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University of Michigan Consumer Confidence slipped in May to 98.0
Posted: May 25, 2018 at 10:00 AM (Friday)

Consumer sentiment slipped by less than an index-point from last month, remaining at the same favorable levels for the past 18 months, according to the University of Michigan Surveys of Consumers.

Since President Trump’s election, the Sentiment Index has meandered in a tight eight-point range from 93.4 to 101.4, with the small month-to-month variations indicating no emerging trend, said U-M economist Richard Curtin, director of the surveys.

Consumers, he said, have remained focused on expected gains in jobs and incomes as well as anticipated increases in interest rates and inflation during the year ahead.

References to low prices for household durables, vehicles and homes fell to decade lows. Coupled with higher interest rates, it is likely that the pace of growth in personal consumption will average about 2.6 percent during the year ahead, he said.

“As past expansions have shown, rising interest rates do not suppress spending gains as long as they are accompanied by more substantial increases in consumer incomes,” Curtin said. “The May survey, however, found that consumers anticipated smaller income gains than a month or year ago, even though they anticipate a continued tight labor market.

“Although consumers anticipated a slightly higher year-ahead inflation rate, they expected the uptick to be temporary and for the inflation rate to fall back in the years ahead. While the vast majority of consumers anticipate repeated rate hikes in the year ahead, those increases must be accompanied by stronger income growth to ensure a robust expansion.”

Income Gains Remain Subdued
The long-awaited rise in wages was still absent in the May survey, as consumers anticipated gains in household incomes of just 1.6 percent, down from last month’s 2.2 percent and last year’s 2 percent. Those under age 45 anticipated income gains of 3.5 percent and those with incomes in the top third expected income gains of 3.2 percent; all other subgroups were under 2 percent.

The majority of consumers (51 percent) expected the unemployment rate to stabilize at about its current 18-year low, with equal proportions of consumers expecting some minor increases or minor declines in the year ahead (24 percent).

Low Prices Disappear
Favorable views of buying conditions fell slightly for household durables, vehicles and homes. Although the falloff still left buying plans at generally favorable levels, the widespread declines were due to how consumers assessed current market prices.

Net price references were the least favorable for household durables since just prior to the Great Recession, for vehicles since 1997, and for homes since 2006—although higher home prices brightened prospects for selling homes. Rather than prices or interest rates, consumers have increasingly cited greater certainty about their future jobs and income as the underlying reason for advancing their purchases.

Consumer Sentiment Index
The Consumer Sentiment Index was 98.0 in the May 2018 survey, barely below the 98.8 in April and just above the 97.1 in last May’s survey. The Current Conditions Index fell to 111.8 in May, down from 114.9 in April, and nearly identical to last May’s 111.7. The Expectations Index was 89.1 in May, up from 88.4 in April and last year’s 87.7.

Consumer sentiment slipped by less than an Index-point from last month. Since Trump's election, the Sentiment Index has meandered in a tight eight-point range from 93.4 to 101.4, with the small month-to-month variations indicating no emerging trend. Consumers have remained focused on expected gains in jobs and incomes as well as anticipated increases in interest rates and inflation during the year ahead. As past expansions have shown, rising interest rates do not suppress spending gains as long as they are accompanied by more substantial increases in incomes. The May survey, however, found that consumers anticipated smaller income gains than a month or year ago, even though they anticipate the unemployment rate to stabilize at its current eighteen year low. Importantly, references to discounted prices for durables, vehicles, and homes fell to decade lows. Coupled with higher interest rates, it is likely that the pace of growth in personal consumption will remain at about 2.6% during the year ahead.

When asked to explain how their personal finances had changed, the proportion that spontaneously cited higher prices worsening their financial situation has shown a close correspondence with actual trends in the year-over-year change in the CPI-see the chart. That close relationship ended about a decade ago, and in the past year or so, as the CPI has risen, complaints about inflation have fallen. While the reasons underlying the current divergence are unclear, it nonetheless signals a change in how consumers judge the impact of inflation on their personal finances. It may also suggest a change in their behavioral reaction to inflation.


April New Orders for Durable Goods decreased 1.7%, Ex-Trans up 0.9%
Posted: May 25, 2018 at 08:30 AM (Friday)

New Orders
New orders for manufactured durable goods in April decreased $4.2 billion or 1.7 percent to $248.5 billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly increases, followed a 2.7 percent March increase. Excluding transportation, new orders increased 0.9 percent. Excluding defense, new orders decreased 1.9 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $5.6 billion or 6.1 percent to $87.1 billion.

Shipments
Shipments of manufactured durable goods in April, down following eight consecutive monthly increases, decreased $0.1 billion or 0.1 percent to $246.7 billion. This followed a 0.7 percent March increase. Transportation equipment, down following three consecutive monthly increases, drove the decrease, $1.8 billion or 2.1 percent to $82.8 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in April, up five of the last six months, increased $5.5 billion or 0.5 percent to $1,153.4 billion. This followed a 0.8 percent March increase. Transportation equipment, also up five of the last six months, led the increase, $4.2 billion or 0.5 percent to $796.2 billion.

Inventories
Inventories of manufactured durable goods in April, up seventeen of the last eighteen months, increased $1.2 billion or 0.3 percent to $401.7 billion. This followed a 0.2 percent March increase. Fabricated metal products, up fifteen of the last sixteen months, led the increase $0.4 billion or 0.8 percent to $52.0 billion.

Capital Goods
Nondefense new orders for capital goods in April decreased $5.7 billion or 6.8 percent to $78.6 billion. Shipments decreased $3.6 billion or 4.6 percent to $74.1 billion. Unfilled orders increased $4.5 billion or 0.6 percent to $713.9 billion. Inventories increased $0.8 billion or 0.5 percent to $176.1 billion. Defense new orders for capital goods in April increased $0.3 billion or 3.1 percent to $11.0 billion. Shipments increased $1.4 billion or 12.9 percent to $12.0 billion. Unfilled orders decreased $1.1 billion or 0.7 percent to $144.7 billion. Inventories decreased $0.3 billion or 1.4 percent to $22.2 billion.

Revised and Recently Benchmarked March Data
Revised seasonally adjusted March figures for all manufacturing industries were: new orders, $498.4 billion (revised from $498.3 billion); shipments, $492.6 billion (revised from $492.2 billion); unfilled orders, $1,147.8 billion (revised from $1,148.2 billion) and total inventories, $664.8 billion (revised from $664.3 billion).


Existing-Home Sales Decreased 2.5% in April
Posted: May 24, 2018 at 10:00 AM (Thursday)

After moving upward for two straight months, existing-home sales retreated in April on both a monthly and annualized basis, according to the National Association of Realtors®. All four major regions saw no gain in sales activity last month.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5 percent to a seasonally adjusted annual rate of 5.46 million in April from 5.60 million in March. With last month’s decline, sales are now 1.4 percent below a year ago and have fallen year-over-year for two straight months.

Lawrence Yun, NAR chief economist, says this spring’s staggeringly low inventory levels caused existing sales to slump in April. “The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” he said. “Realtors® say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”

The median existing-home price for all housing types in April was $257,900, up 5.3 percent from April 2017 ($245,000). March’s price increase marks the 74th straight month of year-over-year gains.

Total housing inventory3 at the end of April increased 9.8 percent to 1.80 million existing homes available for sale, but is still 6.3 percent lower than a year ago (1.92 million) and has fallen year-over-year for 35 consecutive months. Unsold inventory is at a 4.0-month supply at the current sales pace (4.2 months a year ago).

Properties typically stayed on the market for 26 days in April, which is down from 30 days in February and 29 days a year ago. Fifty-seven percent of homes sold in April were on the market for less than a month.

“What is available for sale is going under contract at a rapid pace,” said Yun. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in April were Midland, Texas; Boston-Cambridge-Newton, Mass.; San Francisco-Oakland-Hayward, Calif.; Columbus, Ohio; and Vallejo-Fairfield, Calif.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage increased for the seventh straight month to 4.47 percent in April (highest since 4.49 percent in September 2013) from 4.44 percent in March. The average commitment rate for all of 2017 was 3.99 percent.

“With mortgage rates and home prices continuing to climb, an increase in housing supply is absolutely crucial to keeping affordability conditions from further deterioration,” said Yun. “The current pace of price appreciation far above incomes is not sustainable in the long run.”

First-time buyers were 33 percent of sales in April (highest since last July), which is up from 30 percent last month but down from 34 percent a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34 percent.

“Especially with mortgage rates going up in recent weeks, prospective buyers should visit with more than one lender to ensure they are getting the lowest rate possible,” NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Receiving a rate quote from multiple lenders could lead to considerable savings over the life of the loan. Ask a Realtor® for a few recommendations of lenders to contact to get a quote.”

All-cash sales were 21 percent of transactions in April, which is up from 20 percent in March and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in April (unchanged from last month and a year ago).

Distressed sales – foreclosures and short sales – were 3.5 percent of sales in April (lowest since NAR began tracking in October 2008), down from 4 percent last month and 5 percent a year ago. Three percent of April sales were foreclosures and 0.5 percent were short sales.
Single-family and Condo/Co-op Sales

Single-family home sales declined 3.0 percent to a seasonally adjusted annual rate of 4.84 million in April from 4.99 million in March, and are 1.6 percent below the 4.92 million sales pace a year ago. The median existing single-family home price was $259,900 in April, up 5.5 percent from April 2017.

Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 620,000 units in April (unchanged from a year ago). The median existing condo price was $242,500 in April, which is 3.4 percent above a year ago.
Regional Breakdown

April existing-home sales in the Northeast fell 4.4 percent to an annual rate of 650,000, and are 11.0 percent below a year ago. The median price in the Northeast was $275,200, which is 2.8 percent above April 2017.

In the Midwest, existing-home sales were at an annual rate of 1.29 million in April (unchanged from March), and are 3.0 percent below a year ago. The median price in the Midwest was $202,100, up 4.6 percent from a year ago.

Existing-home sales in the South decreased 2.9 percent to an annual rate of 2.33 million in April, but are still 2.2 percent above a year ago. The median price in the South was $227,600, up 3.9 percent from a year ago.

Existing-home sales in the West declined 3.3 percent to an annual rate of 1.19 million in April, and are 0.8 percent below a year ago. The median price in the West was $382,100, up 6.2 percent from April 2017.


Weekly Initial Unemployment Claims Increase 11,000 to 234,000
Posted: May 24, 2018 at 08:30 AM (Thursday)

In the week ending May 19, the advance figure for seasonally adjusted initial claims was 234,000, an increase of 11,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 222,000 to 223,000. The 4-week moving average was 219,750, an increase of 6,250 from the previous week's revised average. The previous week's average was revised up by 250 from 213,250 to 213,500. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending May 12, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 12 was 1,741,000, an increase of 29,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 1,707,000 to 1,712,000. The 4-week moving average was 1,751,750, a decrease of 23,250 from the previous week's revised average. This is the lowest level for this average since December 15, 1973 when it was 1,735,750. The previous week's average was revised up by 1,250 from 1,773,750 to 1,775,000.


New Home Sales in April at annual rate of 662,000
Posted: May 23, 2018 at 10:00 AM (Wednesday)

New Home Sales
Sales of new single-family houses in April 2018 were at a seasonally adjusted annual rate of 662,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.5 percent (±11.8 percent)* below the revised March rate of 672,000, but is 11.6 percent (±23.7 percent)* above the April 2017 estimate of 593,000.

Sales Price
The median sales price of new houses sold in April 2018 was $312,400. The average sales price was $407,300.

For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of April was 300,000. This represents a supply of 5.4 months at the current sales rate.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 23, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 18, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week to its lowest level since December 2000. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 3 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 35.7 percent of total applications from 35.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications.

The FHA share of total applications remained unchanged at 10.3 percent from the week prior. The VA share of total applications decreased to 9.8 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since April 2011, 4.86 percent, from 4.77 percent, with points increasing to 0.52 from 0.50 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since September 2013, 4.81 percent from 4.73 percent, with points increasing to 0.42 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since May 2011, 4.90 percent from 4.78 percent, with points increasing to 0.85 from 0.76 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since February 2011, 4.31 percent from 4.20 percent, with points increasing to 0.56 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level in the history of the survey, 4.12 percent from 4.09 percent, with points decreasing to 0.46 from 0.56 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.


Richmond Fed's Current Activity Index rebounded from -3 to 16 in May
Posted: May 22, 2018 at 10:00 AM (Tuesday)

Fifth District manufacturing firms saw robust growth in May, according to survey results from the Federal Reserve Bank of Richmond. The composite index swung from −3 in April to 16 in May, boosted by growth in the indexes for shipments, new orders, and employment. Local business conditions also moved back into expansionary territory, after weakening in April, and firms remained optimistic that growth would continue in coming months.

Survey results indicate that both employment and wages rose among manufacturing firms in May, however, firms still struggled to find the skills they needed. They expect this struggle to continue in the next six months and also expect employment and wages to increase further.

Many manufacturing firms continued to increase spending in May. The growth rate of prices paid continued to rise, on average, but firms seemed able to pass some of change through to customers, as prices received also grew at a faster rate.


Philadelphia NonManufacturing Activity Suggest Continued Improvement in Growth in May
Posted: May 22, 2018 at 08:30 AM (Tuesday)

Responses to the Nonmanufacturing Business Outlook Survey suggest that regional nonmanufacturing activity improved in May. The firm-level index of general activity, new orders, and sales/revenues rose notably after posting declines in April, and the full-time employment index remained positive. Both price indicators increased from last month. The firms continue to expect growth over the next six months.

