Data Updates

Data Updates

Keeping you up to date on the latest data releases.

April 2014 :: Growth and Production

  • 04.02.2014
  • Factory Orders
  • New orders for manufactured goods increased at a nonannualized rate of 1.6 percent in February, following a decrease of 1.0 percent in January. Orders for nondurable goods grew 1.0 percent, while orders for durable goods grew 2.2 percent. Since February of 2013, orders for manufactured goods have increased 0.1 percent. After excluding transportation, new orders increased 0.7 percent in February. New orders for nondefense capital goods excluding aircraft fell 1.4 percent in February, following an increase of 0.8 percent in January and a 1.6 percent decrease in December. On a year-over-year basis, orders for nondefense capital goods excluding aircraft are flat.

    Shipments of manufactured goods increased 0.9 percent in February. Unfilled orders increased 0.3 percent and inventories increased 0.8 percent for the month. The unfilled orders-to-shipments ratio remained at 6.5, and the inventory-to-shipment ratio remained at 1.3, roughly where it has been since late 2009.

  • 04.01.2014
  • Construction Spending
  • Private construction spending rose to $680.0 billion in February, 0.1 percent above the upwardly revised January estimate of $679.1 billion. February’s results are 13.0 percent higher year-over-year. Residential construction spending fell 0.8 percent over the month, to $360.4 billion. New single-family construction fell 1.1 percent, but is still up 13.6 percent since last February. New multifamily construction spending grew 2.6 percent in February and is up 29.7 percent year-over-year. Private nonresidential construction spending was at $319.6 billion, 1.2 percent above the revised January estimate of $315.8 billion. Six of the eleven nonresidential construction sectors saw month-to-month declines in spending, with the religious sector posting the largest monthly decline of 6.9 percent. The communication sector registered the largest monthly increase of 6.4 percent.
  • 03.27.2014
  • GDP
  • The annualized percent change in real GDP for the fourth quarter of 2013 was revised up from 2.4 percent to 2.6 percent based on the third estimate. The improvement in GDP growth was mostly the result of an upward revision to consumption, which was partially offset by downward revisions to business fixed investment and inventories. Consumption is now estimated to have increased 3.3 percent, compared with a previous estimate of 2.6 percent, and the contribution of consumption to GDP growth was revised up from 1.7 percentage points to 2.2 percentage points. The entire upward revision to consumption was the result of an upward revision to services consumption, and much of the improvement in services consumption is related to consumption of medical services. Consumption of medical services is now estimated to have contributed 0.6 percentage points to GDP growth, compared with a previous estimate of 0.2 percentage points.

    Business fixed investment was revised down from a 7.3 percent increase to a 5.7 percent increase for the quarter. The result was a decline in the contribution of business fixed investment to GDP from 0.9 percentage points to 0.7 percentage points, while the contribution of inventory investment was also revised down from 0.1 percentage point to zero. Residential investment, as well as imports and exports were mostly unrevised, while government spending was revised up slightly from a 5.6 percent decline to a decline of 5.2 percent.

  • 03.26.2014
  • Durable Goods
  • New orders for durable goods increased 2.2 percent in February, following a decline of 1.3 percent in January. Over the past year, new orders are up 0.2 percent. New orders for transportation equipment lead the monthly increase, rising 6.9 percent in February. Excluding volatile transportation equipment orders, new orders were only up 0.2 percent, following an increase of 0.9 percent in January. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell 1.3 percent in February after rising 0.8 percent in January. Shipments of durable goods, which are up 3.4 percent over the past year, rose 0.9 percent in February. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, rose 0.5 percent in February and are up 1.0 percent year-over-year.
  • 03.17.2014
  • Industrial Production
  • Industrial production increased 0.6 percent in February and manufacturing production increased 0.8 percent. Breaking down the manufacturing sector into durable and nondurable goods, durable and nondurable goods production rose 0.9 and 0.7 percent, respectively. The largest gain in the durable goods sector occurred in auto production. Output of motor vehicles and parts increased 4.8 percent. Utilities production fell 0.2 percent while mining production rose 0.3 percent. The overall capacity utilization rate increased to 78.8 percent.
  • 03.06.2014
  • Factory Orders
  • New orders for manufactured goods fell at a nonannualized rate of 0.7 percent in January, following a decrease of 2.0 percent in December. Orders for nondurable goods fell 0.4 percent, while orders for durable goods fell 1.0 percent. Since January of 2013, orders for manufactured goods have increased 1.2 percent. After excluding transportation, new orders increased 0.2 percent in January. New orders for nondefense capital goods excluding aircraft grew 1.5 percent in January, following a decline of 1.6 percent in December and a 3.0 percent increase in November. On a year-over-year basis, orders for nondefense capital goods excluding aircraft have decreased 1.7 percent.

