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December Housing Starts up 11.3%, Permits down 0.2%
Posted: January 19, 2017 at 08:30 AM (Thursday)

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for December 2016:

BUILDING PERMITS
Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000. This is 0.2 percent (±1.8%)* below the revised November rate of 1,212,000, but is 0.7 percent (±1.6%)* above the December 2015 estimate of 1,201,000. Single-family authorizations in December were at a rate of 817,000; this is 4.7 percent (±1.7%) above the revised November figure of 780,000. Authorizations of units in buildings with five units or more were at a rate of 355,000 in December. An estimated 1,186,900 housing units were authorized by building permits in 2016. This is 0.4 percent (±0.8%)* above the 2015 figure of 1,182,600.

HOUSING STARTS
Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,226,000. This is 11.3 percent (±10.4%) above the revised November rate of 1,102,000 and is 5.7 percent (±12.0%)* above the December 2015 rate of 1,160,000. Single-family housing starts in December were at a rate of 795,000; this is 4.0 percent (±9.2%)* below the revised November figure of 828,000. The December rate for units in buildings with five units or more was 417,000. An estimated 1,166,400 housing units were started in 2016. This is 4.9 percent (±2.5%) above the 2015 figure of 1,111,800.

HOUSING COMPLETIONS
Privately-owned housing completions in December were at a seasonally adjusted annual rate of 1,123,000. This is 7.9 percent (±11.4%)* below the revised November rate of 1,219,000, but is 8.7 percent (±10.1%)* above the December 2015 rate of 1,033,000. Single-family housing completions in December were at a rate of 761,000; this is 0.9 percent (±9.3%)* below the revised November rate of 768,000. The December rate for units in buildings with five units or more was 355,000. An estimated 1,062,300 housing units were completed in 2016. This is 9.7 percent (±3.4%) above the 2015 figure of 968,200.


Weekly Initial Unemployment Claims Decrease 15,000 to 234,000
Posted: January 19, 2017 at 08:30 AM (Thursday)

In the week ending January 14, the advance figure for seasonally adjusted initial claims was 234,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 247,000 to 249,000. The 4-week moving average was 246,750, a decrease of 10,250 from the previous week's revised average. This is the lowest level for this average since November 3, 1973 when it was 244,000. The previous week's average was revised up by 500 from 256,500 to 257,000. There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending January 7, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 7 was 2,046,000, a decrease of 47,000 from the previous week's revised level. The previous week's level was revised up 6,000 from 2,087,000 to 2,093,000. The 4-week moving average was 2,090,000, an increase of 1,750 from the previous week's revised average. The previous week's average was revised up by 1,500 from 2,086,750 to 2,088,250.


Philadelphia Fed Outlook Reported Activity continued to improve in January
Posted: January 19, 2017 at 08:30 AM (Thursday)

Economic conditions continued to improve in January, according to the firms responding to this month’s Manufacturing Business Outlook Survey. The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month. Manufacturers have generally grown more optimistic in their forecasts over the past two months. The future indexes for growth over the next six months, including employment, continued to improve this month.

Most Current Indicators Show Broad Improvement
The index for current manufacturing activity in the region increased from a revised reading of 19.7 in December to 23.6 this month.* Forty percent of the firms reported increases in activity this month; 17 percent reported decreases. The general activity index has remained positive for six consecutive months, and the activity index reading was the highest since November 2014 (see Chart 1). The other broad indicators suggest sustaining growth. The index for current new orders increased 11 points this month, with 41 percent of the firms reporting increases. The shipments index remained at a high reading but fell 1 point. Both the delivery times and unfilled orders indexes were positive for the third consecutive month, suggesting longer delivery times and an increase in unfilled orders.

Firms reported an increase in manufacturing employment this month. The percentage of firms reporting an increase in employment (19 percent) exceeded the percentage reporting a decrease (6 percent). The current employment index improved 9 points, registering its second consecutive positive reading. Firms also reported an increase in work hours this month: The average workweek index, which was essentially unchanged from December, has now been positive for three consecutive months.

Firms Report Price Increases
Price increases were more widespread this month. On the cost side, nearly 35 percent of the firms reported increases in the prices paid for inputs; only 2 percent reported paying lower prices. The prices paid index edged 4 points higher and has now increased nearly 24 points in the past three months (see Chart 2). With respect to prices received for firms’ own manufactured goods, 31 percent of the firms reported higher prices, up from 16 percent in December. The prices received index increased 19 points to its highest reading since July 2008.

Six-Month Indexes Show Continued Improvement
The diffusion index for future general activity increased from a revised reading of 48.7 in December to 56.6 this month. The index is now at its highest reading since August 2014 (see Chart 1). Nearly 67 percent of the firms expect increases in activity over the next six months. The indexes for future new orders and shipments also showed notable improvement this month, increasing 6 points and 12 points, respectively. In addition, firms marked up their forecasts for employment increases. Forty-three percent of the firms expect increases in employment over the next six months, up from 35 percent in December. The future employment diffusion index increased 14 points.

Firms Expect to Increase Production to Meet Rising Demand
In Special Questions, firms were asked to characterize current demand and production of their manufactured products over the past few months and to forecast their production increases for the first quarter of the year. Most firms (61 percent) reported an increase in underlying demand, but 56 percent characterized the increase as moderate. Sixty-three percent of the firms anticipate increasing production in the first quarter, and 25 percent expect to cut production. Firms were also asked about how employment would change to accommodate increased production. Only 14 percent of the firms polled indicated that the increase in production would be accomplished by hiring additional workers. Nearly 46 percent of the firms indicated that they would increase the work hours or the productivity of the current staff.

Summary
Responses to the January Manufacturing Business Outlook Survey suggest continued growth for the region’s manufacturing sector. The indexes for general activity, new orders, shipments, and employment all indicated expansion this month. Firms reported an increase in input price pressures over the past three months, and a notable share of firms reported their own prices were higher in January. Firms’ optimism about future manufacturing growth continued to improve this month.


Treasury International Capital Data for November 2016
Posted: January 18, 2017 at 04:00 PM (Wednesday)

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for November 2016. The sum total in November of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $23.7 billion. Of this, net foreign private inflows were $25.2 billion, and net foreign official outflows were $1.5 billion.

Foreign residents increased their holdings of long-term U.S. securities in November; net purchases were $13.3 billion. Net purchases by private foreign investors were $12.2 billion, while net purchases by foreign official institutions were $1.1 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $17.5 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $30.8 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 $12.1 billion in November.

Foreign residents left their holdings of U.S. Treasury bills unchanged. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $1.1 billion. Banks’ own net dollar-denominated liabilities to foreign residents increased by $10.6 billion.


Beige Book: Economic Activity continues to expand at a modest pace
Posted: January 18, 2017 at 02:00 PM (Wednesday)

Overall Economic Activity
Reports from the twelve Federal Reserve Districts indicated that the economy continued to expand at a modest pace across most regions from late November through the end of the year. Manufacturers in most Districts reported increased sales with several citing a turnaround versus earlier in 2016. Growth in the energy industry was mixed; two Districts reported weakness in coal production but others reported improvements in coal, oil, or gas activity. Most Districts said that non-auto retail sales had expanded, but several noted that sales over the holiday season were disappointing and reports in more than one District suggested that growth in e-commerce had come at the expense of bricks-and-mortar retailers. All Districts reported varying degrees of growth in employment and a majority described their labor markets as tight. Residential construction and sales were generally mixed, although San Francisco reported strong real estate market activity throughout the 12th District. Financial conditions were stable. Firms across the country and industries were said to be optimistic about growth in 2017.

Employment and Wages
Labor markets were reported to be tight or tightening during the period. Employment growth ranged from slight to moderate and most Districts indicated that wages increased modestly. A couple of Districts mentioned layoffs, but even in those Districts, as in other regions, most responding firms were said to have added employment, on net. District reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-skilled jobs. Wages in some Districts were pushed up a bit by increases in the states' minimum wages and most Districts said wage pressures had increased. Many Districts said contacts expect labor markets to continue to tighten in 2017, with wage pressures likely to rise and the pace of hiring to hold steady or increase.