Current Indicators Strengthen
The survey’s indicators for current activity suggest continued improvement in the nonmanufacturing sector of the regional economy. The diffusion index for current general activity at the firm level increased 13.5 points to 39.5, its highest reading since June 2015 (see Chart). Nearly 52 percent of the firms reported increases in activity, compared with 12 percent that reported decreases. The regional activity index also increased, rising 18 points to 45.3, its highest reading since June 2015. The indicators for new orders and sales/revenues rose sharply this month, as fewer firms reported decreases in each measure this month than did last month. The new orders index more than recovered from its decline from last month, rising 24 points to 36.2. The share of firms reporting increases in new orders (45 percent) exceeded the share reporting decreases (9 percent). The sales/revenues index increased after two consecutive months of declines, rising from 13.5 in April to 33.7 in May. Almost 49 percent of the firms reported increases in sales/revenues, while 15 percent reported declines.

Employment Conditions Remain Positive
The firms continued to report overall increases in full-time employment, although most firms noted steady employment levels. The full-time employment index decreased from 15.8 in April to 7.7 in May. The share of firms reporting increases in employment (15 percent) exceeded the share reporting decreases (8 percent); a majority (70 percent) reported no change. The part-time employment index increased 3 points to 11.4, and the average workweek index rose 14 points to 26.8. The wages and benefits indicator also increased, rising from 28.3 to 46.4.

Firms Continue to Report Overall Price Increases
The indexes for prices paid for inputs and prices received for firms’ own products and services increased in May after decreasing in April. The prices paid index rose 8 points to 33.8. Nearly 34 percent of the respondents reported increases in input prices, while none of the firms reported decreases. Most firms (58 percent) reported no change in input prices. The prices received index rose from 12.1 in April to 22.6 in May, its highest reading since February 2016. Nearly 24 percent of the firms reported increases in prices received, while only 1 percent reported decreases. Almost 66 percent of the firms reported no change in their own prices.

Firms' Forecasts for Own Prices and Inflation Edge Higher
In this month’s special questions, the firms were asked to forecast the changes in the prices of their own products and services and for U.S. consumers over the next four quarters (see Special Questions). Regarding their own prices, the firms’ median forecast was for an increase of 2.5 percent, up from 2.0 percent when the question was last asked in February. When asked about the rate of inflation for U.S. consumers over the next year, the firms’ median forecast was 3.0 percent, an increase from the previous forecast of 2.0 percent in February. The firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise 3.0 percent over the next four quarters, the same as the previous forecast. The firms’ forecast for the long-run (10-year) inflation rate decreased from 3.0 percent to 2.5 percent.

Firms Remain Optimistic
The respondents continued to expect growth in nonmanufacturing activity over the next six months. The diffusion index for future activity at the firm level increased from 40.8 to 45.3 (see Chart). Almost 63 percent of the firms expect an increase in activity at their firms over the next six months, compared with 17 percent that expect a decline. The future regional activity index rebounded from its decline last month, rising 9 points to 50.1.

Summary
Results from this month’s Nonmanufacturing Business Outlook Survey suggest improvement in regional nonmanufacturing activity. The indicators for firm-level general activity, sales/revenues, and new orders rose, and the firms continued to report overall increases in full-time employment. The respondents remain optimistic about growth over the next six months.


Chicago Fed National Activity Points to little change in economic growth in April
Posted: May 21, 2018 at 08:30 AM (Monday)

The CFNAI Diffusion Index, which is also a three-month moving average, moved up to +0.23 in April from +0.11 in March. Fifty of the 85 individual indicators made positive contributions to the CFNAI in April, while 35 made negative contributions. Thirty-five indicators improved from March to April, while 50 indicators deteriorated. Of the indicators that improved, eight made negative contributions.

Production-related indicators contributed +0.27 to the CFNAI in April, up from +0.19 in March. Manufacturing industrial production increased by 0.5 percent in April after being unchanged in March. The sales, orders, and inventories category made a contribution of +0.02 to the CFNAI in April, down slightly from +0.08 in March.

Employment-related indicators contributed +0.10 to the CFNAI in April, up from +0.04 in March. The civilian unemployment rate decreased to 3.9 percent in April from 4.1 percent in March. The contribution of the personal consumption and housing category to the CFNAI edged down to –0.05 in April from +0.02 in March. Housing starts decreased to 1,287,000 annualized units in April from 1,336,000 in March, and housing permits decreased to 1,352,000 annualized units in April from 1,377,000 in the previous month.

The CFNAI was constructed using data available as of May 17, 2018. At that time, April data for 51 of the 85 indicators had been published. For all missing data, estimates were used in constructing the index. The March monthly index value was revised to +0.32 from an initial estimate of +0.10, and the February monthly index value was revised to +0.73 from last month’s estimate of +0.98. Revisions to the monthly index can be attributed to two main factors: revisions in previously published data and differences between the estimates of previously unavailable data and subsequently published data. The revision to the March monthly index value was primarily due to the latter, while the revision to the February monthly index value was primarily due to the former.

The Chicago Fed National Activity Index (CFNAI) ticked up to +0.34 in April from +0.32 in March. Two of the four broad categories of indicators that make up the index increased from March, and three of the four categories made positive contributions to the index in April. The index’s three-month moving average, CFNAI-MA3, increased to +0.46 in April from +0.23 in March.


U.S. Leading Economic Index increased 0.4% in April
Posted: May 17, 2018 at 10:00 AM (Thursday)

The Conference Board Leading Economic Index® (LEI)for the U.S. increased 0.4 percent in April to 109.4 (2016 = 100), following a 0.4 percent increase in March, and a 0.7 percent increase in February.

“April’s increase and continued uptrend in the U.S. LEI suggest solid growth should continue in the second half of 2018. However, the LEI’s six-month growth rate has recently moderated somewhat, suggesting growth is unlikely to strongly accelerate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “In April, stock prices and housing permits were the only negative contributors, whereas the labor market components, which made negative contributions in March, improved.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in April to 103.5 (2016 = 100), following a 0.2 percent increase in March, and a 0.2 percent increase in February.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in April to 104.7 (2016 = 100), following a 0.1 percent decrease in March, and a 0.3 percent increase in February.


Weekly Initial Unemployment Claims Increase 11,000 to 222,000
Posted: May 17, 2018 at 08:30 AM (Thursday)

In the week ending May 12, the advance figure for seasonally adjusted initial claims was 222,000, an increase of 11,000 from the previous week's unrevised level of 211,000. The 4-week moving average was 213,250, a decrease of 2,750 from the previous week's unrevised average of 216,000. This is the lowest level for this average since December 13, 1969 when it was 210,750. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending May 5, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 5 was 1,707,000, a decrease of 87,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 1, 1973 when it was 1,692,000. The previous week's level was revised up 4,000 from 1,790,000 to 1,794,000. The 4-week moving average was 1,773,750, a decrease of 39,750 from the previous week's revised average. This is the lowest level for this average since December 22, 1973 when it was 1,756,000. The previous week's average was revised up by 1,000 from 1,812,500 to 1,813,500.


Philadelphia Fed Outlook Reported Activity Suggest a Pickup in Growth in May
Posted: May 17, 2018 at 08:30 AM (Thursday)

Results from the May Manufacturing Business Outlook Survey suggest a pickup in growth of the region’s manufacturing sector. The survey’s indexes for general activity, new orders, shipments, and employment increased from their readings in April. A notable share of firms also reported higher prices for their own manufactured goods this month. The survey’s future indexes, measuring expectations for the next six months, reflected continued optimism.

Current Indicators Suggest a Pickup in Growth
The diffusion index for current general activity increased 11 points, from 23.2 in April to 34.4 this month (see Chart 1). Over 43 percent of the manufacturers reported increases in overall activity this month, while 9 percent reported decreases. Both current new orders and shipments indexes improved this month, increasing 22 points and 2 points, respectively. Both the delivery times and unfilled orders indexes remained positive, suggesting longer delivery times and increases in unfilled orders. Inventories were, on balance, slightly higher this month: The percentage of firms reporting an increase in inventories (25 percent) was higher than the percentage reporting a decrease (17 percent).

The firms continued to report overall increases in employment. Nearly 37 percent of the responding firms reported increases in employment, while 6 percent reported decreases this month. The current employment index edged 3 points higher to 30.2, its highest reading in seven months. The firms also reported a longer average workweek this month: The current average workweek index increased 13 points.

Price Indexes Suggest Increasing Prices
Price increases for purchased inputs were reported by 55 percent of the manufacturers this month, down slightly from 59 percent in April. The prices paid diffusion index fell 4 points but remains at an elevated level (see Chart 2). The current prices received index, reflecting the manufacturers’ own prices, increased 7 points to a reading of 36.4, its second consecutive month of increase and highest reading since February 1989.

Firms Remain Optimistic
The diffusion index for future general activity decreased from 40.7 in April to 38.7 this month (see Chart 1). Over 48 percent of the firms expect increases in activity over the next six months, while 10 percent expect declines. The future new orders index edged 3 points higher, while the future shipments index declined 1 point. Nearly 64 percent of the firms expect price increases for purchased inputs over the next six months, and 36 percent expect higher prices for their own manufactured goods. Over 49 percent of the firms expect to add workers over the next six months, up from 42 percent in April. The future employment index increased 8 points to a reading of 42.8, its highest reading since August 1983.

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

Summary
Responses to the May Manufacturing Business Outlook Survey indicate a pickup in growth for the region’s manufacturing sector. The indexes for general activity, new orders, shipments, and employment all improved from their readings last month. The indexes for prices paid and received continued to suggest price pressures. Looking ahead six months, the firms continued to be optimistic about the outlook for manufacturing activity.


Industrial Production rose 0.7%
Capacity Utilization up to 78.0%

Posted: May 16, 2018 at 09:15 AM (Wednesday)

Industrial production rose 0.7 percent in April for its third consecutive monthly increase. The rates of change for industrial production for previous months were revised downward, on net; for the first quarter, output is now reported to have advanced 2.3 percent at an annual rate. After being unchanged in March, manufacturing output rose 0.5 percent in April. The indexes for mining and utilities moved up 1.1 percent and 1.9 percent, respectively. At 107.3 percent of its 2012 average, total industrial production in April was 3.5 percent higher than it was a year earlier. Capacity utilization for the industrial sector climbed 0.4 percentage point in April to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972–2017) average.


April Housing Starts decreased 3.7%, Permits down 1.8%
Posted: May 16, 2018 at 08:30 AM (Wednesday)

Building Permits
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,352,000. This is 1.8 percent (±1.3 percent) below the revised March rate of 1,377,000, but is 7.7 percent (±0.9 percent) above the April 2017 rate of 1,255,000. Single-family authorizations in April were at a rate of 859,000; this is 0.9 percent (±1.4 percent)* above the revised March figure of 851,000. Authorizations of units in buildings with five units or more were at a rate of 450,000 in April.

Housing Starts
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,287,000. This is 3.7 percent (±11.4 percent)* below the revised March estimate of 1,336,000, but is 10.5 percent (±9.7 percent) above the April 2017 rate of 1,165,000. Single-family housing starts in April were at a rate of 894,000; this is 0.1 percent (±11.8 percent)* above the revised March figure of 893,000. The April rate for units in buildings with five units or more was 374,000.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 16, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 11, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week to its lowest level since August 2008. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 35.9 percent of total applications, its lowest level since August 2008, from 36.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.5 percent of total applications.

The FHA share of total applications increased to 10.3 percent from 10.1 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.4 percent the week prior. The USDA share of total applications increased to 0.8 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.77 percent from 4.78 percent, with points remaining unchanged at 0.50 (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 $453,100) increased to 4.73 percent from 4.65 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.78 percent from 4.80 percent, with points increasing to 0.76 from 0.75 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.20 percent, with points increasing to 0.53 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level in the history of the survey, 4.09 percent, from 4.00 percent, with points increasing to 0.56 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Business Inventories unch% in March
Posted: May 15, 2018 at 10:00 AM (Tuesday)

The combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,438.3 billion, up 0.5 percent (±0.2 percent) from February 2018 and was up 6.4 percent (±0.3 percent) from March 2017.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,929.6 billion, virtually unchanged (±0.1 percent)* from February 2018, but were up 3.8 percent (±0.3 percent) from March 2017.

The total business Inventories/Sales Ratio based on seasonally adjusted data at the end of March was 1.34. The March 2017 ratio was 1.38.


Builder Confidence rose 2 points to 70 in May
Posted: May 15, 2018 at 10:00 AM (Tuesday)

Builder confidence in the market for newly built single-family homes rose two points to 70 in May after a downwardly revised April reading on the NAHB/Wells Fargo Housing Market Index (HMI). This is the fourth time the HMI has reached 70 or higher this year.

“The solid May report shows that builders are buoyed by growing consumer demand for single-family homes,” said NAHB Chairman Randy Noel. “However, the record high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”

“Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly built single-family homes,” said NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”

The HMI chart gauging current sales conditions increased two points to 76 in May while the indexes measuring buyer traffic and expectations in the next six months remained unchanged at 51 and 77, respectively.

Looking at the three-month moving averages for regional HMI scores, the West and Northeast held steady at 76 and 55, respectively. Meanwhile, the South and Midwest each edged down one point to respective levels of 72 and 65.


Empire State Manufacturing Survey Conditions expanded at a faster pace in May
Posted: May 15, 2018 at 08:34 AM (Tuesday)

Business activity grew strongly in New York State, according to firms responding to the May 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed four points to 20.1, indicating a faster pace of growth than in April. The new orders index rose seven points to 16.0, and the shipments index was little changed at 19.1, suggesting ongoing growth in orders and shipments. Delivery times continued to lengthen, and inventories moved higher. Labor market indicators pointed to a modest increase in employment and longer workweeks. The prices paid index rose to its highest level in several years, indicating significant input price increases, and the prices received index remained elevated. Looking ahead, firms were somewhat more optimistic about the six-month outlook than they were in April, though less so than earlier this year.

