Personal income increased 0.4 percent in May, disposable
personal income (DPI) increased 0.5 percent and personal consumption
expenditures (PCE) rose 0.1 percent. The PCE price index decreased 0.1 percent
from April but rose 1.4 percent year-on-year.
Excluding food and energy, the PCE price index increased 0.1 percent
from April and rose 1.4 percent year-on-year.
Friday, June 30, 2017
June Chicago Business Barometer highest in over three years
The MNI Chicago Business Barometer rose to 65.7 in
June from 59.4 in May, the highest level in over three
years.
Optimism among firms about business conditions rose
for the fifth consecutive month. Four of the five Barometer
components led June’s increase, with only Employment
falling, albeit slightly. Successive rises in the barometer
left the Q2 calendar quarter average at 61.1, significantly
above Q1’s 55.1, and the highest level since Q2 2014.
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Consumer sentiment slipped back in June, partisan gap at 39 points
Consumer confidence slipped to its lowest level since Trump was elected, although the overall level still remains quite favorable. The average level of the Sentiment Index during the first half of 2017 was 96.8, the best half-year average since the second half of 2000, and the partisan gap between Democrats and Republicans stood at 39 Index-points in June, nearly identical to the 38 point gap in February.
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Thursday, June 29, 2017
Initial unemployment claims rise 2,000 in latest report
In the week ending June 24, initial unemployment claims were
244,000, an increase of 2,000 from the previous week's revised level. The
4-week moving average was 242,250, a decrease of 2,750 from the previous week's
revised average.
Mortgage applications fall 6.2 percent in latest survey, rates remain unchanged
The Market Composite Index decreased 6.2 percent on a
seasonally adjusted basis from one week earlier, with purchase loans down 4
percent and refinances falling 9 percent. The average contract interest rate
for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or
less) remained unchanged at 4.13 percent.
Corporate profits fell $48.4 billion in 1Q 2017 vs. $11.2 billion rise in 4Q 2016
Profits from current production (corporate profits with
inventory valuation adjustment and capital consumption adjustment) decreased
$48.4 billion in the first quarter, in contrast to an increase of $11.2 billion
in the fourth quarter.
First quarter GDP growth rose to 1.4 percent in final estimate
Real gross domestic product (GDP) increased at an annual
rate of 1.4 percent in the first quarter of 2017 according to the
"third" estimate released by the Bureau of Economic Analysis. In the
second estimate, the increase in real GDP was 1.2 percent. With the third
estimate for the first quarter, personal consumption expenditures (PCE) and
exports increased more than previously estimated.
Wednesday, June 28, 2017
Pending Home Sales Index dipped 0.8 percent in May, due mostly to supply shortages
The Pending Home Sales Index decreased 0.8 percent to 108.5
in May from a downwardly revised 109.4 in April. The index is now 1.7 percent
below a year ago, which marks the second straight annual decline and the most
recent since November and December of last year.
Tuesday, June 27, 2017
Richmond Fed: Manufacturing survey improves sharply in June
Reports from Fifth District manufacturers improved in June, according to the latest survey by the Federal Reserve Bank of Richmond. The composite manufacturing index rose from 1 in May to 7 in June, as the indexes for shipments and new orders increased. The employment index was relatively flat. Most firms continued to report steady or higher wages; although the index for wages did fall in June, it remained above 0. Meanwhile, more firms reported a decline in the average workweek than reported an increase.
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State Street's Investor Confidence Index slips slightly in June
The Global Investor Confidence Index declined slightly in June. The Index now stands at 101.0, down from May’s revised reading of 102.6. Confidence among both Asian and North American investors declined.
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Consumer confidence rebounds moderately in June
Consumer confidence increased moderately in June following a small decline in May. Consumers’ assessment of current conditions improved to a nearly 16-year high (July 2001, 151.3). Expectations for the short-term have eased somewhat, but are still upbeat. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.
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Case-Shiller Index sets 5th consecutive record, up 5.5 percent year-on-year
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census
divisions, reported a 5.5% annual gain in April, down from 5.6% last month. Before seasonal adjustment, the National Index posted a month-over-month gain of 0.9% in April.
