking the fourth coldest last week of March in more than 23 years. This certainly impacted consumers mindset to shop, and the ICSC-GS survey bears that out, as it saw its highest percentage over the last four years of consumers reporting they didn't shop through any channel," noted Michael Niemira, ICSC vice president of research and chief economist. "Looking ahead, we anticipate pent-up consumer demand for spring apparel to drive sales as warmer weather returns," he added.

For March, ICSC Research forecasts that sales will increase by 3% over the same period last year.


Texas Manufacturing Activity at a Stronger Pace Reflecting more Robust Growth
Posted: March 31, 2014 at 10:38 AM (Monday)

Texas factory activity increased for the eleventh month in a row in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 10.8 to 17.1, indicating output grew at a stronger pace than in February.

Other measures of current manufacturing activity also reflected more robust growth. The new orders index rose to a nine-month high of 14.7, with nearly a third of manufacturers noting an increase in demand and less than a fifth noting a decrease. The shipments index rose from 13.3 to 19.5, posting its strongest reading in nearly four years. The capacity utilization index rose as well, climbing four points to 13.1.

Perceptions of broader business conditions were more optimistic in March. The general business activity index moved up to a six-month high of 4.9 after slipping to zero last month. The company outlook index also rebounded, rising six points to 9.1 after falling sharply in February.

Labor market indicators reflected stronger employment growth and longer workweeks. The March employment index rose markedly to a 21-month high of 15. Nearly a quarter of firms reported net hiring compared with 9 percent reporting net layoffs. The hours worked index fell from 12 to 5.3 but remained positive for the third month in a row.

Upward pressure on prices and wages continued in March. The raw materials price index edged up to 23.1, staying well above the level seen for most of 2013. The finished goods price index edged back to single digits, coming in at 7.3. Looking ahead, 38 percent of respondents anticipate further increases in raw materials prices over the next six months, while 33 percent expect higher finished goods prices. The wages and benefits index remained elevated but fell from 25.8 to 20.8, suggesting compensation costs increased but at a slightly weaker pace than in February.

Expectations regarding future business conditions remained optimistic in March. The index of future general business activity edged up to 17.6, and the index of future company outlook rose 7 points to 27.4. Indexes for future manufacturing activity showed mixed movements but remained in solidly positive territory.


Chicago Purchasing Managers Index down 3.9 points to 55.9 in March
Posted: March 31, 2014 at 10:00 AM (Monday)

- New Orders and Order Backlogs Expand at Slower Rate
- Employment Falls Sharply to Neutral

The Chicago Business Barometer decreased 3.9 points in March to 55.9, the lowest level since August, led by a decline in New Orders and a sharp fall in Employment. Business activity slowed, with the Barometer averaging 58.4 in the first quarter, down from a two and a half year high of 63.3 in the fourth quarter of 2013. It remained well above the 50 level, though, pointing to continued recovery of the US economy in a quarter that was plagued by bad weather which almost certainly had some negative impact on the results.

Although New Orders remained firm above the 50 breakeven level, they eased for the second consecutive month pointing to a slight softening in demand. Like the Barometer, New Orders posted the lowest reading since August. Order Backlogs also decreased, to their lowest level since September.

Employment, the second biggest contributor to the Barometer’s decline, decreased sharply in March, erasing nearly all of February’s double digit rise. The volatility seen in Employment for the past four months likely reflects increased reliance on temporary workers.

Production underpinned the Barometer and rose to the highest since November. It was the strongest component for the first time in nine months. Supplier Deliveries also expanded at a faster rate.

Inventory of finished goods fell sharply into contraction to the lowest since July 2013. Prices Paid also declined for a second consecutive month to the lowest since April 2013.

March saw a significant weakening in activity following a five month spell of firm growth. It’s too early to tell, though, if this is the start of a sustained slowdown or just a blip. Panellists, though, were optimistic about the future. Asked about the outlook for demand over the next three months, the majority of businesses said they expected to see a pick-up.


University of Michigan Consumer Confidence dipped at 80.0
Posted: March 28, 2014 at 10:00 AM (Friday)

Consumer confidence has remained largely unchanged in the past three months despite the hard winter as well as a severe drought. The current state of consumer finances were just as strong in March as in December, and more importantly, consumers viewed their financial prospects for the year ahead much more favorably in March than at the start of the winter season. The gains in personal finances were offset by rising concerns about the outlook for the overall economy. While consumers still anticipate that the national economy will continue to grow during the year ahead, they have become increasingly concerned about the ability of the economy to avoid a downturn sometime in the next five years. Of more immediate concern, consumers have voiced their dismay about the slowdown in home value gains, a slowdown that was expected to continue in the year ahead.

Personal Finances Improve for Young
When asked about prospects for their own finances, one-in-three consumers reported in March that they expected their financial situation to improve in the year ahead. The last time a higher share of households anticipated improving finances was nearly five years ago, in June of 2009. The gain was concentrated among those under age 45, as 54% expected improved finances in each of the last two months, the highest levels since 2007.

Buying Plans Slip
Home and vehicle purchase plans declined in March due to less frequent references to low and discounted interest rates on these purchases. The data suggest that people have changed how they evaluate interest rates on loans following the prolonged period of low interest rates (and inflation rates). Consumer spending is likely to respond much more strongly to what would have been considered a minor increase in interest rates in the past.

The Consumer Sentiment Index was 80.0 in the March 2014 survey, insignificantly below February’s 81.6 or January’s 81.2, and just above last March’s 78.6. Compared with a month, the Current Conditions Index remained largely unchanged (+0.3%) while the Index of Consumer Expectations fell (-3.7%). The decline in the Expectations Index was mainly due to less favorable prospects for the overall economy.

Consumers have finally begun to expect sustained gains in their personal finances, especially among younger households. Consumers are ready to celebrate a delayed Spring with renewed spending. Since consumers have become accustomed to very low interest rates on loans, even small increases, which simply tempered demand in the past, could now have a much more pronounced impact on sales of homes and vehicles. Consumers are more likely to postpone than to speed-up purchases in advance of expected increases in interest rates. The Fed now has a more powerful policy tool as well as a less forgiving tool to a policy misstep.


Personal Income increased 0.3%, Spending increased 0.3%
Posted: March 28, 2014 at 08:30 AM (Friday)

Personal income increased $47.7 billion, or 0.3 percent, and disposable personal income (DPI) increased $42.3 billion, or 0.3 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $30.8 billion, or 0.3 percent. In January, personal income increased $41.3 billion, or 0.3 percent, DPI increased $40.3 billion, or 0.3 percent, and PCE increased $20.0 billion, or 0.2 percent, based on revised estimates.

Real DPI increased 0.3 percent in February, compared with an increase of 0.2 percent in January. Real PCE increased 0.2 percent in February, compared with an increase of 0.1 percent in January.


Kansas City Fed Manufacturing Activity Improved due to better weather
Posted: March 27, 2014 at 11:00 AM (Thursday)

Growth in Tenth District manufacturing activity increased in March, and producers’ expectations were mostly stable at solid levels. Some contacts attributed improved activity to better weather conditions. Many firms cited difficulties finding qualified workers with some additional pressure on wages. Most price indexes were stable or slightly higher.

The month-over-month composite index was 10 in March, up from 4 in February and 5 in January. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing activity increased at both durable and non-durable goods-producing plants, particularly for plastic and machinery products. Other month-over-month indexes also improved. The production index jumped from 3 to 22, its highest level in 3 years, and the shipments and new orders indexes also climbed higher. The order backlog index edged up from -4 to -1, and the new orders for exports index also increased slightly. The employment index moderated from 3 to 0, and both inventory indexes eased somewhat.

Most year-over-year factory indexes improved slightly over last month. The composite year-over-year index rose from 8 to 12, and the production, new orders, and order backlog indexes also increased. The capital expenditures index inched higher from 18 to 20, its highest level in over a year, and the new orders for exports index also moved into positive territory. The employment index remained unchanged at 7, while the shipments index eased from 13 to 11. Both inventory indexes edged slightly lower.

Future factory indexes were generally little changed and solid overall. The future composite index was stable at 11, while the future production, shipments, and new orders indexes edged higher. The future order backlog and employment indexes moderated slightly, and the future new orders for exports index also eased somewhat. The future capital expenditures index dropped from 24 to 9, its lowest level in over a year. The future finished goods inventory index moved into negative territory, and the future raw materials inventory index fell from -1 to -8.

Most price indexes increased slightly in March. The month-over-month finished goods price index edged up from 7 to 10, while the raw materials price index was unchanged. The year-over-year raw materials index jumped from 37 to 57, and the finished goods price index rose modestly. The future raw materials price index inched higher from 35 to 38, while the future finished goods price index moderated somewhat, indicating fewer firms plan to pass recent cost increases through to customers.


DJ-BTMU U.S. Business Barometer increased by 0.1%
Posted: March 27, 2014 at 10:00 AM (Thursday)

For the week ending March 15 2014, the DJ-BTMU U.S. Business Barometer increased by 0.1 percent for two consecutive weeks. Upturns in consumption indexes again cancelled out declines in production indexes. Chain store sales rose by 0.8 percent following a 1.3 percent increase in the prior week and railroad freight carloadings picked up after decreasing by more than 1.0 percent for two weeks in a row. On the production side, auto and truck production showed increases, rising by 8.4 percent for the first time in four weeks and by 4.0 percent, respectively. However, these increases were offset by significant decreases in electric output and lumber production.