Business Activity Grows at a Solid Clip
Manufacturing firms in New York State reported that business activity expanded at a faster pace than in April. The general business conditions index rose four points to 20.1. Forty percent of respondents reported that conditions had improved over the month, while 20 percent reported that conditions had worsened. The new orders index rose seven points to 16.0 and the shipments index was little changed at 19.1, indicating that orders and shipments again grew strongly. Unfilled orders increased, and inventories moved higher. The delivery time index was close to last month’s level at 13.7, a sign that delivery times continued to lengthen.

Input Price Increases Pick Up
The index for number of employees edged up three points to 8.7, while the average workweek index fell to 11.1, readings pointing to a modest increase in employment and hours worked. Price increases remained elevated. The prices paid index moved up seven points to 54.0, its highest level since 2011, indicating a pickup in input price increases. The prices received index rose two points to 23.0, suggesting ongoing moderate selling price increases.

Outlook Improves, but Optimism Remains Subdued
Optimism about the six-month outlook increased, but fell short of levels enjoyed in recent months. The index for future business conditions, which plunged to 18.3 in April after remaining above 40 for most of the past year and a half, regained thirteen points to reach 31.1 in May. Employment was expected to increase in the months ahead, and the indexes for future prices remained elevated. The capital expenditures index moved up four points to 29.5, and the technology spending index rose to 23.0.


U.S. Retail Sales for April Increase 0.3%, Ex-Auto up 0.3%
Posted: May 15, 2018 at 08:30 AM (Tuesday)

Advance estimates of U.S. retail and food services sales for April 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $497.6 billion, an increase of 0.3 percent (±0.4 percent)* from the previous month, and 4.7 percent (±0.5 percent) above April 2017. Total sales for the February 2018 through April 2018 period were up 4.6 percent (±0.5 percent) from the same period a year ago. The February 2018 to March 2018 percent change was revised from up 0.6 percent (±0.5 percent) to up 0.8 percent (±0.2 percent).

Retail trade sales were up 0.4 percent (±0.5 percent)* from March 2018, and 4.8 percent (±0.5 percent) above last year. Gasoline Stations were up 11.7 percent (±1.6 percent) from April 2017, while Nonstore Retailers were up 9.6 percent (±1.4 percent) from last year.


University of Michigan Consumer Confidence Preliminary April Results at 98.8
Posted: May 11, 2018 at 10:00 AM (Friday)

Consumer sentiment remained unchanged in early May from the April survey. The Expectations Index gained 1.1 points and the Current Conditions Index fell 1.6 points--both were statistically insignificant changes. What is likely to capture attention, however, are the small uptick in near term inflation expectations, the downward slippage in income expectations, and the expected stabilization of the national unemployment rate at decade lows. The data will thus provide some additional points for both sides in the debate about the timing and number of future interest rate hikes. Eight-in-ten consumers anticipated interest rate hikes during the year ahead, and fewer consumers anticipated further declines in the unemployment rate--although all of the shift was toward the expectation of a stable unemployment rate rather than an increased rate. Consumers have a remarkable track record for anticipating changes in the actual unemployment rate, as shown in the accompanying chart. Overall, the data are consistent with a growth rate of 2.7% in real personal consumption from the second half of 2018 to first half of 2019.


Forecasters See Slightly Brighter Outlook for Growth and Labor Markets in 2018 and 2019
Posted: May 11, 2018 at 10:00 AM (Friday)

The U.S. economy looks slightly stronger now than it did three months ago, according to 36 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict real GDP will grow at an annual rate of 3.0 percent this quarter and next quarter, up slightly from the estimates of three months ago. On an annual-average over annual-average basis, the forecasters predict real GDP growing 2.8 percent in 2018, 2.7 percent in 2019, 1.9 percent in 2020, and 2.0 percent in 2021.

The forecasters see a marginally brighter outlook for the unemployment rate. The forecasters predict the unemployment rate will average 3.9 percent in 2018, 3.7 percent in 2019, 3.9 percent in 2020, and 4.0 percent in 2021. The projections for 2018 and 2019 are slightly below those of the last survey, indicating a better outlook for unemployment.

The panelists also predict an improvement in employment for 2018 and 2019. The projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 185,900 in 2018, up from the previous estimate of 175,100, and 160,800 in 2019, up from 150,300 estimated three months ago. (These annual-average estimates are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.)

Higher Inflation in 2018
The forecasters expect current-year headline CPI inflation to average 2.5 percent, up from 2.1 percent in the last survey. Headline PCE inflation for 2018 will be 2.1 percent, up 0.2 percentage point from the previous estimate.

However, the forecasters’ projections for inflation beyond 2018 are mostly unchanged compared with the previous survey. Headline CPI inflation is expected to average 2.2 percent in 2019 and 2.3 percent in 2020, unchanged from the last survey. The forecasters have revised slightly their projections for headline PCE inflation in 2019 and 2020 to 2.1 percent, from 2.0 percent previously.

Over the next 10 years, 2018 to 2027, the forecasters expect headline CPI inflation to average 2.30 percent at an annual rate, up marginally from the previous estimate of 2.25 percent. The corresponding estimate for 10-year annual-average PCE inflation is 2.00 percent, unchanged from the estimate of three months ago.

Low Risk of a Negative Quarter
The forecasters have revised downward the chance of a contraction in real GDP in any of the next four quarters. For the current quarter, the forecasters predict a 5.3 percent chance of negative growth, down from 9.1 percent in the survey of three months ago. The panelists have also made downward revisions to their probability estimates for the next three quarters.


U.S. Import Price Index Increased 0.3% in April
Posted: May 11, 2018 at 08:30 AM (Friday)

U.S. import prices increased 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today, following a 0.2-percent decline in March. Prices for fuel and nonfuel imports advanced in April. Prices for U.S. exports rose 0.6 percent in April, after increasing 0.3 percent in March. Higher prices for nonagricultural exports more than offset declining agricultural export prices in April.

Imports
All Imports: Import prices advanced 0.3 percent in April resuming the recent upward trend after declining 0.2 percent the previous month. The March decrease was the first time the index recorded a drop since a 0.2-percent decline in July 2017. Prices for U.S. imports rose 3.3 percent between April 2017 and April 2018. U.S. import prices have not recorded a 12-month decline since a 0.2-percent decrease for the year ended October 2016.

Fuel Imports: The price index for import fuels advanced 1.3 percent in April after declining 2.4 percent in March. Petroleum prices rose 1.6 percent in April more than offsetting a 4.4-percent drop in natural gas prices. Import fuel prices advanced 18.7 percent between April 2017 and April 2018 and have not declined on a 12-month basis since a 3.7-percent drop for the year ended September 2016. The price index for petroleum imports rose 20.6 percent over the past 12 months. Natural gas prices fell 6.6 percent for the year ended in April, the largest 12-month decline since a 16.1-percent decrease for the year ended October 2017.

All Imports Excluding Fuel: The price index for nonfuel imports rose 0.2 percent in April, following advances of 0.1 percent in March and 0.4 percent in February. Higher import prices for nonfuel industrial supplies and materials; consumer goods; and automotive vehicles more than offset declining prices for foods, feeds, and beverages. Nonfuel import prices advanced 1.8 percent over the past 12 months and have not recorded an over-the-year decline since a 0.2-percent drop for the year ended November 2016.

Exports
All Exports: Prices for U.S. exports rose 0.6 percent in April and have not recorded a decline since June 2017. The monthly advance was driven by higher nonagricultural export prices which more than offset declining agricultural prices. The price index for U.S. exports increased 3.8 percent over the past year, the largest 12-month increase since a 4.8-percent rise for the year ended November 2011. The index has not recorded a decrease on a 12-month basis since a 0.2-percent decline between November 2015 and November 2016.

Agricultural Exports: Prices for agricultural exports fell 1.2 percent in April after recording a 3.2-percent rise in March. The decline in April was the first monthly drop in agricultural prices since the index fell 0.3 percent in December 2017. Lower export prices for soybeans, nuts, and wheat drove the April decline. The price index for agricultural exports rose 1.4 percent over the past 12 months and has not declined over a 12-month period since a 1.8-percent decrease in July 2017.

All Exports Excluding Agriculture: The price index for nonagricultural exports increased 0.7 percent in April. Nonagricultural export prices have not declined on a monthly basis since a 0.1-percent drop in October 2017. The April increase in nonagricultural export prices was driven by a 1.5-percent rise in nonagricultural industrial supplies and materials. Prices for nonagricultural exports advanced 4.0 percent over the 12-month period ended April 2018, the largest 12-month increase since a 4.8-percent rise for the year ended November 2011.

Import Prices
Imports by Locality of Origin: Import prices from China fell 0.1 percent in April after rising 0.2 percent in March. The decline in April was the first monthly drop since a 0.3-percent decrease in September 2017. Import prices from China increased 0.2 percent over the past 12 months and have not recorded a 12-month decrease since December 2017. Prices for imports from Japan rose 0.1 percent in April after rising 0.2 percent in March and 0.3 percent in February. The price index for imports from Japan rose 0.2 percent over the past 12 months. The price indexes for imports from the European Union and Canada both increased 0.6 percent in April. Import prices from Mexico fell for a third consecutive month in April, declining 0.2 percent.

Nonfuel Industrial Supplies and Materials: Import prices for nonfuel industrial supplies and materials increased 0.7 percent in April following a 1.0-percent rise in March. Import prices for industrial organic chemicals rose 4.2 percent and prices for iron and steel mill products advanced 4.0 percent, driving the overall April increase in nonfuel industrial supplies and materials.

Finished Goods: The price index for consumer goods rose 0.1 percent in April after a 0.1-percent decline in March. Consumer goods import prices were driven by higher prices for medicinal, dental, and pharmaceutical materials. Import prices for automotive vehicles also increased 0.1 percent in April following a 0.1-percent drop in March. Import prices for capital goods recorded no change in April.

Foods, Feeds, and Beverages: Import prices for foods, feeds, and beverages fell 0.4 percent in April after a 1.1-percent drop in March. The import price index for vegetables drove the monthly decrease, falling 7.0 percent. Meat prices also contributed to the April drop, declining 2.2 percent.

Transportation Services: The index for import air passenger fares increased 2.8 percent in April after declining 6.5 percent in March. Import air passenger fares rose 7.9 percent over the past year, the largest 12-month increase since an 8.2-percent advance for the year ended December 2013. Import air freight prices increased 0.7 percent in April and 10.2 percent over the past 12 months.

Export Prices
Nonagricultural Industrial Supplies and Materials: Export prices for nonagricultural industrial supplies and materials increased 1.5 percent in April. The monthly advance was driven by a 4.0-percent increase in the price index for export fuels.

Finished Goods: Export prices for capital goods and automotive vehicles advanced 0.4 percent and 0.1 percent, respectively, in April. Capital goods export prices rose 2.0 percent for the year ended April 2018, the largest 12-month increase since a 2.1-percent rise for the year ended August 2008. Consumer goods prices recorded no change in April.

Transportation Services: Export air passenger fares advanced 16.2 percent in April, the largest monthly advance since the index was first published monthly in December 2000. The April increase was driven by higher Asian and Latin American fares. The price index for export air passenger fares advanced 25.7 percent between April 2017 and April 2018, the largest 12-month rise since the index rose 30.5 percent for the year ended July 2010. Export air freight prices increased 0.6 percent in April and 5.4 percent over the past year.


Consumer Price Index increased 0.2% in April, Ex Fd & Engy rose 0.1%
Posted: May 10, 2018 at 08:30 AM (Thursday)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in April on a seasonally adjusted basis after falling 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.5 percent before seasonal adjustment.

The indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, although the food index increased as well. The gasoline index increased 3.0 percent, more than offsetting declines in other energy component indexes and led to a 1.4-percent rise in the energy index. The food index rose 0.3 percent, with the food at home index rising 0.3 percent and the index for food away from home increasing 0.2 percent.

The index for all items less food and energy rose 0.1 percent in April. The shelter index rose 0.3 percent, with other indexes mixed. The indexes for household furnishings and operations, personal care, tobacco, medical care, and apparel all increased in April, while those for used cars and trucks, new vehicles, recreation,and airline fares all declined.

The all items index rose 2.5 percent for the 12 months ending April; this figure has been mostly trending upward since it was 1.6 percent for the period ending June 2017. The index for all items less food and energy rose 2.1 percent for the 12 months ending April. The food index increased 1.4 percent, and the energy index rose 7.9 percent.

Food
The food index rose 0.3 percent in April after a 0.1-percent increase in March. The index for food at home rose 0.3 percent, the largest increase since March 2017. The fruits and vegetables index rose 1.0 percent in April after declining in February and March. The index for meats, poultry, fish, and eggs increased 0.7 percent, with the index for eggs rising 7.1 percent and the beef index rising 1.3 percent. The index for dairy and related products also increased in April, rising 0.4 percent.

In contrast, the index for nonalcoholic beverages fell 0.6 percent in April after rising in March. The index for cereals and bakery products fell 0.2 percent in April, and the index for other food at home was unchanged. The index for food away from home rose 0.2 percent in April following a 0.1-percent increase in March.

