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Tuesday, May 23, 2017

New Home Sales Decreased in April

New single-family home sales rose to a seasonally adjusted annual rate of 569,000 in April, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The April level was 11.4% below the revised March rate of 642,000 but 0.5% above the April 2016 level.
Sales fell in each region, 7.5% in the Northeast, 26.3% in the West, 13.1% in the Midwest and 4.0% in the South.

The median price of a new home was $309,200, down 3.0% from March. The average price was $368,300.

At the end of April there was an estimated supply of 5.7 months at the current sales rate, up from 4.9 months in March.

Read the Census/HUD release.
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Tuesday, May 16, 2017

Industrial Production Increased 1.0% in April, Largest Gain Since February 2014

Industrial production increased 1.0% in April after a revised 0.4% March increase. This was the third consecutive monthly increase and largest gain since February 2014. Over the last year, industrial production was up 2.2%.
Manufacturing output increased 1.0% in April after a 0.4% decline in March. As with the overall index, this increase was its largest since February 2014. Production of durable goods and nondurables both rose 1.0% during the month. Capacity utilization for manufacturing increased by 0.9 percentage point to 75.9%, a rate that is 2.5 percentage points below its long-run average.

The output of mining rose 1.2% in April after a 0.4% fall in March, largely because of pickups in coal mining and in drilling and support activities.

Utilities output climbed 0.7% in April, as warmer-than-normal temperatures boosted air-conditioning usage.


Read the Fed release.
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Housing Starts Declined in April

Housing starts fell to a seasonally adjusted annual rate of 1.172 million in April, 2.6% below the revised March rate of 1.203 million but 5.7% above the April 2016 rate. 
 
Housing activity increased in two out of the four regions as the Midwest and West saw housing starts increase 1.0% and 8.7%, respectively. The Northeast and South experienced declines of 10.3% and 7.4%, respectively. 
 
New building permits decreased during the month, falling 2.5% to 1.230 million. However, permits were up 5.7% from the April 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.106 million, down 8.6% from the revised March estimate and 15.1% above the April 2016 rate.

Read the Census release.
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Monday, May 15, 2017

Builder Confidence Strengthens in May

The National Association of Home Builders/Wells Fargo Housing Market Index grew to 70 in May, a two point increase from April’s reading of 68.

“This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

Two of the three HMI components grew in May. The component measuring current sales conditions increased two points to 76; the component measuring sales expectations jumped four points to 79, and the component measuring buyer traffic fell one point to 51.

The regional three-month moving averages for HMI scores were showed gains in three of the four regions. The Northeast and South both grew three points to 49 and 71, respectively, while the Midwest held steady at 68. The West rose one point 78.

Read the NAHB release.
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Friday, May 12, 2017

Retail Sales Grew in April

There were $474.9 billion in retail and food service sales in April, up 0.4% from the previous month and up 4.5% from April 2016, according to the U.S. Census Bureau. March’s estimate was revised from down 0.2% to up 0.1%. 
Core retail sales – excluding automobiles and parts grew 0.3%. Year-over-year core sales increased 4.5%. 

Retail trade sales increased 0.4% from March and are up 4.5% from last year. Sales at nonstore retailers increased 1.4% from March, while increasing 11.9% year-over-year.

Sales at gasoline stations increased 0.2% during the month, but are up 12.3% from a year ago.

Read the Census release.
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Consumer Prices Increased 0.2% in April

The Consumer Price Index increased 0.2% in April on a seasonally adjusted basis, rebounding from a 0.3% decline in March. Over the last 12 months, the all-items index rose 2.2%. 
Prices for all items less food and energy, the “core CPI,” increased 0.1% in April, up from March’s 0.1% decline. The index rose 1.9% for the 12 months ending in April.

The food index increased 0.2%, its fourth consecutive increase. Prices for food at home rose 0.2%, while prices for food away from home also increased 0.2%. Over the past 12 months, food prices are up 0.5%.

The energy index increased 1.1% in April. The gasoline index rose 1.2% following a 6.2% March decline.

Read the BLS release.
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Thursday, May 11, 2017

Producer Prices Increased 0.5% in April

Producer prices climbed 0.5% in April, seasonally adjusted, after falling 0.1% in March, according to the U.S. Bureau of Labor Statistics. Producer prices rose 2.5% for the twelve months ended April 2017, which is the largest increase since the twelve months ended February 2012.
The index for final demand goods also increased 0.5% in April. The growth was led by a 0.9% increase in the index for final demand foods. The index for final demand energy increased by 0.8 after falling 2.9% in March.

Prices for final demand services moved up 0.4% in April. Most of the increase can be traced to prices for final demand services less trade, transportation, and warehousing, which advanced 0.8 percent.