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, picked up by 0.1 percent following an upwardly revised 0.1 percent increase. Its year-over-year growth rate was 0.3 percent.


Pending Home Sales Index dipped 0.8%
Posted: March 27, 2014 at 10:00 AM (Thursday)

Pending home sales declined for the eighth straight month in February, according to the National Association of Realtors®. Modest increases in the Midwest and West were offset by declines in the Northeast and South; all regions are below a year ago.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, dipped 0.8 percent to 93.9 from a downwardly revised 94.7 in January, and is 10.5 percent below February 2013 when it was 104.9. The February reading was the lowest since October 2011, when it was 92.2.

The recent slowdown in home sales may be behind us, while home prices continue to rise. Contract signings for the past three months have been little changed, implying the market appears to be stabilizing. Moreover, buyer traffic information from our monthly Realtor® survey shows a modest turnaround, and some weather delayed transactions should close in the spring.

The PHSI in the Northeast declined 2.4 percent to 77.1 in February, and is 7.4 percent below a year ago. In the Midwest the index rose 2.8 percent to 95.3 in February, but is 8.5 percent lower than February 2013. Pending home sales in the South fell 4.0 percent to an index of 106.3 in February, and are 9.3 percent below a year ago. The index in the West increased 2.3 percent in February to 86.1, but is 16.5 percent below February 2013.

Total existing-home sales are forecast at 5.0 million this year, just below the nearly 5.1 million in 2013. Housing starts are projected to rise almost 19 percent in 2014, and reach about 1.1 million, closer to the underlying demand of 1.5 million.

The gain in new home construction will reduce some of the pressure on home prices, with the national median existing-home price expected to rise in the range of 5.5 to 6 percent this year, compared with an 11.5 percent jump in 2013.


Weekly Initial Unemployment Claims Decrease 10,000 to 311,000
Posted: March 27, 2014 at 08:30 AM (Thursday)

In the week ending March 22, the advance figure for seasonally adjusted initial claims was 311,000, a decrease of 10,000 from the previous week's revised figure of 321,000. The 4-week moving average was 317,750, a decrease of 9,500 from the previous week's revised average of 327,250.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 15, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 15 was 2,823,000, a decrease of 53,000 from the preceding week's revised level of 2,876,000. The 4-week moving average was 2,862,500, a decrease of 31,500 from the preceding week's revised average of 2,894,000.


4Q2013 GDP final estimate increased 2.6%
Posted: March 27, 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 2.6 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.4 percent. With this third estimate for the fourth quarter, the general picture of economic growth remains largely the same; personal consumption expenditures (PCE) was larger than previously estimated, while private investment in inventories and in intellectual property products were smaller than previously estimated.

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

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and a deceleration in state and local government spending that were partly offset by accelerations in PCE and in exports, a deceleration in imports, and an acceleration in nonresidential fixed investment.


New Orders for Durable Goods Increased 2.2%, Ex-Trans Up 0.2%
Posted: March 26, 2014 at 08:30 AM (Wednesday)

New orders for manufactured durable goods in February increased $5.0 billion or 2.2 percent to $229.4 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 1.3 percent January decrease. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders increased 1.8 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $4.6 billion or 6.9 percent to $71.4 billion. This was led by nondefense aircraft and parts, which increased $1.8 billion.

Shipments of manufactured durable goods in February, up following two consecutive monthly decreases, increased $2.0 billion or 0.9 percent to $234.0 billion. This followed a 0.6 percent January decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $0.9 billion or 1.3 percent to $68.6 billion.

Unfilled orders for manufactured durable goods in February, up twelve of the last thirteen months, increased $2.9 billion or 0.3 percent to $1,062.6 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a slight January increase. Transportation equipment, up five of the last six months, led the increase, $2.8 billion or 0.4 percent to $659.6 billion.

Inventories of manufactured durable goods in February, up ten of the last eleven months, increased $3.2 billion or 0.8 percent to $392.3 billion. This was at the highest level since the series was first published on a NAICS basis, and followed a 0.3 percent January increase. Transportation equipment, up twenty-one of the last twenty-two months, led the increase, $1.9 billion or 1.5 percent to $125.0 billion.

Nondefense new orders for capital goods in February decreased $2.2 billion or 2.8 percent to $75.1 billion. Shipments increased $0.1 billion or 0.1 percent to $74.8 billion. Unfilled orders increased $0.3 billion or 0.1 percent to $644.4 billion. Inventories increased $1.1 billion or 0.6 percent to $178.1 billion. Defense new orders for capital goods in February increased $0.9 billion or 13.5 percent to $8.0 billion. Shipments decreased $0.2 billion or 1.7 percent to $9.5 billion. Unfilled orders decreased $1.5 billion or 0.9 percent to $156.6 billion. Inventories increased $0.9 billion or 4.0 percent to $23.6 billion.

Revised seasonally adjusted January figures for all manufacturing industries were: new orders, $482.0 billion (revised from $483.0 billion); shipments, $489.6 billion (revised from $490.7 billion); unfilled orders, $1,059.7 billion (revised from $1,059.9 billion); and total inventories $637.9 billion (revised from $637.7 billion).


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: March 26, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 3.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 21, 2014. This week's results are compared to a revised level from last week. The seasonally adjusted market index, initially reported as a decline of 1.2 percent, was revised to an increase of 0.2 percent.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.5 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 8 percent from the previous week, including an 8.1 percent decline in conventional refinance applications and a 5.8 percent decline in government refinance applications; the government refinance index dropped to the lowest level since July 2011. In contrast, the seasonally adjusted Purchase Index increased 3 percent from one week earlier, driven mainly by a 4.0 percent increase in conventional purchase applications. Government purchase applications were essentially flat from the week before. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 17 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 54 percent of total applications, the lowest level since April 2010, from 57 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 4.56 percent, the highest level since January 2014, from 4.50 percent, with points increasing to 0.29 from 0.26 (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 4.45 percent from 4.39 percent, with points increasing to 0.27 from 0.19 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.16 percent from 4.13 percent, with points increasing to 0.23 from 0.18 (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 3.62 percent, the highest level since January 2014, from 3.52 percent, with points decreasing to 0.24 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 3.22 percent, the highest level since January 2014, from 3.09 percent, with points decreasing to 0.32 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Consumer Confidence improved in March to 82.3
Posted: March 25, 2014 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had decreased in February, improved in March. The Index now stands at 82.3 (1985=100), up from 78.3 in February. The Present Situation Index edged down to 80.4 from 81.0, while the Expectations Index increased to 83.5 from 76.5.

“Consumer confidence improved in March, as expectations for the short-term outlook bounced back from February’s decline,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “While consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth. The Present Situation index, which had been on an upward trend for the past four months, was relatively unchanged in March. Overall, consumers expect the economy to continue improving and believe it may even pick up a little steam in the months ahead.”

Consumers’ assessment of current conditions was little changed in March. Those claiming business conditions are “good” increased to 22.9 percent from 21.2 percent; however, those claiming business conditions are “bad” also rose, to 23.2 percent from 22.0 percent. Consumers’ appraisal of the labor market was relatively unchanged. Those claiming jobs are “plentiful” decreased marginally to 13.1 percent from 13.4 percent, while those saying jobs are “hard to get” increased slightly to 33.0 percent from 32.4 percent.

Consumers’ expectations, which fell last month, rebounded in March. The percentage of consumers expecting business conditions to improve over the next six months increased to 18.1 percent from 17.3 percent, while those anticipating business conditions to worsen declined to 10.2 percent from 13.6 percent. Consumers’ outlook for the labor market was also moderately more optimistic. Those expecting more jobs in the months ahead edged up to 13.9 percent from 13.7 percent, while those expecting fewer jobs fell to 18.0 percent from 20.9 percent. The proportion of consumers expecting their incomes to grow declined to 14.9 from 15.8 percent, but those anticipating a decline in their incomes also decreased, to 12.1 percent from 13.4 percent.


New Home Sales in February at annual rate of 440,000
Posted: March 25, 2014 at 10:00 AM (Tuesday)

Sales of new single-family houses in February 2014 were at a seasonally adjusted annual rate of 440,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.3 percent (±17.9%) below the revised January rate of 455,000 and is 1.1 percent (±15.2%)* below the February 2013 estimate of 445,000.

The median sales price of new houses sold in February 2014 was $261,800; the average sales price was $317,500. The seasonally adjusted estimate of new houses for sale at the end of February was 189,000. This represents a supply of 5.2 months at the current sales rate.


Richmond Fed's Current Activity Index dipped one point to -7
Posted: March 25, 2014 at 10:00 AM (Tuesday)

Fifth District manufacturing activity remained soft in March, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments and the volume of new orders declined. Manufacturing employment remained flat, while the average workweek edged up and wages rose moderately.