Over the last 12 months, the index for food away from home increased 2.5 percent, and the food at home index rose 0.5 percent. The index for meats, poultry, fish, and eggs increased 3.5 percent over the last year, the only one of the six major grocery store food group indexes to increase. The indexes for cereals and bakery products and for other food at home were unchanged, and the remaining indexes declined modestly over the last 12 months.

Energy
The energy index rose 1.4 percent in April after falling 2.8 percent in March. The gasoline index rose 3.0 percent following a 4.9-percent decline in March. (Before seasonal adjustment, gasoline prices increased 6.2 percent in April.) In contrast, the electricity index fell 0.6 percent in April, and the index for natural gas fell 0.4 percent.

The energy index increased 7.9 percent over the past year, with all the major component indexes rising. The gasoline index increased 13.4 percent and the fuel oil index rose 22.6 percent. The remaining component indexes increased more moderately; the electricity index increased 1.2 percent, and the index for natural gas advanced 1.0 percent.

All items less food and energy
The index for all items less food and energy increased 0.1 percent in April. The shelter index increased 0.3 percent, with the rent index rising 0.4 percent and the index for owners' equivalent rent increasing 0.3 percent. The index for lodging away from home increased 0.7 percent in April. The index for household furnishings and operations rose 0.5 percent in April, the largest increase since April 2015, and the personal care index increased 0.7 percent.

The apparel index rose 0.3 percent in April after declining in March, and the tobacco index increased 1.3 percent. The medical care index rose 0.1 percent in April, with the hospital services index rising 0.2 percent, the prescription drugs index increasing 0.1 percent, and the physicians' services index unchanged. The indexes for education and for alcoholic beverages also rose in April.

The index for used cars and trucks fell 1.6 percent in April, the largest decline since March 2009. The recreation index fell 0.4 percent, the largest decline since December 2009. The index for airline fares fell 2.7 percent in April, and the new vehicles index declined 0.5 percent. The index for motor vehicle insurance fell 0.2 percent, the first monthly decline since April 2017. The index for communication also declined 0.2 percent in April.

The index for all items less food and energy rose 2.1 percent over the past 12 months, the same increase as for the period ending March. The shelter index rose 3.4 percent over the last 12 months, and the medical care index rose 2.2 percent. Indexes that declined over the past 12 months include those for new vehicles, airline fares, used cars and trucks, and communication.

Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.5 percent over the last 12 months to an index level of 250.546 (1982-84=100). For the month, the index increased 0.4 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.6 percent over the last 12 months to an index level of 244.607 1982-84=100). For the month, the index increased 0.5 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.3 percent over the last 12 months. For the month, the index increased 0.4 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.


Real Average Hourly Earnings unch% in April
Posted: May 10, 2018 at 08:30 AM (Thursday)

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

Real average weekly earnings decreased 0.1 percent over the month due to no change in both real average hourly earnings and the average workweek.

Real average hourly earnings increased 0.2 percent, seasonally adjusted, from April 2017 to April 2018. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.4-percent increase in real average weekly earnings over this period.

Production and nonsupervisory employees
Real average hourly earnings for production and nonsupervisory employees decreased 0.1 percent from March to April, seasonally adjusted. This result stems from a 0.2-percent increase in average hourly earnings combined with a 0.3-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Real average weekly earnings increased 0.3 percent over the month due to the decrease in real average hourly earnings combined with a 0.3-percent increase in average weekly hours.

From April 2017 to April 2018, real average hourly earnings were unchanged, seasonally adjusted. Combining real average hourly earnings with a 0.3-percent increase in the average workweek resulted in a 0.3-percent increase in real average weekly earnings over this period.


Weekly Initial Unemployment Claims Unchanged at 211,000
Posted: May 10, 2018 at 08:30 AM (Thursday)

In the week ending May 5, the advance figure for seasonally adjusted initial claims was 211,000, unchanged from the previous week's unrevised level of 211,000. The 4-week moving average was 216,000, a decrease of 5,500 from the previous week's unrevised average of 221,500. This is the lowest level for this average since December 20, 1969 when it was 214,500. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending April 28, an increase of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 28 was 1,790,000, an increase of 30,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 1,756,000 to 1,760,000. The 4-week moving average was 1,812,500, a decrease of 22,000 from the previous week's revised average. This is the lowest level for this average since December 29, 1973 when it was 1,784,250. The previous week's average was revised up by 1,250 from 1,833,250 to 1,834,500.


Wholesale Inventories up 0.3% in March
Posted: May 9, 2018 at 10:00 AM (Wednesday)

March 2018 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $497.9 billion, up 0.3 percent (±0.5 percent)* from the revised February level and were up 7.3 percent (±0.9 percent) from the March 2017 level. The January 2018 to February 2018 percent change was revised from the preliminary estimate of up 1.0 percent (±0.5 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 $627.4 billion at the end of March, up 0.3 percent (±0.2 percent) from the revised February level. Total inventories were up 5.5 percent (±0.7 percent) from the revised March 2017 level. The February 2018 to March 2018 percent change was revised from the advance estimate of up 0.5 percent (±0.2 percent) to up 0.3 percent (±0.2 percent).

The March Inventories/Sales Ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.26. The March 2017 ratio was 1.28.


Producer Price Index increased 0.1% in April, ex Fd & Engy up 0.1%
Posted: May 9, 2018 at 08:30 AM (Wednesday)

The Producer Price Index for final demand rose 0.1 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.3 percent in March and 0.2 percent in February. (See table A.) On an unadjusted basis, the final demand index increased 2.6 percent for the 12 months ended in April.

In April, the index for final demand services advanced 0.1 percent, and prices for final demand goods were unchanged.

The index for final demand less foods, energy, and trade services edged up 0.1 percent in April after increasing 0.4 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services advanced 2.5 percent.

Final Demand
Final demand services: Prices for final demand services inched up 0.1 percent in April, the fourth straight rise. The advance in April was led by the index for final demand trade services, which increased 0.2 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services rose 0.6 percent. Conversely, the index for final demand services less trade, transportation, and warehousing services declined 0.1 percent.

Product detail: A major factor in the April advance in prices for final demand services was the index for machinery, equipment, parts, and supplies wholesaling, which climbed 0.9 percent. The indexes for services related to securities brokerage and dealing (partial), residential real estate loans (partial), airline passenger services, and wireless telecommunication services also moved higher. In contrast, prices for traveler accommodation services fell 3.2 percent. The indexes for health, beauty, and optical goods retailing; legal services; and apparel wholesaling also decreased.

Final demand goods: Prices for final demand goods were unchanged in April after increasing 0.3 percent in March. In April, a 0.3-percent rise in the index for final demand goods less foods and energy and a 0.1-percent advance in prices for final demand energy offset a 1.1-percent drop in the index for final demand foods.

Product detail: Among prices for final demand goods in April, the index for tobacco products jumped 2.6 percent. The indexes for carbon steel scrap; search, detection, navigation, and guidance systems; pharmaceutical preparations; diesel fuel; and prepared poultry products also increased. Conversely, prices for fresh and dry vegetables fell 17.8 percent. The indexes for chicken eggs, beef and veal, residential electric power, and basic organic chemicals also moved lower.


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 9, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending May 4, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index remained unchanged from the previous week. The Refinance Index decreased 1 percent from the previous week to its lowest level since October 2008. The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. The unadjusted Purchase Index increased 0.4 percent compared with the previous week and was 3 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 36.3 percent of total applications, its lowest level since September 2008, from 36.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.3 percent the week prior. The VA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.78 percent from 4.80 percent, with points decreasing to 0.50 from 0.53 (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 $453,100) decreased to 4.65 percent from 4.69 percent, with points decreasing to 0.36 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 30-year fixed-rate mortgages backed by the FHA decreased to 4.80 percent from 4.81 percent, with points decreasing to 0.75 from 0.78 (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 4.20 percent from 4.21 percent, with points decreasing to 0.48 from 0.49 (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 4.00 percent from 4.03 percent, with points decreasing to 0.43 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.


Job Openings increased to 6.6 million in March
Posted: May 8, 2018 at 10:00 AM (Tuesday)

The number of job openings increased to 6.6 million on the last business day of March, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.4 million and 5.3 million, respectively. Within separations, the quits rate was little changed at 2.3 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.

Job Openings
On the last business day of March, the job openings level increased to a series high of 6.6 million. The series began in December 2000. The job openings rate was 4.2 percent in March. The number of job openings increased for total private and edged up for government. Job openings increased in a number of industries, with the largest increases in professional and business services (+112,000), construction (+68,000), and transportation, warehousing, and utilities (+37,000). The number of job openings increased in the Northeast and Midwest regions.

Hires
The number of hires was little changed at 5.4 million in March. The hires rate was 3.7 percent. The number of hires was little changed for total private and for government. Hires decreased in finance and insurance (-32,000). The number of hires was little changed in all four regions.

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

The number of total separations was little changed at 5.3 million in March. The total separations rate was 3.6 percent. The number of total separations was little changed for total private and for government. Total separations decreased in finance and insurance (-34,000). The number of total separations was little changed in all four regions.

The number of quits edged up to 3.3 million in March. The quits rate was 2.3 percent. The number of quits edged up for total private and was unchanged for government. Quits increased in other services (+71,000). The number of quits increased in the Midwest region.

There were 1.6 million layoffs and discharges in March, little changed from February. The layoffs and discharges rate was 1.1 percent in March. The number of layoffs and discharges was little changed for total private and for government. Layoffs and discharges decreased in health care and social assistance (-35,000). The number of layoffs and discharges was little changed in all four regions.

The number of other separations was little changed in March at 382,000. The number of other separations was little changed for total private and for government. Other separations increased in retail trade (+20,000) but decreased in educational services (-5,000). The number of other separations was little changed in all four regions.

Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in March, hires totaled 65.7 million and separations totaled 63.4 million, yielding a net employment gain of 2.3 million. These totals include workers who may have been hired and separated more than once during the year.


NFIB Small Business Optimism Index increased 0.1 points to 104.8 in April
Posted: May 8, 2018 at 07:00 AM (Tuesday)

The Small Business Optimism Index sustained record-high levels increasing to 104.8 in April, driven by reports of improved profits, the highest in the NFIB Small Business Economic Trends Survey’s 45-year history. Additionally, the number of small businesses reporting poor sales fell to a near record low. April is the 17th consecutive month of historically high readings, according to the survey that was released today.

“Never in the history of this survey have we seen profit trends so high”, said NFIB President and CEO Juanita Duggan. “The optimism small businesses owners have about the economy is turning into new job creation, increased wages and benefits, and investment.”

The frequency of positive profit trends went up three points in April due to gains in operating productivity and stronger sales as well as the newly implemented tax law.

Reports of capital outlays rose three points this month to 61 percent, indicating that small businesses are confident and strong enough to make investments. Of those businesses making expenditures, 43 percent are spending on new equipment (up four points), while 27 percent are acquiring vehicles (up three points).

In addition, more small businesses are planning capital outlays in the next few months, increasing three points to 29 percent. As the difficulty of finding qualified workers continues to be a major obstacle for small businesses, with 22 percent citing it as their single most important business problem (up one point), more of this planned spending is expected to go toward training and labor-saving technology.

“There is no question that small business is booming,” said NFIB Chief Economist Bill Dunkelberg. “Consumer spending, the new tax law, and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors.”

Small businesses are also confident in future sales growth, with a net 21 percent of owners expecting higher sales volumes (up one point). These numbers are particularly high in the construction and manufacturing industries.

As reported in Thursday’s NFIB jobs report, the share of small business owners who are hiring or trying to hire rose four points to 57 percent, and new job creation remains at historically strong levels, with a net 16 percent of owners planning to create new jobs. Significantly more new businesses are opening than closing, providing a major boost to new employment.

Worker compensation remains at the highest level since 2000, with net 33 percent reporting increasing compensation. The average family saw wages and salaries grow last year. Gains are likely to increase for many families this year due to tax cuts.

LABOR MARKETS
Reports of employment gains remain strong among small businesses, inconsistent with the BLS report for March employment gains. Owners reported adding a net 0.28 workers per firm on average, the third highest reading since 2006 (down from 0.36 workers reported last month, the highest since 2006). Sixteen percent (up 2 points) reported increasing employment an average of 2.7 workers per firm and 9 percent (unchanged) reported reducing employment an average of 2.5 workers per firm (seasonally adjusted).

Fifty-seven percent reported hiring or trying to hire (up 4 points), but 50 percent (88 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 1 point), exceeding the percentage citing taxes or regulations. Shortages of qualified workers are clearly holding back economic growth.

Thirty-five percent of all owners reported job openings they could not fill in the current period, unchanged and tied with March 2018, July and October 2017 for the highest reading since November 2000. Twelve percent reported using temporary workers, up 2 points. Reports of job openings were most frequent in construction (48 percent) and manufacturing (48 percent). The inability of construction firms to organize teams is slowing the construction of new homes at all levels.

A seasonally-adjusted net 16 percent plan to create new jobs, down 4 points from March but historically strong. Not seasonally adjusted, 27 percent plan to increase total employment at their firm (down 3 points), and 3 percent plan reductions (up 1 point). In some industries, nearly half the firms have unfilled openings, especially severe in construction and manufacturing.

SALES AND INVENTORIES
A net 8 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months compared to the prior three months, unchanged and the fifth consecutive strong month. After a blow-out holiday season, consumer spending slowed in the first quarter according to the Bureau of Economic Analysis, contributing to a weaker first quarter GDP number. But on Main Street, there was no slowdown in reports of improving sales trends. Customers (consumers and other businesses) turned out in numbers that rivaled performances turned in all year, and March data indicated that the consumer is back, which will boost the second estimate of first quarter growth.