Read the BLS release.
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Tuesday, May 9, 2017

Small Business Optimism Remains Strong in April

The NFIB Small Business Optimism Index decreased 0.2 points in April to 104.5, maintaining the high level of post-election optimism. Five of the ten index components rose, while three declined.
Reported job creation has improved, as 55% of businesses reported hiring or trying to hire. However, 48% reported few or no qualified applicants for the positions they were trying to fill. Sixteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 16% of owners plan to create new jobs, unchanged and a strong reading.

Seasonally adjusted, the net percent of owners expecting better business conditions fell eight points to a net 38%, a sign that business owners were concerned by Congress’ tentativeness on healthcare reform at the end of March. The percent of owners reporting higher sales in the past three months compared to the prior three months remained at 5%. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose two points to a net 20% of owners. Capital spending decreased five points as 59% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months dropped two points to 27%, which is just below the highest reading since the financial crisis but well below historical levels for periods of growth.

Credit conditions mostly held steady, as 3% of owners reported that all their borrowing needs were not met, a decrease of one point from March. Only 2% of business owners surveyed reported that financing was their top business problem, unchanged from the past five months.

Read the NFIB report.

Monday, May 8, 2017

Consumer Credit Growth Strong in March

Consumer credit increased at a seasonally adjusted annual rate of 5.2% in March, up from a revised 4.4% rate in February. Total outstanding credit increased $16.4 billion during the month (compared with $13.8 billion in February) to $3.81 trillion.
Revolving credit grew at an annual rate of 2.4% to $1.0 trillion, compared to a 2.0% increase in February. Non-revolving credit rose at a 6.2% annual rate, or $14.5 billion, compared to February’s rate of $12.1 billion. Total non-revolving credit is now $2.81 trillion.
Federal government holdings of student loans continue to be the largest portion of non-revolving credit, comprising approximately 39% of outstanding credit. Depository institutions and finance companies are secondary and tertiary holders, with 25% and 22%, respectively, of outstanding non-revolving credit.

Read the Fed release.
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Friday, May 5, 2017

211,000 Jobs Added in April

Total nonfarm payroll employment rose by 211,000 in April, an increase from March’s downwardly revised figure of 79,000, according to the Bureau of Labor Statistics. The national unemployment rate moved down to 4.4%, the lowest rate in more than 10 years. 
Private service-providing industries added a net 173,000 jobs, led by gains in leisure and hospitality services, which added 55,000 during the month, and by health care and social assistance, which added 41,000.

Goods-producing employment rose by 21,000 jobs during the month, as gains in mining and logging led the way by adding 10,000.

The civilian labor force participation rate was 62.9%, a 0.1% decrease from March. The number of long-term unemployed, those jobless for 27 weeks or more, was little changed at 1.6 million and accounted for 22.6% of the unemployed. The number of discouraged workers was 450,000, falling for the third straight month.

Average hourly earnings increased by 7 cents to $26.19, after a 2-cent increase in March. Over the past year, average hourly earnings have risen by 65 cents, or 2.5%.

Read the BLS 
release.
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Thursday, May 4, 2017

Manufactured Goods Orders Rose in March

New orders for manufactured goods increased 0.2% to $478.2 billion in March, according to the U.S. Census Bureau. The March reading followed a 1.2% February increase. 
New orders for manufactured durable goods rose 0.9% to $239.4 billion, the third consecutive month of growth. Orders for transportation equipment drove the increase, rising 2.6% to $83.6 billion.

Shipments of manufactured durable goods increased 0.3% to $240.1 billion. This was the third consecutive month of marginal growth.

Inventories of manufactured durable goods increased 0.2% to $386.0 billion.

Read the Census release.
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International Trade Balance Narrowed in March

The U.S. international trade deficit narrowed slightly in March to $43.7 billion, down from $43.8 billion in February, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The overall decrease reflected a $1.7 billion decrease in exports along with a $1.7 billion decrease in imports. 
The goods deficit decreased $0.3 billion to $65.5 billion, while the services surplus increased $0.4 billion to $21.8 billion.

Exports of goods decreased just over $2.0 billion to $126.3 billion in March, driven by a $0.6 billion decline in oil and $0.6 billion reduction in petroleum products. Exports of services increased $0.3 billion to $64.7 billion.

Imports of goods decreased $1.7 billion to $191.8 billion, mostly due to a decrease in capital goods, which fell by $0.9 billion. Imports of services decreased less than $0.1 billion to $43.0 billion in March.

Read the Census/BEA release.
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Job Cuts Declined in April

Employers announced plans to cut 36,602 jobs in April, according to a report issued by Challenger, Gray & Christmas. April’s announced cuts were 15% less than March’s. The month’s figure was 43% lower than April 2016.

The retail sector continues to lead the way in job cuts, with 50,133 so far this year. This is 36% higher than the same period last year. However, the energy sector held strong, announcing 459 cuts in April, which brings the total to 8,725 in 2017. This is an 87% decrease from this point last year when the energy sector had shed 67,660 jobs.