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Monday, June 26, 2017
Dallas Fed: Manufacturing activity expanded in June, but at a slower pace
Texas factory activity increased in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 11 points to 12.3, indicating output grew but at a slower pace than in May.
Durable goods orders fell more than expected in May
Overall orders for durable goods fell 1.1 percent in May after declining 0.9 percent in April. Shipments also declined, suggesting a loss of momentum in the manufacturing sector.
Chicago Fed's National Activity Index slumped to -0.26 in May
Led by declines in production-related indicators, the
Chicago Fed National Activity Index (CFNAI) moved down to –0.26 in May from
+0.57 in April. The index’s three-month moving average declined to +0.04 in May
from +0.21 in April.
Friday, June 23, 2017
Private sector output growth slows in June, but new orders rise at strongest pace for five months
U.S. private sector firms recorded a further solid
expansion of business activity in June, but there
was a loss of momentum since May. This was
highlighted by the seasonally adjusted IHS Markit
Flash U.S. Composite PMI Output Index falling
from 53.6 to 53.0 in June. The latest reading
signalled the slowest upturn in business activity for
three months.
READ MORE
May new home sales rebounded strongly to 610,000 units
Sales of new single-family houses in May 2017 were at a seasonally adjusted annual rate of 610,000, for the second-highest rate this year. This level is also 2.9 percent above the revised April rate of 593,000 and is 8.9
percent above the May 2016 estimate of 560,000.
READ MORE
Thursday, June 22, 2017
Kansas City Fed: Manufacturing activity expands further in June
The Kansas City Fed's Tenth District manufacturing activity expanded further in June, and expectations for future activity remained strong.
Price indexes were mixed, with some increases in raw materials prices. Firms reported faster growth in June than earlier in the second quarter, and the share of
factories planning to add workers over the next six months also rose solidly.
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Initial unemployment claims rise 3,000 in latest report
In the week ending June 17, initial unemployment claims were
241,000, an increase of 3,000 from the previous week's revised level. The
4-week moving average was 244,750, an increase of 1,500 from the previous
week's revised average.
Mortgage applications rise 0.6 percent in latest survey
The Market Composite Index increased 0.6 percent on a
seasonally adjusted basis from one week earlier, with purchase loans falling 2
percent and refinances up 2 percent. The average contract interest rate for
30-year fixed-rate mortgages with conforming loan balances remained unchanged
at 4.13 percent.
FHFA: May home prices up 0.7 percent from April and 6.8 percent year-on-year
U.S. house prices
rose in April, up 0.7 percent from the previous month, according to the Federal
Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index
(HPI). From April 2016 to April 2017,
house prices were up 6.8 percent.
Leading Economic Indicators increased 0.3 percent in May
The U.S. LEI continued on its upward trend in May,
suggesting the economy is likely to remain on, or perhaps even moderately
above, its long-term trend of about 2 percent growth for the remainder of the
year. The improvement was widespread among the majority of the leading
indicators except for housing permits, which declined again.
Wednesday, June 21, 2017
Existing home sales rebounded 1.1 percent in May while sales prices reached new high
Existing-home sales rebounded in May following a notable
decline in April, and low inventory levels helped propel the median sales price
to a new high while pushing down the median days a home is on the market to a
new low.
Sunday, June 18, 2017
State of the Rental Market: Growth is Moderating but Long-Term Prospects Very Favorable
Nonetheless, with an economic expansion in its seventh year and an average of one million new renter households being formed over the past five years, these economic tailwinds should continue to support this sector over the near term. The long-term prognosis is even better, with a recent study concluding a need for 4.6 million new apartments between now and 2030.
For now, overall tenant demand remains strong, especially as more millennials continue to form new households after being delayed due to the Great Recession and paying off student loan debt. Nationally, the homeownership rate fell to a 51-year low of 63 percent last year, and is expected to remain around this level for at least the rest of the year.
In addition, if government proposals for increased infrastructure spending see the light of day, this could mean increased competition for both the materials and labor required for more multi-family supply.
