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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.

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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%.

Read the BLS release.
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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.

Read the Challenger Gray & Christmas release.
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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.

Read the FOMC Minutes.
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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.

Read the ISM release.
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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.

Read the ADP report.
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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.

Read the Census release.
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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.

Read the Census/BEA release.
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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.

Read the Census release.
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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.

Read the ISM release.
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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.”

Read the University of Michigan Surveys of Consumers release.
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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.

Read the GDP release.
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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.

Read the Conference Board release.
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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.

Read the Census release.
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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.

Read the Census/HUD release.
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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.

Read the NAR release.
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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.

Read the Fed release.
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Thursday, March 16, 2017

Housing Starts Rose in February

Housing starts rose to a seasonally adjusted annual rate of 1.288 million in February, 3.0% above the revised January rate of 1.251 million, and 6.2% above the February 2016 rate.
Housing activity increased in only one out of the four regions as the West saw housing starts jump 35.7%. The Northeast, Midwest, and South experienced declines of 9.8%, 4.6%, and 3.8%, respectively.
New building permits decreased during the month, falling 6.2% to 1.213 million. However, permits were up 4.4% from the February 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.114 million, up 5.4% from the revised January estimate and 8.7% above the February 2016 rate.

Read the Census release.
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Wednesday, March 15, 2017

Fed Raises Rates for First Time in 2017

The Federal Reserve Open Market Committee (FOMC) voted to raise the target range for the federal funds rate by 25 basis points to 0.75 to 1 percent. The vote was near unanimous, with Minneapolis Fed President Neel Kashkari casting the only dissenting vote, wanting to hold rates steady.
The projected policy path for the federal funds rate was in line with December’s, with the Fed’s dot plot showing three rate hikes this year. Participants estimated a target rate of 1.4 percent for 2017, a 2.1 percent rate for 2018, and a 3.0 percent rate for 2019.

In their decision to move the target rate, the Committee noted that the labor market has “continued to strengthen and that economic activity has continued to expand at a moderate pace.” Monetary policy remains accommodative, supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

The Committee once again announced that it is maintaining its policy of reinvesting principal payments from its holdings of agency debt and mortgage-backed securities, and of rolling over maturing Treasury securities at auction, anticipating it will do so until normalization of the federal funds rate is under way.

Read the FOMC statement.
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Builder Confidence Reaches 12-Year High in March

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 71 in March, a six point increase from February’s reading of 65.

“Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

All three HMI components increased in March. The component measuring current sales conditions rose seven points to 78, the component measuring sales expectations increased five points to 78, and the component measuring buyer traffic rose eight points to 54.

The regional three-month moving averages for HMI scores were mixed. The Northeast fell one point to 48 and the Midwest rose three points to 68. The South increased one point to 68 and the West fell three points to 76.

Read the NAHB release.
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Retail Sales Rose in February

There were $474.0 billion in retail and food service sales in February, up 0.1% from the previous month and 5.7% from February 2016, according to the U.S. Census Bureau.
Core retail sales – excluding automobiles and parts – increased 0.2% after rising by 1.2% in January. Year-over-year core sales increased 5.7%.

Retail trade sales increased 0.1% from January and are up 5.9% from last year. Sales at nonstore retailers increased 1.2% from January, while increasing 13.0% year-over-year.

Sales at gasoline stations declined 0.6% during the month, but are up 19.6% from a year ago.

Read the Census release.
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CPI Increased 0.1% in February

The Consumer Price Index increased 0.1% in February on a seasonally adjusted basis. Over the last 12 months, the all-items index rose 2.7%.
Prices for all items less food and energy, the “core CPI,” increased 0.2% in February, down slightly from January. The index rose 2.2% for the 12 months ending in February.

The food index increased 0.2% its largest rise since September 2015. Prices for food at home rose 0.3%, while prices for food away from home increased 0.2%. Over the past 12 months, food prices are unchanged.

The energy index decreased 1.0% in February. The gasoline index posted a decline of 3.0% following a 7.8% January increase.

Read the BLS release.
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Tuesday, March 14, 2017

Producer Prices Increased 0.3% in February

Producer prices rose 0.3% in February, seasonally adjusted, after climbing 0.6% in January, according to the U.S. Bureau of Labor Statistics. Producer prices rose 2.2% for the twelve months ended February 2017, which is the largest increase since the twelve months ended March 2012.
The index for final demand goods rose 0.3% in February. The increase was led by a 0.6% rise in the index for final demand energy. There was a smaller 0.1% increase in the index for final demand goods less food and energy.

Prices for final demand services ticked up 0.4% in February. Much of the advance was due to the index for final demand services less trade, transportation, and warehousing, which increased by 0.5%.