“Although restructuring in the retail sector continues to shed jobs, we aren’t seeing the wide scale layoffs in other sectors, like energy or tech,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Telecommunications companies have reported 10,269 job cuts through April this year, 70% more than the 6,023 cuts through this point last year.

“The FCC is expected to lift a ban on merger talks in the telecom industry which will likely result in companies paring down to make themselves more attractive in these deals. We could see even more cuts in the coming months from this sector,” said Challenger.

Read the Challenger Gray & Christmas release.
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Wednesday, May 3, 2017

Fed Holds Rates Steady

The Federal Reserve Open Market Committee (FOMC) unanimously voted to hold the target range for the federal funds rate steady at 0.75 to 1 percent at their May meeting. The Committee had raised rates by 25 basis points at their previous meeting in March with the expectation of two more rate increases this year.

The FOMC recognized that growth in economic activity, and especially in consumer spending, slowed in the first quarter, but noted that it is “likely to be transitory and [the Committee] continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace.” The Committee also pointed out that the labor market has continued to strengthen and business investment has firmed.

There were no clear signals indicating a move at the upcoming June meeting, but the Committee stated their expectation of economic conditions continuing to evolve in a manner that will warrant gradual increases in the federal funds rate. Fed officials noted their intent to maintain the existing policy regarding the handling of the balance sheet, with no further clues as to when or how the portfolio reinvestment policy could change in the future.

Read the FOMC statement.
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ISM: Non-Manufacturing Sector Grew in April

The ISM Non-Manufacturing Index registered 57.5 points in April, 2.3 percentage points above March’s figure. This was the 88th consecutive month of growth. Sixteen non-manufacturing industries reported growth in April, while only one reported contraction.
Growth in the Business Activity Index increased 3.5 points to 62.4. Seventeen industries reported increased business activity and one reported decreased activity. Respondents noted that business activity was very solid with higher activity over the past few months.

Non-manufacturing employment grew for the 38th consecutive month. The index decreased 0.2 percentage point to 51.4. Nine industries reported increased employment, while five reported decreased employment.

The New Orders Index rose 4.3 points to 63.2. Some respondents commented that they had won more projects and were ramping up new programs.

Supplier deliveries slowed for the 16th consecutive month, as the index registered 53.0 points (readings above 50 for this index indicate slower deliveries). Six industries reported slower deliveries, while one reported faster deliveries.

Read the ISM release.
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ADP: 177,000 Jobs Added in April

The non-farm private sector added 177,000 jobs in April, according to the ADP National Employment Report. March’s figure was revised down to 255,000. Service-providing jobs accounted for most of the month’s growth. 
 
Growth was widespread in April with businesses of all sizes seeing strong increases, with strong gains for small and medium-sized businesses. Small businesses with fewer than 50 employees added 61,000 jobs, while medium-sized businesses with 50-499 employees added 78,000 jobs. Large businesses added 38,000 jobs.

“In April we saw a moderate slowdown from the strong pace of hiring in the first quarter,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labor market nears full employment. Looking across company sizes, midsized businesses showed persistent growth for the past six months.”

Service-providing employment rose by 165,000 jobs, driven by the professional and business services sector which added 72,000 jobs. Leisure and hospitality jobs, along with health care and social assistance, also increased, adding 35,000 and 22,000 jobs, respectively. Goods-producing employment increased by 12,000 jobs. The manufacturing industry led the gain, adding 11,000 jobs, while the construction industry lost 2,000 jobs.

Read the ADP report.
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Monday, May 1, 2017

Construction Spending Decreased in March

Construction spending decreased 0.2% in March to a seasonally adjusted annual level (SAAL) of $1,218.3 billion, according to the Census Bureau. February’s spending estimate was revised to a rate of $1,220.7 billion. March’s figure is 3.6% greater than the March 2016 estimate of $1,176.4 billion.
Total private construction was $940.2 billion SAAL, nearly the same as the revised February estimate of $940.1 billion.

Private residential construction was $503.4 billion SAAL, 1.2% above February’s rate.

Private nonresidential construction was $436.8 billion, 1.3% below February’s estimate.

Public construction decreased 0.9% to $278.1 billion SAAL, largely due to a decrease in educational projects.

Read the Census release.
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Manufacturing Sector Expanded in April

The ISM Manufacturing Index registered 54.8 points in April, down 2.4 percentage points from the previous month, according to the Institute for Supply Management. April’s reading indicates an eighth consecutive month of expansion in manufacturing, as readings over 50 points denote expansion. Of the eighteen manufacturing industries, sixteen reported growth while one reported contraction.

The Employment Index decreased 6.9 points to 52.0 in April, indicating expansion for the seventh consecutive month but at a slower rate. Twelve industries reported expansion, while four reported a decrease in employment.

The New Orders Index decreased 7.0 percentage points to 57.5 in April, indicating growth for the seventh consecutive month. Sixteen industries reported expansion, while none reported a decrease in employment.

Export orders increased 0.5 point to 59.5, indicating growth for the fourteenth consecutive month. Thirteen industries reported growth while only one of the eighteen reported a decrease in new export orders.