Manufacturers' expectations moved back in line with January's expectations. A participant commented that weather has "wreaked havoc" on demand for the past two months, but he anticipated that his company will be very busy once the weather improves. Compared to last month's outlook, shipments and new orders were expected to grow more quickly. Additionally, manufacturers looked for faster growth in backlogs and capacity utilization. Firms anticipated slightly longer vendor lead times in the six months ahead. Survey participants also expected faster growth in the number of employees along with strong growth in wages and a pickup in the average workweek.

Raw materials and finished goods prices rose at a slower pace in March compared to last month. Manufacturers expected faster growth in prices paid and prices received over the next six months, although their outlook was below February's expectations.

The composite index of manufacturing dipped to a reading of −7 following last month's reading of −6. The index for shipments slipped three points to −9, while the index for new orders remained at an indicator of −9. Manufacturing employment remained flat the past two months.

The index for backlog of orders slowed four points from last month's reading. The capacity utilization index also slipped, ending at −14. Vendor lead time lengthened, moving the index to 6 from a reading of 0.

Finished goods inventories built up at nearly the same rate as a month ago. Raw materials inventories grew more slowly compared to last month.

As weather improved slightly, a participant stated that his company was trying to catch up from weather-related plant shutdowns by adding employees and increasing capacity utilization.


S&P/Case-Shiller Home Price Indices declined 0.1%
Posted: March 25, 2014 at 09:00 AM (Tuesday)

Data through January 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, showed that the 10-City and 20-City Composites rose 13.5% and 13.2% year-over-year. Twelve cities and the 20-City Composite saw their annual rates worsen.

The 10-City Composite showed a slight uptick in its index level but remained relatively unchanged. The 20-City Composite, a broader measure of home prices, posted its third consecutive monthly decline of 0.1%. Twelve cities declined in January with Chicago decreasing 1.2%. Las Vegas led at +1.1% and posted its 22nd consecutive monthly gain. Despite recent advances, Las Vegas is still the farthest from its high set in August 2006 with a peak-to-current decline of 45%. Dallas and Denver are now less than 1% away from their recent all-time index highs.

In January 2014, the 10-City and 20-City Composites posted year-over-year increases of 13.5% and 13.2%. The housing recovery may have taken a breather due to the cold weather. Twelve cities reported declining prices in January vs. December; eight of those were worse than the month before. From the bottom in 2012, prices are up 23% and the housing market is showing signs of moving forward with more normal price increases.

The Sun Belt showed the five highest monthly returns. Las Vegas was the leader with an increase of 1.1% followed by Miami at +0.7%. San Diego showed its best January performance of 0.6% since 2004. San Francisco and Tampa trailed closely at +0.5% and +0.4%. Elsewhere, New York and Washington D.C. stood out as they continued to improve and posted their highest year-over-year returns since 2006. Dallas and Denver are the only cities to have reached new record peaks while Detroit remains the only city with home prices below those of 14 years ago.

Expectations and recent data point to continued home price gains for 2014. Although most analysts do not expect the same rapid increases we saw last year, the consensus is for moderating gains. Existing home sales declined slightly in February and are at their lowest level since July 2012.

As of January 2014, average home prices across the United States are back to their mid-2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 20%. The recovery from the March 2012 lows is 23% for the 10-City and 20-City Composites.

Las Vegas and San Francisco remain the only two cities posting annual gains of over 20%. San Diego showed the most improvement with a year-over-year return of 19.4% in January from 18.0% in December. Phoenix saw its annual rate decelerate the most; the city’s return peaked last January when it led all 20 cities by a wide margin.

Only seven cities – Las Vegas, Miami, New York, San Diego, San Francisco, Tampa and Washington – showed positive monthly returns in January. Chicago and Seattle declined the most and posted their fourth consecutive drop in average home prices. Although Cleveland continued its decline, it showed the most improvement with -1.5% in December to -0.3% in January.


ICSC Chain Store Sales slipped by 1.5% in Mar 22 Wk
Posted: March 25, 2014 at 07:45 AM (Tuesday)

fter three weekly sequential sales gains retailers experienced mixed results as retail demand varied across categories and overall was softer than the prior week. For the week ending March 22, 2014 weekly sales slipped by 1.5%, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index. However, on a positive note, the year-over-year pace remained strong and rose by 1.7%.

"Sales on a year-over-year basis were a tad stronger though segment demand was mixed across retail categories," said Michael Niemira, ICSC vice president of research and chief economist. "According to the ICSC-GS consumers tracking survey dollar and electronics stores saw a strong improvement while discounters and apparel stores improved on a year-over-year basis. However, business was softer than the same week of the prior year for grocery, drug, department, furniture stores and wholesale clubs," Niemira added.

For March ICSC Research expects monthly comparable store sales will increase by about 3.0%.


Chicago Fed National Activity increased in February
Posted: March 24, 2014 at 08:30 AM (Monday)

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.14 in February from –0.45 in January. Three of the four broad categories of indicators that make up the index increased from January, and two of the four categories made positive contributions to the index in February.

The index’s three-month moving average, CFNAI-MA3, decreased to –0.18 in February from +0.02 in January, marking its first reading below zero in six months. February’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

The CFNAI Diffusion Index decreased to –0.06 in February from +0.03 in January. Fifty-four of the 85 individual indicators made positive contributions to the CFNAI in February, while 31 made negative contributions. Fifty-one indicators improved from January to February, while 33 indicators deteriorated and one was unchanged. Of the indicators that improved, 15 made negative contributions.

Production-related indicators contributed +0.26 to the CFNAI in February, up from –0.38 in January. Manufacturing output increased 0.8 percent in February after declining 0.9 percent in January, and manufacturing capacity utilization rose to 76.4 percent in February from 75.9 percent in the previous month. The contribution from the sales, orders, and inventories category to the CFNAI increased to +0.06 in February from a neutral reading in January.

Employment-related indicators contributed –0.02 to the CFNAI in February, down from +0.11 in January. The unemployment rate ticked up to 6.7 percent in February from 6.6 percent in January. Nonfarm payrolls increased by 175,000 in February after rising by 129,000 in January, whereas civilian employment increased by just 42,000 in February.

The contribution from the consumption and housing category to the CFNAI moved up to –0.16 in February from –0.19 in January. Housing permits increased to 1,018,000 annualized units in February from 945,000 in January, but housing starts ticked down to 907,000 annualized units in February from 909,000 in the previous month. The CFNAI was constructed using data available as of March 20, 2014.

At that time, February data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The January monthly index was revised to –0.45 from an initial estimate of –0.39. 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 January monthly index was due primarily to the former.


U.S. Leading Economic Index increased 0.5%
Posted: March 20, 2014 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.5 percent in February to 99.8 (2004 = 100), following a 0.1 percent increase in January, and a 0.1 percent decline in December.

The U.S. LEI increased sharply in February, suggesting that any weather-related volatility will be short lived and the economy should continue to improve into the second half of the year. The strengths and weaknesses in the LEI were balanced in February, with large increases in housing permits and the interest rate spread more than offsetting decreases in the workweek in manufacturing, consumer expectations and rising initial claims for unemployment insurance.

While the CEI shows the pace of economic activity remained slow at the start of 2014, the trend in the LEI remains quite positive. The biggest challenge continues to be weak consumer demand, pinned down by weak wage growth. These conditions were still in evidence the first two months of the year, but will likely improve as spring arrives.

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in February to 108.2 (2004 = 100), following a 0.1 percent increase in January, and no change in December.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 in February to 122.1 (2004 = 100), following a 0.5 percent increase in January, and a 0.4 percent increase in December.


Existing-Home Sales declined 0.4% in February
Posted: March 20, 2014 at 10:00 AM (Thursday)

Home prices continued to show solid growth in most of the country due to limited inventory conditions, but rising prices and severe winter weather caused existing-home sales to slip in February, 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, declined 0.4 percent to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January, and 7.1 percent below the 4.95 million-unit level in February 2013. February’s pace of sales was the lowest since July 2012, when it stood at 4.59 million.

Conditions in February were largely unchanged from January. We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago. Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.

The median existing-home price for all housing types in February was $189,000, which is 9.1 percent above February 2013. Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years.

Distressed homes – foreclosures and short sales – accounted for 16 percent of February sales, compared with 15 percent in January and 25 percent in February 2013.

Eleven percent of February sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in February, while short sales were discounted 11 percent.

Total housing inventory at the end of February rose 6.4 percent to 2.00 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 4.9 months in January. Unsold inventory is 5.3 percent above a year ago, when there was a 4.6-month supply.

The median time on market for all homes was 62 days in February, down from 67 days in January and 74 days on market in February 2013. Short sales were on the market for a median of 94 days in February, while foreclosures typically sold in 60 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to 4.30 percent in February from 4.43 percent in January; the rate was 3.53 percent in February 2013.

First-time buyers accounted for 28 percent of purchases in February, up from 26 percent in January, but down from 30 percent in February 2013.

Student debt appears to be a factor in the weak level of first-time buyers. The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges. However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle.

Brown notes the survey results are for recent homebuyers. “It’s clear there are other people who would like to buy a home that are not in the market because of debt issues, so we can expect a lingering impact of delayed home buying,” Brown added.