Read the BLS release.
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Small Business Optimism Remained Strong in February

The NFIB Small Business Optimism Index decreased 0.6 points in February to 105.3, maintaining the high level of post-election optimism. Three of the ten index components rose, while six declined. All of the index components have held near record highs since the remarkable increases after the election.
Reported job creation has improved, as 52% of businesses reported hiring or trying to hire. However, 44% reported few or no qualified applicants for the positions they were trying to fill. Seventeen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 15% of owners plan to create new jobs, down three points but still a strong reading.

Seasonally adjusted, the net percent of owners expecting better business conditions fell one point to a net 47%. The percent of owners reporting higher sales in the past three months rose four points to 2%, the first positive reading since early 2015. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell three points to a net 26% of owners. Capital spending increased as 62% of owners reported capital outlays, up three points from January. The percent of owners planning capital outlays in the next 3 to 6 months fell one point to 26%.

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

Read the NFIB report.
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Friday, March 10, 2017

235,000 Jobs Added in February

Total nonfarm payroll employment rose by 235,000 in February, down slightly from January’s upwardly revised figure of 238,000, according to the Bureau of Labor Statistics. The national unemployment rate moved was little changed at 4.7%. The majority of gains occurred in construction, private educational services, manufacturing, and health care.
Private-service providing industries added a net 132,000 jobs, led by gains in education and health services, which added 62,000 jobs during the month, and by professional and business services, which added 37,000 jobs this month.

Goods-producing employment rose by 95,000 jobs during the month, as gains in construction led the way.

The civilian labor force participation rate was 63.0%, an increase from January. The number of long-term unemployed, those jobless for 27 weeks or more, was virtually unchanged at 1.8 million and accounted for 23.8% of the unemployed. The number of discouraged workers was 522,000, little changed from a year earlier.

Average hourly earnings increased by 6 cents to $26.09, after a 5-cent increase in January. Over the past year, average hourly earnings have risen by 2.8%.

Read the BLS release.
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Thursday, March 9, 2017

Job Cuts Declined in February

Employers announced plans to cut 39,957 jobs in February, according to a report issued by Challenger, Gray & Christmas. February’s announced cuts were 19% less than January’s. The month’s figure was 40% lower than February 2016.

The retail sector once again led the way in job cuts, announcing 11,889 layoffs. The industry continues to move toward online and away from brick-and-mortar operations. Job cuts in retail are 580% more than the energy sector, which is the next highest so far this year.

“Retailers are experiencing a tremendous transformation from the traditional business model. The cost of digitizing merchandise, moving sales to online, and downsizing physical stores will likely take a toll on employees in this field,” said Andrew Challenger, vice president of Challenger, Gray & Christmas.

The energy sector, on the other hand, has reported only 5,930 job cuts so far this year. This is an 87% decline in job cuts compared to this point last year.

“The energy sector announced over 107,000 jobs last year. It seems the bleeding has stopped for now. The new administration and EPA chief Scott Pruitt have already enacted legislation to aid oil & gas companies, but it remains to be seen if those actions will result in more jobs,” said Challenger.

Read the Challenger Gray & Christmas release.
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Wednesday, March 8, 2017

ADP: 298,000 Jobs Added in February

The non-farm private sector added 298,000 jobs in February, according to the ADP National Employment Report. January’s figure was revised upward to 261,000. Service-providing jobs accounted for most of the month’s growth, while goods-producing employment surged as well.
Growth was widespread in February 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 104,000 jobs, while medium-sized businesses with 50-499 employees added 122,000 jobs. Large businesses added 72,000 jobs.

“February was a very good month for workers,” said Mark Zandi, chief economist of Moody’s Analytics. “Powering job growth were the construction, mining and manufacturing industries. Unseasonably mild winter weather undoubtedly played a role. But near record high job openings and record low layoffs underpin the entire job market.”

Service-providing employment rose by 193,000 jobs, driven by the professional and business services sector which added 66,000 jobs. Health care and social assistance jobs also increased, adding 38,000 jobs. Goods-producing employment increased by 106,000 jobs. The construction industry led the gain, adding 66,000 jobs.

Read the ADP report.
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Tuesday, March 7, 2017

Consumer Credit Growth Retreats in January

Consumer credit increased at a seasonally adjusted annual rate of 2.8% in January, down from a 4.7% rate in December. Total outstanding credit increased $8.8 billion during the month (compared with $14.8 billion in December) to $3.77 trillion.
Revolving credit fell at an annual rate of 4.6% to $995.1 billion, compared to a 4.3% increase in December. Non-revolving credit rose at a 5.5% annual rate, or $12.6 billion, compared to December’s rate of $11.2 billion. Total non-revolving credit is now $2.78 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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International Trade Balance Widened in January

The U.S. international trade deficit widened in January to $48.5 billion, up from $44.3 billion in December, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The overall increase reflected a $1.1 billion increase in exports along with a $5.3 billion increase in imports.
The goods deficit increased $4.0 billion to $69.7 billion, while the services surplus decreased $0.2 billion to $21.4 billion.

