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Thursday, August 17, 2017

Industrial Production Rose 0.2% in July

Industrial production grew 0.2% in July after 0.4% June increase, according to the Federal Reserve. July represented the sixth consecutive month without a decline.
Manufacturing output fell 0.1% in July after a 0.2% increase in June. Production of durable goods decreased 0.5%, while nondurables edged up 0.4% during the month. Capacity utilization for manufacturing decreased by 0.1 percentage point to 75.4%, a rate that is 3.0 percentage points below its long-run average.

The output of mining continued to rise, increasing 0.5% in July, following an upwardly revised 2.0% June jump. The index in July was 10.2% higher than its year-earlier level.

Utilities increased 1.6% in July, following a 1.2% decline in June. The index in July was 0.6% lower than its year-earlier level.

Read the Fed release.
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Fed Divided Over Timing of Next Rate Hike

The Federal Open Market Committee was divided over when it will next raise the target federal funds rate, which they decided to hold at 1 to 1.25 percent, according to minutes from the FOMC’s July 25-26 meeting. “Some” FOMC members expressed uncertainty about inflation, saying that the committee “could afford to be patient” in deciding when to raise rates, while others said the labor market has neared full employment and a delay in raising rates “would likely be costly to reverse” or “could lead to an intensification or financial stability risks or to other imbalances that might prove difficult to unwind.”

The committee also said its plans to begin reducing the Fed’s balance sheet will be “formally announced next month.” The balance sheet is swollen with $4.5 trillion in securities purchased as part of quantitative easing programs between 2008 and 2014.

FOMC members said they expect continued economic growth and job gains in the near term, and agreed that the timing and size of future rate hikes “would depend on their assessment of realized and expectation economic conditions.” 


Read the FOMC minutes

Wednesday, August 16, 2017

Housing Starts Declined in July

Housing starts decreased to a seasonally adjusted annual rate of 1.155 million in July, according to the U.S. Department of Commerce. The decline was 4.8% below the revised June rate of 1.213 million and is 5.6% below the July 2016 rate.
Housing activity decreased in three of the four regions with only the South showing growth, increasing 0.6%. The Northeast and Midwest both saw large declines after a strong June report, falling 15.7% and 15.2%, respectively. The West fell at a slower rate as housing activity decreased 1.6%.
New building permits decreased during the month, falling 4.1% to 1.223 million. However, permits were up 4.1% from the July 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.175 million, down 6.2% from the revised June estimate but 8.2% above the July 2016 rate.

Read the Census release.

Tuesday, August 15, 2017

Homebuilder Confidence Soared in August

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 68 in August, a four point increase from June’s reading.

“Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”

All three HMI components posted gains in August. The component measuring current sales conditions rose four points to 74; the component measuring sales expectations in the next six months grew five points to 78, and the component measuring buyer traffic moved up one point to 49.

The regional three-month moving averages for HMI scores showed gains in one of the four regions. The Northeast edged one point up to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.

Read the NAHB release.
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Retail Sales Jumped to 7-Month High in July

There were $478.9 billion in retail and food service sales in July, up 0.6% from the previous month and 4.2% from July 2016, according to the U.S. Census Bureau. July’s retail sales were the largest gain in seven months. June’s number was upwardly revised to reflect 0.3% growth.
Core retail sales – excluding automobiles and parts – grew 0.5%. Year-over-year core sales increased 3.8%.

Retail trade sales increased 0.6% from June, up 4.3% from last year. Sales at nonstore retailers increased 1.3% from June, the largest monthly gain since December 2016. Nonstore retailer sales are up 11.5% year-over-year as online retailers continue to grow their market share.

Sales at gasoline stations decreased 0.4% during July, the second consecutive monthly decline, but are up 2.1% from a year ago.

Read the Census release.
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Friday, August 11, 2017

Consumer Prices Increased 0.1% in July

The Consumer Price Index grew 0.1% in July on a seasonally adjusted basis, according to U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index rose 1.7%.
Prices for all items less food and energy, the “core CPI,” increased 0.1% in July, the fourth month in a row it increased that amount. The index rose 1.7% for the 12 months ending in July.

The food index increased 0.2% after remaining flat in June. Prices for food at home and food away from home both grew 0.2%. Over the past 12 months, food prices are up 1.1%.