Prices
Pricing pressures intensified somewhat since the last report. Eight out of twelve Districts saw modest price increases and the remainder experienced slight increases, or flat prices in the case of the Atlanta District. Increases in input costs were more widespread than increases in final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. Retailers' selling prices were mixed, but on balance were flat or down amidst competitive discounting. Prices of most agricultural commodities stayed flat at very low levels. Home prices were stable or up modestly. Businesses in several districts reportedly expect further modest increases in input costs and selling prices in 2017.


Builder Confidence down 2 points to 67 in January
Posted: January 18, 2017 at 10:00 AM (Wednesday)

Builder confidence in the market for newly-built single-family homes remained on firm ground in January, down two points to a level of 67 from a downwardly revised December reading of 69 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“NAHB expects solid 10 percent growth in single-family construction in 2017, adding to the gains of 2016,” said NAHB Chief Economist Robert Dietz. “Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor.”

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

All three HMI components retreated in January. The component gauging current sales conditions fell three points to 72, the index charting sales expectations in the next six months registered a two-point decline to 76 and the component measuring buyer traffic edged one-point lower to 51.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 52 and the Midwest posted a three-point gain to 64. The South and West each held steady at 67 and 79, respectively.


Industrial Production rose 0.8%
Capacity Utilization increased to 75.5%

Posted: January 18, 2017 at 09:15 AM (Wednesday)

Industrial production rose 0.8 percent in December after falling 0.7 percent in November. For the fourth quarter as a whole, the index slipped 0.6 percent at an annual rate. In December, manufacturing output moved up 0.2 percent and mining output was unchanged. The index for utilities jumped 6.6 percent, largely because of a return to more normal temperatures following unseasonably warm weather in November; the gain last month was the largest since December 1989. At 104.6 percent of its 2012 average, total industrial production in December was 0.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.6 percentage point in December to 75.5 percent, a rate that is 4.5 percentage points below its long-run (1972–2015) average.


Consumer Price Index increased 0.3% in December, Ex Fd & Engy up 0.2%
Posted: January 18, 2017 at 08:30 AM (Wednesday)

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

Continuing their recent trends, the shelter and gasoline indexes increased in December and were largely responsible for the seasonally adjusted all items increase. The shelter index rose 0.3 percent in December, while the gasoline index increased 3.0 percent.

Recent trends also continued in the food indexes, as the food at home index again declined, offsetting an increase in the index for food away from home and leaving the overall food index unchanged for the sixth consecutive month. The energy index continued to rise, advancing 1.5 percent in December, primarily due to an increase in the gasoline index.

The index for all items less food and energy rose 0.2 percent in December, the same increase as in November. Along with the shelter index, the indexes for motor vehicle insurance, medical care, education, airline fares, used cars and trucks, and new vehicles were among the indexes that increased. The indexes for apparel and communication declined in December.

The all items index rose 2.1 percent for the 12 months ending December. This figure has been steadily rising since July, and is the largest 12-month increase since the period ending June 2014. The index for all items less food and energy rose 2.2 percent for the 12 months ending December, and the energy index increased 5.4 percent. In contrast, the food index declined 0.2 percent over the last 12 months.


Real Average Hourly Earnings increased 0.1% in December
Posted: January 18, 2017 at 08:30 AM (Wednesday)

Real average hourly earnings for all employees increased 0.1 percent from November to December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.4 percent increase in average hourly earnings combined with a 0.3-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.1 percent over the month due to the increase in real average hourly earnings combined with no change in the average workweek.

Real average hourly earnings increased 0.8 percent, seasonally adjusted, from December 2015 to December 2016. This increase in real average hourly earnings combined with a 0.6-percent decrease in the average workweek resulted in a 0.2-percent increase in real average weekly earnings over this period.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 18, 2017 at 07:00 AM (Wednesday)

Mortgage applications increased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 13, 2017. The previous week's results included an adjustment for the New Year's holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 29 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 25 percent compared with the previous week and was 1 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 53.0 percent of total applications from 51.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications.

The FHA share of total applications increased to 13.1 percent from 11.7 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.8 percent the week prior. The USDA share of total applications remained unchanged at 0.9 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) decreased to its lowest level since December 2016, 4.27 percent, from 4.32 percent, with points decreasing to 0.39 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,000) decreased to 4.22 percent from 4.27 percent, with points increasing to 0.36 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.10 percent from 4.08 percent, with points decreasing to 0.28 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.51 percent from 3.56 percent, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.44 percent from 3.32 percent, with points decreasing to 0.21 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Empire State Manufacturing Survey Conditions continues modest growth in January
Posted: January 17, 2017 at 08:30 AM (Tuesday)

Business activity continued to grow modestly in New York State, according to firms responding to the January 2017 Empire State Manufacturing Survey. The headline general business conditions index was little changed at 6.5. The new orders index fell to 3.1, pointing to a small increase in orders, and the shipments index held steady at 7.3. Inventories edged higher for the first time in more than a year. Labor market conditions remained weak, though less so than in recent months, with manufacturers reporting a slight decline in employment and somewhat shorter workweeks. Both input prices and selling prices increased more rapidly this month, with the prices paid index climbing to its highest level in nearly three years, and the prices received index also jumping to a multiyear high. Indexes for the six-month outlook continued to convey a high degree of optimism about future conditions, with the index for future business conditions matching last month’s nearly five-year high.

Business Activity Continues to Expand
Manufacturing firms in New York State reported that business activity grew in January. The general business conditions index was little changed at 6.5, its third consecutive positive reading. The new orders index fell seven points to 3.1, indicating that orders increased at a slower clip than last month, and the shipments index held steady at 7.3, pointing to an ongoing increase in shipments. The unfilled orders index rose to -1.7, and the delivery time index rose to -2.5. The inventories index climbed 16 points to 2.5, signaling a slight increase in inventory levels—the first increase since mid-2015.

Price Increases Pick Up Markedly
As has been the case for the past several months, both employment indexes were negative in January. The index for number of employees rose but held below zero at -1.7, a sign that employment levels edged slightly lower; the average workweek index, at -4.2, pointed to a small decline in hours worked. Prices increased significantly this month. The prices paid index advanced fourteen points to 36.1, its highest level since 2014. The prices received index also climbed fourteen points, rising to 17.6, signaling a pickup in selling price increases.

Firms Remain Highly Optimistic
Indexes for the six-month outlook suggested that respondents remained very optimistic about future conditions. The index for future business conditions was unchanged at 49.7, matching last month’s multiyear high. Delivery times were expected to be longer, and inventories were expected to increase. The index for future employment and the future average workweek indicated that firms expected strong growth in employment and hours worked. The capital expenditures index climbed four points to 25.2, and the technology spending index edged up to 14.3.


Business Inventories up 0.7% in November
Posted: January 13, 2017 at 10:00 AM (Friday)

The U.S. Census Bureau announced the following new manufacturing and trade statistics for November 2016. The combined value of distributive trade sales and manufacturers’ shipments for November, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,326.7 billion, up 0.1 percent (±0.2 percent)* from October 2016 and was up 2.3 percent (±0.4 percent) from November 2015.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,827.5 billion, up 0.7 percent (±0.1 percent) from October 2016 and were up 1.5 percent (±0.4 percent) from November 2015.

The total business inventories/sales ratio based on seasonally adjusted data at the end of November was 1.38. The November 2015 ratio was 1.39.


University of Michigan Consumer Confidence Preliminary January Results steady at 98.1
Posted: January 13, 2017 at 10:00 AM (Friday)

Consumer confidence remained unchanged at the cyclical peak levels recorded in December. The Current Conditions Index rose 0.6 points to reach its highest level since 2004, and the Expectations Index fell 0.6 points which was lower than only the 2015 peak during the past dozen years. The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news. The importance of government policies and partisanship has sharply risen over the past half century. From 1960 to 2000, the combined average of positive and negative references to government policies was just 6%; during the past six years, this proportion averaged 20%, and rose to new peaks in early January, with positive and negative references totaling 44%. This extraordinary level of partisanship has had a dramatic impact on economic expectations. In early January, the partisan divide on the Expectations Index was a stunning 42.7 points (108.9 among those who favorably mentioned government policies, and 66.2 among those who made unfavorable references). Needless to say, these extreme differences would imply either strong growth or a recession. Since neither is likely, one would anticipate that both extreme views will be tempered in the months ahead. Nonetheless, it should be noted that among the majority of consumers who referred to neither positive nor negative views on government, the Expectations Index was a strong 90.9, supporting a real consumption growth of 2.7% in 2017.