The inventories index registered 51.0 points, up 2.0 points from the previous month. This reading indicates that raw materials inventories are growing.

Read the ISM release.
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Friday, April 28, 2017

Consumer Sentiment Held Strong in April

Consumer Sentiment increased 0.1 point in April to 97.0, according to the University of Michigan Consumer Sentiment Index.
The Current Economic Conditions Index fell 0.5 point to 112.7, while the Consumer Expectations Index rose 0.5 point to 87.0.
“Consumer sentiment continued to travel along the high plateau established following Trump's election, with only minor deviations from its five month average of 97.4. There was widespread agreement among consumers on their very positive assessments of the current state of the economy as well as widespread disagreement on future economic prospects,” said Richard Curtin, chief economist of UM Surveys of Consumers. “Although the partisan divide has slightly narrowed in recent months, it still reflects a very pessimistic economic outlook among Democrats and a very optimistic outlook among Republicans. The partisan divide on the Expectations Index was 51.0 points in April (61.4 vs. 112.4), down from last month's 63.1 (59.4 vs. 122.5), with Republicans moderating their optimism more than Democrats reduced their pessimism. Selective perception of news is the driving force behind the partisan divide.”

Read the University of Michigan Surveys of Consumers release.
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First Quarter GDP Weak

Real GDP grew at a seasonally adjusted annual rate of 0.7% during the first quarter of 2017, according to the Bureau of Economic Analysis’s “advance” estimate, down from 2.1% in the fourth quarter. The deceleration in real GDP reflected a deceleration in personal consumption expenditures along with drawbacks in private inventory investment and in state and local government spending. These were partly offset by an increase in exports and higher fixed investment.
Consumption, usually the largest contributor to GDP growth, accounted for only 0.2% of the gain, down from 2.4% during the fourth quarter. Consumption spending increased to an annual rate of $11.7 trillion, up $9.7 billion from the preceding quarter.
Fixed investment was a strong contributor, adding a total of 1.6% to GDP. Inventories, on the other hand, subtracted 0.9% from the growth.

Government spending decreased during the quarter, as both federal and state and local government spending were down. Government spending decreased by a seasonally adjusted and annualized $12.4 billion.

Net exports were positive, adding 0.1% to GDP.

Read the BEA release.
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Thursday, April 27, 2017

Durable Goods Orders Increased in March

New orders for manufactured durable goods increased 0.7% in March to $238.7 billion, following a 2.3% February increase, according to the U.S. Census Bureau.
New orders excluding defense rose 0.1% on the month, as orders of nondefense capital goods increased 1.2% to $75.0 billion.

Shipments of manufactured durable goods increased 0.2% to $239.8 billion.

Inventories of manufactured durable goods rose 0.1% to $385.7 billion, following a 0.2% February increase.

Read the Census release.
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Tuesday, April 25, 2017

New Home Sales Increased in March

New single-family home sales rose to a seasonally adjusted annual rate of 621,000 in March, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The March level was 5.8% above the revised February rate of 587,000 and 15.6% above the March 2016 level.
Sales rose in most regions, increasing 25.8% in the Northeast, 16.7% in the West, and 1.6% in the South. In contrast, sales in the Midwest fell 4.5%.

The median price of a new home was $315,100, up 7.5% from February. The average price was $388,200.

At the end of March there was an estimated supply of 5.2 months at the current sales rate, down from February.

Read the Census/HUD release.
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Consumer Confidence Receded in April

The Conference Board Consumer Confidence Index decreased to 120.3 in April, down 4.6 points from March. The Present Situation Index fell 3.3 points to 140.6, while the Expectations Index declined 5.6 points to 106.7.
“Consumer confidence declined in April after increasing sharply over the past two months, but still remains at strong levels,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers assessed current business conditions and, to a lesser extent, the labor market less favorably than in March. Looking ahead, consumers were somewhat less optimistic about the short-term outlook for business conditions, employment and income prospects. Despite April’s decline, consumers remain confident that the economy will continue to expand in the months ahead.”

Consumers’ labor market outlook was less upbeat during April. The percentage of consumers expecting more jobs in the coming months decreased from 23.8% to 23.0%, while the share anticipating fewer jobs increased from 12.7% to 13.1%. Income expectations also fell, as 19.3% of consumers expected their incomes to increase in coming months, down from 22.5% March.

Read the Conference Board release.
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Friday, April 21, 2017

Existing-Home Sales Rose in March

Existing-home sales increased 4.4% to a seasonally adjusted annual rate of 5.71 million in March, according to the National Association of Realtors (NAR). This is the highest level in the past ten years.
"The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month," said Lawrence Yun, NAR chief economist. "Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does."

The total housing inventory rose 5.8% to 1.83 million homes available for sale, while the median existing home price stood at $236,400, a 6.8% increase from March 2016.