    Shipments of manufactured goods declined 0.3 percent in January. Unfilled orders were unchanged and inventories decreased 0.3 percent for the month. The unfilled orders-to-shipments ratio remained at 6.5, and the inventory-to-shipment ratio remained at 1.3, roughly where it has been since late 2009.

  • 03.06.2014
  • Productivity and Costs
  • Based on the revised estimate, nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 1.8 percent in the fourth quarter of 2013, which was revised down from a previous estimate of 3.2 percent. This follows increases of 1.8 percent and 3.5 percent in the second and third quarters, respectively. On a year-over-year basis, productivity has increased 1.3 percent.

    Both hours and output increased in the fourth quarter. Hours increased 1.6 percent and are up 1.7 percent over the past four quarters, while real output increased 3.4 percent and is up 2.9 percent since the fourth quarter of 2012. Real hourly compensation, which is measured as compensation per hour after controlling for price changes, was revised up from a 0.6 percent increase to a 0.8 percent increase for the quarter, but over the past year, hourly compensation is down 0.9 percent. Unit labor costs, which are the ratio of hourly compensation to hourly output, declined just 0.1 percent in the fourth (compared with a previously estimated decline of 1.6 percent), and are down 0.9 percent since the end of 2012.

  • 03.03.2014
  • Construction Spending
  • Private construction spending rose in January to $670.8 billion, 0.5 percent above the upwardly revised December estimate of $667.5 billion. January’s results are 12.3 percent higher on a year-over-year basis. Residential construction spending rose 1.1 percent over the month to $359.9 billion. New single-family construction led the monthly increase (rising 2.3 percent) and is up 21.0 percent since last January. New multi-family construction spending grew 1.0 percent in January and is up 28.0 percent year-over-year. Private nonresidential construction spending was at $310.9 billion, 0.2 percent below the revised December estimate of $311.5 billion. Eight of the eleven nonresidential construction sectors saw month-to-month declines in spending with the power sector posting the largest monthly decline of 5.0 percent. The communication sector registered the largest monthly increase of 18.2 percent.
  • 02.28.2014
  • GDP
  • The annualized percent change in real GDP for the fourth quarter of 2013 was revised down from 3.2 percent to 2.4 percent, based on the second estimate. The downward adjustment to GDP growth primarily reflects downward revisions to consumption, inventories, and net exports, which were partially offset by an upward revision to business fixed investment.

    Personal consumption expenditures are now estimated to have increased 2.6 percent for the quarter, compared to a previous estimate of 3.3 percent. This change primarily reflects a downward revision to goods consumption, while services consumption was also adjusted down slightly. The net result was a reduction in the contribution of consumption to GDP growth from 2.3 percentage points to 1.7 percentage points.

    The contribution of business fixed investment to GDP was revised up from 0.5 percentage points to 0.9 percentage points, as business fixed investment is now estimated to have increased 7.3 percent for the quarter. Partially offsetting this was a downward revision to inventory investment, which is now estimated to have contributed 0.1 percentage points, compared with a previous estimate of 0.4 percentage point. Residential investment was largely unchanged from the previous release.

    The increase in exports for the quarter was revised down from 11.4 percent to 9.4 percent, while the increase in imports was revised up from 0.9 percent to 1.5 percent. This resulted in a reduction in the contribution of net exports to GDP growth, from 1.3 percentage points to 1.0 percentage point. Additionally, government spending is now estimated to have subtracted 1.1 percentage points from GDP growth for the quarter, compared with a previous estimate of 0.9 percentage points.