U.S. Retail Sales for December Increase 0.6%, Ex-Auto up 0.2%
Posted: January 13, 2017 at 08:30 AM (Friday)

Advance estimates of U.S. retail and food services sales for December 2016, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $469.1 billion, an increase of 0.6 percent (±0.5 percent) from the previous month, and 4.1 percent (±0.9 percent) above December 2015. Total sales for the 12 months of 2016 were up 3.3 percent (±0.6 percent) from 2015. Total sales for the October 2016 through December 2016 period were up 4.1 percent (±0.7 percent) from the same period a year ago. The October 2016 to November 2016 percent change was revised from up 0.1 percent (±0.5 percent)* to up 0.2 percent (±0.2 percent)*.

Retail trade sales were up 0.8 percent (±0.5 percent) from November 2016, and up 4.3 percent (±0.7
percent) from last year. Nonstore retailers were up 13.2 percent (±1.8 percent) from December 2015, while Miscellaneous stores were up 7.1 percent (±4.6 percent) from last year.


Producer Price Index increased 0.3% in December, ex Fd & Engy up 0.1%
Posted: January 13, 2017 at 08:30 AM (Friday)

The Producer Price Index for final demand increased 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.4 percent in November and were unchanged in October. (See table A.) On an unadjusted basis, the final demand index climbed 1.6 percent in 2016 after falling 1.1 percent in 2015.

In December, nearly 80 percent of the advance in the final demand index is attributable to a 0.7 percent increase in prices for final demand goods. The index for final demand services inched up 0.1 percent.

Prices for final demand less foods, energy, and trade services moved up 0.1 percent in December after rising 0.2 percent in November. In 2016, the index for final demand less foods, energy, and trade services climbed 1.7 percent following a 0.3-percent advance in 2015.


Weekly Initial Unemployment Claims Increase 10,000 to 247,000
Posted: January 12, 2017 at 08:30 AM (Thursday)

In the week ending January 7, the advance figure for seasonally adjusted initial claims was 247,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 235,000 to 237,000. The 4-week moving average was 256,500, a decrease of 1,750 from the previous week's revised average. The previous week's average was revised up by 1,500 from 256,750 to 258,250. There were no special factors impacting this week's initial claims. This marks 97 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending December 31, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 31 was 2,087,000, a decrease of 29,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 2,112,000 to 2,116,000. The 4-week moving average was 2,086,750, an increase of 16,500 from the previous week's revised average. The previous week's average was revised up by 3,250 from 2,067,000 to 2,070,250.


U.S. Import Price Index increased 0.4% in December
Posted: January 12, 2017 at 08:30 AM (Thursday)

Prices for U.S. imports rose 0.4 percent in December, the U.S. Bureau of Labor Statistics reported today, after a 0.2-percent decline the previous month. The advance in December was primarily driven by higher fuel prices which more than offset lower nonfuel prices. U.S. export prices advanced in December, rising 0.3 percent following a 0.1-percent decrease in November.


Purchase Apps up, Refi's up in Latest MBA Weekly Survey
Posted: January 11, 2017 at 10:00 AM (Wednesday)

Mortgage applications increased 5.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 6, 2017. The most recent week's results include an adjustment to account for the New Year's Day holiday, while the previous week's results were adjusted for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 42 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 45 percent compared with the previous week and was 18 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to 51.2 percent of total applications from 52.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.5 percent of total applications.

The FHA share of total applications increased to 11.7 percent from 11.6 percent the week prior. The VA share of total applications increased to 12.8 percent from 12.3 percent the week prior. The USDA share of total applications decreased to 0.9 percent from 1.1 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.32 percent from 4.39 percent, with points decreasing to 0.41 from 0.43 (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 4.27 percent from 4.37 percent, with points decreasing to 0.31 from 0.44 (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 4.08 percent from 4.22 percent, with points increasing to 0.35 from 0.34 (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 3.56 percent from 3.64 percent, with points increasing to 0.42 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.32 percent from 3.28 percent, with points increasing to 0.46 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Job Openings was little changed at 5.5 million in November
Posted: January 10, 2017 at 10:00 AM (Tuesday)

The number of job openings was little changed at 5.5 million on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5.2 million and 5.0 million, respectively. Within separations, the quits rate was unchanged at 2.1 percent and the layoffs and discharges rate was unchanged at 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.


Wholesale Inventories up 1.0% in November
Posted: January 10, 2017 at 10:00 AM (Tuesday)

November 2016 sales of merchant wholesalers, except manufacturers’ sales branches and offices, adjustment for seasonal variations and trading-day differences but not for price changes, were $452.6 billion, up 0.4 percent (±0.5 percent)* from the revised October level and were up 3.4 percent (±0.9 percent) from the November 2015 level. The September 2016 to October 2016 percent change was revised from the preliminary estimate of up 1.4 percent (±0.7 percent) to up 1.1 percent (±0.5 percent).

Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $595.3 billion at the end of November, up 1.0 percent (±0.2 percent) from the revised October level. Total inventories are up 1.4 percent (±1.1 percent) from the revised November 2015 level. The October 2016 to November 2016 percent change was revised from the advance estimate of up 0.9 percent (±0.2 percent) to up 1.0 percent (±0.2 percent).

The November Inventories/Sales Ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.32. The November 2015 ratio was 1.34.


NFIB Small Business Optimism Index rose 7.4 points in December to 105.8
Posted: January 10, 2017 at 08:30 AM (Tuesday)

The Index of Small Business Optimism rose 7.4 points to 105.8, the highest reading since December 2004. Seven of the 10 Index components posted a gain, 2 declined and 1 was unchanged. Expectations for real sales gains and outlook for business conditions accounted for 73 percent of the gain. The percent of owners viewing the current period as a good time to expand is now triple the average level in the recovery. GDP related hiring and inventor investment showed little gain. Capital spending though, the laggard in this recovery, posted a strong advance, both in reported outlays and plans for spending in the first half. Job creation plans remained at highest levels seen since 2007. Reports of compensation gains were robust while reports of higher prices, though the highest all year, were infrequent.

In a wealthy economy with substantial discretion over the allocation of resources, expectations and sentiment can trigger substantial changes in “macroeconomic activity”. Some of our 300 million consumers can decide to spend a bit more if the future looks brighter. A larger number of our six million employer firms could decide to hire another worker to meet higher expected demand or expand their businesses to handle expected increases in sales. Just how much growth this can generate depends on the availability of unused capacity, in labor and production facilities and debt or capital funds. No doubt we can do better than 2 percent and, for short periods, 3 to 4 percent growth. Ultimately, job creation depends on economic growth, modified by the level of productivity.

What is required is a sensible set of policies that do not squander our scarce resources. Virtually every business owner can identify regulations that have little or no apparent value but have high compliance costs, using up scarce capital and valuable management time. Politicians say they want to create jobs but their regulations and laws passed only increase the cost of hiring a worker, and that is not good for job creation. Economic policies designed to redistribute the pie do not grow the pie, indeed they shrink it by building dependency among some of the population and businesses who need the discipline of competition and the marketplace. Optimistic consumers and business owners are more likely to bet (spend and hire) on a future that seems to hold promise, but to maintain the enthusiasm, reality will play an important supporting role. The appearance of a new customer is much more powerful than the expectation of one. And actual results in Washington D.C. will be much more supportive than “hope and no good change” as we have discovered.


Consumer Credit Increased at an annual rate of 8.00%
Posted: January 9, 2017 at 03:00 PM (Monday)

In November, consumer credit increased at a seasonally adjusted annual rate of 8 percent. Revolving credit increased at an annual rate of 13-1/2 percent, while nonrevolving credit increased at an annual rate of 6 percent.