All-cash sales comprised 35 percent of transactions in February, up from 33 percent in January and 32 percent in February 2013. Individual investors, who account for many cash sales, purchased 21 percent of homes in February, compared with 20 percent in January; they were 22 percent in February 2013. Seventy-three percent of investors paid cash in February.

Single-family home sales edged down 0.2 percent to a seasonally adjusted annual rate of 4.04 million in February from 4.05 million in January, and are 6.9 percent below the 4.34 million-unit level in February 2013. The median existing single-family home price was $189,200 in February, up 9.0 percent from a year ago.

Existing condominium and co-op sales declined 1.8 percent to an annual rate of 560,000 units in February from 570,000 in January, and are 8.2 percent below a year ago. The median existing condo price was $187,900 in February, which is 9.8 percent above February 2013.


Philadelphia March Outlook Suggest Activity Rebounded This Month
Posted: March 20, 2014 at 10:00 AM (Thursday)

Manufacturing activity rebounded in March, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, and shipments increased and recorded positive readings this month, suggesting a return to growth following weather-related weakness in February. Firms’ employment levels were reported near steady, but responses reflected optimism about adding to payrolls over the next six months. The survey's indicators of future activity reflected optimism about continued growth over the next six months.

Indicators Suggest Activity Rebounded This Month
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of -6.3 in February to 9.0 this month, nearing its reading in January. The current shipments and new orders indexes also returned to positive readings this month. The demand for manufactured goods, as measured by the current new orders index, increased from -5.2 to 5.7 this month. Shipments also increased, with its index rising 16 points to a reading of 5.7. Firms reported, on balance, shorter delivery times and an increase in unfilled orders this month. Lower inventories were also reported in March.

Indicators suggest stable labor market conditions this month. The employment index remained positive for the ninth consecutive month but edged 3 points lower, suggesting near-steady employment: The percentage of firms reporting increases in employment (17 percent) edged out the percentage reporting decreases (15 percent). The workweek index was slightly positive this month, following negative readings over the previous two months.

The survey's price diffusion indexes fell slightly this month, suggesting moderate price pressures. The prices received index decreased 3 points, to 4.3. Thirteen percent of the firms reported increases for their own products, while 9 percent reported price reductions. The largest percentage (77 percent) indicated that their firms’ prices were steady this month. The prices paid index edged slightly lower, to 13.9. Nineteen percent of the firms reported higher input prices, down from 24 percent in February.

Expectations for Growth Remain Optimistic
Firms remain optimistic about the growth of overall manufacturing activity for the next six months. The future general activity index remained at a relatively high reading; however, the index decreased 5 points from its reading in February. Indexes for future new orders and shipments moved in opposite directions but remained at high readings. The future new orders index decreased 3 points, while the future shipments index increased 5 points. The future employment index continues to reflect confidence about future conditions: The index increased 13 points this month, marking its highest reading since last September. The percentage of firms expecting employment growth increased from 27 percent in February to 34 percent this month.

In special questions this month, firms were asked about their expectations for capital spending for 2014 compared with 2013. Nearly 49 percent of the firms indicated that total capital spending would increase this year compared with 2013; 21 percent indicated that spending would decrease. Expected high sales growth and the need to replace equipment were the most cited reasons for the increase. Among the firms that did not plan to increase capital spending, the most cited reasons were low sales growth, low capacity utilization, and a limited need to replace capital and technology equipment.

Summary
The March Business Outlook Survey suggests that activity in the region’s manufacturing sector rebounded following a month of decline in February. Firms reported increases in overall activity, new orders, and shipments this month. Price pressures remained moderate. The survey’s future activity indexes indicate that firms expect continued growth and employment increases over the next six months.


DJ-BTMU U.S. Business Barometer increased by 0.1%
Posted: March 20, 2014 at 10:00 AM (Thursday)

For the week ending March 8 2014, the DJ-BTMU U.S. Business Barometer increased slightly by 0.1 percent following a 0.4 percent rise in the prior week. Decreases in production indexes were more than offset by increases in consumption indexes, in particular, chain store sales, rising by 1.3 percent. Meanwhile, railroad freight carloadings declined by more than 1 percent for two weeks in a row. Production side was dragged by auto production and steel production, which dropped by 6.2 percent and 0.8 percent, respectively, while electric output increased by 3.9 percent.

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

The smoothed version of the barometer, which attempts to account for weekly volatility, continued to remain at 97.3 and hasn’t increased since December 21 2013. Its year-over-year growth rate was 0.3 percent.


Weekly Initial Unemployment Claims Increase 5,000 to 320,000
Posted: March 20, 2014 at 08:30 AM (Thursday)

In the week ending March 15, the advance figure for seasonally adjusted initial claims was 320,000, an increase of 5,000 from the previous week's unrevised figure of 315,000. The 4-week moving average was 327,000, a decrease of 3,500 from the previous week's unrevised average of 330,500.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 8, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 8 was 2,889,000, an increase of 41,000 from the preceding week's revised level of 2,848,000. The 4-week moving average was 2,897,250, a decrease of 16,750 from the preceding week's revised average of 2,914,000.


Federal Open Market Committee Press Conference
Posted: March 19, 2014 at 02:30 PM (Wednesday)


FOMC target funds rate still 0 - 1/4%, QE now $55 bil, Updated guidance
Posted: March 19, 2014 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective, but 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 and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

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 April, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 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.

With the unemployment rate nearing 6-1/2 percent, the Committee has updated its forward guidance. The change in the Committee's guidance does not indicate any change in the Committee's policy intentions as set forth in its recent statements.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Richard W. Fisher; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; and Daniel K. Tarullo.

Voting against the action was Narayana Kocherlakota, who supported the sixth paragraph, but believed the fifth paragraph weakens the credibility of the Committee's commitment to return inflation to the 2 percent target from below and fosters policy uncertainty that hinders economic activity.


4Q2013 Current Account Deficit Decreased
Posted: March 19, 2014 at 08:30 AM (Wednesday)

The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—decreased to $81.1 billion (preliminary) in the fourth quarter from $96.4 billion (revised) in the third quarter. The deficit decreased to 1.9 percent of current-dollar gross domestic product (GDP) from 2.3 percent in the third quarter. The decrease in the current-account deficit reflected a decrease in the deficit on goods and services, an increase in the surplus on income, and a decrease in net outflows of unilateral current transfers.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: March 19, 2014 at 07:00 AM (Wednesday)

Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 14, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index also decreased 1 percent from one week earlier. The unadjusted Purchase Index was essentially unchanged compared with the previous week and was 15 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased for the sixth straight week to 56.5 percent of total applications from 57 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) decreased to 4.50 percent from 4.52 percent, with points decreasing to 0.26 from 0.29 (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 4.39 percent from 4.41 percent, with points decreasing to 0.19 from 0.20 (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 4.13 percent from 4.18 percent, with points decreasing to 0.18 from 0.21 (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 3.52 percent from 3.53 percent, with points decreasing to 0.25 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 3.09 percent from 3.18 percent, with points increasing to 0.38 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


February Housing Starts down 0.2%, Permits up 7.7%
Posted: March 18, 2014 at 08:30 AM (Tuesday)

BUILDING PERMITS
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,018,000. This is 7.7 percent (±1.0%) above the revised January rate of 945,000 and is 6.9 percent (±1.2%) above the February 2013 estimate of 952,000. Single-family authorizations in February were at a rate of 588,000; this is 1.8 percent (±0.9%) below the revised January figure of 599,000. Authorizations of units in buildings with five units or more were at a rate of 407,000 in February.

HOUSING STARTS
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 907,000. This is 0.2 percent (±12.1%) below the revised January estimate of 909,000 and is 6.4 percent (±9.9%) below the February 2013 rate of 969,000. Single-family housing starts in February were at a rate of 583,000; this is 0.3 percent (±12.0%) above the revised January figure of 581,000. The February rate for units in buildings with five units or more was 312,000.

HOUSING COMPLETIONS
Privately-owned housing completions in February were at a seasonally adjusted annual rate of 886,000. This is 4.4 percent (±9.5%) above the revised January estimate of 849,000 and is 21.9 percent (±13.9%) above the February 2013 rate of 727,000. Single-family housing completions in February were at a rate of 631,000; this is 4.0 percent (±9.7%) above the revised January rate of 607,000. The February rate for units in buildings with five units or more was 246,000.


Consumer Price Index increased 0.1% in February, Ex Fd & Engy up 0.1%
Posted: March 18, 2014 at 08:30 AM (Tuesday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment.

An increase in the food index accounted for more than half of the all items increase in February. The food index rose 0.4 percent in February, driven by a 0.5 percent increase in the index for food at home, with four of the six major grocery store food group indexes increasing. The energy index declined, with a decrease in the gasoline index more than offsetting sharp increases in the fuel oil and natural gas indexes.

The index for all items less food and energy also rose 0.1 percent in February. An increase of 0.2 percent in the shelter index was the major contributor to the rise, but the indexes for medical care, airline fares, personal care, recreation, and new vehicles also increased. In contrast, the indexes for household furnishings and operations, apparel, used cars and trucks, and tobacco all declined in February.