Distressed sales were 6% of the total in March, which are down from 8% a year ago. Five percent of sales were foreclosures and 1% were short sales. On average, foreclosures and short sales sold for discounts of 16% and 14%, respectively.

Read the NAR release.
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Wednesday, April 19, 2017

Beige Book: Economic Expansion Continues to Pick Up

Economic activity continued to expand at a modest to moderate pace across the twelve Federal Reserve Districts over the period from mid-February to the end of March, according to the just-released Federal Reserve Beige Book.

Consumer spending varied this period as reports of stronger light vehicle sales were accompanied by somewhat softer readings in non-auto retail spending. Manufacturing continued to expand at a modest to moderate pace across the Districts. Non-financial services continued to expand steadily while energy-related businesses noted improved conditions.

Employment expanded across all Districts at a modest to moderate pace. Labor markets once again remained tight and employers in most Districts reported having more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage growth was seen in most Districts, while prices rose modestly since the previous report.

Read the full Federal Reserve report.
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Tuesday, April 18, 2017

Industrial Production Increased in March

Industrial production increased 0.5% in March after a 0.1% February increase. Over the last year, industrial production was up 1.5%.
Manufacturing output decreased 0.4% in March, its first loss since August 2016. Production of durable goods fell 1.7%, while nondurables rose 2.1% during the month. Capacity utilization for manufacturing increased by 0.3 percentage point to 75.3%, a rate that is 3.1 percentage points below its long-run average.

The mining index increased 0.1% in March as gains in oil and gas extraction were mostly offset by declines in coal mining and in nonmetallic mineral mining.

The utilities index rose 8.6% in March, the largest increase in the history of the index.

Read the Fed release.
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Housing Starts Declined in March

Housing starts fell to a seasonally adjusted annual rate of 1.215 million in March, 6.8% below the revised February rate of 1.303 million, but 9.2% above the March 2016 rate.
Housing activity increased in only one out of the four regions as the Northeast saw housing starts jump 12.9%. The West, Midwest, and South experienced declines of 16.0%, 16.2%, and 2.9%, respectively.
New building permits increased during the month, rising 3.6% to 1.260 million. Permits were up 17.0% from the March 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.205 million, up 3.2% from the revised February estimate and 13.4% above the March 2016 rate.

Read the Census release.
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Monday, April 17, 2017

Builder Confidence Remained Solid in April

The National Association of Home Builders/Wells Fargo Housing Market Index fell to 68 in April, a three point decrease from March’s reading of 71.

“Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

All three HMI components declined in April, but remained at healthy levels. The component measuring current sales conditions fell three points to 74, the component measuring sales expectations decreased three points to 75, and the component measuring buyer traffic fell one point to 52.

The regional three-month moving averages for HMI scores were mixed. The Northeast fell two points to 46 while the Midwest and West rose one point to 68 and 77, respectively. The South held steady at 68.

Read the NAHB release.
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Friday, April 14, 2017

Retail Sales Fell in March

There were $470.8 billion in retail and food service sales in March, down 0.2% from the previous month and up 5.2% from March 2016, according to the U.S. Census Bureau. February’s estimate was revised from up 0.1% to down 0.3%.
Core retail sales – excluding automobiles and parts – were unchanged for the second consecutive month. Year-over-year core sales increased 5.0%.

Retail trade sales declined 0.2% from February and are up 5.5% from last year. Sales at nonstore retailers decreased 0.6% from February, while increasing 11.9% year-over-year.

Sales at gasoline stations declined 1.0% during the month, but are up 14.3% from a year ago.

Read the Census release.
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CPI Decreased 0.3% in March

The Consumer Price Index decreased 0.3% in March on a seasonally adjusted basis. Over the last 12 months, the all-items index rose 2.4%.
Prices for all items less food and energy, the “core CPI,” decreased 0.1% in March, down from February’s 0.2% increase. The index rose 2.0% for the 12 months ending in March.

The food index increased 0.3%. Prices for food at home rose 0.5%, its largest increase since May 2014, while prices for food away from home increased 0.2%. Over the past 12 months, food prices are up 0.5%.

The energy index decreased 3.2% in March. The gasoline index posted a decline of 6.2% following a 3.0% February decrease.

Read the BLS release.
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Thursday, April 13, 2017

Producer Prices Declined 0.1% in March

Producer prices fell 0.1% in March, seasonally adjusted, after climbing 0.3% in February, according to the U.S. Bureau of Labor Statistics. Producer prices rose 2.3% for the twelve months ended March 2017, which is the largest increase since the twelve months ended March 2012.
The index for final demand goods also fell 0.1% in March. The decrease was led by a 2.9% decline in the index for final demand energy. However, the index for final demand goods less food and energy rose 0.4%.

Prices for final demand services ticked down 0.1% in March. More than half of the decline was due to the index for final demand services less trade, transportation, and warehousing, which decreased by 0.1%.