According to recent figures from brokerage Marcus & Millichap, most of the softening is beginning to occur for Class A buildings, both due to an increase in new product as well as historically weak absorption during the fourth quarter of 2016 being pushed into 2017. Nationally, this meant a large bump in Class A vacancy rates to over 6.5 percent. Yet instead of lowering asking rents to fill vacant units, many owners are betting that the strong spring and summer leasing season will mop up the excess supply.
Both Axiometrics and Yardi Matrix -- which regularly survey apartment communities across the country each month – have shown a similar softening in both rent growth and occupancy rates. According to Axiometrics, although its surveyed properties had rebounded to the benchmark occupancy rate of 95 percent by May 2017, annual effective rent growth has stayed within a fairly narrow band of 2.0 to 2.2 percent over the past six months.
As Marcus & Millichap similarly found, this is largely due to a temporary over-supply in Yardi’s “Lifestyle” class, which caters to households who prefer to rent versus owning, and has resulted in flat growth. Meanwhile, low supply and strong demand for “Renter by Necessity” units helped propel their average rents by 2.6 percent over the same time period.
Due to this softening, as well as higher borrowing costs and proposed changes to fiscal policy and the tax code – including a possible end to the popular 1031 tax exchange program – investors have recently pulled back. Preliminary estimates for first quarter 2017 sales suggest a decline of 15 to 20 percent from the same period of 2016, although greater clarity on these policy changes would certainly lead to a rebound in investor interest.
With an annual projected demand of 325,000 new units per year through 2030 and an aging housing stock increasingly in need of renovations, there should be very favorable terms for well-financed investors, especially in high-cost and high-growth areas throughout the West and the South.
Friday, June 16, 2017
Industrial production unchanged in May following April boost
Industrial production was unchanged in May following a large increase in April and smaller increases in February and March. At 105.0 percent of its 2012 average, total industrial production in May was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector edged down 0.1 percentage point in May to 76.6 percent, a rate that is 3.3 percentage points below its long-run (1972–2016) average.
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New York Fed: Manufacturing activity rebounds strongly in June
Business activity rebounded strongly in New York State, according to firms responding to the June 2017 Empire State Manufacturing Survey. The headline general business conditions index shot up twenty-one points to 19.8, its highest level in more than two years.
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Philadelphia Fed: Manufacturing activity growth dips in June
Regional manufacturing continues to expand, according to results from the June Manufacturing Business Outlook Survey. The diffusion index for general activity fell from its reading in May but remained positive and continued to reflect growth. Although many of the future indicators also declined, firms continue to expect growth over the next six months. About one-third of the firms expect to add to their payrolls through the end of the year.
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Consumer sentiment dips sharply in preliminary June survey
The modest early June drop of 2.6 points in the Sentiment Index masks a much larger decline since June 8th. Prior to that date the Sentiment Index had averaged 97.7, but since June 8th, the Index fell to 86.7, a decline of 11.0 points. While this break corresponds with James Comey's testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views.
The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans.
Fortunately, a strong job market, improved household income and wealth have provided a financial buffer against rising uncertainties. Nonetheless, consumers have become less optimistic about the future course of the domestic economy.
READ MORE
May building permits dipped 4.9 percent from April and 0.8 percent year-on-year
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual
rate of 1,168,000. This is 4.9 percent below the revised April rate of 1,228,000 and is 0.8
percent below the May 2016 rate of 1,178,000.
READ MORE
May housing starts fell for third straight month to eight-month low
U.S. homebuilding fell for a third straight month in May to
the lowest level in eight months as construction activity declined broadly. Privately-owned housing starts in May were at
a seasonally adjusted annual rate of 1,092,000. This is 5.5 percent below the
revised April estimate of 1,156,000 and is 2.4 percent below the May 2016 rate
of 1,119,000.
Thursday, June 15, 2017
Initial unemployment claims fall by 8,000 in latest report
In the week ending June 10, initial unemployment claims were 237,000, a decrease of 8,000 from the previous week's unrevised level of 245,000. The 4-week moving average was 243,000, an increase of 1,000 from the previous week's unrevised average of 242,000.