Employment Trends Index declined slightly in December to 129.62
Posted: January 9, 2017 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) declined slightly in the final month of 2016, after increasing in November. The index now stands at 129.62, down from 129.93 in November. The change represents a 2.2 percent gain in the ETI compared to a year ago.

“After strong growth over the previous three months, the Employment Trends Index declined slightly in the final month of 2016. However, the ETI’s trend suggests that job growth will remain solid in early 2017,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “And, employers have become more upbeat in recent months, suggesting the labor market may very well tighten faster than pre-recession expectations.”

December’s decline in the ETI was fueled by negative contributions from five of the eight components. In order from the largest negative contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Percentage of Firms With Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, Initial Claims for Unemployment Insurance, and Job Openings.


New orders for manufactured goods decreased 2.4% in November
Posted: January 7, 2017 at 10:00 AM (Saturday)

New orders for manufactured goods in November, down following four consecutive monthly increases, decreased $11.3 billion or 2.4 percent to $458.3 billion, the U.S. Census Bureau reported today. This followed a 2.8 percent October increase.

Shipments, down following three consecutive monthly increases, decreased $0.3 billion or 0.1 percent to $463.8 billion. This followed a 0.2 percent October increase. Unfilled orders, down five of the last six months, decreased $1.7 billion or 0.1 percent to $1,127.8 billion. This followed a 0.8 percent October increase. The unfilled orders-to-shipments ratio was 6.78, down from 6.79 in October.

Inventories, up four of the last five months, increased $1.4 billion or 0.2 percent to $623.1 billion. This followed a 0.1 percent October increase. The inventories-to-shipments ratio was 1.34, unchanged from October.


November Employment increased by 156,000
Unemployment Rate increased to 4.7%

Posted: January 6, 2017 at 08:30 AM (Friday)

Total nonfarm payroll employment rose by 156,000 in December, and the unemployment rate was little changed at 4.7 percent, the U.S. Bureau of Labor Statistics reported today. Job growth occurred in health care and social assistance.

The unemployment rate, at 4.7 percent, and the number of unemployed persons, at 7.5 million, changed little in December. However, both measures edged down in the fourth quarter, after showing little net change earlier in the year.

Among the major worker groups, the unemployment rates for adult men (4.4 percent), adult women (4.3 percent), teenagers (14.7 percent), Whites (4.3 percent), Blacks (7.8 percent), Asians (2.6 percent), and Hispanics (5.9 percent) showed little change in December.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.8 million in December and accounted for 24.2 percent of the unemployed. In 2016, the number of long-term unemployed declined by 263,000.

The labor force participation rate, at 62.7 percent, changed little in December and was unchanged over the year. In December, the employment-population ratio was 59.7 percent for the third consecutive month; this measure showed little change, on net, in 2016.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers), at 5.6 million, was essentially unchanged in December but was down by 459,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In December, 1.7 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 426,000 discouraged workers in December, down by 237,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available to them. The remaining 1.3 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities.

Total nonfarm payroll employment rose by 156,000 in December, with an increase in health care and social assistance. Job growth totaled 2.2 million in 2016, less than the increase of 2.7 million in 2015.

Employment in health care rose by 43,000 in December, with most of the increase occurring in ambulatory health care services (+30,000) and hospitals (+11,000). Health care added an average of 35,000 jobs per month in 2016, roughly in line with the average monthly gain of 39,000 in 2015.

Social assistance added 20,000 jobs in December, reflecting job growth in individual and family services (+21,000). In 2016, social assistance added 92,000 jobs, down from an increase of 162,000 in 2015.

Employment in food services and drinking places continued to trend up in December (+30,000). This industry added 247,000 jobs in 2016, fewer than the 359,000 jobs gained in 2015.

Employment also continued to trend up in transportation and warehousing in December (+15,000). Within the industry, employment expanded by 12,000 in couriers and messengers. In 2016, transportation and warehousing added 62,000 jobs, down from a gain of 110,000 jobs in 2015.

Employment in financial activities continued on an upward trend in December (+13,000). This is in line with the average monthly gains for the industry over the past 2 years.

In December, employment edged up in manufacturing (+17,000), with a gain of 15,000 in the durable goods component. However, since reaching a recent peak in January, manufacturing employment has declined by 63,000.

Employment in professional and business services was little changed in December (+15,000), following an increase of 65,000 in November. The industry added 522,000 jobs in 2016.

Employment in other major industries, including mining, construction, wholesale trade, retail trade, information, and government, changed little in December.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in December. In manufacturing, the workweek edged up by 0.1 hour to 40.7 hours, and overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.6 hours.

In December, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $26.00, after edging down by 2 cents in November. Over the year, average hourly earnings have risen by 2.9 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $21.80.

The change in total nonfarm payroll employment for October was revised down from +142,000 to +135,000, and the change for November was revised up from +178,000 to +204,000. With these revisions, employment gains in October and November were 19,000 higher than previously reported. Over the past 3 months, job gains have averaged 165,000 per month.


Goods and Services Deficit Increased in November 2016
Posted: January 6, 2017 at 08:30 AM (Friday)

The Nation's international trade deficit in goods and services increased to $45.2 billion in November from $42.4 billion in October (revised), as exports decreased and imports increased.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $45.2 billion in November, up $2.9 billion from $42.4 billion in October, revised. November exports were $185.8 billion, $0.4 billion less than October exports. November imports were $231.1 billion, $2.4 billion more than October imports.

The November increase in the goods and services deficit reflected an increase in the goods deficit of $3.4 billion to $66.6 billion and an increase in the services surplus of $0.5 billion to $21.4 billion.

Year-to-date, the goods and services deficit decreased $4.9 billion, or 1.1 percent, from the same period in 2015. Exports decreased $56.6 billion or 2.7 percent. Imports decreased $61.4 billion or 2.4 percent.


ISM Non-Manufacturing Index steady at 57.2% in December
Posted: January 5, 2017 at 10:00 AM (Thursday)

Economic activity in the non-manufacturing sector grew in December for the 83rd consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 57.2 percent in December, matching the November figure. This represents continued growth in the non-manufacturing sector at the same rate. The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.3 percentage point lower than the November reading of 61.7 percent, reflecting growth for the 89th consecutive month, at a slightly slower rate in December. The New Orders Index registered 61.6 percent, 4.6 percentage points higher than the reading of 57 percent in November. The Employment Index decreased 4.4 percentage points in December to 53.8 percent from the November reading of 58.2 percent. The Prices Index increased 0.7 percentage point from the November reading of 56.3 percent to 57 percent, indicating prices increased in December for the ninth consecutive month at a slightly faster rate. According to the NMI®, 12 non-manufacturing industries reported growth in December. The non-manufacturing sector closed out the year strong maintaining its rate of growth month-over-month. Respondents' comments are mostly positive about business conditions and the overall economy."

INDUSTRY PERFORMANCE
The 12 non-manufacturing industries reporting growth in December — listed in order — are: Mining; Retail Trade; Finance & Insurance; Information; Arts, Entertainment & Recreation; Construction; Other Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Accommodation & Food Services. The three industries reporting contraction in December are: Public Administration; Wholesale Trade; and Agriculture, Forestry, Fishing & Hunting.


Weekly Initial Unemployment Claims Decrease 30,000 to 233,000
Posted: January 5, 2017 at 08:30 AM (Thursday)

In the week ending December 31, the advance figure for seasonally adjusted initial claims was 235,000, a decrease of 28,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 265,000 to 263,000. The 4-week moving average was 256,750, a decrease of 5,750 from the previous week's revised average. The previous week's average was revised down by 500 from 263,000 to 262,500. There were no special factors impacting this week's initial claims. This marks 96 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending December 24, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 24 was 2,112,000, an increase of 16,000 from the previous week's revised level. The previous week's level was revised down by 6,000 from 2,102,000 to 2,096,000. The 4-week moving average was 2,067,000, an increase of 26,250 from the previous week's revised average. The previous week's average was revised down by 1,500 from 2,042,250 to 2,040,750.