The all items index increased 1.1 percent over the last 12 months; this compares to increases of 1.5 percent in December and 1.6 percent in January. The index for all items less food and energy rose 1.6 percent over the last 12 months. The energy index declined 2.5 percent over the same period, while the food index has increased 1.4 percent.


Real Average Hourly Earnings rose 0.3% in February
Posted: March 18, 2014 at 08:30 AM (Tuesday)

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

Real average weekly earnings were unchanged over the month due to the 0.3 percent increase in real average hourly earnings being offset by a 0.3 percent decrease in the average workweek.

Real average hourly earnings rose 1.1 percent, seasonally adjusted, from February 2013 to February 2014. The increase in real average hourly earnings, combined with a 0.9 percent decline in the average workweek, resulted in a 0.2 percent increase in real average weekly earnings over this period.


ICSC Chain Store Sales rose by 1.5% in Mar 15 Wk
Posted: March 18, 2014 at 07:45 AM (Tuesday)

U.S. chain-store sales rose 1.5 percent year on year for the week that ended on March 15, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Comparable-store sales improved 0.7 percent from the previous week.

“Weather Trends International put it best on the weather conditions over the past week when they said, it was a ‘battle between winter and spring,’ which seemingly added to the mixed performance for the industry,” said Michael Niemira, ICSC's vice president of research and chief economist. “Furniture, office, department and other non-apparel specialty stores all saw a year over year improvement, according to the ICSC-Goldman Sachs consumer tracking survey, while many stores selling staples — grocery, drug, discounters and wholesale clubs — were softer over the past week. The later Easter this year versus last year, as well as the lingering winter weather, is likely paring the consumer’s appetite for seasonal merchandise, but the strengthening in some of the discretionary segment — such as furniture and department stores — is fundamentally positive.”

ICSC Research anticipates that chain-store sales will increase 3 percent for March. The weekly chain-store sales snapshot is produced by ICSC and Goldman Sachs to measure U.S. nominal same-store, or comparable-store, sales while excluding restaurant and vehicle demand. The weekly sales index is presented on an adjusted basis to account for normal seasonal and other data anomalies.


Builder Confidence Rose 1 point in February to 47
Posted: March 17, 2014 at 10:00 AM (Monday)

Builder confidence in the market for newly-built, single-family homes rose one point to 47 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

The March HMI mirrors last month’s sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor.

A number of factors are raising builder concerns over meeting demand for the spring buying season. These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale.

The index’s components were mixed in March. The component gauging current sales conditions rose one point to 52 and the component measuring buyer traffic increased two points to 33. The component gauging sales expectations in the next six months fell one point to 53.

The three-month moving averages for regional HMI scores all fell in March. The Northeast dropped three points to 35, the Midwest fell three points to 53, the South posted a four-point decline to 49 and the West registered a two-point drop to 61.


Industrial Production increased 0.6%
Capacity Utilization increased to 78.8%

Posted: March 17, 2014 at 09:15 AM (Monday)

Industrial production increased 0.6 percent in February after having declined 0.2 percent in January. In February, manufacturing output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which resulted, in part, from extreme weather. The gain in factory production in February was the largest since last August. The output of utilities edged down 0.2 percent following a jump of 3.8 percent in January, and the production at mines moved up 0.3 percent. At 101.6 percent of its 2007 average, total industrial production in February was 2.8 percent above its level of a year earlier. The capacity utilization rate for total industry increased in February to 78.8 percent, a rate that is 1.3 percentage points below its long-run (1972–2013) average.


Treasury International Capital Data for January 2014
Posted: March 17, 2014 at 09:00 AM (Monday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for January 2014. The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $83.0 billion. Of this, net foreign private inflows were $115.9 billion, and net foreign official outflows were $32.8 billion.

Foreign residents decreased their holdings of long-term U.S. securities in January; net sales were $14.8 billion. Net purchases by private foreign investors were $1.8 billion, while net sales by foreign official institutions were $16.5 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $22.0 billion.

Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were $7.3 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 $2.5 billion in January.

Foreign residents decreased their holdings of U.S. Treasury bills by $15.3 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $1.0 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $84.6 billion.


Empire State Manufacturing Survey Conditions Continue to Improve Modestly
Posted: March 17, 2014 at 08:30 AM (Monday)

The March 2014 Empire State Manufacturing Survey indicates that business conditions continued to improve for New York manufacturers, though activity grew slowly. At 5.6, the general business conditions index was little changed from last month. The new orders index climbed three points to 3.1, indicating that orders were slightly higher, and the shipments index inched up to 4.0. The unfilled orders index fell further into negative territory, declining ten points to -16.5, and the inventories index advanced to 7.1, pointing to rising inventory levels. The indexes for both prices paid and prices received declined but remained positive, indicating slower price growth. Employment indexes were positive and suggested a small increase in employment levels and hours worked. Indexes for the six-month outlook were down somewhat from last month’s levels, but continued to convey a fairly strong degree of optimism about future conditions, and the capital spending index rose to its highest level in several months.

Business Conditions Continue to Improve Modestly
According to the March 2014 survey, business conditions continued to improve for New York manufacturers, but the pace of growth remained modest. The general business conditions index was little changed at 5.6. Roughly 30 percent of respondents reported that conditions had improved over the month, while 25 percent reported that conditions had worsened. The new orders index climbed three points to 3.1, pointing to a slight increase in orders. The shipments index inched up two points to 4.0, indicating a small rise in shipments, and the unfilled orders index fell ten points to -16.5. The delivery time index dropped to -3.5, indicating somewhat shorter delivery times, and the inventories index climbed twelve points to 7.1—a sign that inventory levels had risen over the month.

Price Increases Slow, Employment Expands
Price indexes were lower in March, and pointed to a slowing in the pace of both input price increases and selling price increases. The prices paid index fell four points to 21.2, while the prices received index fell thirteen points to 2.4, suggesting only a slight increase in selling prices. Labor market conditions continued to improve. The employment index fell five points but, at 5.9, indicated a small increase in employment levels. The average workweek index, holding steady at 4.7, pointed to a small increase in hours worked.
Six-Month Outlook Remains Optimistic

Indexes for the six-month outlook continued to convey a solid degree of optimism about future business conditions, though to a somewhat lesser degree than last month. The index for expected general business conditions fell six points to 33.2, and the index for future new orders dropped to 36.0, down nine points from last month’s two-year high. Indexes for future price increases inched higher. The index for expected number of employees, though lower than last month, remained firmly in positive territory. After falling sharply last month, the capital expenditures index rose fourteen points to 16.5, and the technology spending index increased to 7.1.


Producer Price Index fell 0.1% in February, ex Fd & Engy up 0.2%
Posted: March 14, 2014 at 08:30 AM (Friday)

The Producer Price Index for final demand fell 0.1 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decline followed advances of 0.2 percent in January and 0.1 percent in December. On an unadjusted basis, the index for final demand moved up 0.9 percent for the 12 months ended in February, the smallest 12-month rise since a 0.9 percent increase in May 2013.

In February, the 0.1-percent decrease in final demand prices can be traced to the index for final demand services, which fell 0.3 percent. In contrast, prices for final demand goods advanced 0.4 percent.


Business Inventories up 0.4% in January
Posted: March 13, 2014 at 10:00 AM (Thursday)

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for January, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,302.9 billion, down 0.9 percent (±0.2) from December 2013, but were up 2.5 percent (±0.4) from January 2013.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,715.1 billion, up 0.4 percent (±0.1) from December 2013 and up 3.9 percent (±0.6) from January 2013.

The total business inventories/sales ratio based on seasonally adjusted data at the end of January was 1.32. The January 2013 ratio was 1.30.


DJ-BTMU U.S. Business Barometer picked up by 0.4%
Posted: March 13, 2014 at 10:00 AM (Thursday)

For the week ending March 1 2014, the DJ-BTMU U.S. Business Barometer picked up by 0.4 percent following a large decline of 0.7 percent in the prior week. Most of the production indexes bounced back from decreases last week and pushed up this week’s barometer. Electric output increased significantly by 8.5 percent, rebounding from a 10.8 percent drop, and lumber production and steel production also rose by 2.5 percent and 1.4 percent, respectively. In the consumption indexes, chain store sales picked up slightly after declining in the previous week, but was cancelled out by a 1.2 percent drop in railroad freight carloadings.

On a year-over-year basis, the barometer showed a gain of 0.2 percent, the lowest rate since October 12 2013, 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 unchanged at 97.2. Its year-over-year growth rate was 0.3 percent.


U.S. Import Price Index increased 0.9% in February
Posted: March 13, 2014 at 08:30 AM (Thursday)

U.S. import prices increased 0.9 percent in February following a 0.4 percent advance the previous month, the U.S. Bureau of Labor Statistics reported today. The February advance was led by higher fuel prices which more than offset declining nonfuel prices. U.S. export prices rose 0.6 percent in February, after increasing 0.2 percent in January.