  • 02.27.2014
  • Durable Goods
  • New orders for durable goods fell 1.0 percent in January. Over the past year, new orders are up 4.6 percent. New orders for transportation equipment lead the decline, falling 5.6 percent in January. Excluding volatile transportation equipment orders, new orders were up 1.1 percent, following a decline of 1.9 percent in December. Orders for nondefense capital goods excluding aircraft, which are used to evaluate the near-term outlook in equipment and software investment, rose 1.7 percent in January. Shipments of durable goods, which are up 3.4 percent over the past year, fell 0.4 percent in January. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, fell 0.8 percent in January, but are up 2.6 percent year-over-year.
  • 02.14.2014
  • Industrial Production
  • Industrial production decreased 0.3 percent in January due to the decline in auto production and extreme winter weather conditions in parts of the United States. The three-month annualized growth rate dropped from 4.7 percent to 2.6 percent. Manufacturing output decreased 0.8 percent, the largest decrease experienced in the past five years. Breaking down the manufacturing sector into durable and nondurable goods, both durable and nondurable goods production decreased 0.8 percent. Auto production fell 5.0 percent, the first time decrease in three months. The decline in auto production accounted for about one-third of the decrease in manufacturing output. Due to the cold weather, utilities production increased for a fourth time in the last five months to more than 1.0 percent. Mining production fell 0.9 percent for January. However, mining is up at a 7.3 percent annualized rate over the past three months. Overall capacity utilization fell to 78.5 percent.
  • 02.06.2014
  • Productivity and Costs
  • In the fourth quarter of 2013, nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 3.2 percent according to the preliminary estimate. This follows two consecutive quarterly increases in productivity during the middle half of the year, and since the fourth quarter of 2012, productivity has increased 1.7 percent. The increase in the last quarter of 2013 was driven by stronger output growth relative to the increase in hours. Real output increased 4.9 percent for the quarter, while hours increased just 1.7 percent. Real hourly compensation, which is measured as compensation per hour after controlling for price changes, increased 0.6 percent in the fourth quarter after declining 1.0 percent in the previous quarter. On a year-over-year basis, hourly compensation has decreased 0.9 percent. Unit labor costs, which are measured as the ratio of hourly compensation to hourly output, fell 1.6 percent in the fourth quarter of 2013, as they have declined in three of the past four quarters. Since the end of last year, unit labor costs are down 1.3 percent.
  • 02.04.2014
  • Factory Orders
  • New orders for manufactured goods fell at a nonannualized rate of 1.5 percent in December, following an increase of 1.5 percent in November. Orders for nondurable goods increased 1.1 percent, while orders for durable goods fell 4.2 percent. Since December of 2012, orders for manufactured goods have increased 0.8 percent. After excluding transportation, new orders increased 0.2 percent in December and are up 2.0 percent over the past twelve months. New orders for nondefense capital goods excluding aircraft declined 0.6 percent in December, following a similar decline of 0.6 percent in October and a 3.0 percent increase in November. On a year-over-year basis, orders for nondefense capital goods excluding aircraft have increased 7.4 percent.

    Shipments of manufactured goods declined 0.2 percent in December, as a 1.1 percent increase in shipments of nondurable goods was offset by a 1.7 percent decline in shipments of durable goods. Unfilled orders increased 0.4 percent and inventories increased 0.5 percent for the month. The unfilled orders-to-shipments ratio increased from 6.4 to 6.5 and the inventory-to-shipment ratio remained at 1.3, roughly where it has been since late 2009.

  • 02.03.2014
  • Construction Spending
  • Private construction spending rose in December to $663.9 billion, 1.0 percent above the revised November estimate of $657.1 billion. December’s results are 8.0 percent higher on a year-over-year basis. Residential construction spending rose 2.6 percent over the month to $352.6 billion. New multifamily construction spending grew 0.5 percent in December and is up 27.3 percent year-over-year. New single-family construction rose 3.4 percent and is up 21.6 percent since last December. Private nonresidential construction spending was at $311.3 billion, 0.7 percent below the revised November estimate of $313.4 billion. Six of the eleven nonresidential construction sectors saw month-to-month declines in spending with the amusement and recreation sector posting the largest monthly decline of 6.0 percent. The power sector registered the largest monthly increase of 1.9 percent.
  • 02.03.2014
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) fell 5.2 percentage points to 51.3 in January, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Four of the five PMI components declined in January. New orders posted the largest monthly decline, falling 13.2 percentage points to 51.2. This is the largest monthly decline in the new orders index since December 1980. The inventory index fell for the third consecutive month to 44.0 from 47.0 in December. Employment fell 3.5 percentage points to 52.3 and production fell 6.9 percentage points to 54.8 percent. Supplier deliveries increased 0.6 percentage points to 54.3 percent. The ISM Prices Index rose 7.0 percentage points to 60.5 percent. Prices have decreased by 1.0 percentage point since February 2013’s high of 61.5 percent.
  • 01.30.2014
  • GDP
  • According to the advance estimate, real GDP increased at an annualized rate of 3.2 percent in the fourth quarter of 2013. Contributing to this increase were improvements to consumption, business investment, inventories, and net exports. The components that decreased in the fourth quarter were residential investment and government spending. During 2013, real GDP increased 1.9 percent overall. Personal consumption expenditures were a primary contributor to the improvement in real GDP during the fourth quarter. Consumption increased 3.3 percent in, which was the result of increases in all three of the major consumption categories. Durable and nondurable goods consumption increased 5.9 and 4.4 percent, respectively, while services consumption increased 2.5 percent. The increase in consumption was the largest since the fourth quarter of 2010, and consumption contributed 2.3 percentage points to real GDP growth, over half of the overall gain.