ADP National Employment Report increased by 153,000 jobs in December
Posted: January 5, 2017 at 08:15 AM (Thursday)

Private sector employment increased by 153,000 jobs from November to December according to the December ADP National Employment Report®.

“As we exit 2016, it’s interesting to note that the private sector generated an average of 174,000 jobs per month, down from 209,000 in 2015,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “And while job gains in December were slightly below our monthly average, the U.S. labor market has experienced unprecedented seven years of growth that has brought us to near full employment. As we enter 2017, the tightening labor market will likely slow the growth.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth remains strong but is slowing. The gap between employment growth in the service economy and losses on the goods side persists. Smaller companies are struggling to maintain payrolls while large companies are expanding at a healthy pace.”


Challenger Layoffs increase to 33,627 in December
Posted: January 5, 2017 at 07:30 AM (Thursday)

The pace of downsizing ticked up slightly to close out 2016, as U.S.-based employers announced plans to shed 33,627 jobs from payrolls in December, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

December job cuts were up 25 percent from November’s 26,936, the lowest monthly total of 2016. The December total was well below the 43,910 job cuts averaged monthly throughout the year.

Last month’s tally was 42 percent higher than the same month a year ago, when employers announced planned layoffs totaling 23,622, which was not only the lowest monthly total of 2015, but the lowest monthly total in more than 15 years.

December marked the third consecutive month in which job cuts remained significantly below the annual average. In all, just 91,303 planned job cuts were reported in the final quarter of 2016. That is the lowest quarterly total since Q2 of 2000, when employers announced only 81,568 planned layoffs.

Employers announced a total of 526,915 job cuts in 2016. That is 12 percent fewer than the 598,510 cuts tracked in 2015. The 2016 total sits below the 539,581 annual job cuts averaged since 2010, which marked the first year of recovery in the wake of the Great Recession.

The heaviest job cuts in 2016 occurred in the energy sector, which announced 107,714 layoffs during the year. That was up 14 percent from 2015, when these firms cut 94,409 job cuts.

Most of the energy cuts were announced in the first half of 2016, as the industry continued to suffer from historically low oil prices. Between January and June, layoffs in the sector totaled 77,211.

As prices started to recover in the second half of the year, job cuts declined sharply. Additionally, of the 30,503 energy cuts in the second half of 2016, about 20 percent came from companies in the renewable energy industry, including wind and solar. In contrast, cuts from renewable energy firms accounted for just under 11 percent of the 77,211 energy sector layoffs announced in the first half of the year.

“Oil prices are back on the rise. The new administration poised to take over the White House in January could further benefit the industry by relaxing regulations and drilling restrictions. Oil companies may once again start to expand in 2017. Ironically, the only obstacle in their way may be a shortage of skilled workers,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“When the last boom got underway, oil firms had the luxury of building their workforces amid high unemployment across the nation. Before the most recent downturn, drilling firms were already struggling to find workers. Now, they will have to rebuild their workforces at a time when unemployment nationwide is below 5.0 percent. In many areas, the rate is much lower. In fact, there are nearly 50 metropolitan areas with unemployment rates of 3.0 percent or lower,” said Challenger.

Job cuts were also up in the computer industry in 2016. These firms announced 66,821 job cuts during the year, 7.4 percent more than in 2015 (62,191).

Rounding out the top five job-cutting industries of the year were retail (59,324), industrial goods (33,435), and financial (22,015), each of which saw annual job cuts decline from the previous year.

“Last year appeared to be an adjustment year for many big tech firms. Long-time hardware makers, including IBM and Hewlett-Packard, are undergoing multi-year transformations that will ultimately shift their business away from hardware toward services. Others, including Microsoft, Dell and Intel, are shifting toward mobile while, at the same time, attempting to become more agile,” said Challenger.

“It is hard to say how the tech sector will do under the new administration. Many rely on offshoring as well as the employment of foreign talent immigrating to the U.S. Both of those business practices are likely to come under threat in the coming year. However, the new administration’s pro-business policies may ultimately favor these firms and many others. Only time will tell,” Challenger concluded.


Help Wanted OnLine Labor Demand increased 74,000 to 4,797,000 in December
Posted: January 4, 2017 at 10:00 AM (Wednesday)

Online advertised vacancies increased 74,000 to 4,797,000 in December, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The November Supply/Demand rate stands at 1.57 unemployed for each advertised vacancy with a total of 2.7 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.4 million in November.

“The HWOL series ended 2016 on a positive note, with a 74,000 increase,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The number of online job ads has been fluctuating around a steady trend in the second half of 2016.”

The Professional occupational category saw small losses in Management (-0.8), Business/Finance (-0.1), and gains Computer/Math (8.7) and Health (10.6). The Services/Production occupational category saw gains in most occupational groups led by Sales (14.6) and Office/Admin (21.3).


New York Purchasing Managers Business Activity surged in December to 63.8
Posted: January 4, 2017 at 08:30 AM (Wednesday)

New York City purchasing managers shared a surge of forward looking optimism to end 2016 according to the survey taken by the Institute for Supply Management-New York. While not all of the indices in the December Report were directionally aligned with the Six-Month Outlook, the responses to this portion of the survey mark December 2016 as the highest year-end optimism seen since 2010.

New York Metro
Current Business Conditions came in at 63.8 in December, reaching a fourteen-month high. As noted above, the Six-Month Outlook significantly increased to 74.2 after coming in at 60.8 in November. This is the highest level of optimism seen in eighteen months. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, dropped to 42.0 in December after rising above the breakeven point to reach 52.3 in November. Quantity of Purchases came in at 58.0 in November, continuing the trajectory seen in November and tying with February for the 2016 high.

News for the top line and forward guidance continued to be positive, albeit without seeing significant changes over last month. Current Revenues were 55.0 in December. Expected Revenues reached 67.5 in December, topping November's six month high of 66.7. Prices Paid decreased to 57.5 in December after reaching a five year high of 69.2 in November.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: January 4, 2017 at 07:00 AM (Wednesday)

Mortgage applications decreased 12 percent from two weeks earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 30, 2016. The results included adjustments to account for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 12 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 48 percent compared with two weeks ago. The Refinance Index decreased 22 percent from two weeks ago. The seasonally adjusted Purchase Index decreased 2 percent from two weeks earlier. The unadjusted Purchase Index decreased 41 percent compared with two weeks ago and was 1 percent lower than the same week one year ago.

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity increased to 52.2 percent of total applications from 51.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications increased to 11.6 percent from 10.7 percent the week prior. The VA share of total applications decreased to 12.3 percent from 12.4 percent the week prior. The USDA share of total applications increased to 1.1 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.39 percent from 4.45 percent, with points increasing to 0.43 from 0.39 (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 4.41 percent, with points increasing to 0.44 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 4.22 percent, with points decreasing to 0.34 from 0.44 (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 3.64 percent from 3.70 percent, with points increasing to 0.38 from 0.34 (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 3.28 percent from 3.41 percent, with points increasing to 0.42 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Construction Spending increased 0.9% in November
Posted: January 3, 2017 at 10:00 AM (Tuesday)

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2016 was estimated at a seasonally adjusted annual rate of $1,182.1 billion, 0.9 percent (±1.5%)* above the revised October estimate of $1,171.4 billion. The November figure is 4.1 percent (±2.0%) above the November 2015 estimate of $1,135.5 billion. During the first 11 months of this year, construction spending amounted to $1,070.9 billion, 4.4 percent (±1.0%) above the $1,025.5 billion for the same period in 2015.

PRIVATE CONSTRUCTION
Spending on private construction was at a seasonally adjusted annual rate of $892.8 billion, 1.0 percent (±1.5%)* above the revised October estimate of $884.3 billion. Residential construction was at a seasonally adjusted annual rate of $462.9 billion in November, 1.0 percent (±1.3%)* above the revised October estimate of $458.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $429.9 billion in November, 0.9 percent (±1.5%)* above the revised October estimate of $426.2 billion.