U.S. Retail Sales for February increase 0.3%, Ex-Auto up 0.3%
Posted: March 13, 2014 at 08:30 AM (Thursday)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for February, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $427.2 billion, an increase of 0.3 percent (±0.5%) from the previous month, and 1.5 percent (±0.9%) above February 2013. Total sales for the December 2013 through February 2014 period were up 2.3 percent (±0.5%) from the same period a year ago. The December 2013 to January 2014 percent change was revised from -0.4 percent (±0.5%) to -0.6 percent (±0.2%).

Retail trade sales were up 0.3 percent (±0.5%) from January 2014, and 1.3 percent (±0.9%) above last year. Nonstore retailers were up 6.3 percent (±2.5%) from February 2013 and health and personal care stores were up 5.5 percent (±1.9%) from last year.


Weekly Initial Unemployment Claims Decrease 9,000 to 315,000
Posted: March 13, 2014 at 08:30 AM (Thursday)

In the week ending March 8, the advance figure for seasonally adjusted initial claims was 315,000, a decrease of 9,000 from the previous week's revised figure of 324,000. The 4-week moving average was 330,500, a decrease of 6,250 from the previous week's revised average of 336,750.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 1, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 1 was 2,855,000, a decrease of 48,000 from the preceding week's revised level of 2,903,000. The 4-week moving average was 2,915,750, a decrease of 19,500 from the preceding week's revised average of 2,935,250.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: March 12, 2014 at 07:00 AM (Wednesday)

MMortgage applications decreased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 7, 2014.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 17 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 57 percent of total applications, the lowest level since April 2011, from 58 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 4.52 percent from 4.47 percent, with points increasing to 0.29 from 0.28 (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 4.41 percent from 4.37 percent, with points unchanged at 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.18 percent from 4.13 percent, with points increasing to 0.21 from 0.13 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent, with points increasing to 0.28 from 0.18 (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 3.18 percent from 3.09 percent, with points decreasing to 0.36 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings were 4.0 million in January
Posted: March 11, 2014 at 10:00 AM (Tuesday)

There were 4.0 million job openings on the last business day of January, little changed from December, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) and separations rate (3.2 percent) were little changed in January. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region. The release also includes 2013 annual estimates for hires and separations. The annual levels for hires and quits increased in 2013 while the annual total for layoffs and discharges decreased.

There were 4.0 million job openings in January, little changed from December. The number of openings also was little changed in total private and government. The number of job openings decreased in retail trade; the number increased in health care and social assistance and in arts, entertainment, and recreation. The West region experienced a rise in job openings in January.

The number of job openings (not seasonally adjusted) increased over the year for total nonfarm and total private but decreased for government. Over the year, the number of job openings increased in several industries while it decreased in real estate and rental and leasing and in federal government. The Midwest and West regions experienced an increase in the number of job openings over the 12 months ending in January.

In 2013, annual hires increased to 54.2 million (39.7 percent of employment) and annual total separations rose to 51.8 million (38.0 percent of employment). Annual quits increased to 27.6 million (20.3 percent of employment) in 2013. Annual layoffs and discharges decreased in 2013 to 20.0 million (14.6 percent of employment). Annual other separations rose in 2013 to 4.3 million (3.1 percent of employment).


Wholesale Inventories up 0.6% in January
Posted: March 11, 2014 at 10:00 AM (Tuesday)

The U.S. Census Bureau announced today that January 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 $432.6 billion, down 1.9 percent (+/-0.5%) from the revised December level, but were up 3.9 percent (+/-1.2%) from the January 2013 level. The December preliminary estimate was revised downward $1.4 billion or 0.3 percent. January sales of durable goods were down 0.4 percent (+/-0.7%) from last month, but were up 3.9 percent (+/-1.2%) from a year ago. Sales of nondurable goods were down 3.2 percent (+/-0.5%) from December, but were up 3.9 percent (+/-1.8%) from last January. Sales of petroleum and petroleum products were down 7.5 percent from last month and sales of paper and paper products were down 2.9 percent.

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $521.2 billion at the end of January, up 0.6 percent (+/-0.4%) from the revised December level and were up 3.6 percent (+/-0.9%) from the January 2013 level. The December preliminary estimate was revised upward $0.3 billion or 0.1 percent. January inventories of durable goods were up 0.4 percent (+/-0.5%) from last month and were up 4.9 percent (+/-1.4%) from a year ago. Inventories of motor vehicle and motor vehicle parts and supplies were up 2.2 percent from last month, while inventories of electrical and electronic goods were down 2.4 percent. Inventories of nondurable goods were up 0.8 percent (+/-0.5%) from December and were up 1.8 percent (+/-0.9%) from last January. Inventories of paper and paper products were up 2.8 percent from last month and inventories of drugs and druggists' sundries were up 2.7 percent.

The January inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.20. The January 2013 ratio was 1.21.


ICSC Chain Store Sales rose by 1.3% in Mar 8 Wk
Posted: March 11, 2014 at 07:45 AM (Tuesday)

Retail sales roared like a lion during the past week ending March 8, 2014. Sales rose by a solid 1.3%, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index. Sales also improved on a year-over-year basis, up 2.1% in the latest period, after a soft patch during the prior two weeks.

"Sales received a nice lift over the past week as consumers were more motivated to shop, according to the ICSC-GS consumer tracking survey," said Michael Niemira, ICSC vice president of research and chief economist. "Although adverse winter weather continued to play havoc regionally, a bout of extremely warm temperatures in the West (the warmest in more than 23 years, according to Weather Trends International) was favorable for spring seasonal categories," added Niemira.

For March ICSC Research expects monthly comparable store sales will increase by about 3.0%.


NFIB Small Business Optimism Index fell 2.7 points to 91.4
Posted: March 11, 2014 at 07:30 AM (Tuesday)

The Small Business Optimism Index fell 2.7 points to 91.4, a substantial reversal in an unexciting January measure but ends a 3 month improvement trend. Only one of the Index components improved, three were unchanged, and six were lower, indicating that the small business half of the economy is still adding little to growth beyond that needed to support population growth. The substantial decline in the Index is consistent with the prospect that GDP growth will remain in the mid 2 percent range barring some exceptional good news, unlikely in this election year.

The one “green shoot” in the January survey, a surge in hiring plans, was crushed by the continued onslaught of a wintry recovery now in its 5th year. The February report on net new jobs was better than expected, but inadequate to the task of reducing the unemployment rate which rose a tenth of a point. As disturbing as the decline in job creation plans was, the plunge in expectations for improvements in real sales in the coming months and for business conditions 6 months from now, undoubtedly the reason for the decline in hiring plans. Averaging 22 percent from 1973 through 2007, a net 22 percent expected real sales volumes to rise in the following 3 month period. In February, it was a meager net 3 percent.

Uncertainty is a major cause of the reluctance to spend and hire. Large firms are loaded with cash but unwilling to spend. For small firms, record low numbers are reporting the current period as a good time to expand, for 5 years and running. More firms are reducing inventory than adding to it, even in a growing economy. And more firms are expecting a deterioration in the economy than an improvement. In NFIB’s Problems and Priorities survey, uncertainty about the economy and government policy both rank in the top 5 most severe problems facing small business owners. You don’t bet your money on a future you cannot see clearly.

The Federal Reserve now holds more government bonds than either Japan or China and remains the major buyer of mortgage securities. In the “olden days” banks made mortgages, lending out depositors money to credit worthy home buyers. Now the regulatory cost of making mortgages is so large that only a few big banks will do it. Regulators no longer allow banks to lend for 30 years and finance with short-term deposits. This risk is dumped onto the taxpayer.

The economy is not doing well and little is happening in Washington that would lead owners to think otherwise. Even the Federal Reserve’s guidance is for a weak economy, that’s what owners read and they are the experts (and policy makers). All policy is focused on the election, pandering to special interests, not the interests of the “middle class” (most of us) which simply wants to see better economic growth and serious job creation (along with improving compensation). Consumer sentiment is equally morose for this stage of a “recovery”. Only 1 in 10 consumers think government policy is good. The IRS is still taking the 5th and the DOJ investigator sends campaign money to the Democrat party. None of the “issues” are resolved; those involved hoping to stall long enough for other crises to shove them off the front pages - maybe Putin will save them. But the stock market is hitting new highs so I guess we should all cheer.


Employment Trends Index increased in February to 116.39
Posted: March 10, 2014 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in February. The index now stands at 116.39, up from 115.99 (a downward revision) in January. This represents a 4.4 percent gain in the ETI compared to a year ago.

February’s job report and the ongoing improvement in the Employment Trends Index should provide some relief for those concerned about weakness in the U.S. economy and labor market. The majority of the ETI’s components have been steadily rising in recent months, suggesting solid job growth will continue in the coming months.

February’s increase in the ETI was driven by positive contributions from six of its eight components. In order from the largest positive contributor to the smallest, these were: Number of Temporary Employees, Job Openings, Real Manufacturing and Trade Sales, Industrial Production, Consumer Confidence Survey® Percentage of Respondents Who Say They Find “Jobs Hard to Get,” and Ratio of Involuntarily Part-time to All Part-time Workers.


Consumer Credit Increased at an annual rate of 5.25%
Posted: March 7, 2014 at 03:00 PM (Friday)

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


February Employment increased by 175,000
Unemployment Rate increased to 6.7%

Posted: March 7, 2014 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in wholesale trade but declined in information.