Exports of goods rose $1.1 billion to $128.0 billion in January, driven by increases in industrial supplies and materials. They saw a jump of $2.1 billion, largely due to increases in crude oil and other petroleum products. Exports of services decreased less than $0.1 billion to $64.1 billion.

Imports of goods increased $5.1 billion to $197.6 billion, mostly due to an increase in consumer goods, which rose by $2.4 billion. Imports of services increased $0.2 billion to $42.9 billion in January.

Read the Census/BEA release.
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Monday, March 6, 2017

Manufactured Goods Orders Rose in January

New orders for manufactured goods increased 1.2% to $470.2 billion in January, according to the U.S. Census Bureau. The January reading followed a 1.3% December increase.
New orders for manufactured durable goods jumped 2.0% to $230.7 billion, after decreasing for two consecutive months. Orders for transportation equipment drove the increase, rising 6.2% to $76.5 billion.

Shipments of manufactured durable goods were virtually unchanged, holding at $238.8 billion. This followed a 1.7% December increase.

Inventories of manufactured durable goods decreased 0.1% to $384.1 billion.

Read the Census release.
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Friday, March 3, 2017

ISM: Non-Manufacturing Sector Grew in February

The ISM Non-Manufacturing Index registered 57.6 points in February, 1.1 percentage points above January’s figure and the highest reading since October 2015. This was the 86th consecutive month of growth. Sixteen non-manufacturing industries reported growth in February, while two reported contraction.
Growth in the Business Activity Index increased 3.3 points to 63.6, the highest reading since February 2011. Thirteen industries reported increased business activity and one reported decreased activity. Respondents noted an optimistic business climate and seasonal uptick over a typically slow January.

Non-manufacturing employment grew for the 36th consecutive month. The index increased 0.5 percentage point to 55.2. Eleven industries reported increased employment, while four reported decreased employment.

The New Orders Index rose 2.6 points to 61.2. Some respondents commented that they had new clients onboard and are spending new budgets.

Supplier deliveries slowed for the 14th consecutive month, as the index registered 50.5 points (readings above 50 for this index indicate slower deliveries). Five industries reported slower deliveries, while five reported faster deliveries.

Read the ISM release.
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Wednesday, March 1, 2017

Beige Book: Economic Expansion Continues into 2017

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

Consumer spending expanded at a moderate pace this period. Most Districts reported expanded retail sales at a subdued pace, with numerous Districts reporting an ongoing shift from purchases made in-store to those made online. Manufacturers in most Districts reported accelerated activity, although at a moderate pace. Firms across the country and industries were still optimistic about growth in the coming months, but less so than the prior report.

Some Districts reported widening labor shortages as labor markets remained tight to start the year. Most Districts saw employment rise at a moderate pace. Wage growth was characterized generally as modest or moderate across the Districts, while price growth was little changed from the prior period.

Read the full Federal Reserve report.
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Construction Spending Declined in January

Construction spending decreased 1.0% in January to a seasonally adjusted annual level (SAAL) of $1,180.3 billion, according to the Census Bureau. December’s spending estimate was revised to a rate of $1,192.2 billion. January’s figure is 3.1% greater than the January 2016 estimate of $1,144.9 billion.
Total private construction rose to $911.6 billion SAAL, up 0.2% from the revised December estimate of $909.4 billion.

Private residential construction was $476.4 billion SAAL, 0.5% above December’s rate.

Private nonresidential construction was $435.3 billion, virtually the same as December’s estimate.

Public construction decreased 5.0% to $268.7 billion SAAL, largely due to declines in educational and highway construction projects.

Read the Census release.
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Manufacturing Sector Expanded in February

The ISM Manufacturing Index registered 57.7 points in February, up 1.7 points from the previous month and the highest reading since August 2014, according to the Institute for Supply Management. February’s reading indicates a sixth consecutive month of expansion in manufacturing, as readings over 50 points denote expansion. Of the eighteen manufacturing industries, seventeen reported growth while only one reported contraction.
The Employment Index declined 1.9 points to 54.2 in February, indicating expansion for the fifth consecutive month. Ten industries reported expansion, while five reported a decrease in employment.

The New Orders Index increased 4.7 points to 65.1 in February, indicating growth for the sixth consecutive month. Sixteen industries reported increases in new orders while none reported decreases.

Export orders increased 0.5 point to 55.0, indicating growth for the twelfth consecutive month. Six industries reported growth while only one of the eighteen reported a decrease in new export orders.

The inventories index registered 51.5 points, indicating that raw materials inventories are growing for the first time after nineteen consecutive months of contraction.