    Business fixed investment increased 3.8 percent in the fourth quarter, contributing 0.5 percentage points to real GDP growth. Investment in equipment increased 6.9 percent and investment in intellectual property increased 3.2 percent. These gains were partially offset by a 1.2 percent decline in investment in structures. Additionally, inventory investment increased as well, contributing another 0.4 percentage points to the percent change in real GDP. Residential investment declined for the first time since 2010, as it fell 9.8 percent for the quarter. This reduction in residential investment subtracted 0.3 percentage points from overall GDP growth.

    Government spending also fell during the fourth quarter, as it decreased 4.9 percent. The decline in government spending was the result of a 12.6 percent decline in federal government spending, as state and local government spending increased 0.5 percent. This reduction subtracted 0.9 percentage pointa from GDP growth for the quarter. A sizable increase in exports coupled with a modest increase in imports lead to a strong positive contribution from net exports to GDP growth. Exports increased 11.4 percent, the largest increase since the fourth quarter of 2010, while imports increased just 0.9 percent. This resulted in a quarterly contribution from net exports of 1.3 percentage points to GDP growth.

  • 01.28.2014
  • Durable Goods
  • New orders for durable goods fell 4.3 percent in December. Over the past year, new orders are up 4.9 percent. New orders for transportation equipment lead the decline, falling 9.5 percent in October. Excluding volatile transportation equipment orders, new orders were down 1.6 percent, following an increase of 0.1 percent in November. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, declined 1.3 percent in December. Shipments of durable goods, which are up 3.4 percent over the past year, fell 1.9 percent in December. Perhaps more encouraging is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, fell only 0.2 percent in December after increasing 2.3 percent in November. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.5 percent.
  • 01.23.2014
  • Existing Home Sales
  • In December, existing single-family home sales rose 1.9 percent for the month, but are down 0.7 percent over the past 12 months to a seasonally-adjusted annualized rate of 4.3 million units sold. The median sales price was $197,900, increasing 1.3 percent for the month and 9.8 percent compared to December 2012. The inventory of existing single-family homes stood at 1.6 million units, down 10.4 percent for the month, but up 1.9 percent on an annual basis, representing a 4.6 month supply of homes at the current sales pace.
  • 01.17.2014
  • Industrial Production
  • Industrial production rose 0.3 percent in December for a fifth consecutive monthly increase. In the fourth quarter of 2013, industrial production rose at an annual rate of 6.8 percent. This is the largest quarterly increase since the second quarter of 2010. Manufacturing production increased 0.4 percent in December and has increased at a 6 percent annual rate over the past three months. Production has increased in autos, electronics, and appliances. Breaking down the manufacturing sector into durable and nondurable goods, durable goods production increased 0.1 percent, and nondurable goods output rose by 0.9 percent. Within durable goods, primary metals, electrical equipment, appliances, and components contributed to the increase in durable goods production. Motor vehicle and parts production increased 1.6 percent in December. Within nondurable goods, all major categories except textile and product mills reported gains for December. Mining production rose 0.8 percent in December with a three-month annualized growth rate of 4.3 percent. Utilities production declined 1.6 percent. Overall capacity utilization rose 0.1 percentage points to 79.2 percent.
  • 01.06.2014
  • Factory Orders
  • New orders for manufactured goods rose 1.8 percent (nonannualized) in November, following a decrease of 0.8 percent in October. Excluding transportation, new orders were up 0.6 percent for the month, while new orders of durable goods grew 3.4 percent and nondurable goods fell 0.3 percent. New orders of nondefense capital goods excluding aircraft orders increased 4.1 percent in November, compared to a 0.8 percent decrease in October. Shipments increased 1.0 percent, led by an increase of 1.8 percent in shipments of durable goods. Unfilled orders increased 1.0 percent, while inventories were unchanged from a month ago. The unfilled orders-to-shipments ratio was 6.4, roughly where it has been since late 2009 but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio was steady at 1.3, roughly where it has been since late 2009.
  • 01.02.2014
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) declined 0.3 percentage points to 57.0 in December, indicating a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Three of the five components that constitute the PMI have increased since November. Furthermore, four of the five components were above the growth threshold of 50. New orders increased 0.6 percentage points to 64.2, employment rose 0.4 percentage points to 56.9, supplier deliveries increased 1.5 percentage points to 54.7 percent, production fell 0.6 percentage points to 62.2 percent, and inventories fell 3.5 percentage points to 47.0. The ISM Prices Index rose 1.0 percentage point to 53.5 percent. Prices have decreased by 8.0 percentage points since February 2013’s high of 61.5 percent.
  • 01.02.2014
  • Construction Spending
  • Private construction spending increased 2.2 percent in November to $659.4 billion and is 8.6 percent higher than November 2012. Residential construction spending increased 1.9 percent over the month to a seasonally-adjusted annual rate of $345.5 billion. New multifamily construction spending increased 0.9 percent in November and is up 36.3 percent on a year-over-year basis. New single-family construction posted a monthly gain of 1.9 percent and is up 16.6 percent since November 2012. Private nonresidential construction spending increased 2.7 percent over the month to $313.9 billion and is up 1.0 percent year-over-year. The communication sector saw the largest monthly increase of 11.2 percent. The educational sector posted the largest monthly decline of 3.1 percent.
  • 12.24.2013
  • Durable Goods
  • New orders for durable goods increased 3.5 percent in November. Over the past year, new orders are up 5.3 percent. New orders for transportation equipment rose 8.4 percent in November. Excluding volatile transportation equipment orders, new orders were up only 1.2 percent following an increase of 0.7 percent in October. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, rose 4.5 percent in November. Shipments of durable goods, which are up 3.4 percent over the past year, were up 1.8 percent in November. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, rose 4.5 percent in November after falling 0.7 percent in October. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.4 percent.
  • 12.20.2013
  • GDP
  • The annualized percent change in real GDP for the third quarter of 2013 was revised up from 3.6 percent to 4.1 percent based on the third estimate. The upward revision to GDP growth primarily reflects revisions to consumption and business fixed investment. Consumption, which was previously estimated to have increased 1.4 percent during the quarter, is now estimated to have increased 2.0 percent and contributed 1.4 percentage points to GDP growth. This revision to consumption was primarily caused by an upward revision to services consumption, which is now estimated to have increased 0.7 percent after being flat in the previous release.