Both the number of unemployed persons (10.5 million) and the unemployment rate (6.7 percent) changed little in February. The jobless rate has shown little movement since December. Over the year, the number of unemployed persons and the unemployment rate were down by 1.6 million and 1.0 percentage point, respectively.

Among the major worker groups, the unemployment rates for adult men (6.4 percent), adult women (5.9 percent), teenagers (21.4 percent), whites (5.8 percent), blacks (12.0 percent), and Hispanics (8.1 percent) showed little or no change in February. The jobless rate for Asians was 6.0 percent (not seasonally adjusted), about unchanged over the year.

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 203,000 in February to 3.8 million; these individuals accounted for 37.0 percent of the unemployed. The number of long-term unemployed was down by 901,000 over the year.

Both the civilian labor force participation rate (63.0 percent) and the employment-population ratio (58.8 percent) were unchanged in February. The labor force participation rate was down 0.5 percentage point from a year ago, while the employment-population ratio was little changed over the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 7.2 million in February. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work.

Total nonfarm payroll employment rose by 175,000 in February. Job growth averaged 189,000 per month over the prior 12 months. In February, job gains occurred in professional and business services and in wholesale trade, while information lost jobs.

The change in total nonfarm payroll employment for December was revised from +75,000 to +84,000, and the change for January was revised from +113,000 to +129,000. With these revisions, employment gains in December and January were 25,000 higher than previously reported.


Goods and Services Deficit Increased in January 2014
Posted: March 7, 2014 at 08:30 AM (Friday)

The Nation’s international trade deficit in goods and services increased to $39.1 billion in January from $39.0 billion in December (revised), as imports increased more than exports.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total January exports of $192.5 billion and imports of $231.6 billion resulted in a goods and services deficit of $39.1 billion, up from $39.0 billion in December, revised. January exports were $1.2 billion more than December exports of $191.3 billion. January imports were $1.3 billion more than December imports of $230.3 billion.

In January, the goods deficit increased $0.7 billion from December to $59.3 billion, and the services surplus increased $0.5 billion from December to $20.2 billion. Exports of goods increased $1.0 billion to $133.8 billion, and imports of goods increased $1.7 billion to $193.1 billion. Exports of services increased $0.2 billion to $58.7 billion, and imports of services decreased $0.4 billion to $38.5 billion.

The goods and services deficit decreased $3.0 billion from January 2013 to January 2014. Exports were up $5.7 billion, or 3.0 percent, and imports were up $2.6 billion, or 1.2 percent.


New orders for manufactured goods decreased 0.7%
Posted: March 6, 2014 at 10:17 AM (Thursday)

New orders for manufactured goods in January, down three of the last four months, decreased $3.3 billion or 0.7 percent to $483.0 billion, the U.S. Census Bureau reported today. This followed a 2.0 percent December decrease. Excluding transportation, new orders increased 0.2 percent.

Shipments, down two consecutive months, decreased $1.7 billion or 0.3 percent to $490.7 billion. This followed a 0.3 percent December decrease.

Unfilled orders, up eleven of the last twelve months, increased $0.3 billion to $1,059.9 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent December increase. The unfilled orders-to-shipments ratio was 6.50, down from 6.52 in December.

Inventories, up thirteen of the last fourteen months, increased $1.2 billion or 0.2 percent to $637.7 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 0.5 percent December increase. The inventories-to-shipments ratio was 1.30, up from 1.29 in December.


DJ-BTMU U.S. Business Barometer declined significantly by 0.7%
Posted: March 6, 2014 at 10:00 AM (Thursday)

For the week ending February 22 2014, the DJ-BTMU U.S. Business Barometer declined significantly by 0.7 percent, the biggest drop since January 18 2014, after a 0.4 percent pickup in the prior week. Production indexes dragged down the barometer this week; lumber production, which has been on a downward trend since the end of last year, decreased by 8.5 percent as well as electric output dropped by 10.8 percent. However, the decrease in electric output could be just a rebound from high production volume seen past few weeks, generated by higher demand of electricity due to the cold weather. Among other components, only truck production showed an increase.

On a year-over-year basis, the barometer showed a gain of 0.2 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, decreased to 97.2 and hasn’t increased since December 21 2013. Its year-over-year growth rate was 0.5 percent.


Weekly Initial Unemployment Claims Decrease 26,000 to 323,000
Posted: March 6, 2014 at 08:30 AM (Thursday)

In the week ending March 1, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 26,000 from the previous week's revised figure of 349,000. The 4-week moving average was 336,500, a decrease of 2,000 from the previous week's revised average of 338,500.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending February 22, unchanged from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 22 was 2,907,000, a decrease of 8,000 from the preceding week's revised level of 2,915,000. The 4-week moving average was 2,927,750, a decrease of 14,750 from the preceding week's revised average of 2,942,500.


4Q2013 Productivity Growth Increased 3.21.8%
Posted: March 6, 2014 at 08:30 AM (Thursday)

Nonfarm business sector labor productivity increased at a 1.8 percent annual
rate during the fourth quarter of 2013, the U.S. Bureau of Labor Statistics
reported today. The increase in productivity reflects increases of 3.4
percent in output and 1.6 percent in hours worked. (All quarterly percent
changes in this release are seasonally adjusted annual rates.) From the
fourth quarter of 2012 to the fourth quarter of 2013, productivity increased
1.3 percent as output and hours worked rose 2.9 percent and 1.7 percent,
respectively. Annual average productivity increased 0.5 percent from 2012 to 2013.

Unit labor costs in nonfarm businesses decreased 0.1 percent in the fourth
quarter of 2013, while hourly compensation increased 1.7 percent. Unit labor
costs fell 0.9 percent over the last four quarters.

Manufacturing sector productivity increased 1.3 percent in the fourth quarter
of 2013, as output increased 5.0 percent and hours worked increased 3.6
percent. Productivity increased 3.0 percent in the durable goods sector and
decreased 0.1 percent in the nondurable goods sector. Over the last four
quarters, manufacturing productivity increased 1.9 percent, as output
increased 3.0 percent and hours increased 1.1 percent. Unit labor costs in
manufacturing decreased 0.1 percent in the fourth quarter of 2013 and
declined 1.0 percent from the same quarter a year ago.

In the fourth quarter of 2013, nonfarm business productivity increased 1.8
percent rather than 3.2 percent as reported February 6. The revised figure
reflects a 1.5 percentage point downward revision to output and a 0.1
percentage point downward revision to hours. Unit labor costs decreased 0.1
percent, a smaller decline than was previously reported. Manufacturing
productivity growth was revised downward, to 1.3 percent, reflecting a
downward revision to output that was larger than a downward revision to
hours. Due to both the downward revision to productivity and an upward
revision to hourly compensation, manufacturing unit labor costs decreased 0.1
percent, rather than falling 1.0 percent as reported in the preliminary
release.


Challenger Layoffs lower by 7.3% in February
Posted: March 6, 2014 at 07:30 AM (Thursday)

The pace of downsizing declined slightly in the second month of the new year, as U.S.-based employers announced plans to cut payrolls by 41,835 in February. The February total was 7.3 percent lower than the 45,107 job cuts employers announced to kick off 2014, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

February job cuts were down 24 percent from the same month a year ago, when 55,356 planned layoffs were recorded. It was, in fact, the lowest February total since 35,415 job cuts were announced in 2000.

Through the first two months of 2014, employers announced 86,942 planned job cuts, which is 9.2 percent fewer than the 95,786 job cuts tracked in January and February of 2013. At the current pace, with job cuts averaging 43,471 per month, the first quarter could see the fewest announced layoffs since 1995, when job cuts totaled 97,716 through the end of March.

The financial sector experienced the heaviest job-cut activity in February, with these institutions announcing plans to cut 9,791 workers in the coming weeks and months. That is about double the 4,817 job cuts announced by financial services firms in January. It is largest monthly toll in the sector since last February, when these employers announced 21,724 job cuts.

While some of the cuts in the financial sector were related to cutbacks in mortgage lending operations, a large portion of the banking workforce reductions in February were due to the ongoing shift away from branch banking toward increased mobile banking. This is trend that is gaining momentum and undoubtedly will have a profound impact on banking employment levels in the coming years. The number of bank tellers and traditional banks will continue to shrink as more people manage their bank accounts over their phones, on their laptops, and at ATMs and kiosks.

These are the kinds of cuts we don’t see in a recession. These are successful companies taking proactive steps to adjust to new realities.

Last month, JP Morgan Chase revealed an additional 3,500 cuts in its consumer operations. According to reports, most of these will come from its branch network. However, these are not cuts from a weakening economy or a struggling bank. These are proactive moves by CEO Jamie Dimon in recognition of the coming sea change in the way people bank. The bank has shifted from a ‘branch-building strategy to an optimization strategy.’ In other words, Chase will have more places to bank, but technology will replace tellers for day-to-day banking. Meanwhile, the bank promises to provide more personalized asset-management services for those seeking more financial planning guidance.