The energy index fell 0.1% in July, the third consecutive monthly decline. The fuel oil index led the decrease, falling 2.0%. However, the energy index still rose 3.4% in the last twelve months.

Read the BLS release.
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Thursday, August 10, 2017

Producer Prices Declined 0.1% in July

Producer prices fell 0.1% in July, seasonally adjusted, after increasing 0.1% in June, according to the U.S. Bureau of Labor Statistics. Producer prices rose 1.9% for the twelve months ended July 2017.
The index for final demand goods decreased 0.1% in July after growing 0.1% in the previous month. The index for final demand energy fell 0.3%, the third consecutive monthly decline. Prices for final demand were unchanged after growing 0.6% in June.

Prices for final demand services decreased 0.2% in July, the first decline since February. Prices for final demand transportation and warehousing services led the way, falling 0.8%.

Read the BLS release.
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Tuesday, August 8, 2017

Small Business Optimism Rose to Five Month High in July

The NFIB Small Business Optimism Index grew to 105.2, its highest reading since February. July’s index was 1.6 points above June’s 103.6 reading. Seven of the ten index components rose, while two declined.
Reported job creation jumped 6 points, as 60% of businesses reported hiring or trying to hire. However, 52% reported few or no qualified applicants for the positions they were trying to fill. Nineteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 19% of owners plan to create new jobs, up four points from the previous month.

Seasonally adjusted, the net percent of owners expecting better business conditions grew four points to a net 37%. The percent of owners reporting higher sales in the past three months compared to the prior three months was zero, a 4-point improvement from June’s reading. Seasonally adjusted, the net percent of owners expecting higher real sales volumes grew five points to a net 22% of owners. Capital spending was unchanged as 57% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months decreased two points to 28%. June’s 30% reading was the highest since September 2007.

Credit conditions remained historically low, as 3% of owners reported that all their borrowing needs were not met, one point lower than June. Only 2% of business owners surveyed reported that financing was their top business problem, compared to 21% citing taxes.

Read the NFIB report.
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Monday, August 7, 2017

Consumer Credit Growth Slowed in June

Consumer credit increased at a seasonally adjusted annual rate of 3.9% in June, down from a revised 5.7% rate in May. Total outstanding credit increased $12.4 billion during the month (compared with $18.3 billion in May) to $3.86 trillion.
 
Revolving credit grew at an annual rate of 4.9% to $1.0 trillion, compared to an 8.2% increase in May. Non-revolving credit rose at a 3.5% annual rate, or $8.2 billion, compared to May’s rate of $11.5 billion. Total non-revolving credit is now $2.83 trillion.

Federal government holdings of student loans continue to be the largest portion of non-revolving credit, comprising approximately 38.0% of outstanding credit. Depository institutions and finance companies are secondary and tertiary holders, with 24.4% and 21.4%, respectively, of outstanding non-revolving credit.

Read the Fed release.
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Friday, August 4, 2017

International Trade Balance Narrowed in June

The U.S. international trade deficit narrowed for the second consecutive month, falling to $43.6 billion, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. June's decrease was down $2.8 billion from a $46.4 billion trade deficit in May. The increase reflected a $2.4 billion growth in exports along with a $0.4 billion decrease in imports.
The goods deficit decreased $2.1 billion to $65.3 billion, while the services surplus grew $0.6 billion to $21.6 billion.

Exports of goods decreased just over $1.7 billion to $129.0 billion in June, driven by a $0.5 billion increase in petroleum products. Exports of services increased $0.6 billion to $65.4 billion.

Imports of goods decreased $0.4 billion to $194.3 billion, mostly due to a significant decrease in crude oil, which fell by $1.4 billion. Imports of services remained unchanged at $43.8 billion in June.

Read the Census/BEA release.
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209,000 Jobs Added in July

Total nonfarm payroll employment rose by 209,000 in July, a small decrease from June’s upwardly revised figure of 231,000, according to the Bureau of Labor Statistics. The national unemployment rate fell to 4.3%, staying within a 10 basis point range in the last four months.
Private service-providing industries added a net 183,000 jobs, led by gains in leisure and hospitality, which added 62,000 during the month, and by the health care and social assistance sector, which added 45,000.

Goods-producing employment rose by 22,000 jobs during the month, as gains in durable goods manufacturing led by adding 13,000 in July.