PUBLIC CONSTRUCTION
In November, the estimated seasonally adjusted annual rate of public construction spending was $289.3 billion, 0.8 percent (±2.5%)* above the revised October estimate of $287.1 billion. Educational construction was at a seasonally adjusted annual rate of $71.6 billion, 2.1 percent (±2.5%)* above the revised October estimate of $70.1 billion. Highway construction was at a seasonally adjusted annual rate of $94.6 billion, 1.1 percent (±5.4%)* above the revised October estimate of $93.6 billion.


December Manufacturing ISM registered 54.7
Posted: January 3, 2017 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in December, and the overall economy grew for the 91st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The December PMI® registered 54.7 percent, an increase of 1.5 percentage points from the November reading of 53.2 percent. The New Orders Index registered 60.2 percent, an increase of 7.2 percentage points from the November reading of 53 percent. The Production Index registered 60.3 percent, 4.3 percentage points higher than the November reading of 56 percent. The Employment Index registered 53.1 percent, an increase of 0.8 percentage point from the November reading of 52.3 percent. Inventories of raw materials registered 47 percent, a decrease of 2 percentage points from the November reading of 49 percent. The Prices Index registered 65.5 percent in December, an increase of 11 percentage points from the November reading of 54.5 percent, indicating higher raw materials prices for the 10th consecutive month. The PMI®, New Orders, Production and Employment Indexes all registered new highs for the year 2016, and the forward-looking comments from the panel are largely positive.

Of the 18 manufacturing industries, 11 are reporting growth in December in the following order: Petroleum & Coal Products; Primary Metals; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products. The six industries reporting contraction in December — listed in order — are: Plastics & Rubber Products; Furniture & Related Products; Printing & Related Support Activities; Textile Mills; Nonmetallic Mineral Products; and Transportation Equipment.


Paychex-IHS Small Business Jobs Index rebounded to 100.49 in December
Posted: January 3, 2017 at 08:30 AM (Tuesday)

The Paychex | IHS Small Business Jobs Index rebounded 0.10 percent in December, increasing to 100.49, and ending three months of declines. Despite a series of positive and negative swings throughout the year, small business employment growth levels are 0.12 percent higher than the same period a year ago. Among regions, the East South Central continues to experience the strongest growth, up 3.02 percent from last year. Tennessee surpassed neighboring Georgia as the top-ranked state for small business employment. After nine months as the top metro index, Seattle was overtaken by Atlanta. Construction showed the strongest gains in December, while Education and Health Services had the best year-over-year growth.

“A year-end increase brought the Paychex | IHS Small Business Jobs Index 0.12 percent above a year ago. The average index level of 100.62 during 2016 surpassed 2015’s average of 100.59,” said James Diffley, chief regional economist at IHS Markit.

“The increase of the national index in December seems to mirror the overall sentiment of optimism for small business owners right now. According to the latest data from the NFIB, optimism among small business owners surged following the election,” said Martin Mucci, Paychex president and CEO.


Chicago Purchasing Managers Index fell 3.0 points to 54.6 in December
Posted: December 30, 2016 at 10:00 AM (Friday)

The MNI Chicago Business Barometer fell 3.0 points to 54.6 in December from 57.6 in November, led by declines in both New Orders and Order Backlogs. After a disappointing start to the fourth quarter, the latest results suggest economic conditions have improved somewhat, with the Barometer averaging 54.3 in Q4, the highest in two years.

The December decline was led by a slowdown in New Orders, which fell 6.7 points to 56.5, giving up most of the November gain that had left it running at the fastest pace since June. Production also subtracted from the Barometer, ending 2016 at the lowest level since October, while Order Backlogs moved back into contraction. Employment held firm, remaining below 50 for the second month in a row, while Supplier Deliveries was the only component to gain ground in December.

The Inventories Indicator moved back into contraction, sitting below the break-even mark for the eighth time this year, with some firms reluctant to add to their stock levels as we approach the end of the year. Meanwhile, inflationary pressures at the factory-gate edged higher having eased slightly last month. Prices Paid rose 1.2 points to 58.0 in December, the indicator’s second highest outturn of 2016. Panellists in our survey reported that the prices of metals, plastics, and transportation costs were all increasing with another commenting that “prices are headed higher”.

This month’s special question asked panellists how they expected the new administration’s policies to impact their business in 2017. Over half of total respondents expected their business to prosper, with many citing anticipated tax reforms and deregulation as positive for business. However, 40% thought it would have no impact and 9% said they anticipated a negative impact on their activities.

“The Chicago Business Barometer ended 2016 in a much healthier position than a year ago when it slipped into contraction. This is largely owed to stronger outturns in the second half of the year and is testament to the resilience of the US economy.

“Most respondents to our survey remain upbeat about the fate of their business as we head into 2017, buoyed by fresh hope of better things to come under the new administration. Hopefully, 2017 can build on the momentum generated in the latter stages of 2016.” said Jamie Satchithanantham, economist at MNI Indicators.


Weekly Initial Unemployment Claims Decrease 10,000 to 265,000
Posted: December 29, 2016 at 08:30 AM (Thursday)

In the week ending December 24, the advance figure for seasonally adjusted initial claims was 265,000, a decrease of 10,000 from the previous week's unrevised level of 275,000. The 4-week moving average was 263,000, a decrease of 750 from the previous week's unrevised average of 263,750. There were no special factors impacting this week's initial claims. This marks 95 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending December 17, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 17 was 2,102,000, an increase of 63,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,036,000 to 2,039,000. The 4-week moving average was 2,042,250, an increase of 4,500 from the previous week's revised average. The previous week's average was revised up by 750 from 2,037,000 to 2,037,750.


Pending Home Sales Index declined 2.5% in November
Posted: December 28, 2016 at 10:00 AM (Wednesday)

Pending home sales dipped in November to their lowest level in nearly a year as the brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers, according to the National Association of Realtors. Only the Northeast saw monthly and annual pending sales gains last month.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 2.5 percent to 107.3 in November from 110.0 in October. After last month's decrease in activity, the index is now 0.4 percent below last November (107.7) and is at its lowest reading since January (105.4).

Lawrence Yun, NAR chief economist, says ongoing supply shortages and the surge in mortgage rates took a small bite out of pending sales in November. "The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election,” he said. "Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract."

With 2017 at the doorstep, Yun says higher borrowing costs somewhat cloud the outlook for the housing market. This was evident in NAR's most recent HOME survey, which found that confidence amongst renters about now being a good time to buy has diminished since the beginning of the year. The good news, according to Yun, is that the impact of higher rates will be partly neutralized by stronger wage growth as a result of the 2 million net new job additions expected next year.

"Healthy local job markets amidst tight supply means many areas will remain competitive with prices on the rise. Those rushing to lock in a rate before they advance even higher will probably have few listings to choose from," said Yun. "Some buyers will have to expand the area of their home search or be forced to delay in order to save a little more money for their down payment."

Existing sales are still expected to close out 2016 at a pace of around 5.42 million, which will eclipse 2015 (5.25 million) as the highest since 2006 (6.48 million). In 2017, sales are forecast to grow roughly 2 percent to around 5.52 million. The national median existing-home price is expected to increase to around 5 percent this year and 4 percent in 2017.

"Much more robust new home construction is needed to relieve inventory shortages and lessen the affordability pressures present throughout the country," added Yun.

The PHSI in the Northeast nudged forward 0.6 percent to 97.5 in November, and is now 5.7 percent above a year ago. In the Midwest the index declined 2.5 percent to 103.5 in November, and is now 2.4 percent lower than November 2015.

Pending home sales in the South decreased 1.2 percent to an index of 118.7 in November and are now 1.3 percent lower than last November. The index in the West fell 6.7 percent in November to 101.0, and is now 1.0 percent below a year ago.


Texas Fed Manufacturing Activity Increased Again in December
Posted: December 27, 2016 at 10:30 PM (Tuesday)

Texas factory activity increased for the sixth consecutive month in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose five points to 13.8, suggesting faster output growth this month.

Most other measures of current manufacturing activity indicated expansion, although demand growth remained slightly negative. The new orders index climbed nine points to 7.3, posting its first positive reading in four months. However, the growth rate of orders index stayed slightly negative, edging down to -3.4. The capacity utilization index shot up 10 points to 13.8, its highest reading in more than two years. The shipments index rebounded from a dip into negative territory last month, climbing seven points to 4.7.