Of course, retail banking is being impacted by the same technology trends that are altering the consumer products retail landscape. Last month, we saw significant job cuts from Best Buy and the closure of two-thirds of the U.S. Sony retail stores. It’s not that Americans are buying fewer consumer electronics, clothes, and household goods. What has changed is how and where they buy these products. Pretty much every brick-and-mortar retailer these days, whether it is selling clothes, books, TVs or refrigerators, has to have an Amazon.com strategy, which basically boils down to fewer stores, smaller sales staff, lower prices and heavier focus on internet sales.

Retail had the third highest job-cut total in February, with 3,848 announced layoffs. It ranks as the top job-cutting industry for the year, with 15,242 cuts over the first two months. The two-month total is up 70 percent from a year ago, when retailers cut 8,955 over the same period.


Beige Book: Economic Activity Continued to Expand at a Modest to Moderate Pace
Posted: March 5, 2014 at 02:00 PM (Wednesday)

Reports from most of the twelve Federal Reserve Districts indicated that economic conditions continued to expand from January to early February. Eight Districts reported improved levels of activity, but in most cases the increases were characterized as modest to moderate. New York and Philadelphia experienced a slight decline in activity, which was mostly attributed to the unusually severe weather experienced in those regions. Growth slowed in Chicago, and Kansas City reported that conditions remained stable during the reporting period. The outlook among most Districts remained optimistic.

Retail sales growth weakened since the previous report for most Districts, as severe winter weather limited activity. However, Richmond, St. Louis, and Minneapolis reported modest sales growth since the beginning of the year. Weather was also cited as a contributing factor to softer auto sales in many Districts, with the exception of Cleveland, which saw strong gains. Tourism increased in a number of Districts but declined in Philadelphia and was reported to have been mixed in New York and Minneapolis.

The demand for nonfinancial services was mixed compared with the last report; however, both Boston and San Francisco reported strong demand for technology related services. Manufacturing sales and production in several Districts were negatively impacted by severe winter weather; however, modest improvements were noted in Boston, Atlanta, Minneapolis, and Dallas.

Residential real estate markets continued to improve in several areas, albeit modestly. Boston and New York gave mixed reports on sales, and Philadelphia, Cleveland, Minneapolis, and Kansas City noted a decrease in sales. Many Districts cited low inventories of housing and continued home price appreciation. Commercial real estate leasing expanded, according to most reports, while reports on construction activity were mixed. Demand for commercial real estate loans was solid in Boston, improved slightly in Dallas, and continued to grow steadily in Chicago and Kansas City.

Of the Districts that reported on agriculture, conditions softened in Kansas City and Dallas as dry soil adversely affected wheat crops. Districts reported that energy production and demand continued to increase as a result of increased demand due to the unusually cold winter.

Employment levels improved gradually for most Districts, and shortages of specialized skilled labor continued to be reported. Price pressures remained subdued, with the exception of upward cost pressures for some energy and construction products. Wage pressures remained stable for most Districts.


ISM Non-Manufacturing Index grew slower at 51.6%
Posted: March 5, 2014 at 10:00 AM (Wednesday)

Economic activity in the non-manufacturing sector grew in February for the 49th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 51.6 percent in February, 2.4 percentage points lower than January's reading of 54 percent. The Non-Manufacturing Business Activity Index decreased to 54.6 percent, which is 1.7 percentage points lower than the reading of 56.3 percent reported in January, reflecting growth for the 55th consecutive month and at a slower rate. The New Orders Index registered 51.3 percent, 0.4 percentage point higher than the reading of 50.9 percent registered in January. The Employment Index decreased 8.9 percentage points to 47.5 percent from the January reading of 56.4 percent and indicates contraction in employment for the first time after 25 consecutive months of growth. The Prices Index decreased 3.4 percentage points from the January reading of 57.1 percent to 53.7 percent, indicating prices increased at a slower rate in February when compared to January. According to the NMI®, ten non-manufacturing industries reported growth in February. The majority of respondents' comments indicate a slowing in the rate of growth month over month of business activity. Some of the respondents attribute this to weather conditions. Overall respondents' comments reflect cautiousness regarding business conditions and the economy.

INDUSTRY PERFORMANCE
The 10 non-manufacturing industries reporting growth in February — listed in order — are: Other Services; Management of Companies & Support Services; Public Administration; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Utilities; Transportation & Warehousing; Educational Services; Professional, Scientific & Technical Services; and Information. The eight industries reporting contraction in February — listed in order — are: Mining; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Retail Trade; Accommodation & Food Services; Wholesale Trade; Construction; and Health Care & Social Assistance.


ADP National Employment Report increased by 139,000
Posted: March 5, 2014 at 08:15 AM (Wednesday)

Private sector employment increased by 139,000 jobs from January to February according to the February 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 19,000 jobs in February, up from a downwardly-revised figure of 12,000 in January. Nearly all of the growth came from the construction industry which added 14,000 jobs over the month; this followed downwardly revised increases of 17,000 in the prior two months. Manufacturing eked out a small gain in February adding just 1,000 jobs. January’s decline in manufacturing was upwardly revised to a loss of just 7,000 jobs.

Service-providing industries added 120,000 jobs in February, up from a downwardly-revised January figure of 116,000. The ADP National Employment Report indicates that professional/ business services contributed the most to growth in service-providing industries, adding 33,000 jobs. This was well below the average gains for the industry in 2013. Expansion in trade/transportation/utilities accelerated slightly after a poor showing in January, gaining 31,000 jobs in February. Financial activities employment fell for the second straight month after January’s reading was downwardly revised to an 8,000 job loss. These two months have been the weakest for financial services employment since January and February of 2011

The U.S. private sector added 139,000 jobs in February, well below the average over the last 12 months.

February was another soft month for the job market. Employment was weak across a number of industries. Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures.

Payroll growth for businesses with 49 or fewer employees accelerated in February, adding 59,000 jobs. Though this month was improved from January, growth remains slower than previous months; the smallest gain for small businesses in 2013 was 71,000. Employment levels among medium-sized companies with 50-499 employees rose by 35,000 and employment at large companies – those with 500 or more employees – increased by 44,000. While this represented an acceleration in job growth for large firms, growth at mid-size firms was slower than it has been since April 2013.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: March 5, 2014 at 07:00 AM (Wednesday)

Mortgage applications increased 9.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 28, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 11 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week.

The previous week’s results did not include an adjustment for the Presidents’ Day holiday. The seasonally adjusted Purchase Index was 6 percent higher than its level two weeks earlier, but was still 19 percent lower than the same week one year ago. Despite the increase observed this week, the Refinance Index is still 3 percent lower than it was two weeks ago.

The refinance share of mortgage activity decreased to 57.7 percent of total applications from 58 percent the previous week and is at its lowest level since early September of 2013. 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) decreased to 4.47 percent from 4.53 percent, with points decreasing to 0.28 from 0.31 (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 4.37 percent from 4.47 percent, with points increasing to 0.20 from 0.13 (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 4.13 percent from 4.17 percent, with points decreasing to 0.13 from 0.20 (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 3.52 percent from 3.56 percent, with points decreasing to 0.18 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 3.09 percent from 3.17 percent, with points increasing to 0.38 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


New York Purchasing Managers Business Activity eased to 57.0
Posted: March 4, 2014 at 08:30 AM (Tuesday)

New York City business activity eased to the lowest reading in five months, according to the survey taken by the Institute for Supply Management-New York (ISM-New York).

Current Business Conditions came in at 57.0 in February and indicated the slowest rate of expansion since last summer. However, the moderation in the headline index may be temporary.

Future optimism vaulted to the highest level since 2010. The Six-Month Outlook was 76.3 in February. In the past, the Outlook index has proved to be reliable guide for the future path of the Current Business Conditions index.

Job growth entered uncharted territory. Employment rose to 65.7 in February, the highest reading recorded since the inception of this sub-index in late-2007.

Purchase volume improved to a 12-month high. Quantity of Purchases increased to 60.0 in February.

Prices Paid hit a three-year high of 66.7 in February. Input costs have become more and more pervasive, so much so that the six-month winning streak for the Prices Paid index was the longest in the history of the Report on Business.

The pulse quickened for both the top line and forward guidance for the top line. Current Revenues were 72.5 in February, and Expected Revenues were 75.0 in February.


ICSC Chain Store Sales rose by 0.3% in Mar 1 Wk
Posted: March 4, 2014 at 07:45 AM (Tuesday)

Adverse weather conditions throughout the fiscal month made February a challenging environment for retail sales, but sales did rise sequentially in the final week of the month as need-driven sales and increased retailer promotions enticed some consumers to shop and spend. For the week ending March 1, 2014, sales rose by 0.3%, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index. On a year-over-year basis, sales remained at a relatively steady, but sluggish pace, with the prior week at 1.5%.

"As retailers faced more adverse weather over the prior weeks, they stepped up their promotional activity during the past week, which helped sales at some retailers, such as department store," said Michael Niemira, ICSC vice president of research and chief economist. "But the on-going negative impacts of stormy weather caused us to pare our monthly estimate of sales to about 3% from upwards of about a half percentage point higher. Yet, easy year-ago comparisons should still dominate the February reports," added Niemira

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

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

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