The civilian labor force participation rate was 62.9%, a 0.1% increase from June. Workers unemployed for less than 14 weeks decreased 88,000, while the number of long-term unemployed, those jobless for 27 weeks or more, increased 121,000 and accounted for 25.9% of the unemployed. The number of discouraged workers was 536,000, a 22,000 increase from June.

Average hourly earnings increased by 9 cents to $26.36, after a 5-cent increase in June. Over the past year, average hourly earnings have risen by 65 cents, or 2.5%.

Read the BLS release.
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Thursday, August 3, 2017

ISM: Non-Manufacturing Sector Grew in July

The ISM Non-Manufacturing Index registered 53.9 points in July, 3.5 percentage points below June’s figure. This was the 91st consecutive month of growth. Fifteen non-manufacturing industries reported growth in July, while two reported contraction.
Growth in the Business Activity Index decreased 4.9 points to 55.9. Fourteen industries reported increased business activity and three reported decreased activity. Respondents noted a drop off in business activity, potentially due to the summer, while others noted increased store traffic. 

Non-manufacturing employment grew for the 41st consecutive month. The index decreased 2.2 points to 53.6. Nine industries reported increased employment, while four reported decreased employment. 

The New Orders Index fell 5.4 points to 55.1. Thirteen industries reported increased business activity and one industry reported decreased activity.

Supplier deliveries slowed for the 19th consecutive month, as the index registered 51.0 points (readings above 50 for this index indicate slower deliveries). Seven industries reported slower deliveries, while five reported faster deliveries.

Read the ISM release.
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Manufactured Goods Orders Grew 3% in June

New orders for manufactured goods increased 3.0% to $481.1 billion in June, according to the U.S. Census Bureau. It followed a 0.3% decrease in each of the two previous months. June saw the largest gain in eight months.
New orders for manufactured durable goods increased 6.4%% to $245.8 billion in June. Orders for nondefense aircraft and parts drove the increase, jumping 131.1% to $25.3 billion.

Shipments of manufactured durable goods saw no significant change, remaining at $236.2 billion.

Inventories of manufactured durable goods, up eleven of the last twelve months, increased 0.5% to $397.4 billion.

Read the Census release.

Job Cuts Hit 8-Month Low in July

Employers announced plans to cut 28,307 jobs in July, according to a report issued by Challenger, Gray & Christmas, the lowest monthly total since November 2016. July’s announced cuts were 9% lower than June’s. The month’s figure was 37.6% lower than July 2016.

The retail sector continues to lead the way in job cuts, with 63,989 so far this year. This is 46.7% higher than the same period last year. However, the energy sector continued to hold strong, announcing 1,614 cuts in July, which brings the total to 8,635 in 2017. This is an 89.1% decrease from this point last year when the energy sector had shed 94,936 jobs.

“While retailers are cutting the most jobs this year, those companies are also announcing the most hiring. These jobs are not the typical retail job, as consumers increasingly turn to online shopping. New retail jobs could be going to places like fulfillment and distribution centers, which increasingly need talent, as well as to workers with the tech skills necessary to interact with and manage the automation that’s revolutionizing the industry,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Telecommunications companies have reported 11,569 job cuts through July this year, 57.5% more than the 7,344 cuts through this point last year.

The service industry shed 2,607 jobs last month, totaling 18,022 through July this year. This is a 131.1% increase from July 2016.

Read the Challenger, Gray & Christmas release.
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Wednesday, August 2, 2017

ADP: 178,000 Jobs Added in July

The non-farm private sector added 178,000 jobs in July, according to the ADP National Employment Report. June’s figure was revised up from 158,000 to 191,000. Professional and business services jobs accounted for 36.4% of July’s growth.
Businesses of all sizes saw steady increases. Small businesses with fewer than 50 employees rebounded from a sluggish June, adding 50,000 jobs, while medium-sized businesses with 50-499 employees added 83,000. Large businesses added 45,000 jobs.

Mark Zandi, chief economist of Moody’s Analytics, said, “The American job machine continues to operate in high gear. Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls. At this pace of job growth, unemployment will continue to quickly decline.”

Service-providing employment rose by 174,000 jobs, driven by the professional and business services sector which added 65,000. The health services sector had a robust report, adding 41,000 jobs. The education sector saw the smallest increase in service-providing employment, gaining 2,000 jobs. Goods-producing employment grew by 4,000 jobs. The manufacturing industry lost 4,000 jobs after gaining 6,000 in June. It was offset by gains of 3,000 and 6,000 in the mining and construction sectors, respectively.