Read the ISM release.
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Tuesday, February 28, 2017

Fourth Quarter GDP Grew at 1.9%

Real GDP for the fourth quarter of 2016 grew at a seasonally adjusted annual rate of 1.9%, according to the Bureau of Economic Analysis’s revised estimate, unchanged from the advance estimate. The general picture of economic growth remained the same.
The change in GDP reflected an upward revision to personal consumption expenditures that was offset by downward revisions to nonresidential fixed investment and state and local government spending.
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 yearly increase was due to positive contributions from PCE, residential fixed investment, state and local government spending, and exports that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment.

Read the GDP release.
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Monday, February 27, 2017

Durable Goods Orders Increased in January

New orders for manufactured durable goods increased 1.8% in January to $230.4 billion, following a 0.8% December decrease, according to the U.S. Census Bureau.
New orders excluding defense rose 1.5% on the month, as orders of nondefense capital goods increased 3.6% to $69.0 billion.

Shipments of manufactured durable goods decreased 0.1% to $238.3 billion.

Inventories of manufactured durable goods were virtually unchanged at $383.8 billion, following 0.1% December decrease.

Read the Census release.
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Friday, February 24, 2017

New Home Sales Increased in January

New single-family home sales rose to a seasonally adjusted annual rate of 555,000 in January, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The January level was 3.7% above the revised December rate of 535,000 and 5.5% above the January 2016 level.
Sales rose in most regions, increasing 15.8% in the Northeast, 14.8% in the Midwest, and 4.3% in the South. In contrast, sales in the West fell 4.4%.

The median price of a new home was $312,900, down 3.0% from December. The average price was $360,900.

At the end of January there was an estimated supply of 5.7 months at the current sales rate, unchanged from December.

Read the Census/HUD release.
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Consumer Sentiment Fell in February

Consumer Sentiment declined 2.2 points in February to 96.3, according to the University of Michigan Consumer Sentiment Index.
The Current Economic Conditions Index rose 0.2 points to 111.5, while the Consumer Expectations Index fell 3.8 points to 86.5.
“While consumer confidence edged upward in late February, it remained slightly below the decade peak recorded in January. Overall, the Sentiment Index has been higher during the past three months than anytime since March 2004,” said Richard Curtin, chief economist of UM Surveys of Consumers. “Normally, the implication would be that consumers expected Trump's election to have a positive economic impact. That is not the case since the gain represents the result of an unprecedented partisan divergence, with Democrats expecting recession and Republicans expecting robust growth.”

Read the University of Michigan Surveys of Consumers release.
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Wednesday, February 22, 2017

FOMC Minutes: Hike May be Appropriate ‘Fairly Soon’

Fed officials expressed that they could raise interest rates “fairly soon” as an improving economy and the possibility of faster than anticipated inflation could put the economy at risk of overheating, according to the minutes of the meeting released today.

“Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations,” the minutes said.

The minutes showed that Fed officials grappled with uncertainty on numerous issues, including the Trump administration’s fiscal plans and the potential effects of a rising dollar.

The Fed has left the door open for the possibility of raising rates at its next policy meeting on March 14-15, as some Federal Open Market Committee members noted that it might be appropriate to move “potentially at an upcoming meeting.” The FOMC voted unanimously to leave rates at 0.50-0.75 basis points at its last meeting.

Read the FOMC Minutes.
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Existing-Home Sales Increased in January

Existing-home sales rose 3.3% to a seasonally adjusted annual rate of 5.69 million in January, according to the National Association of Realtors (NAR). The fast start to 2017 saw existing-home sales reach their strongest level since February 2007 (5.79 million).
"Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home," said Lawrence Yun, NAR chief economist. "Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions."

The total housing inventory rose 2.4% to 1.69 million homes available for sale, while the median existing home price stood at $228,900, a 7.1% increase from January 2016.

Distressed sales remained at 7% of the total in January, which are down from 9% a year ago. Five percent of sales were foreclosures and 2% were short sales. On average, foreclosures and short sales sold for discounts of 14% and 10%, respectively.

Read the NAR release.
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Thursday, February 16, 2017

Housing Starts Fell in January

Housing starts fell to a seasonally adjusted annual rate of 1.246 million in January, 2.6% below the revised December rate of 1.279 million, but 10.5% above the January 2016 rate.
Housing activity increased in two out of the four regions. The Northeast and the South saw housing starts jump 55.4% and 20.0%, respectively. The West and the Midwest, however, experienced declines of 41.3% and 17.9%, respectively.
New building permits increased during the month, rising 4.6% to 1.285 million. Permits were up 8.2% from the January 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.047 million, down 5.6% from the revised December estimate and 0.9% below the January 2016 rate.

Read the Census release.
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