The net percent of owners expecting higher real sales volumes rose 1 point to a net 21 percent of owners. Fifty-nine percent of construction firms and 56 percent of manufacturing firms expect higher real sales volumes in the coming months. The average family saw wages and salaries grow last year. Gains are likely to increase for many families this year due to tax cuts. Consumer sentiment has remained solid, anticipating continued good spending in the coming months.

The net percent of owners reporting inventory increases rose 1 percentage point to a net 4 percent (seasonally adjusted), positive and extending a four month run of substantial inventory building (a boost to GDP growth).

The net percent of owners viewing current inventory stocks as “too low” (a positive number means more think stocks are too low than too high, a positive for inventory building) improved 2 points to a negative 4 percent. The build in inventory is clearly not excessive in the minds of owners expecting continued strong sales.

The net percent of owners planning to build inventories was unchanged at 1 percent, the eighteenth positive reading in the past 19 months. This has been very supportive of GDP growth over that period.

CAPITAL SPENDING
Sixty-one percent reported capital outlays, up 3 points. Of those making expenditures, 43 percent reported spending on new equipment (up 4 points), 27 percent acquired vehicles (up 3 points), and 16 percent improved or expanded facilities (unchanged). Five percent acquired new buildings or land for expansion (down 3 points) and 15 percent spent money for new fixtures and furniture (up 3 points). Non-residential fixed investment has grown at a better than 6 percent rate for the past 5 quarters (compared to under 1 percent in 2015 and 2016) and small business has made a major contribution.

Twenty-nine percent plan capital outlays in the next few months, up 3 points. Plans were most frequent in manufacturing (38 percent) where additional capacity and productivity-enhancing investments are needed and construction (32 percent) where labor-saving investments are needed to increase the number of housing starts and completions. Hiring difficulties will lead firms to engage in more training and adopt more labor-saving technology to support growth and serve growing numbers of customers.

COMPENSATION AND EARNINGS
Reports of higher worker compensation were unchanged at a net 33 percent, the highest reading since 2000. Although government reports of wage and salary gains remain historically low, they are the best in a long time and don’t include benefits. Historically wage gains were larger, but that was in environments with much higher inflation. Plans to raise compensation rose 2 points to a net 21 percent, historically high, but below its recent peak of 24 percent in January.

Owners complain at record rates of labor quality issues, with 88 percent of those hiring or trying to hire reporting few or no qualified applicants for their open positions. Twenty-two percent (up 1 point) selected “finding qualified labor” as their top business problem, more than cited taxes, weak sales, or the cost of regulations as their top challenge.

The frequency of reports of positive profit trends improved 3 percentage points to a net negative 1 percent reporting quarter on quarter profit improvements, the best reading in the survey’s 45 year history. Although the new tax law will impact profits this year, much of the current improvement is due to gains in operating profits and stronger sales. Sales gains from stronger growth fall to the bottom line before costs such as rising labor costs catch up. Overall, the new tax law and the strong economy are very supportive of profit improvements.

INFLATION
The net percent of owners raising average selling prices fell 2 points to a net 14 percent seasonally adjusted, breaking a steady march to higher levels that started in November of 2016. The Federal Reserve’s target of 2 percent inflation (based on the headline Personal Consumption Deflator) has not been reached, but it is close. But, if Main Street slows the frequency of its price hikes, reaching the goal will become more difficult. Unadjusted, 9 percent of owners reported reducing their average selling prices in the past three months (up 1 point), and 26 percent reported price increases (unchanged).

Seasonally adjusted, a net 22 percent plan price hikes (down 3 points). With reports of increased compensation running high, there is more pressure to pass these costs on in higher selling prices, although tax cuts and growing operating profits alleviate some of this pressure. Still, as the gap between the percent raising compensation and raising prices closes, more of these costs will be passed on to customers. The NFIB data predict a PCE inflation rate of 2.1 percent in the months ahead.

CREDIT MARKETS
Four percent of owners reported that all their borrowing needs were not satisfied, unchanged and historically low. Thirty-two percent reported all credit needs met (up 1 point), and 50 percent said they were not interested in a loan, up 3 points but one of the lowest readings since 2010. Only 2 percent reported that financing was their top business problem compared to 18 percent citing taxes, 13 percent citing regulations and red tape, and 22 percent the availability of qualified labor. Weak sales garnered 8 percent of the vote, down 3 points and only 3 points above the 45 year record low reading. Five percent reported loans “harder to get,” historically low. In short, credit availability and cost are not issues and haven’t been for many years, even with the Federal Reserve raising interest rates.

Thirty-one percent of all owners reported borrowing on a regular basis (down 1 point). The average rate paid on short maturity loans was up 30 basis points at 6.4 percent, rates are rising gradually with Fed policy moves. In anticipation of the Federal Reserve rate hikes, borrowers have increased their demand for fixed rate loans with longer maturities.

As the Federal Reserve moves away from its focus on keeping rates low, more firms are reporting changes in the interest rates they pay. For those experiencing a rate increase, not a happy event, but not an impediment to borrowers who now see much higher rates of return on investments in a growing economy with lower tax rates. Bigger picture, it is important to be returning the job of capital allocation to markets and interest rates, and not Federal Reserve policy. We have twice experienced in recent times the cost of interest rate suppression, “too low for too long.”

THE LARGER PERSPECTIVE
GDP growth for the first quarter came in at 2.3 percent, considerably shy of the 2.9 percent “guess” by the New York Federal Reserve but well above the Atlanta Federal Reserve’s 2 percent “guess.” Most observers feel the economy was much stronger in the first quarter of 2018, although consumers did slow spending considerably in January and February after their holiday binge. March has come in better, and that will show up in the second estimate. After the cold weather pause, it appears consumer spending is back on track. Business invesment grew just above a 6 percent rate, 1.5 points faster than the average in this recovery. Small business capital spending has also picked up the pace. GDP growth for the first quarter will likely be revised up, as consumers were back spending in March, and exports grew substantially while imports (a negative for GDP arithmetic) slowed.

Federal Reserve policy now revolves around two issues. First, will inflation finally hit the Federal Reserve’s 2 percent target? Second, will they raise interest rates even faster if economic growth runs at 3 percent or better (as even the CBO forecasts) and inflation starts to pick up? Removing the “punch bowl” just when the party is really hopping is a habit, and responsibility, of the Federal Reserve. Currently the Federal Reserve plans two more rate hikes this year, but if inflation finally starts to run, more are possible – unless it decides to let the economy “run hot” with more inflation. Inflation pressures on Main Street remain “moderate,” even falling back a bit in April.

Overall, the outlook remains exceptionally positive. Forecasters have the growth pace near 3 percent, even with the weak start in the first quarter (which will likely be revised up). The main impediment to growth will be the short supply of labor, which plagues all industries but especially manufacturing and housing. House prices are rising sharply but are not directly included in the inflation measures. Housing starts are still running below the estimated 1.5 million needed based on demographics. This pressure will show up in rents and ultimately in the PCE inflation measure. That said, 2018 will be “lookin’ good.”


Consumer Credit Increased at an annual rate of 3.50%
Posted: May 7, 2018 at 03:00 PM (Monday)

Consumer credit increased at a seasonally adjusted annual rate of 4-1/4 percent during the first quarter. Revolving credit decreased at an annual rate of 1 percent, while nonrevolving credit increased at an annual rate of 6 percent. In March, consumer credit increased at an annual rate of 3-1/2 percent.


Employment Trends Index Increased in April to 108.08
Posted: May 7, 2018 at 10:00 AM (Monday)

The Conference Board Employment Trends Index™ (ETI) increased in April, after increasing in March. The index now stands at 108.08, up from 107.37 (a downward revision) in March. The change represents a 4.9 percent gain in the ETI compared to a year ago.

“In recent months, the Employment Trends Index continued to improve, signaling that employment growth will remain solid through the summer,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “With the economy growing well above trend, and the working-age population barely growing at all, we expect the labor market to significantly tighten in the coming year. At 3.9 percent, the unemployment rate is historically low, and we expect it to be around 3.5 percent a year from now.”

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


April Employment rose by 164,000
Unemployment Rate edged down to 3.9%

Posted: May 4, 2018 at 08:30 AM (Friday)

Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, health care, and mining.

Household Survey Data
In April, the unemployment rate edged down to 3.9 percent, following 6 months at 4.1 percent. The number of unemployed persons, at 6.3 million, also edged down over the month.

Among the major worker groups, the unemployment rate for adult women decreased to 3.5 percent in April. The jobless rates for adult men (3.7 percent), teenagers (12.9 percent), Whites (3.6 percent), Blacks (6.6 percent), Asians (2.8 percent), and Hispanics (4.8 percent) showed little or no change over the month.

Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 188,000 in April to 3.0 million.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.3 million in April and accounted for 20.0 percent of the unemployed. Over the year, the number of long-term unemployed was down by 340,000.

Both the labor force participation rate, at 62.8 percent, and the employment-population ratio, at 60.3 percent, changed little in April.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 5.0 million in April. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or because they were unable to find full-time jobs.

In April, 1.4 million persons were marginally attached to the labor force, down by 172,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 408,000 discouraged workers in April, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.0 million persons marginally attached to the labor force in April had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment increased by 164,000 in April, compared with an average monthly gain of 191,000 over the prior 12 months. In April, job gains occurred in professional and business services, manufacturing, health care, and mining.

In April, employment in professional and business services increased by 54,000. Over the past 12 months, the industry has added 518,000 jobs.

Employment in manufacturing increased by 24,000 in April. Most of the gain was in the durable goods component, with machinery adding 8,000 jobs and employment in fabricated metal products continuing to trend up (+4,000). Manufacturing employment has risen by 245,000 over the year, with about three-fourths of the growth in durable goods industries.

Health care added 24,000 jobs in April and 305,000 jobs over the year. In April, employment rose in ambulatory health care services (+17,000) and hospitals (+8,000).

In April, employment in mining increased by 8,000, with most of the gain occurring in support activities for mining (+7,000). Since a recent low in October 2016, employment in mining has risen by 86,000. Employment changed little over the month in other major industries, including construction, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in April. In manufacturing, the workweek increased by 0.2 hour to 41.1 hours, while overtime edged up by 0.1 hour to 3.7 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.1 hour to 33.8 hours.

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $22.51 in April.

The change in total nonfarm payroll employment for February was revised down from +326,000 to +324,000, and the change for March was revised up from +103,000 to +135,000. With these revisions, employment gains in February and March combined were 30,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 208,000 over the last 3 months.


New orders for manufactured goods increased 1.6% in March
Posted: May 3, 2018 at 10:00 AM (Thursday)

New orders for manufactured goods in March, up seven of the last eight months, increased $7.8 billion or 1.6 percent to $507.7 billion, the U.S. Census Bureau reported today. This followed a 1.6 percent February increase. Shipments, up fifteen of the last sixteen months, increased $2.1 billion or 0.4 percent to $502.8 billion. This followed a 0.2 percent February increase. Unfilled orders, up six of the last seven months, increased $9.2 billion or 0.8 percent to $1,153.8 billion. This followed a 0.3 percent February increase. The unfilled orders-to-shipments ratio was 6.52, up from 6.51 in February. Inventories, up sixteen of the last seventeen months, increased $1.7 billion or 0.3 percent to $677.3 billion. This followed a 0.4 percent February increase. The inventories-to-shipments ratio was 1.35, unchanged from February.

New Orders
New orders for manufactured durable goods in March, up four of the last five months, increased $6.5 billion or 2.6 percent to $255.2 billion, unchanged from the previously published increase. This followed a 3.6 percent February increase. Transportation equipment, also up four of the last five months, led the increase, $6.4 billion or 7.6 percent to $91.4 billion. New orders for manufactured nondurable goods increased $1.2 billion or 0.5 percent to $252.4 billion.

Shipments
Shipments of manufactured durable goods in March, up ten of the last eleven months, increased $0.9 billion or 0.4 percent to $250.4 billion, up from the previously published 0.3 percent increase. This followed a 0.8 percent February increase. Transportation equipment, up four of the last five months, drove the increase, $1.5 billion or 1.8 percent to $83.5 billion. Shipments of manufactured nondurable goods, up nine of the last ten months, increased $1.2 billion or 0.5 percent to $252.4 billion. This followed a 0.3 percent February decrease. Petroleum and coal products, up eight of the last nine months, led the increase, $0.8 billion or 1.5 percent to $51.7 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in March, up six of the last seven months, increased $9.2 billion or 0.8 percent to $1,153.8 billion, unchanged from the previously published increase. This followed a 0.3 percent February increase. Transportation equipment, up three of the last four months, led the increase, $7.9 billion or 1.0 percent to $782.8 billion.

Inventories
Inventories of manufactured durable goods in March, up twenty of the last twenty-one months, increased $0.5 billion or 0.1 percent to $411.5 billion, unchanged from the previously published increase. This followed a 0.5 percent February increase. Machinery, up four of the last five months, led the increase, $0.4 billion or 0.5 percent to $71.0 billion. Inventories of manufactured nondurable goods, up ten consecutive months, increased $1.2 billion or 0.5 percent to $265.8 billion. This followed a 0.2 percent February increase. Petroleum and coal products, up nine consecutive months, led the increase, $0.8 billion or 1.9 percent to $43.7 billion. By stage of fabrication, March materials and supplies increased 0.5 percent in durable goods and increased 0.2 percent nondurable goods. Work in process decreased 0.4 percent in durable goods and increased 2.0 percent in nondurable goods. Finished goods increased 0.4 percent in durable goods and were virtually unchanged in nondurable goods.