Read the ADP report.
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Tuesday, August 1, 2017

Construction Spending Fell 1.3% in June

Construction spending slowed in June, landing at a seasonally adjusted annual level (SAAL) of $1,205.8 billion, according to the Census Bureau. May’s spending estimate was revised to a rate of $1,221.6 billion. June’s figure is 1.6% greater than the June 2016 estimate of $1,186.4 billion.
Total private construction was $940.7 billion SAAL, a 0.1% decrease from the revised May estimate of $941.3 billion. Total private construction is 5.3% higher than the June 2016 figure.

Private residential construction was $502.9 billion SAAL, 0.2% below May’s downwardly revised rate. June’s figure is 9.2% greater than its June 2016 estimate.

Private nonresidential construction was $437.8 billion, 0.1% above May’s upwardly revised estimate. June’s estimate is 1.1% greater than the June 2016 figure.

Public construction decreased 5.4% to $265.1 billion SAAL. June’s figure is 9.5% below the June 2016 estimate.

Read the Census release.

Manufacturing Sector Expanded for Eleventh Consecutive Month

The ISM Manufacturing Index registered 56.3 points in July, down 1.5 percentage points from the previous month, according to the Institute for Supply Management. July’s reading indicates an eleventh consecutive month of expansion in manufacturing, as readings over 50 points denote expansion. Of the eighteen manufacturing industries, fifteen reported growth, while three reported contraction. Eight of the ten index components grew, while the inventories index was unchanged, and the customers’ inventories index was the only to contract.
The Employment Index decreased 2.0 points to 55.2 in July, indicating expansion for the tenth consecutive month. Eleven industries reported expansion, while three reported a decrease in employment.

The New Orders Index decreased 3.1 points to 60.4 in July, indicating growth for the eleventh consecutive month. Fourteen industries reported expansion, while one reported a decrease in employment.

Export orders decreased 2.0 points to 57.5, indicating growth for the seventeenth consecutive month. Eleven industries reported growth while only one of the eighteen reported a decrease in new export orders.

The inventories index registered 50.0 points, up 1.0 point from the previous month. Seven industries reported higher inventories, while eight reported a decrease.

Read the ISM release.

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Fed Survey: CRE Lending Tightened in Second Quarter

Bankers continued tightening credit for commercial real estate and certain consumer loans in the second quarter of 2017, while residential mortgage lending eased and commercial and industrial standards remained mostly unchanged, according to the Federal Reserve’s latest senior loan officer opinion survey released yesterday.

Regarding CRE lending, 17.3% said they tightened standards somewhat on construction and land development loans, while 21% said they tightened somewhat or considerably on multifamily loans. Twelve percent said they tightened standards somewhat for loans secured by nonfarm nonresidential properties. Lenders noted slightly weaker demand for construction and land development loans and loans secured by multifamily residential properties during the second quarter, and demand for nonfarm residential loans remained unchanged on net.

Commercial and industrial lending standards remained mostly unchanged, though some lenders reported some easing of specific loan terms. Of those, 86.7% said that more aggressive competition from bank or nonbank lenders was a somewhat or very important factor in the decision to ease. Demand for C&I loans was weaker in the second quarter, with lenders citing shifts in customer borrowing to other bank or nonbank sources and decreases in customers’ needs to finance inventory, accounts receivable, investment in plants or equipment and mergers and acquisitions.

Meanwhile, on the residential lending side, lenders saw stronger demand for most categories of residential loans, with most saying that their standards either eased or remained unchanged. Auto lending and credit card standards tightened amidst weaker demand in the second quarter. 


View the survey results

Friday, July 28, 2017

Consumer Sentiment Declined in July

Consumer Sentiment fell 1.8 points in July to 93.4, according to the University of Michigan Consumer Sentiment Index.  
 
The Current Economic Conditions Index rose 0.8 point to 113.4, while the Consumer Expectations Index decreased 4.1 points to 80.5. 
 