Read the BLS release.
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Tuesday, April 11, 2017

Small Business Optimism Held Strong in March

The NFIB Small Business Optimism Index decreased 0.6 points in March to 104.7, maintaining the high level of post-election optimism. Three of the ten index components rose, while five declined.
Reported job creation has improved, as 51% of businesses reported hiring or trying to hire. However, 45% reported few or no qualified applicants for the positions they were trying to fill. Sixteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 16% of owners plan to create new jobs, up one point and a strong reading.

Seasonally adjusted, the net percent of owners expecting better business conditions fell one point to a net 46%. The percent of owners reporting higher sales in the past three months rose three points to 5%. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell eight points to a net 18% of owners. Capital spending increased as 64% of owners reported capital outlays, up two points from February. The percent of owners planning capital outlays in the next 3 to 6 months rose three points to 29%, which is the highest reading since the financial crisis.

Credit conditions mostly held steady, as 4% of owners reported that all their borrowing needs were not met, an increase of one point. Only 2% of business owners surveyed reported that financing was their top business problem, unchanged from the past four months.

Read the NFIB report.
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Friday, April 7, 2017

Consumer Credit Growth Strong in February

Consumer credit increased at a seasonally adjusted annual rate of 4.8% in February, up from a 3.5% rate in January. Total outstanding credit increased $15.2 billion during the month (compared with $10.9 billion in January) to $3.79 trillion.
Revolving credit grew at an annual rate of 3.5% to $1.0 trillion, compared to a 3.2% decrease in January. Non-revolving credit rose at a 5.3% annual rate, or $12.3 billion, compared to January’s rate of $13.5 billion. Total non-revolving credit is now $2.79 trillion.
Federal government holdings of student loans continue to be the largest portion of non-revolving credit, comprising approximately 38% of outstanding credit. Depository institutions and finance companies are secondary and tertiary holders, with 25% and 22%, respectively, of outstanding non-revolving credit.

Read the Fed release.
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98,000 Jobs Added in March

Total nonfarm payroll employment rose by 98,000 in March, a decline from February’s downwardly revised figure of 219,000, according to the Bureau of Labor Statistics. The national unemployment rate moved down to 4.5%. The majority of gains occurred in professional and business services and in mining.
Private-service providing industries added a net 61,000 jobs, led by gains in professional and business services, which added 56,000 jobs during the month, and by health care and social assistance, which added 17,000 jobs this month.

Goods-producing employment rose by 28,000 jobs during the month, as gains in mining led the way by adding 11,000 jobs.

The civilian labor force participation rate was 63.0%, unchanged from February. The number of long-term unemployed, those jobless for 27 weeks or more, was little changed at 1.7 million and accounted for 23.3% of the unemployed. The number of discouraged workers was 460,000, down from a year earlier.

Average hourly earnings increased by 5 cents to $26.14, after a 7-cent increase in February. Over the past year, average hourly earnings have risen by 2.7%.

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Thursday, April 6, 2017

Job Cuts Rose in March

Employers announced plans to cut 43,310 jobs in March, according to a report issued by Challenger, Gray & Christmas. March’s announced cuts were 17% more than February’s. The month’s figure was 2% lower than March 2016.

The retail sector has led the way this year in job cuts, with 38,464 so far this year. This is 19% higher than the same period last year. The industry has, however, announced over 121,000 new jobs this year. The energy sector, on the other hand, has reported only 7,880 job cuts so far this year. This is an 84% decline in job cuts compared to this point last year.

“Cuts in the energy sector, which started en masse in mid-2014, were still occurring in the first quarter of 2016. The energy industry is no longer bleeding jobs, which is partly why job cut announcements have trended down,” said John A. Challenger, chief executive officer of global outplacement and executive coaching consultancy Challenger, Gray & Christmas, Inc.

Telecommunications companies were second to only retailers with 9,782 job cuts through March, 184% more than the total through the first quarter of 2016.

“Telecommunications providers, like other tech companies, are undergoing restructuring, losing jobs to automation, and pivoting to new projects,” said Challenger.

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Wednesday, April 5, 2017

FOMC Minutes: Shrinking of Balance Sheet Could Begin this Year

Fed officials expressed that they anticipate the reduction of the $4.5 trillion portfolio to begin later this year as interest rates continue to increase, according to the minutes of the meeting released today.

“Most participants anticipated that gradual increases in the federal-funds rate would continue and judged that a change in the (Fed’s) reinvestment policy would likely be appropriate later this year,” the minutes said.

The minutes showed most Fed officials in support of a gradual path of rate hikes, but open to a quicker pace if the economy heats up more than anticipated. On the more aggressive side were some of the hawks, arguing for a faster pace of hikes with the Fed near its 2% inflation goal.

On the topic of fiscal policy, the Fed officials do not expect any of President Trump’s expansionary policies to begin until 2018. The next policy meeting will take place May 2-3, 2017.