ISM Non-Manufacturing Index slowed to 56.8% in April
Posted: May 3, 2018 at 10:00 AM (Thursday)

Economic activity in the non-manufacturing sector grew in April for the 99th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 56.8 percent, which is 2 percentage points lower than the March reading of 58.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 59.1 percent, 1.5 percentage points lower than the March reading of 60.6 percent, reflecting growth for the 105th consecutive month, at a slower rate in April. The New Orders Index registered 60 percent, 0.5 percentage point higher than the reading of 59.5 percent in March. The Employment Index decreased 3 percentage points in April to 53.6 percent from the March reading of 56.6 percent. The Prices Index increased by 0.3 percentage point from the March reading of 61.5 percent to 61.8 percent, indicating that prices increased in April for the 26th consecutive month. According to the NMI®, all 18 non-manufacturing industries reported growth. There was a slowing in the rate of growth that was mostly attributed to the decline in the Employment and Supplier Deliveries indexes. The respondents have expressed concern regarding the uncertainty about tariffs and the effect on the cost of goods. Overall, the respondents remain positive about business conditions and the economy.


INDUSTRY PERFORMANCE
All 18 non-manufacturing industries reported growth in April, listed in order: Mining; Utilities; Retail Trade; Educational Services; Wholesale Trade; Construction; Transportation & Warehousing; Public Administration; Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Finance & Insurance; Other Services; Arts, Entertainment & Recreation; Management of Companies & Support Services; Professional, Scientific & Technical Services; Accommodation & Food Services; Information; and Health Care & Social Assistance.


Weekly Initial Unemployment Claims Increase 2,000 to 211,000
Posted: May 3, 2018 at 08:30 AM (Thursday)

In the week ending April 28, the advance figure for seasonally adjusted initial claims was 211,000, an increase of 2,000 from the previous week's unrevised level of 209,000. The 4-week moving average was 221,500, a decrease of 7,750 from the previous week's unrevised average of 229,250. This is the lowest level for this average since March 3, 1973 when it was 221,250. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending April 21, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 21 was 1,756,000, a decrease of 77,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 8, 1973 when it was 1,717,000. The previous week's level was revised down by 4,000 from 1,837,000 to 1,833,000. The 4-week moving average was 1,833,250, a decrease of 15,500 from the previous week's revised average. This is the lowest level for this average since December 29, 1973 when it was 1,784,250. The previous week's average was revised down by 1,000 from 1,849,750 to 1,848,750.


1Q2018 Productivity Growth Increased 0.7%
Posted: May 3, 2018 at 08:30 AM (Thursday)

Nonfarm business sector labor productivity increased 0.7 percent during the first quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 2.8 percent and hours worked increased 2.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2017 to the first quarter of 2018, productivity increased 1.3 percent, reflecting a 3.6-percent increase in output and a 2.2-percent increase in hours worked.

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

Unit labor costs in the nonfarm business sector increased 2.7 percent in the first quarter of 2018, reflecting a 3.4-percent increase in hourly compensation and a 0.7-percent increase in productivity. BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them. When the change in consumer prices was taken into account, real hourly compensation declined 0.1 percent in the first quarter of 2018. Unit labor costs increased 1.1 percent over the last four quarters.

Manufacturing sector labor productivity rose 0.5 percent in the first quarter of 2018, as output increased 3.3 percent and hours worked increased 2.8 percent. Productivity increased 1.3 percent in the durable manufacturing sector, as output grew at a 5.5-percent rate and hours worked increased 4.2 percent. In the non-durable goods manufacturing sector, a 0.6-percent increase in productivity reflected a 1.1-percent increase in output and a 0.5-percent increase in hours worked. Over the last four quarters, total manufacturing sector productivity increased 0.8 percent, as output increased 2.5 percent and hours worked increased 1.6 percent. Unit labor costs in manufacturing increased 2.7 percent in the first quarter of 2018 and increased 1.3 percent from the same quarter a year ago.

Preliminary fourth quarter and annual 2017 measures were announced today for the nonfinancial corporate sector. Productivity increased 0.8 percent in the fourth quarter of 2017 and increased 1.7 percent over the last four quarters. Annual average productivity increased 1.0 percent from 2016 to 2017, following a decline of 0.1 percent in the previous year. The historical average annual rate of productivity growth in the nonfinancial corporate sector between 1947 and 2017 is 2.2 percent.

Revised measures
Hours and related measures, including productivity, were revised back to 2013 for all sectors to incorporate updated ratios of hours worked to hours paid by detailed industry; resulting revisions are small. Measures of real hourly compensation for all sectors were revised from 2010 forward to incorporate new and revised data from the BLS Office of Prices and Living Conditions. Output and related measures--including labor productivity and unit labor costs--for the manufacturing sector incorporate historically revised indexes of industrial production published by the Board of Governors of the Federal Reserve System on March 23, 2018.

In the fourth quarter of 2017, nonfarm business sector productivity increased 0.3 percent, rather than unchanged as reported March 7. Unit labor costs were revised down to an increase of 2.1 percent. Total manufacturing sector productivity increased 4.5 percent in the fourth quarter of 2017, a smaller increase than previously reported, reflecting both a downward revision to output and an upward revision to hours worked. Unit labor costs in the manufacturing sector decreased 2.2 percent during the fourth quarter, a smaller decline than previously reported. Fourth-quarter 2017 labor productivity was revised down 3.0 percentage points in the durable goods sector to an increase of 5.1 percent, and was revised up 0.1 percentage point in the nondurable goods sector to an increase of 3.5 percent.

Annual average productivity growth in the nonfarm business sector was revised up for 2017, from 1.2 percent to 1.3 percent. (See table 2.) The annual average rate of manufacturing productivity growth for 2017 was revised down slightly from 0.6 percent to 0.4 percent, and the rate for 2016 was revised down from positive 0.4 percent to negative 0.4 percent. The average annual rate of productivity growth in the total manufacturing sector from 2007 to 2017--corresponding to the current business cycle--was revised down from 0.8 percent to 0.7 percent.


Goods and Services Deficit Decreased in March 2018
Posted: May 3, 2018 at 08:30 AM (Thursday)

The nation's international trade deficit in goods and services decreased to $49.0 billion in March from $57.7 billion in February (revised), as exports increased and imports decreased. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $49.0 billion in March, down $8.8 billion from $57.7 billion in February, revised.

Exports, Imports, and Balance
March exports were $208.5 billion, $4.2 billion more than February exports. March imports were $257.5 billion, $4.6 billion less than February imports. The March decrease in the goods and services deficit reflected a decrease in the goods deficit of $7.5 billion to $69.5 billion and an increase in the services surplus of $1.3 billion to $20.5 billion. Year-to-date, the goods and services deficit increased $25.5 billion, or 18.5 percent, from the same period in 2017. Exports increased $39.2 billion or 6.8 percent. Imports increased $64.7 billion or 9.1 percent.

Three-Month Moving Averages
The average goods and services deficit decreased $1.7 billion to $54.5 billion for the three months ending in March.
- Average exports increased $1.6 billion to $204.6 billion in March.
- Average imports decreased less than $0.1 billion to $259.1 billion in March.
Year-over-year, the average goods and services deficit increased $8.5 billion from the three months ending in March 2017.


Challenger Layoffs Decreased to 36,081 in April
Posted: May 3, 2018 at 07:30 AM (Thursday)

Job cuts announced by U.S.-based employers fell 40.2 percent in April to 36,081, the second lowest monthly total for the year, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

April’s total belies a trend for increased cuts after announcements in March hit a 23-month high of 60,357. March’s total was the highest since April 2016, when 64,141 job cuts were announced.

“Most of the cuts in March came from a single announcement, but an increase in large-scale job cut announcements could be on the horizon,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

“With rising wages, near full employment, and solid job creation, we may be in for a market correction over the upcoming months,” added Challenger.

According to the Bureau of Labor Statistics, compensation costs rose 2.7 percent over the last year. Employers added 326,000 jobs in February and 103,000 in March.

Job cut announcements in April were down 1.4 percent from the 36,602 announced job cuts during the same month last year. So far this year, employers have announced 176,460 job cuts, 8.38 percent more than the 162,803 announced through the first four months of 2017.

Retail leads all sectors in job cuts in 2018, with 64,370, 7,844 of which occurred in April. Retailers have announced 28.4 percent more cuts than through the same period last year, when 50,133 cuts were announced.

In 2018, Challenger has tracked 2,460 retail store closures. That is in addition to the 9,241 store closures that were announced in 2017.

Health Care/Products companies announced the second highest number of job cuts in April, with 4,949 for a total of 17,450 this year. Companies in the Services sector announced 14,665 cuts, with 4,101 in April.

Electronics companies announced 2,793 cuts in April for a four-month total of 4,070. That is 170 percent more than the 1,504 cuts that were announced in that sector through the same period last year.

Companies in the Technology sector have announced 13,328 cuts so far in 2018, down 23.8 percent from the 17,507 cuts announced through the same period last year. Employers in the tech sector announced a total of 38,508 cuts in 2017, the lowest annual total since 2011, when 37,038 tech sector cuts were announced.


FOMC target funds rate maintained at 1.50% - 1.75%
Posted: May 2, 2018 at 02:00 PM (Wednesday)

Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

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

Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams.


Help Wanted OnLine Labor Demand decreased 69,300 to 4,750,500 in April
Posted: May 2, 2018 at 10:00 AM (Wednesday)

Online advertised vacancies decreased 69,300 to 4,750,500 in April, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The March Supply/Demand rate stands at 1.37 unemployed for each advertised vacancy, with a total of 1.8 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 6.6 million in March.

The Professional occupational category saw gains in Computer and math (19.1) and Arts, design, entertainment (-8.0). The Services/Production occupational category saw changes in Sales (-20.8), Construction (-17.5), and Building and grounds (-12.3).


New York Purchasing Managers Business Activity Improved to 64.3 in April
Posted: May 2, 2018 at 08:30 AM (Wednesday)

In April, New York City purchasing managers reported the highest level of Current Business Conditions since January, according to the survey taken by the Institute for Supply Management-New York.

New York Metro
Current Business Conditions were at 64.3 in April, up from 54.0 in March, reaching the highest level since January when current business conditions reached an eleven plus year high of 72.5. The Six-Month Outlook fell to 58.4 in April from 65.6 in March. With the exception of the 0.9 increase reported in March, the six-month outlook has declined every month since December 2017. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Company Specific
Employment, a seasonally adjusted index, was 58.3 in April, increasing from 53.5 in March. Employment has increased two months in a row and has been above the breakeven point of 50.0 in half of the last 12 months. Quantity of Purchases decreased to 50.0 in April, down from 54.2 in March. In April, top line and forward revenue guidance moved up together. Current Revenues increased to 55.6, up from 50.0 in March. Expected Revenues rose to 76.3, up from 68.2 in March, reaching the highest level reported since March 2017.

Prices Paid decreased slightly to 65.8, down from 66.7 in March. Despite the decrease, this index has been above 60 for 7 straight months - the third longest time above 60 on record. The other two instances are the 8 months from February to September 2008, and the 10 months from September 1994 to June 1995.


ADP National Employment Report increased by 204,000 jobs in April
Posted: May 2, 2018 at 08:15 AM (Wednesday)

Private sector employment increased by 204,000 jobs from March to April according to the April ADP National Employment Report®.

“The labor market continues to maintain a steady pace of strong job growth with little sign of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “However, as the labor pool tightens it will become increasingly difficult for employers to find skilled talent. Job gains in the high-skilled professional and business services industry accounted for more than half of all jobs added this month. The construction industry, which also relies on skilled labor, continued its six month trend of steady job gains as well.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Despite rising trade tensions, more volatile financial markets, and poor weather, businesses are adding a robust more than 200,000 jobs per month. At this pace, unemployment will soon be in the threes, which is rarified and risky territory, as the economy threatens to overheat.”


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: May 2, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 27, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 5 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 36.5 percent of total applications, its lowest level since September 2008, from 37.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.

The FHA share of total applications increased to 10.3 percent from 10.2 percent the week prior. The VA share of total applications increased to 10.2 percent from 10.1 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since September 2013, 4.80 percent, from 4.73 percent, with points increasing to 0.53 from 0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since September 2013, 4.69 percent, from 4.64 percent, with points increasing to 0.42 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since July 2011, 4.81 percent, from 4.71 percent, with points decreasing to 0.78 from 0.79 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since February 2011, 4.21 percent, from 4.13 percent, with points decreasing to 0.49 from 0.52 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to a survey high of 4.03 percent, from 3.98 percent, with points remaining unchanged at 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


April Manufacturing ISM slowed to 57.3
Posted: May 1, 2018 at 10:00 AM (Tuesday)

Economic activity in the manufacturing sector expanded in April, and the overall economy grew for the 108th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The April PMI® registered 57.3 percent, a decrease of 2 percentage points from the March reading of 59.3 percent. The New Orders Index registered 61.2 percent, a decrease of 0.7 percentage point from the March reading of 61.9 percent. The Production Index registered 57.2 percent, a 3.8 percentage point decrease compared to the March reading of 61 percent. The Employment Index registered 54.2 percent, a decrease of 3.1 percentage points from the March reading of 57.3 percent. The Supplier Deliveries Index registered 61.1 percent, a 0.5 percentage point increase from the March reading of 60.6 percent. The Inventories Index registered 52.9 percent, a decrease of 2.6 percentage points from the March reading of 55.5 percent. The Prices Index registered 79.3 percent in April, a 1.2 percentage point increase from the March reading of 78.1 percent, indicating higher raw materials prices for the 26th consecutive month. Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 or above for the 12th straight month, and the Customers’ Inventories Index remaining at low levels. The Backlog of Orders Index continued expanding, with its highest reading since May 2004, when it registered 63 percent. Consumption, described as production and employment, continues to expand, but has been restrained by labor and skill shortages. Inputs, expressed as supplier deliveries, inventories and imports, declined overall, due primarily to inventory reductions likely led by supplier performance restrictions. Lead time extensions, steel and aluminum disruptions, supplier labor issues, and transportation difficulties continue. Export orders remained strong. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In April, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation’s employment resources and supply chains continue to struggle.