Consumer confidence remained largely unchanged at the same favorable level recorded at mid-month. The overall Sentiment Index has declined by 5.1 Index-points since the January peak, which was the highest figure in a dozen years,” said Richard Curtin, chief economist of UM Surveys of Consumers. “The relatively small decline still left the Sentiment Index higher in the first seven months of 2017 than in any other year since 2004. The size of the decline was tempered by record favorable views of Current Economic Conditions, which rose to its highest level since July of 2005.

Read the University of Michigan Surveys of Consumers release
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Banks and the Economy.

Second Quarter GDP Grows 2.6%

Real GDP grew at a seasonally adjusted annual rate of 2.6% during the second quarter of 2017, according to the Bureau of Economic Analysis’s “advance” estimate, up from 1.2% in the first quarter. The acceleration in real GDP reflected positive contributions from personal consumption expenditures, nonresidential fixed investment, exports, and federal government spending. These were partly offset by negative contributions from private residential fixed investment, private inventory investment, and state and local government spending.
Consumption accounted for 1.9% of the gain, up from 1.3% during the first quarter. Fixed investment slowed after a high previous quarter, adding a total of 0.4% to GDP. Inventories did not have a net impact on GDP this quarter after subtracting 1.5% in the first.
Government spending increased during the quarter, as federal government spending led with a 0.2% contribution to the GDP increase, while state and local spending saw a marginal decrease.  

Net exports were positive, adding 0.2% to GDP.

Read the BEA release.
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Thursday, July 27, 2017

Durable Goods Orders Climbed 6.5% in June

New orders for manufactured durable goods increased 6.5% in June to $245.6 billion, following a 0.1% May decrease, according to the U.S. Census Bureau.
 
New orders excluding defense grew 6.7% on the month, while orders of nondefense capital goods jumped 21.0% to $84.6 billion.

Shipments of manufactured durable goods, down in three of the last fourth months, decreased $0.1 billion, virtually unchanged at $236.0 billion. This followed a 1.2% increase in May.

Inventories of manufactured durable goods continued to rise, growing 0.4% to $397.0 billion, following a 0.1% May increase and growth in eleven of the last twelve months. 

Read the Census release.
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FOMC: Balance Sheet Reduction to Begin ‘Soon’

At its meeting that concluded yesterday, the Federal Open Market Committee said it plans to begin "relatively soon" to reduce the Fed’s balance sheet, which is swollen with $4.5 trillion in securities purchased as part of quantitative easing programs between 2008 and 2014.

According to a statement from the FOMC released yesterday, the committee said it expects to begin the process “provided that the economy evolves broadly as anticipated.” At their previous meeting in June, the committee agreed to publicly communicate the plan once it has been agreed upon.

FOMC members decided at the same meeting to maintain the target federal funds rate of 1 to 1.25 percent, saying they expect “moderate” economic growth and continued job gains in the near term.


The statement noted that the labor market has continued to strengthen with solid job gains and expanding household spending and business fixed investment. According to the FOMC, overall inflation and the measure excluding food and energy prices have declined, running below the Fed's 2% target rate.

Read more.
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Wednesday, July 26, 2017

New Home Sales Increased in June

New single-family home sales rose to a seasonally adjusted annual rate of 610,000 in June, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The June level was 0.8% above the revised May rate of 605,000 and 9.1% above the June 2016 estimate.
Sales grew in two regions, 10.0% in the Midwest and 12.5% in the West. The South posted a loss of 6.1%, while the Northeast’s sales remained unchanged.

The median price of a new home was $310,800, down 4.2% from May. The average price was $379,500.

At the end of June, the estimated supply at the current sales rate remained unchanged at 5.4 months.

Read the Census/HUD release.

Tuesday, July 25, 2017

Consumer Confidence Grew in July

The Conference Board Consumer Confidence Index increased to 121.1 in July, rebounding from declines in the three preceding months. Last month’s index was downwardly revised from 118.9 to 117.3. The Present Situation Index rose 3.9 points to 146.3, the third consecutive monthly increase. The Expectations Index grew 3.7 points to 103.3 after declining in the three preceding months.
“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”

Consumers’ labor market outlook improved in July. The percentage of consumers expecting more jobs in the coming months was unchanged at 19.2%, but the share anticipating fewer jobs decreased from 14.6% to 13.3%. Income expectations dipped, as 20.0% of consumers expected their incomes to increase in coming months, down from 20.9% in June.

Read the Conference Board release.