READ MORE
Mortgage applications rise 2.8 percent in latest survey
The Market Composite Index increased 2.8 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising three percent and refinances jumping nine percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 4.13 percent.
READ MORE
Business inventories fell 0.2 percent in April, reversing March's gain
U.S. business inventories fell 0.2 percent in April, recording their biggest drop in six months, which could temper expectations that inventory investment would support economic growth in the second quarter.
READ MORE
NAHB's Housing Market Index dips two points in June
Builder confidence in the market for newly-built single-family homes weakened slightly in June, down two points to a level of 67 from a downwardly revised May reading of 69 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). All three HMI components posted losses in June but remain at healthy levels.
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Wednesday, June 14, 2017
Federal Reserve opts to hike key interest rate another 1/4 point
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.
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CPI slipped 0.1 percent in May, up 1.9 percent year-on-year
The Consumer Price Index for All Urban Consumers (CPI-U)
decreased 0.1 percent in May - mostly due to lower energy costs -- but rose 1.9
percent over the last 12 months. The
index for all items less food and energy rose 0.1 percent in May and 1.7
percent over the past 12 months.
Producer Price Index flat in May, up 2.4 percent year-on-year
The Producer Price Index for final demand was unchanged in
May but increased 2.4 percent for the 12 months ended in May. Prices for final
demand less foods, energy, and trade services fell 0.1 percent in May, the
first decline since a similar 0.1-percent decrease in May 2016, but was up 2.1
percent over the previous 12 months.
May Small Business Optimism Index remained at historically high level
The Index for May matched its strong performance in April of
104.5. That means the Index has been at a historically high level for six
straight months. Five of the Index components posted a gain, four declined, and
one remained unchanged.
May retail sales posted biggest drop since January 2016
U.S. retail sales recorded their biggest drop of 0.3 percent
in more than a year in May amid declining purchases of motor vehicles and
discretionary spending.
Friday, June 9, 2017
May Employment Trends Index up 6.4 percent year-on-year
While employment numbers have shown some softness in the past three months, there is no slowdown visible in the Employment Trends Index, suggesting solid job growth over the summer. Employment will likely grow fast enough to continue tightening the labor market.
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Bloomberg Consumer Comfort Index dips in latest survey
The latest reading, the first decline in four weeks, remains consistent with projections for a rebound in growth this quarter. Even with the drop in the index of the buying climate, the measure remains above this year's average.
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April wholesale sales fell 0.4 percent from March but still up 7.3 percent year-on-year
April 2017 sales of merchant wholesalers fell 0.4 percent from the revised March level, but were up 7.3 percent from the April 2016 level.
READ MORE
Thursday, June 8, 2017
Initial unemployment claims fall by 10,000 in latest report
In the week ending June 3, initial unemployment claims were 245,000, a decrease of 10,000 from the previous week's revised level. The 4-week moving average was 242,000, an increase of 2,250 from the previous week's revised average.
READ MORE
Mortgage loan applications rise 7.1 percent in latest survey as rates dip
The Market Composite Index increased 7.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 10 percent and refinances up 3 percent. The average contract interest rate for 30-year fixed-rate mortgages decreased to its lowest level since November 2016, 4.14 percent.
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Consumer credit use growth slowed sharply in April
Consumer borrowing decelerated in April to the smallest increase in almost six years, suggesting an expected rebound in spending in the second quarter may not be as robust as hoped. Total consumer credit rose $8.2 billion in April to a seasonally adjusted $3.82 trillion, posting an annual growth rate of 2.6%.
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Wednesday, June 7, 2017
U.S. Economic Confidence Index fell to six-month low in May, but still well into positive territory
Though still historically high, Americans' confidence in the
economy fell to a six-month low in May, largely dragged down by Democrats'
worsening economic attitudes. Gallup's U.S. Economic Confidence Index averaged
a score of +3 in May, down slightly from April (+5) but eight points below
January's record monthly high (+11).
READ MORE
Job Creation Index rebounded to +37 in May, continuing 15-month streak of +30 or higher
Gallup's Job Creation Index was +37 in May, tied with the
record high found in March. This marks 15 straight months of the index reaching
+30 or higher.