Perceptions of broader business conditions improved again this month. The general business activity index posted a second consecutive positive reading and moved up to 15.5. The company outlook index posted a similar gain, increasing six points to a reading of 17.4.

Labor market measures indicated slight employment declines and modestly longer workweeks. The employment index dipped to -2.9 after three months in positive territory. Seventeen percent of firms noted net hiring, compared with 20 percent noting net layoffs. The hours worked index came in at 2.7, largely unchanged from last month’s reading and indicative of a slight increase in workweek length.

Prices and wages rose in December. Input cost increases accelerated markedly, with the raw materials prices index rising 10 points to 28.1. The finished goods prices index also rose notably, climbing from 8 to 14.7 and reaching its highest level since early 2012. Wages and benefits continued to rise, with the index edging up to 18.7.

Expectations regarding future business conditions improved notably this month. The index of future general business activity advanced 8 points to 39.7. The index of future company outlook posted a double-digit increase and came in at 46.8, its highest reading in 12 years. Most other indexes for future manufacturing activity pushed higher in to positive territory.


Consumer Confidence increased in December to 113.7
Posted: December 27, 2016 at 10:00 AM (Tuesday)

The Conference Board Consumer Confidence Index®, which had increased considerably in November, posted another gain in December. The Index now stands at 113.7 (1985=100), up from 109.4 in November. The Expectations Index increased sharply from 94.4 to 105.5, but the Present Situation Index decreased from 132.0 last month to 126.1.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was December 15.

“Consumer Confidence improved further in December, due solely to increasing Expectations which hit a 13-year high (Dec. 2003, 107.4),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers. Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”



Consumers’ assessment of current conditions declined in December. Those saying business conditions are “good” decreased slightly from 29.7 percent to 29.2 percent, while those saying business conditions are “bad” increased from 15.2 percent to 17.3 percent. Consumers’ appraisal of the labor market was less positive than last month. Those stating jobs are “plentiful” declined from 27.8 percent to 26.9 percent, while those claiming jobs are “hard to get” increased from 21.2 percent to 22.5 percent.

Consumers’ short-term outlook improved considerably in December. Those expecting business conditions to improve over the next six months increased from 16.4 percent to 23.6 percent, while those expecting business conditions to worsen declined from 9.9 percent to 8.7 percent.

Consumers’ outlook for the labor market also improved markedly. The proportion expecting more jobs in the months ahead increased from 16.1 to 21.0 percent. However, those anticipating fewer jobs also increased, from 13.5 percent to 14.0 percent. The percentage of consumers expecting their incomes to increase rose from 17.4 percent to 21.0 percent, while the proportion expecting a decrease fell moderately, from 9.2 percent to 8.6 percent.


Richmond Fed's Current Activity Index gained 4 points to a reading of 8
Posted: December 27, 2016 at 10:00 AM (Tuesday)

Fifth District manufacturing activity expanded in December. The volume of new orders picked up compared to last month and shipments increased. Manufacturing employment softened, while wage increases were more widespread across firms. Prices of raw materials rose more quickly in December, while prices of finished goods rose at a somewhat slower rate.

Manufacturers were optimistic about future business conditions. Firms expected robust growth in shipments and in the volume of new orders. Additionally, survey participants looked for backlogs to build more quickly in the months ahead and anticipated increased capacity utilization. Expectations were for slightly longer vendor lead times.

Producers anticipated an increase in hiring along with broader wage gains during the next six months, while they planned for longer workweeks. For the six months ahead, producers expected faster growth in prices paid and prices received.

Overall manufacturing conditions strengthened this month. The composite index for manufacturing moved to a reading of eight from last month's reading of 4. The index for shipments advanced 11 points to end at 12, and the new orders indicator added five points also ending at a reading of 12. Manufacturing employment softened this month; the December index settled at −1.

Backlogs rose at a faster pace this month; the index jumped up 20 points, ending at 8. Additionally, capacity utilization grew at a faster pace, moving the index up 11 points to a reading of 10. Vendor lead time lengthened this month, moving the index up five points to 9. More firms reported a building up of finished goods inventories in December; however, the indicator ended seven points lower than a month ago at 11. The raw materials inventories index added two points to end at 25.


S&P CoreLogic Case-Shiller Home Price Indices gained 0.2% in October
Posted: December 27, 2016 at 09:00 AM (Tuesday)

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

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.6% annual gain in October, up from 5.4% last month. The 10-City Composite posted a 4.3% annual increase, up from 4.2% the previous month. The 20-City Composite reported a year-over-year gain of 5.1%, up from 5.0% in September.

Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over each of the last nine months. In October, Seattle led the way with a 10.7% year-over-year price increase, followed by Portland with 10.3%, and Denver with an 8.3% increase. 10 cities reported greater price increases in the year ending October 2016 versus the year ending September 2016.

MONTH-OVER-MONTH
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2% in October. The 10-City Composite remains unchanged and the 20-City Composite posted a 0.1% increase in October. After seasonal adjustment, the National Index recorded a 0.9% month-over-month increase, while both the 10-City and 20-City Composites each reported a 0.6% month-over-month increase. 13 of 20 cities reported increases in September before seasonal adjustment; after seasonal adjustment, all 20 cities saw prices rise.

ANALYSIS
“Home prices and the economy are both enjoying robust numbers,” says David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices. “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income. Affordability measures based on median incomes, home prices and mortgage rates show declines of 20-30% since home prices bottomed in 2012. With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends. Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely.”

“After the S&P CoreLogic Case-Shiller National Index bottomed in February 2012, its year-over-year growth accelerated to a peak rate of 10.9% in October 2013 and then gradually fell to its current rate of approximately 5%. During the same period, the highest year-over-year rate from any city was 29% in August and September 2013; currently the highest single city gain declined to approximately 11%. Both national and city growth in home prices slowed but remains above the growth rate of incomes and inflation.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 5.6% annual gain in October 2016. The 10-City and 20-City Composites reported year-over-year increases of 4.3% and 5.1%, respectively. As of October 2016, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.


New Home Sales in November at annual rate of 592,000
Posted: December 23, 2016 at 10:00 AM (Friday)

Sales of new single-family houses in November 2016 were at a seasonally adjusted annual rate of 592,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.2 percent (±14.1%)* above the revised October rate of 563,000 and is 16.5 percent (±19.3%)* above the November 2015 estimate of 508,000.

The median sales price of new houses sold in November 2016 was $305,400; the average sales price was $359,900. The seasonally adjusted estimate of new houses for sale at the end of November was 250,000. This represents a supply of 5.1 months at the current sales rate.


University of Michigan Consumer Confidence up in December to 98.2
Posted: December 23, 2016 at 10:00 AM (Friday)

As unexpected as Trump’s election, consumers expressed much more positive economic expectations following his victory. While the surge in confidence ended by mid December, it nonetheless led to the highest level of the Sentiment Index since January 2004. An all-time record number of consumers spontaneously mentioned the expected favorable impact of Trump’s policies on the economy. Consumers anticipated that a stronger economy would create more jobs, although expected wage gains were quite meager. Smaller income gains were offset by record low inflation expectations. Overall, after a contentious election, to a surprising degree, consumers have given the incoming president the advantage of economic optimism and confidence in his policies.

Favorable Outlook for Personal Finances
Consumers held the most favorable personal financial outlook of the past ten years. An improved financial situation during the year ahead was expected by 40% of all consumers in December, the highest level since 2006. The gains were largely due to recent income increases, which were also the most positive since 2006. Expected annual income growth retreated to 1.5% from 1.8% last month. The smaller expected income gains were offset by declines in inflation expectations, which fell to the lowest levels since the Great Recession.

Buying Depends on Low Rates
In contrast to the expected improvements in jobs and personal finances, consumers did not express more positive attitudes toward vehicle and home buying conditions. Higher interest rates on purchases of vehicles and higher mortgage rates have limited the same type of resurgence in these buying plans. Importantly, the degree of resistance to interest rate increases depends on improvements in wage expectations above their current low levels.