Monday, July 24, 2017

Existing-Home Sales Declined in June

Existing-home sales decreased 1.8% to a seasonally adjusted annual rate of 5.52 million in June, according to the National Association of Realtors (NAR). Despite the decline, sales are 0.7% above a year ago.
"Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that's straining their budget," said Lawrence Yun, NAR chief economist. "The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines."

The total housing inventory fell 0.5% to 1.96 million homes available for sale, while the median existing home price climbed to $263,800, up 6.5% from June 2016 ($247,600) as the new peak median sales price. This marks the 64th straight month of year-over-year gains.

Distressed sales were 4% of the total in June, down from 6% a year ago and matching last September as the lowest share of sales since NAR began tracking in October 2008. Three percent of sales were foreclosures and 1% were short sales.

Read the NAR release.
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Wednesday, July 19, 2017

Housing Starts Grew in June

Housing starts increased to a seasonally adjusted annual rate of 1.215 million in June, 8.3% above the revised May rate of 1.122 million and 2.1% above the June 2016 rate.
Housing activity increased 1.6% in the West and jumped 83.7% in the Northeast. The Midwest’s housing activity grew 22.0%, while the South’s decreased 3.8%.
New building permits increased during the month, rising 7.4% to 1.254 million. Permits were up 5.1% from the June 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.203 million, up 5.2% from the revised May estimate and 8.1% above the June 2016 rate.

Read the Census release.

Tuesday, July 18, 2017

Builder Confidence Declines Slightly in July

The National Association of Home Builders/Wells Fargo Housing Market Index slowed to 64 in July, a two point decrease from July’s downwardly revised reading of 66.

“Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.”

All three HMI components posted losses in July but remained at historically solid levels. The component measuring current sales conditions fell two points to 70; the component measuring sales expectations in the next six months decreased two points to 73, and the component measuring buyer traffic moved down one point to 48.

The regional three-month moving averages for HMI scores showed gains in just one of the four regions. The Northeast edged one point up to 47, while the Midwest and West each dropped one point to 66 and 75, respectively. The South fell three points to 67.

Read the NAHB release.
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Friday, July 14, 2017

Industrial Production Rose 0.4% in June

Industrial production grew 0.4% in June after an upwardly revised 0.1% May increase, according to the Federal Reserve. May’s jump was the fifth consecutive month of growth
Manufacturing output grew 0.2% in June after a 0.4% decline in May. Production of durable goods and nondurables both edged up 0.5% during the month. Capacity utilization for manufacturing increased by 0.1 percentage point to 75.4%, a rate that is 3.4 percentage points below its long-run average.

The output of mining continued to rise, increasing 1.6% in June, following a 1.9% May jump. The index in June was 9.9% higher than its year-earlier level.

Utilities remained unchanged in June, following increases in the three previous months.

Read the Fed release.
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Retail Sales Fell in June

There were $473.5 billion in retail and food service sales in June, down 0.2% from the previous month and up 2.8% from June 2016, according to the U.S. Census Bureau. 
Core retail sales – excluding automobiles and parts – also fell 0.2%. Year-over-year core sales increased 2.4%. 

Retail trade sales decreased 0.1% from May and are up 3.0% from last year. Sales at nonstore retailers increased 0.4% from May, while increasing 9.2% year-over-year.

Sales at gasoline stations decreased 1.3% during the month but are up 0.3% from a year ago.

Read the Census release.
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Consumer Prices Unchanged in June

The Consumer Price Index remained flat in June on a seasonally adjusted basis, according to U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index rose 1.6%. 
Prices for all items less food and energy, the “core CPI,” increased 0.1% in June, the same as in May. The index rose 1.7% for the 12 months ending in June. 

The food index was unchanged after five consecutive monthly increase. Prices for food at home fell 0.1%, while prices for food away from home remained flat. Over the past 12 months, food prices are up 0.9%.

The energy index decreased 1.6% in June, led by the fuel oil index falling 3.7%.

Read the BLS release.
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Thursday, July 13, 2017

Producer Prices Increased 0.1% in June

Producer prices increased 0.1% in June, seasonally adjusted, after remaining unchanged in May, according to the U.S. Bureau of Labor Statistics. Producer prices rose 2.0% for the twelve months ended June 2017. 
The index for final demand goods increased 0.1% in June after falling 0.5% in the previous month. The index for final demand energy fell 0.5%, the second consecutive monthly decline. Prices for final demand foods climbed 0.6%. 