Of the 18 manufacturing industries, 17 reported growth in April, in the following order: Wood Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Furniture & Related Products; Paper Products; Machinery; Primary Metals; Nonmetallic Mineral Products; Chemical Products; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Printing & Related Support Activities; Miscellaneous Manufacturing; and Apparel, Leather & Allied Products. No industry reported a decrease in PMI® in April compared to March.


Construction Spending down 1.7% in March
Posted: May 1, 2018 at 10:00 AM (Tuesday)

Total Construction
Construction spending during March 2018 was estimated at a seasonally adjusted annual rate of $1,284.7 billion, 1.7 percent (±0.8 percent) below the revised February estimate of $1,306.4 billion. The March figure is 3.6 percent (±1.3 percent) above the March 2017 estimate of $1,239.6 billion. During the first three months of this year, construction spending amounted to $279.0 billion, 5.5 percent (±1.2 percent) above the $264.5 billion for the same period in 2017.

Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $987.5 billion, 2.1 percent (±0.8 percent) below the revised February estimate of $1,009.1 billion. Residential construction was at a seasonally adjusted annual rate of $536.8 billion in March, 3.5 percent (±1.3 percent) below the revised February estimate of $556.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $450.7 billion in March, 0.4 percent (±0.8 percent)* below the revised February estimate of $452.5 billion.

Public Construction
In March, the estimated seasonally adjusted annual rate of public construction spending was $297.2 billion, nearly the same as (±1.6 percent)* the revised February estimate of $297.3 billion. Educational construction was at a seasonally adjusted annual rate of $73.1 billion, 0.1 percent (±2.5 percent)* below the revised February estimate of $73.2 billion. Highway construction was at a seasonally adjusted annual rate of $91.0 billion, 1.2 percent (±5.4 percent)* above the revised February estimate of $89.9 billion.


Paychex-IHS Small Business Jobs Index declined to 99.53 in April
Posted: May 1, 2018 at 08:30 AM (Tuesday)

According to the latest Paychex | IHS Markit Small Business Employment Watch , wage growth accelerated in April, while the pace of monthly small business job growth continued to tighten. The Small Business Jobs Index fell 0.12 percent for the month and is down 0.96 over the past year to 99.53. Hourly earnings grew $0.70 to $26.56, up 2.69 percent from last year. One-month annualized hourly earnings growth in April was 3.25 percent, reaching a two-year high.

“The 2018 moderation in small business job growth continued apace in April, reflecting tightening labor markets across the country,” said James Diffley, chief regional economist at IHS Markit.

“The low unemployment rate is contributing to steady increases in wage growth,” said Martin Mucci, Paychex president and CEO. . “With tightening labor conditions and wages continuing to show positive momentum, business owners and HR managers will need to focus on recruitment and benefit strategies to attract and retain qualified talent.”

Wages Show Positive Momentum as Job Growth Continues to Moderate Amid Tightening Labor Market

At $26.56, hourly earnings growth increased 2.69 percent YOY ($0.70); one-month annualized hourly earnings growth increased 3.25 percent, the best rate in more than two years
The Small Business Jobs Index decreased 0.12 percent to 99.53 in April
South leads regions in employment growth; West ranks highest for wage growth
Tennessee remains the top in state job growth; Arizona remains first in annual hourly earnings growth
Denver continues to lead metros in job growth; Phoenix tops metros in wage growth
Manufacturing has seen the pace of small business job growth improve nearly one percent from last year; Leisure and Hospitality continues to lead industry sectors in hourly earnings growth


Texas Fed Manufacturing Activity Rebounds Strongly in April
Posted: April 30, 2018 at 10:30 AM (Monday)

Texas factory activity rose markedly in April after posting slower growth in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, increased 11 points to 25.3.

Other indexes of manufacturing activity also rose sharply in April. The new orders and growth rate of orders indexes jumped to their highest readings this year, 27.9 and 18.9, respectively. The capacity utilization index climbed eight points to 18.7, and the shipments index rose nine points to 19.3.

Perceptions of broader business conditions remained highly positive on net in April. The general business activity index was largely unchanged at 21.8, and the company outlook index edged up four points to 23.6. Both indexes remained far above their average levels.

Labor market measures suggested stronger growth in employment and work hours in April. The employment index came in at 17.8, up six points from March. Twenty-four percent of firms noted net hiring, compared with 6 percent noting net layoffs. The hours worked index moved up four points to 14.3.

Price and wage pressures remained elevated in April. The raw materials prices index ticked up to 46.3, its highest reading in seven years, while the finished goods prices index edged down to 17.0. The wages and benefits index rose five points to 29.3, with 30 percent of firms reporting an increase in pay from March.

Expectations regarding future business conditions remained largely optimistic in April. The index of future general business activity held steady at 31.9, and the index of future company outlook rose to 37.1. Both readings are significantly above average. Other indexes for future manufacturing activity pushed further into positive territory.


Pending Home Sales Index inched up 0.4% in April
Posted: April 30, 2018 at 10:00 AM (Monday)

Pending home sales inched higher for the second consecutive month in March, but unrelenting inventory constraints once again kept overall activity below year ago levels, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched up 0.4 percent to 107.6 in March from a downwardly revised 107.2 in February. Even with last month's increase in activity, the index declined on an annualized basis (3.0 percent) for the third straight month.

Lawrence Yun, NAR chief economist, says contract activity is moving sideways and not breaking higher despite the strong job-creating economy. "Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory," he said. "Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy."

Added Yun, "As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast."

Looking ahead to the upcoming peak months for home sales, Yun believes that affordability will be a significant topic of discussion and driving factor of if overall activity can break out above year ago levels. Price appreciation in most markets continues to outpace incomes, and the recent uptick in mortgage rates to over a four-year high only adds to the budget constraints aspiring buyers are feeling this spring.

"Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive," said Yun. "That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers — especially first-time buyers — will be left on the sidelines."

Yun forecasts for existing-home sales in 2018 to be around 5.61 million — up from 5.51 million in 2017. The national median existing-home price is expected to increase around 4.4 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent.

The PHSI in the Northeast fell 5.6 percent to 90.6 in March, and is now 8.1 percent below a year ago. In the Midwest the index rose 2.4 percent to 101.3 in March, but is 6.0 percent lower than March 2017. Pending home sales in the South climbed 2.5 percent to an index of 128.6 in March, and are 0.3 percent higher than last March. The index in the West declined 1.1 percent in March to 94.7, and is 2.2 percent below a year ago.


Chicago Purchasing Managers Index rose 0.2 points to 57.6 in April
Posted: April 30, 2018 at 09:45 AM (Monday)

The MNI Chicago Business Barometer rose 0.2 points to 57.6 in April, up from 57.4 in March, snapping a three-month downward trend.

Business activity continued to rise at a solid pace in April, with growth in firms’ operations up for the first time this year, albeit marginally. Three of the five Barometer components fell on the month, with only Production and Supplier Deliveries finding room to grow.

While output levels rose in April, driving the upward move in the Barometer, order book growth continued to weaken. The Production indicator ended a run of three consecutive falls, rising to the highest level since February. The New Orders indicator, on the other hand, extended the downward momentum shown since the turn of the year, hitting a 15-month low in April. The two indicators account for exactly 60 percent of the headline Barometer and sit 2.2% and 10.4% below their respective year-ago levels.

Firms’ levels of unfulfilled orders continued to recede in April, falling for the fourth straight month and slipping below the neutral-mark for the first time in a year. Backlogs rose sharply at the tail end of last year but have fallen just as quickly, as temporary factors faded away and demand softened.

Supplier delivery times continued to lengthen, however, with evidence from multiple survey respondents that sourcing steel was particularly difficult. On the year, the associated indicator was up almost 20%, hand-in-hand with the long running trend of dearer material prices and the more recent implementation of tariffs.

In line with the start of the new fiscal year firms’ level of stock continued to expand in April, although at a softer pace than last month. Firms’ hiring intentions also moderated in April, with the Employment indicator falling to a six-month low.

Input material prices continued to rise in April, soaring to a near-seven-year-high. Up 22.8% on the year, the Prices Paid indicator surpassed the 70-mark in April for only the third time since 2012. A wide range of inputs were reported as more expensive on the month and some firms felt uncertainty was driving prices higher.

This month’s special question asked firms to assess the impact of the government’s recently imposed tariff programme on their business. The majority of firms, just over 50%, deemed its impact to be insignificant compared to just under a third who foresaw a major impact on their operations. The remaining 16.7% saw it having no effect on their business.

“While the MNI Chicago Business Barometer ended a three month falling streak in April, supply constraints faced by firms intensified and continue to weigh on activity. Longer delivery times are proving attritive, while dearer materials bite further into margins” said Jamie Satchi, Economist at MNI Indicators.

“Uncertainty among suppliers appears to be assisting the upward march in prices, but the majority of firms were optimistic any negative impact stemming directly from recently implemented tariffs would be minimal,” he added.


Personal Income increased 0.3%, Spending increased 0.4%
Posted: April 30, 2018 at 08:30 AM (Monday)

Personal income increased $47.8 billion (0.3 percent) in March according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $61.7 billion (0.4 percent).

Real DPI increased 0.2 percent in March and Real PCE increased 0.4 percent. The PCE price index increased less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The increase in personal income in March primarily reflected increases in wages and salaries, social security benefits, and dividend income.

The $50.0 billion increase in real PCE in March reflected an increase of $24.2 billion in spending for goods and a $26.8 billion increase in spending for services. Within goods, purchases of recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $62.3 billion in March. Personal saving was $460.6 billion in March and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.1 percent.


University of Michigan Consumer Confidence dipped in April to 98.8
Posted: April 27, 2018 at 10:00 AM (Friday)

Although the Consumer Sentiment Index fell slightly in April, it has remained at very favorable levels since the start of 2018. Consumers remain confident that inflation and unemployment will remain low during the year ahead and wages will continue to slowly improve, according to the University of Michigan Surveys of Consumers.

The recent small variation in the Sentiment Index has been due to favorable impact from the tax reforms legislation, which is now being offset by unfavorable views of the proposed trade tariffs, said U-M economist Richard Curtin, director of the surveys.

"Perhaps the best single summary of the current state of confidence is that consumers believe the economy is now 'as good as it gets,'" he said. "This view recognizes that the current expansion is approaching an all-time record length and the peak in economic conditions is near."

Overall, the data are consistent with growth rate in personal consumption expenditures of 2.7 percent from mid-2018 to mid-2019.

"While consumers do not anticipate an economic downturn anytime soon, the long expansion has made consumers somewhat apprehensive about future trends," Curtin said. "Consumers anticipate that higher interest rates will trim the future pace of growth and have become increasingly concerned about the negative impact from tariffs on trade.

"Moreover, there has been a growing gap in the past few years between how consumers judge future economic prospects and how they evaluate the current economy. When this gap grows to extreme levels, the divergence sparks a cyclical downturn. While the gap is not yet at such extremes, the divergence is large enough to spark growing apprehensions about the economy."

Taxes and Tariffs
Tax reform and trade policies sparked many spontaneous comments, with a positive balance of opinion on the tax reforms and a negative balance of opinion on the trade tariffs. The difference in the Expectation Index was stark: positive views on tax reform had Index values 28 points higher than those who made no mention of the tax reform legislation, and negative views on tariffs had Index values that were 28 points lower than those who didn't mention trade. As a result, trade policies neutralized the impact of tax reforms on consumer confidence.

Growth Slows but Economy Remains Strong
Fewer consumers anticipated that the pace of economic growth would increase during the year ahead, but half of all consumers still anticipate the continuation of good times in the economy as a whole. April's survey found just 29 percent who expected an improving pace of growth, down from 42 percent last year.

Nonetheless, when asked about whether the economy would remain satisfactory, half reported that they expected good times to persist. Importantly, just one-in-four consumers expected any increase in unemployment from its current low rate.

The Consumer Sentiment Index was 98.8 in the April 2018 survey, between the 101.4 in March and last April's 97.0. The Current Conditions Index was 114.9 in April, down
from 121.2 in March, returning to February's level and just above last April's 112.7. The Expectations Index was 88.4 in April, barely below March's 88.8 and last year's 87.0.

Consumer sentiment improved slightly in the 2nd half of the month, shrinking the small overall decline for April. The final April figure was nearly identical to its 2018 average (98.9)-which was higher than any other yearly average since 107.6 was recorded in 2000 (which was, in turn, the highest yearly average in more than a half century). Tax reform and trade policies continue to spark spontaneous, or unaided, comments. The spontaneous comments about the tax reform legislation had a positive balance of opinion, but the trade tariffs generated a negative balance of opinion. The difference in the Expectation Index was striking: positive views on tax reform had Index values 28 points higher than those who made no mention of the tax reform legislation, and negative views on tariffs had Index values that were 28 points lower than those who didn’t spontaneously mention trade. Aside from the offsetting impact of Trump’s tax and tariff policies, the best simple summary of the current state of consumer confidence is that the economy is "as good as it gets." While consumers do not anticipate an economic downturn anytime soon, the long expansion has made consumers (and economists) somewhat apprehensive about future trends. Overall, the data are consistent with a growth rate of 2.7% in real personal consumption in the year ahead.