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Job openings rose 4.5 percent to series high of 6.0 million in April
The number of job openings increased 4.5 percent to a series
high of 6.0 million by the last business day of April. Over the month, hires
decreased to 5.1 million and separations edged down to 5.0 million.
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April CoreLogic Home Price Index up 1.6 percent from March and 6.9 percent year-on-year
Home prices nationwide, including distressed sales,
increased year over year by 6.9 percent in April 2017 compared with April 2016
and increased month over month by 1.6 percent in April 2017 compared with March
2017, according to the CoreLogic HPI.
READ MORE
Monday, June 5, 2017
Service sector index dipped 0.6 percent in May, but new job growth still strong
The NMI® registered 56.9 percent, which is 0.6 percentage point lower than the April reading of 57.5 percent. Although the non-manufacturing sector's growth rate dipped in May, the sector continues to reflect strength, buoyed by the strong rate of growth in the Employment Index.
Manufacturing sector index mostly flat in May; pricing pressure slowing
The May PMI® registered 54.9 percent, an increase of 0.1 percentage point from the April reading of 54.8 percent. The slowing of pricing pressure, especially in basic commodities, should have a positive impact on margins and buying policies as this moderation moves up the value chain.
Unit labor costs rose 2.2 percent in 1Q 2017 due entirely to higher hourly compensation
Unit labor costs in the nonfarm business sector increased 2.2 percent in the first quarter of 2017, reflecting a 2.2-percent increase in hourly compensation; productivity was unchanged. Unit labor costs increased 1.1 percent over the last four quarters.
Labor productivity unchanged in 1Q 2017 but up 1.2 percent year-on-year
Nonfarm business sector labor productivity was unchanged during the first quarter of 2017, as both output and hours worked increased 1.7 percent. From the first quarter of 2016 to the first quarter of 2017, productivity increased 1.2 percent, reflecting a 2.5-percent increase in output and a 1.3-percent increase in hours worked.
Factory goods orders slipped in April after five months of increases
Factory goods orders dropped 0.2 percent in April, after an upwardly revised 1.0 percent increase in March. This was the first decline in five months, but still up 4.4 percent year-on-year.
Friday, June 2, 2017
Payroll employment grew by 138,000 in May; unemployment rate at 4.3 percent
Total nonfarm payroll employment increased by 138,000 in May, and
the unemployment rate was little changed at 4.3 percent.
Since January, the
unemployment rate has declined by 0.5 percentage point, and the number of unemployed has decreased
by 774,000.
READ MORE
Thursday, June 1, 2017
Manufacturing index rises slightly in May, price pressures slowing
The May PMI® registered 54.9 percent, an increase of 0.1 percentage point from the April reading of 54.8 percent. Comments
from the panel generally reflect stable to growing business conditions, with new orders, employment and inventories of raw materials all growing in May compared to April. The slowing of pricing pressure, especially in basic commodities, should have a positive impact on margins and buying policies as this moderation moves up the value chain.
READ MORE
Initial unemployment claims rise 13,000 in latest report
In the week ending May 27, initial unemployment claims were 248,000, an increase of 13,000 from the previous week's revised level. The 4-week moving average was 238,000, an increase of 2,500 from the previous week's revised average.
Planned job cuts rose sharply in May, but still down 28 percent YTD from 2016
The number of workforce reductions announced by US-based employers rose sharply in May, as planned job cuts totaled 51,692 for the month, although nearly 40 percent of those job cuts were announced by Ford Motor Company.
Employers have announced a total of 214,495 job cuts so far this year, down 28 percent year-on-year.
Private sector employment rose sharply to 253,000 jobs in May
ADP: Private sector employment increased by 253,000 jobs from April to May. This compares to 174,000 jobs the previous month and 58,000 jobs during May of 2016.
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Construction spending dipped 1.4 percent in April but still up 5.8 percent YTD from 2016
Spending
on construction sagged in April as a strong start to the year started to
falter, falling 1.4 percent from March. However, a 0.2% decline in March
was revised to a 1.1% monthly gain. Spending so far in 2017 is 5.8% higher than
in the same period a year ago.
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