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ISM: Non-Manufacturing Sector Grew in March

The ISM Non-Manufacturing Index registered 55.2 points in March, 2.4 percentage points below February’s figure. This was the 87th consecutive month of growth. Fifteen non-manufacturing industries reported growth in March, while three reported contraction.
Growth in the Business Activity Index decreased 4.7 points to 58.9. Fourteen industries reported increased business activity and two reported decreased activity. Respondents noted new capital budgets, increasing optimism, and strong price increases.

Non-manufacturing employment grew for the 37th consecutive month. The index decreased 3.6 percentage point to 51.6. Nine industries reported increased employment, while six reported decreased employment.

The New Orders Index fell 2.3 points to 58.9. Some respondents commented that they had added additional business with existing customers.

Supplier deliveries slowed for the 15th consecutive month, as the index registered 51.5 points (readings above 50 for this index indicate slower deliveries). Eight industries reported slower deliveries, while three reported faster deliveries.

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ADP: 263,000 Jobs Added in March

The non-farm private sector added 263,000 jobs in March, according to the ADP National Employment Report. February’s figure was revised down to 245,000. Service-providing jobs accounted for most of the month’s growth, while goods-producing employment were strong as well.
Growth was widespread in March with businesses of all sizes seeing strong increases, with strong gains for small and medium-sized businesses. Small businesses with fewer than 50 employees added 118,000 jobs, while medium-sized businesses with 50-499 employees added 100,000 jobs. Large businesses added 45,000 jobs.

“The U.S. labor market finished the first quarter on a strong note,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Consumer dependent industries including healthcare, leisure and hospitality, and trade had strong growth during the month.”

Service-providing employment rose by 181,000 jobs, driven by the professional and business services sector which added 57,000 jobs. Leisure and hospitality jobs, along with health care and social assistance, also increased, adding 55,000 and 46,000 jobs, respectively. Goods-producing employment increased by 82,000 jobs. The construction industry led the gain, adding 49,000 jobs.

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Tuesday, April 4, 2017

Manufactured Goods Orders Rose in February

New orders for manufactured goods increased 1.0% to $476.5 billion in February, according to the U.S. Census Bureau. The February reading followed a 1.5% January increase.
New orders for manufactured durable goods jumped 1.8% to $236.0 billion, the second consecutive month of growth. Orders for transportation equipment drove the increase, rising 4.4% to $80.5 billion.

Shipments of manufactured durable goods increased 0.3% to $239.4 billion. This followed a virtually unchanged January decrease.

Inventories of manufactured durable goods decreased 0.2% to $385.2 billion.

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International Trade Balance Narrowed in February

The U.S. international trade deficit narrowed in February to $43.6 billion, down from $48.2 billion in January, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The overall decrease reflected a $0.4 billion increase in exports along with a $4.3 billion decrease in imports.
The goods deficit decreased $4.6 billion to $65.0 billion, while the services surplus increased less than $0.1 billion to $21.4 billion.

Exports of goods rose $0.4 billion to $128.5 billion in February, driven by increases in consumer goods. They saw a jump of $0.7 billion, largely due to an increase in pharmaceutical preparations. Exports of services increased less than $0.1 billion to $64.4 billion.

Imports of goods decreased $4.2 billion to $193.4 billion, mostly due to a decrease in consumer goods, which fell by $3.1 billion. Imports of services decreased less than $0.1 billion to $43.0 billion in February.

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Construction Spending Increased in February

Construction spending increased 0.8% in February to a seasonally adjusted annual level (SAAL) of $1,192.8 billion, according to the Census Bureau. January’s spending estimate was revised to a rate of $1,183.8 billion. February’s figure is 3.0% greater than the February 2016 estimate of $1,157.7 billion.
Total private construction rose to $917.3 billion SAAL, up 0.8% from the revised January estimate of $910.0 billion.

Private residential construction was $484.7 billion SAAL, 1.8% above January’s rate.

Private nonresidential construction was $432.7 billion, 0.3% below January’s estimate.

Public construction increased 0.6% to $275.5 billion SAAL, largely due to growth in educational and highway construction projects.

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Manufacturing Sector Expanded in March

The ISM Manufacturing Index registered 57.2 points in March, down 0.5 percentage point from the previous month, according to the Institute for Supply Management. March’s reading indicates a seventh consecutive month of expansion in manufacturing, as readings over 50 points denote expansion. Of the eighteen manufacturing industries, seventeen reported growth while none reported contraction.
The Employment Index increased 4.7 points to 58.9 in March, indicating expansion for the sixth consecutive month. Fourteen industries reported expansion, while three reported a decrease in employment.

The New Orders Index decreased 0.6 percentage point to 64.5 in March, indicating growth for the seventh consecutive month. All eighteen industries reported increases in new orders.

Export orders increased 4.0 points to 59.0, indicating growth for the thirteenth consecutive month. Eleven industries reported growth while only one of the eighteen reported a decrease in new export orders.

The inventories index registered 49.0 points, down 2.5 points from the previous month. This reading indicates that raw materials inventories are contracting.