The Consumer Sentiment Index was 98.2 in the December 2016 survey, up from 93.8 in November and October’s preelection reading of 87.2, reaching the highest level since January 2004. Most of the gains were in the Expectations Index, which rose to 89.5, up from last month’s 85.2 and October’s 76.8. The Current Conditions Index rose to 111.9 in December from 107.3 in November and October’s 103.2.

Needless to say, the record gain in consumer confidence was based on anticipated policy changes, with the specific details as yet unknown. On the positive side, such favorable expectations could help jump-start growth before the actual enactment of new policies. A potential draw-back is that these favorable expectations will act as a much higher performance standard that people will use to judge the effectiveness of Trump’s policies. More substantial wage gains are critical to the success of Trump’s expansive fiscal policies as well as the shift toward less expansive monetary policies. Until more is known, the 2017 real consumption forecast is 2.7%.


Kansas City Fed Manufacturing Activity improved considerably in December
Posted: December 22, 2016 at 11:00 AM (Thursday)

Tenth District manufacturing activity improved considerably to its highest growth rate in over two years, and producers’ expectations for future activity also increased. Price indexes continued to post moderate increases in December.

The month-over-month composite index was 11 in December, up from 1 in November and 6 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity in nondurable goods plants increased markedly, particularly for food and plastics, while durable goods plants expanded at a slower pace. Most month-over-month indexes improved in December. The production index jumped from 9 to 24, and the shipments, new orders, and order backlog indexes also rose. The employment index increased from 1 to 10, its highest level since May 2014. The finished goods inventory index rose from -13 to 1, and the raw materials inventory index also moved higher.

Most year-over-year factory indexes moved out of negative territory for the first time in nearly two years. The composite year-over-year index jumped from -10 to 0, and the production, shipments, and new orders indexes were all higher than a year ago. The order backlog index increased from -12 to -5, and the employment index also rose slightly. The capital expenditures index inched higher from -1 to 2, and the new orders for exports index also improved somewhat. The raw materials inventory index increased from -15 to -9, while the finished goods inventory index eased slightly.

Expectations for future factory activity increased over the previous month. The future composite index rose from 12 to 19, and the future production, shipments, new orders, and order backlog indexes also moved up moderately. The future employment index increased modestly, while the future capital expenditures index moderated slightly from 19 to 14. The future raw materials inventory index increased slightly, and the future finished goods index moved into positive territory.

Price indexes increased in December. The month-over-month finished goods price index jumped from -2 to 13, its first positive reading since July 2015, and the raw materials price also increased moderately. The year-over-year finished goods price index moved higher from 10 to 17, and the raw materials price rose slightly. The future finished goods price index posted its highest level in over two years, and the future raw materials price index also increased considerably.


Personal Income increased 0.1%, Spending decreased 0.1%
Posted: December 22, 2016 at 10:00 AM (Thursday)

Personal income increased $1.6 billion (less than 0.1 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $1.3 billion (less than 0.1 percent) and personal consumption expenditures (PCE) increased $24.0 billion (0.2 percent).

Real DPI decreased 0.1 percent in November and Real PCE increased 0.1 percent. The PCE price index increased less than 0.1 percent. Excluding food and energy, the PCE price index increased less than 0.1 percent.


U.S. Leading Economic Index unch% in November
Posted: December 22, 2016 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI) for the U.S. was unchanged in November, remaining at 124.6 (2010 = 100), following a 0.1 percent increase in October, and a 0.3 percent increase in September.

“The U.S. Leading Economic Index continued on an upward trend through 2016, although at a moderate pace of growth,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The underlying trends in the LEI suggest that the economy will continue expanding into the first half of 2017, but it’s unlikely to considerably accelerate. Although the industrial and construction indicators held the U.S. LEI back in November, the weakness was offset by improvements in the interest rate spread, initial unemployment insurance claims, and stock prices.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in November to 114.6 (2010 = 100), following a 0.2 percent increase in October, and a 0.2 percent increase in September.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in November to 123.2 (2010 = 100), following a 0.2 percent increase in October, and a 0.2 percent increase in September.


3Q2016 GDP final estimate increased 3.5%
Posted: December 22, 2016 at 08:30 AM (Thursday)

Real gross domestic product increased at an annual rate of 3.5 percent in the third quarter of 2016, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4 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 3.2 percent. With this third estimate for the third quarter, nonresidential fixed investment, personal consumption expenditures (PCE), and state and local government spending increased more than previously estimated, but the general picture of economic growth remains the same.

Real gross domestic income (GDI) increased 4.8 percent in the third quarter, compared with an increase of 0.7 percent in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 4.1 percent in the third quarter, compared with an increase of 1.1 percent in the second.

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

The acceleration in real GDP in the third quarter primarily reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, an upturn in federal government spending, and a smaller decrease in residential investment, that were partly offset by a smaller increase in PCE and an acceleration in imports.

Current-dollar GDP increased 5.0 percent, or $225.2 billion, in the third quarter to a level of $18,675.3 billion. In the second quarter, current dollar GDP increased 3.7 percent, or $168.5 billion.

The price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 2.1 percent in the second quarter (table 4). The PCE price index increased 1.5 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.

The upward revision to the percent change in real GDP reflected upward revisions to nonresidential fixed investment, PCE, and state and local government spending.

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $117.8 billion in the third quarter, in contrast to a decrease of $12.5 billion in the second quarter.

Profits of domestic financial corporations increased $50.1 billion in the third quarter, compared with an increase of $5.6 billion in the second. Profits of domestic nonfinancial corporations increased $66.4 billion, in contrast to a decrease of $56.1 billion. The rest-of-the-world component of profits increased $1.3 billion, compared with an increase of $38.0 billion. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world. In the third quarter, receipts decreased $1.3 billion, and payments decreased $2.6 billion.


November New Orders for Durable Goods decreased 4.6%, Ex-Trans up 0.5%
Posted: December 22, 2016 at 08:30 AM (Thursday)

New Orders
New orders for manufactured durable goods in
November decreased $11.0 billion or 4.6 percent to $228.2 billion, the U.S. Census Bureau announced today. This decrease, down following four consecutive monthly increases, followed a 4.8 percent October increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 6.6 percent. Transportation equipment, also down following four consecutive monthly increases, drove the decrease, $11.7 billion or 13.2 percent to $76.6 billion.

Shipments
Shipments of manufactured durable goods in November, up two of the last three months, increased $0.2 billion or 0.1 percent to $234.2 billion. This followed a 0.1 percent October decrease. Primary metals, also up two of the last three months, drove the increase, $0.3 billion or 1.7 percent to $18.0 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in November, down five of the last six months, decreased $2.3 billion or 0.2 percent to $1,126.7 billion. This followed a 0.8 percent October increase. Transportation equipment, also down five of the last six months, drove the decrease, $3.6 billion or 0.5 percent to $769.8 billion.

Inventories
Inventories of manufactured durable goods in November, up four of the last five months, increased $0.6 billion or 0.1 percent to $384.0 billion. This followed a virtually unchanged October decrease. Transportation equipment, also up four of the last five months, led the increase, $0.3 billion or 0.2 percent to $124.1 billion.

Capital Goods
Nondefense new orders for capital goods in November decreased $15.6 billion or 19.5 percent to $64.4 billion. Shipments decreased $0.9 billion or 1.2 percent to $70.3 billion. Unfilled orders decreased $5.9 billion or 0.8 percent to $697.1 billion. Inventories increased $0.5 billion or 0.3 percent to $170.1 billion. Defense new orders for capital goods in November increased $3.2 billion or 29.1 percent to $14.3 billion. Shipments increased $0.3 billion or 2.9 percent to $11.0 billion. Unfilled orders increased $3.3 billion or 2.4 percent to $142.2 billion. Inventories decreased $0.2 billion or 1.1 percent to $20.9 billion.

Revised October Data
Revised seasonally adjusted October figures for all manufacturing industries were: new orders, $469.9 billion (revised from $469.4 billion); shipments, $464.8 billion (revised from $464.7 billion); unfilled orders, $1,129.0 billion (revised from $1,128.5 billion) and total inventories, $621.3 billion (revised from $621.4 billion).


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