    Business fixed investment increased 4.8 percent in the quarter, compared to a 3.5 percent increase in the second estimate. This upward revision to investment was mostly due to an upward revision to investment in intellectual property, which increased 5.8 percent in the quarter. Business fixed investment contributed 0.6 percentage points to GDP growth, compared with 0.4 percentage points prior to the revision. Residential investment was revised down slightly, from a 13.0 percent increase to an increase of 10.3 percent, contributing 0.3 percentage points to GDP growth. Both exports and imports were revised down slightly as well, and government spending was basically unchanged from the previous estimate.

  • 12.19.2013
  • Existing Home Sales
  • Existing single-family home sales fell 3.8 percent in November and 0.9 percent over the past 12 months to a seasonally-adjusted annualized rate of 4.32 million units sold. Regionally, all areas posted negative growth rates led by an 8.7 percent decline in the West, which is now at the lowest level of sales since November 2010. On an annual basis, existing single-family home sales ranged from an 11.3 percent decline in the West to a 6.0 percent increase in the Northeast. The median price of existing single-family homes was $196,200, a slight decline of 0.7 percent for the month but a 9.4 percent increase since last November. The inventory of homes rose 0.5 percent, representing a 5.2 months’ supply of homes at the current sales pace.
  • 12.17.2013
  • Current Account
  • The US current account deficit narrowed to −$94.8 billion in the third quarter of 2013, a $1.8 billion contraction from the second quarter’s revised −$96.6 billion deficit (−$98.9 billion, previously). The current account deficit has now contracted in five of the past six quarters. The contraction in the third quarter was driven by a 1.1 percent contraction in net unilateral transfers and a 2.2 percent narrowing in the balance of trade in goods, services, and income. A 0.7 percent increase in exports of goods, services, and income and was partially offset by a 0.4 percent gain in imports of goods, services, and income. As a percent of GDP, the current account deficit ticked down to 2.2 percent, which is the smallest percentage since 1998.
  • 12.16.2013
  • Productivity and Costs
  • Based on the second estimate, nonfarm business sector productivity—real output per hour of all persons—was revised up in the third quarter from a 1.9 percent increase to a 3.0 percent increase at a seasonally-adjusted annualized rate. This increase is the greatest quarterly improvement since the fourth quarter of 2009 and over the past year, productivity has increased 0.3 percent. The revision to productivity reflects an upward revision to output, which is now estimated to have increased 4.7 percent during the quarter, compared with a prior estimate of 3.7 percent. The increase in hours was unrevised at 1.7 percent. Over the past year, output has increased 2.1 percent, while hours have increased 1.8 percent. Real hourly compensation, which is compensation per hour after controlling for price changes, declined 1.0 percent in the third quarter, compared with a previously estimated decline of 1.3 percent. Unit labor costs, which are measured as hourly compensation per hourly output, declined 1.4 percent for the quarter, following a 2.0 percent increase in the second quarter. Over the past year, unit labor costs have increased 2.1 percent.
  • 12.16.2013
  • Industrial Production