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Friday, March 31, 2017

Consumer Sentiment Rose in March

Consumer Sentiment increased 0.6 points in March to 96.9, according to the University of Michigan Consumer Sentiment Index.
The Current Economic Conditions Index rose 1.7 points to 113.2, while the Consumer Expectations Index held at 86.5.
“The continued strength in consumer sentiment has been due to optimistic views on three critical components: higher incomes and wealth, more favorable job prospects, and low inflation expectations,” said Richard Curtin, chief economist of UM Surveys of Consumers. “All of these factors, however, have been influenced by partisanship. Democrats expect an imminent recession, higher unemployment, lower income gains, and more rapid inflation, while Republicans anticipate a new era of robust growth in incomes, job prospects, and lower inflation. It is a rare situation that combines increasing optimism, which promotes spending, and rising uncertainty which makes consumers more cautious spenders.”

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Thursday, March 30, 2017

GDP Revised Up to 2.1% for Fourth Quarter

Real GDP for the fourth quarter of 2016 grew at a seasonally adjusted annual rate of 2.1%, according to the Bureau of Economic Analysis’s third estimate, up from the second estimate of 1.9%. The general picture of economic growth remains the same.
The change in GDP estimates reflected upward revisions to personal consumption expenditures and private inventory investment, partly offset by downward revisions to nonresidential fixed investment and to exports.
The upward revision to consumer spending reflected upward revisions to both goods and services. The nonresidential fixed investment downward revision was due to downward revisions to equipment and to intellectual property products.

Real GDP grew at 1.6% in 2016, a slower pace than the 2.6% rate in 2015. The deceleration in real GDP reflected lower private inventory investment and nonresidential fixed investment, along with decelerations in PCE and residential fixed investment.

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Tuesday, March 28, 2017

Consumer Confidence Jumped in March

The Conference Board Consumer Confidence Index increased to 125.6 in March, up 9.5 points from February. The Present Situation Index rose 8.7 points to 143.1, while the Expectations Index jumped 9.9 points to 113.8.
“Consumer confidence increased sharply in March to its highest level since December 2000 (Index, 128.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers’ also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”

Consumers’ labor market outlook was more upbeat during March. The percentage of consumers expecting more jobs in the coming months increased from 20.9% to 24.8%, while the share anticipating fewer jobs declined from 13.6% to 12.2%. Income expectations also improved, as 21.5% of consumers expected their incomes to increase in coming months, up from 19.2% February.

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Friday, March 24, 2017

Durable Goods Orders Increased in February

New orders for manufactured durable goods increased 1.7% in February to $235.4 billion, following a 2.3% January increase, according to the U.S. Census Bureau.
New orders excluding defense rose 2.1% on the month, as orders of nondefense capital goods increased 4.1% to $72.9 billion.

Shipments of manufactured durable goods increased 0.3% to $239.2 billion.

Inventories of manufactured durable goods rose 0.2% to $385.1 billion, following a 0.1% January increase.

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Thursday, March 23, 2017

New Home Sales Increased in February

New single-family home sales rose to a seasonally adjusted annual rate of 592,000 in February, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The February level was 6.1% above the revised January rate of 558,000 and 12.8% above the February 2016 level.
Sales rose in most regions, increasing 3.6% in the South, 30.9% in the Midwest, and 7.5% in the West. In contrast, sales in the Northeast fell 21.4%.

The median price of a new home was $296,200, down 3.9% from January. The average price was $390,400.

At the end of February there was an estimated supply of 5.4 months at the current sales rate, down from January.

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Wednesday, March 22, 2017

Existing-Home Sales Slipped in February

Existing-home sales fell 3.7% to a seasonally adjusted annual rate of 5.48 million in February, according to the National Association of Realtors (NAR). Total existing-home sales cooled off after a strong start to 2017.
"Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that's pushing up price growth and pressuring the budgets of prospective buyers," said Lawrence Yun, NAR chief economist. "Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market."

The total housing inventory rose 4.2% to 1.75 million homes available for sale, while the median existing home price stood at $228,400, a 7.7% increase from February 2016.

Distressed sales remained at 7% of the total in February, which are down from 10% a year ago. Six percent of sales were foreclosures and 1% were short sales. On average, foreclosures and short sales sold for discounts of 18% and 17%, respectively.

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Monday, March 20, 2017

Industrial Production Unchanged in February

Industrial production was unchanged in February after decreasing 0.1% in January. Over the last year, industrial production was up 0.3%.
Manufacturing output increased 0.5% in February, the same increase as January. Production of durable goods rose 0.6%, while nondurables rose 0.4% during the month. Capacity utilization for manufacturing increased by 0.3 percentage point to 75.6%, a rate that is 2.8 percentage points below its long-run average.

The mining index increased 2.7% in February as most mining industries posted increases.

The utilities index fell 5.7% in February, largely because unseasonably warm weather reduced the demand for heating.

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