1Q2018 GDP advance estimate increased 2.3%
Posted: April 27, 2018 at 08:30 AM (Friday)

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the first quarter of 2018 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.9 percent.

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

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, residential fixed investment, exports, and state and local government spending. These movements were partly offset by an upturn in private inventory investment. Imports, which are a subtraction in the calculation of GDP, decelerated.

Current-dollar GDP increased 4.3 percent, or $211.2 billion, in the first quarter to a level of $19.97 trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion.

The price index for gross domestic purchases increased 2.8 percent in the first quarter, compared with an increase of 2.5 percent in the fourth quarter. The PCE price index increased 2.7 percent, the same increase as in the fourth quarter. Excluding food and energy prices, the PCE price index increased 2.5 percent, compared with an increase of 1.9 percent.

Personal Income
Current-dollar personal income increased $182.1 billion in the first quarter, compared with an increase of $186.4 billion in the fourth quarter. Decelerations in personal interest income, rental income, and nonfarm proprietors' income were largely offset by accelerations in wages and salaries and in government social benefits.

Personal current taxes decreased $40.1 billion in the first quarter compared with an increase of $50.1 billion in the fourth quarter.

Disposable personal income increased $222.1 billion, or 6.2 percent, in the first quarter, compared with an increase of $136.3 billion, or 3.8 percent, in the fourth quarter. Real disposable personal income increased 3.4 percent, compared with an increase of 1.1 percent.

Personal saving was $462.1 billion in the first quarter, compared with $379.8 billion in the fourth quarter. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 3.1 percent in the first quarter, compared with 2.6 percent in the fourth quarter.

The 2017 Tax Cuts and Jobs Act includes provisions that impact the personal income statistics in the National Income and Product Accounts.


Employment Cost Index up 0.8% in 1Q2018
Posted: April 27, 2018 at 08:30 AM (Friday)

Compensation costs for civilian workers increased 0.8 percent, seasonally adjusted, for the 3-month period ending in March 2018, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.9 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.7 percent.

Civilian Workers
Compensation costs for civilian workers increased 2.7 percent for the 12-month period ending in March 2018 compared with a compensation costs increase of 2.4 percent in March 2017. Wages and salaries increased 2.7 percent for the 12-month period ending in March 2018 and increased 2.5 percent for the 12-month period ending in March 2017. Benefit costs increased 2.6 percent for the 12-month period ending in March 2018. In March 2017, the increase was 2.2 percent.

Private Industry Workers
Compensation costs for private industry workers increased 2.8 percent over the year, a larger increase thanthe 2.3-percent increase in March 2017. Wages and salaries increased 2.9 percent for the current 12-month period and increased 2.6 percent in March 2017. The cost of benefits rose 2.5 percent for the 12-month period ending in March 2018 and increased 1.9 percent in March 2017.

Employer costs for health benefits increased 1.5 percent for the 12-month period ending in March 2018.

Among occupational groups, compensation cost increases for private industry workers for the 12-month period ending in March 2018 ranged from 2.6 percent for both management, professional, and related occupations and natural resources, construction, and maintenance occupations to 3.3 percent for production, transportation, and material moving occupations.

Among industry supersectors, compensation cost increases for private industry workers for the 12-month period ending in March 2018 ranged from 2.3 percent for education and health services to 3.3 percent for financial activities.

State and Local Government
Compensation costs for state and local government workers increased 2.2 percent for the 12-month period ending in March 2018. In March 2017, the increase was 2.6 percent. Wages and salaries increased 1.8 percent for the 12-month period ending in March 2018, compared with 2.2 percent a year ago. Benefit costs increased 3.0 percent for the 12-month period ending in March 2018. The prior year’s increase was 3.1 percent.


Kansas City Fed Manufacturing Activity expanded more rapidly in April
Posted: April 26, 2018 at 10:00 AM (Thursday)

Tenth District manufacturing activity expanded more rapidly in April, with the composite index matching its highest level in survey history, and optimism remained high for future activity. Selling price indexes increased further, while raw material price indexes remained at high levels.

The month-over-month composite index was 26 in April, up from readings of 17 in March and 17 in February. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity accelerated at both durable and nondurable goods plants, particularly for machinery, plastics, and chemicals. Month-over-month indexes increased considerably. The production index jumped from 20 to 33, and the shipments, new orders, and order backlog indexes also rose. The employment and new orders for exports indexes were unchanged. The raw materials inventory index increased from 11 to 17, while the finished goods inventory index fell slightly.

Year-over-year factory indexes were mixed but showed little change overall. The composite index was basically unchanged at 36, while the production, shipments, and new orders indexes eased slightly. The employment index inched lower from 37 to 35, while the order backlog and capital expenditures indexes increased moderately. The raw materials inventory index edged higher from 30 to 32, while the finished goods inventory index decreased.

Future factory activity expectations were mixed but were still solid overall. The future composite index slipped from 33 to 31, and the future new orders and order backlog indexes also fell. In contrast, the future production and shipments indexes moved slightly higher, while the future employment and capital expenditures indexes were largely unchanged. The future raw materials inventory index edged down from 21 to 19, and the future finished goods inventory index also decreased slightly.

Most price indexes were little changed in April but remained at high levels. The month-over-month finished goods price index edged higher from 24 to 29, while the raw materials price index eased slightly. The year-over-year finished goods price index increased from 49 to 60, while the year-over-year raw materials price index was unchanged. The future finished goods price index moved up from 48 to 53, while the future raw materials price index moderated somewhat.


Weekly Initial Unemployment Claims Decrease 24,000 to 209,000
Posted: April 26, 2018 at 08:30 AM (Thursday)

In the week ending April 21, the advance figure for seasonally adjusted initial claims was 209,000, a decrease of 24,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week's level was revised up by 1,000 from 232,000 to 233,000. The 4-week moving average was 229,250, a decrease of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 231,250 to 231,500. Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

The advance seasonally adjusted insured unemployment rate was 1.3 percent for the week ending April 14, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 14 was 1,837,000, a decrease of 29,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 1,863,000 to 1,866,000. The 4-week moving average was 1,849,750, a decrease of 9,750 from the previous week's revised average. This is the lowest level for this average since January 5, 1974 when it was 1,838,500. The previous week's average was revised up by 750 from 1,858,750 to 1,859,500.


March New Orders for Durable Goods increased 2.6%, Ex-Trans unch%
Posted: April 26, 2018 at 08:30 AM (Thursday)

New Orders
New orders for manufactured durable goods in March increased $6.4 billion or 2.6 percent to $254.9 billion, the U.S. Census Bureau announced today. This increase, up four of the last five months, followed a 3.5 percent February increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders increased 2.8 percent. Transportation equipment, also up four of the last five months, drove the increase, $6.4 billion or 7.6 percent to $91.4 billion.

Shipments
Shipments of manufactured durable goods in March, up ten of the last eleven months, increased $0.7 billion or 0.3 percent to $250.0 billion. This followed a 0.7 percent February increase. Transportation equipment, up four of the last five months, drove the increase, $1.5 billion or 1.8 percent to $83.4 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in March, up six of the last seven months, increased $9.3 billion or 0.8 percent to $1,154.0 billion. This followed a 0.3 percent February increase. Transportation equipment, up three of the last four months, led the increase, $8.0 billion or 1.0 percent to $782.8 billion.

Inventories
Inventories of manufactured durable goods in March, up twenty of the last twenty-one months, increased $0.3 billion or 0.1 percent to $411.0 billion. This followed a 0.4 percent February increase. Both Fabricated metal products and Machinery led the increase. Fabricated metal products, up fifteen consecutive months, increased $0.3 billion or 0.6 percent to $52.0 billion. Machinery, up four of the last five months, increased $0.3 billion or 0.4 percent to $70.8 billion.

Capital Goods
Nondefense new orders for capital goods in March increased $4.7 billion or 6.0 percent to $83.1 billion. Shipments increased $1.7 billion or 2.2 percent to $76.9 billion. Unfilled orders increased $6.3 billion or 0.9 percent to $716.1 billion. Inventories decreased $0.5 billion or 0.3 percent to $182.5 billion. Defense new orders for capital goods in March increased $0.1 billion or 0.9 percent to $10.6 billion. Shipments decreased $0.3 billion or 2.7 percent to $10.6 billion. Unfilled orders increased less than $0.1 billion or virtually unchanged to $140.7 billion. Inventories also increased less than $0.1 billion or 0.2 percent to $23.3 billion.

Revised February Data
Revised seasonally adjusted February figures for all manufacturing industries were: new orders, $499.3 billion (revised from $498.0 billion); shipments, $500.0 billion (revised from $500.5 billion); unfilled orders, $1,144.7 billion (revised from $1,142.8 billion) and total inventories, $675.1 billion (revised from $675.2 billion).


Purchase Apps down, Refi's down in Latest MBA Weekly Survey
Posted: April 25, 2018 at 07:00 AM (Wednesday)

Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 20, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 0.3 percent from the previous week. The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 11 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 37.2 percent of total applications, the lowest level since September 2008, from 37.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.5 percent of total applications.

The FHA share of total applications decreased to 10.2 percent from 10.6 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.4 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since September 2013, 4.73 percent, from 4.66 percent, with points increasing to 0.49 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since January 2014, 4.64 percent, from 4.53 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.71 percent from 4.70 percent, with points increasing to 0.79 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2011, 4.13 percent, from 4.08 percent, with points increasing to 0.52 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level since February 2011, 3.98 percent, from 3.94 percent, with points increasing to 0.44 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.


Existing-Home Sales Increased 1.1% in March
Posted: April 24, 2018 at 10:00 AM (Tuesday)

Existing-home sales grew for the second consecutive month in March, but lagging inventory levels and affordability constraints kept sales activity below year ago levels, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million in March from 5.54 million in February. Despite last month's increase, sales are still 1.2 percent below a year ago.

Lawrence Yun, NAR chief economist, says closings in March eked forward despite challenging market conditions in most of the country. "Robust gains last month in the Northeast and Midwest – a reversal from the weather-impacted declines seen in February – helped overall sales activity rise to its strongest pace since last November at 5.72 million," said Yun. "The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford."

The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600). March's price increase marks the 73rd straight month of year-over-year gains.

"Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West," said Yun.

Total housing inventory at the end of March climbed 5.7 percent to 1.67 million existing homes available for sale, but is still 7.2 percent lower than a year ago (1.80 million) and has fallen year-over-year for 34 consecutive months. Unsold inventory is at a 3.6-month supply at the current sales pace (3.8 months a year ago).

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased for the sixth straight month to 4.44 percent in March (highest since 4.46 percent in December 2013) from 4.33 percent in February. The average commitment rate for all of 2017 was 3.99 percent.

Properties typically stayed on the market for 30 days in March, which is down from 37 days in February and 34 days a year ago. Fifty percent of homes sold in March were on the market for less than a month.

"Realtors® throughout the country are seeing the seasonal ramp-up in buyer demand this spring but without the commensurate increase in new listings coming onto the market," said Yun. "As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016."

Realtor.com®'s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in March were San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; Midland, Texas; and San Jose-Sunnyvale-Santa Clara, Calif.

First-time buyers were 30 percent of sales in March, which is up from 29 percent last month but down from 32 percent a year ago. NAR's 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34 percent.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says the extremely tight inventory in the entry-level segment of the market should greatly benefit homeowners looking to trade up this spring. "First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range," she said. "Supply conditions improve in higher up price brackets, which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search."

All-cash sales were 20 percent of transactions in March, which is down from 24 percent in February and 23 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in March, which is unchanged from February and down from 18 percent a year ago.

Distressed sales – foreclosures and short sales – were 4 percent of sales in March, unchanged from February and down from 6 percent a year ago. Three percent of March sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales
Single-family home sales rose inched forward (0.6 percent) to a seasonally adjusted annual rate of 4.99 million in March from 4.96 million in February, but are 1.0 percent below the 5.04 million sales pace a year ago. The median existing single-family home price was $252,100 in March, up 5.9 percent from March 2017.

Existing condominium and co-op sales increased 5.2 percent to a seasonally adjusted annual rate of 610,000 units in March, but are still 3.2 percent below a year ago. The median existing condo price was $236,100 in March, which is 4.8 percent above a year ago.

Regional Breakdown
March existing-home sales in the Northeast jumped 6.3 percent to an annual rate of 680,000, but are still 9.3 percent below a year ago. The median price in the Northeast was $270,600, which is 3.3 percent above March 2017.

In the Midwest, existing-home sales increased 5.7 percent to an annual rate of 1.29 million in March, but are still 1.5 percent below a year ago. The median price in the Midwest was $192,200, up 5.1 percent from a year ago.

Existing-home sales in the South decreased 0.4 percent to an annual rate of 2.40 million in March, but are 0.4 percent above a year ago. The median price in the South was $222,400, up 5.7 percent from a year ago.

Existing-home sales in the West declined 3.1 percent to an annual rate of 1.23 million in March, but are still 0.8 percent above a year ago. The median price in the West was $377,100, up 7.9 percent from March 2017.


New Home Sales in March at annual rate of 694,000
Posted: April 24, 2018 at 10:00 AM (Tuesday)

New Home Sales
Sales of new single-family houses in March 2018 were at a seasonally adjusted annual rate of 694,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.0 percent (±18.6 percent)* above the revised February rate of 667,000 and is 8.8 percent (±17.0 percent)* above the March 2017 estimate of 638,000.

Sales Price
The median sales price of new houses sold in March 2018 was $337,200. The average sales price was $369,900.

For Sale Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of March was 301,000. This represents a supply of 5.2 months at the current sales rate.


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