Prices for final demand services moved up 0.2% in June. Most of the increase can be traced to prices for final demand services less trade, transportation and warehousing, which advanced 0.3%.

Read the BLS release.
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Wednesday, July 12, 2017

Beige Book: Economic Activity Expanding at a Slight to Moderate Pace

Economic activity continued to expand at a slight to moderate pace across the twelve Federal Reserve Districts in June, according to the just-released Federal Reserve Beige Book.

Consumer spending softened this period, particularly in auto retail sales which declined in half of the Districts. Manufacturing and non-financial services continued to expand at a modest to moderate pace across the Districts. Agricultural conditions were mixed as regions reported varying moisture conditions. Energy activity improved since the most recent Beige Book, driven by growth in oil and natural gas but somewhat offset by sluggish coal production.

Employment expanded across most Districts at a modest to moderate pace. Labor markets once again remained tight, and employers in most Districts continued to report greater difficulty attracting and retaining qualified workers.

Modest to moderate wage growth was seen in most Districts, with many reporting tight labor market conditions driving wage gains. Prices increased modestly in the majority of districts. Several Districts reported higher construction materials costs but lower gasoline and agricultural prices.

Read the full Federal Reserve report
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Tuesday, July 11, 2017

Small Business Optimism Dips in June, Remains Historically High

The NFIB Small Business Optimism Index dipped to 103.6 in June but maintained the high level of post-election optimism. June’s index was 0.9 point lower than May’s 104.5 reading. Four of the ten index components rose, while five declined.
Reported job creation fell 5 points, as 54% of businesses reported hiring or trying to hire. However, 46% reported few or no qualified applicants for the positions they were trying to fill. Fifteen 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 from the previous month. 

Seasonally adjusted, the net percent of owners expecting better business conditions fell six points to a net 33%. The percent of owners reporting higher sales in the past three months compared to the prior three months was negative 4%, a 9-point decline from May’s reading. Seasonally adjusted, the net percent of owners expecting higher real sales volumes fell five points to a net 17% of owners. Capital spending moved down five points as 57% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months increased three points to 30%, which is the highest reading since September 2007.

Credit conditions mostly held steady, as 4% of owners reported that all their borrowing needs were not met, one point higher than May but historically very low. Only 1% of business owners surveyed reported that financing was their top business problem, down one point from May.

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Monday, July 10, 2017

Consumer Credit Growth Accelerated in May

Consumer credit increased at a seasonally adjusted annual rate of 5.8% in May, up from a revised 4.1% rate in April. Total outstanding credit increased $18.4 billion during the month (compared with $12.9 billion in April) to $3.84 trillion.
Revolving credit grew at an annual rate of 8.7% to $1.0 trillion, compared to a 1.4% increase in April. Non-revolving credit rose at a 4.7% annual rate, or $11.1 billion, compared to April’s rate of $11.7 billion. Total non-revolving credit is now $2.82 trillion.
Federal government holdings of student loans continue to be the largest portion of non-revolving credit, comprising approximately 38.7% of outstanding credit. Depository institutions and finance companies are secondary and tertiary holders, with 24.5% and 21.3%, respectively, of outstanding non-revolving credit.

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Friday, July 7, 2017

222,000 Jobs Added in June

Total nonfarm payroll employment rose by 222,000 in June, an increase from May’s upwardly revised figure of 152,000, according to the Bureau of Labor Statistics. The national unemployment rate nudged up to 4.4%.
Private service-providing industries added a net 162,000 jobs, led by gains in health care and social assistance, which added 59,100 during the month, and by the leisure and hospitality sector, which added 36,000.

Goods-producing employment rose by 25,000 jobs during the month, as gains in construction led the way for the second consecutive month by adding 16,000 in June.

The civilian labor force participation rate was 62.8%, a 0.1% increase from May. Workers unemployed for less than 14 weeks increased 124,000, while the number of long-term unemployed, those jobless for 27 weeks or more, was virtually unchanged at 1.67 million and accounted for 23.8% of the unemployed. The number of discouraged workers was 514,000, a 159,000 increase after four straight monthly declines.

Average hourly earnings increased by 4 cents to $26.25, after a 3-cent increase in May. Over the past year, average hourly earnings have risen by 63 cents, or 2.5%.

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