  • Industrial production exceeded expectations with an increase of 1.1 percent in November. This was the greatest gain since November 2012. Manufacturing production rose 0.6 percent in November and production is up 3.7 percent over the past six months. Breaking down the manufacturing sector into durable and nondurable goods, production of durable goods rose by 0.8 percent and nondurables were up by 0.5 percent. Within durable goods, wood products, nonmetallic mineral products, fabricated metal products, furniture and related products, miscellaneous manufacturing, and electrical equipment, appliances, and components all increased by about 1 percent or more in November. Motor vehicle and parts output increased 3.4 percent. Within nondurable manufacturing production, the index for textile and product mills increased by 1.7. The indexes for petroleum and coal products and for chemicals edged up 0.9 percent.

    There were small gains for paper, plastics, and rubber products, however slight losses occurred in the apparel and leather and printing support industries. Mining output increased 1.7 percent in November and the mining capacity utilization rate has increased by 1.1 percentage points to an overall capacity utilization rate of 89.7 percent. Utilities output increased 3.9 percent and the capacity utilization rate for utilities also increased 2 percentage points, for an overall capacity utilization rate of 81 percent. Overall capacity utilization for November rose 0.8 percentage points to 79 percent due to increases in productions.

  • 12.05.2013
  • Factory Orders
  • New orders for manufactured goods fell 0.9 percent (nonannualized) in October, following an increase of 1.8 percent in September. Excluding transportation, new orders were unchanged for the month, while new orders of durable goods fell 1.7 percent and nondurable goods fell 0.2 percent. New orders of nondefense capital goods excluding aircraft orders decreased 0.6 percent in October, compared to a 1.2 percent decrease in September. Shipments increased 0.1 percent, led by an increase of 0.4 percent in shipments of durable goods. Unfilled orders and inventories increased 0.4 and 0.1 percent, respectively. The unfilled orders-to-shipments ratio was 6.4, roughly where it has been since late 2009, but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio was steady at 1.3, roughly where it has been since late 2009.
  • 12.05.2013
  • GDP
  • The annualized percent change in real GDP for the third quarter of 2013 was revised up from 2.8 percent to 3.6 percent, based on the second estimate. The improvement in GDP growth primarily reflects an upward revision to inventory investment. Also contributing to the positive revision were slight improvements to business fixed investment and government spending, which were partially offset by slight downward revisions to consumption, residential investment, and net exports.

    The contribution of changes in private inventories to GDP growth was revised up from 0.8 percentage points to 1.7 percentage points, accounting for most of the upward revision to the annualized percent change in overall GDP. Business fixed investment is now estimated to have increased 3.5 percent during the third quarter—compared with a prior estimate of 1.6 percent—and is now estimated to have contributed 0.4 percentage points to the increase in GDP. Additionally, the increase in government spending was revised up from 0.2 to 0.4 percent, and the contribution of government spending to GDP growth was 0.1 percentage point.

    Personal consumption expenditures were revised down slightly, increasing 1.4 percent and contributing 1.0 percentage point to GDP growth for the quarter. Residential investment is now estimated to have increased 13 percent, compared with a prior estimate of 14.6 percent. Exports remained essentially unchanged, but an upward revision to imports (from a 1.9 percent increase to a 2.7 percent increase) resulted in an downward revision to net exports. Residential investment and net exports contributed 0.4 percentage points and 0.1 percentage point to the increase in GDP, respectively.

  • 12.02.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) increased 0.9 percentage points to 57.3 in November, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Three of the five components that constitute the PMI have increased since October. Furthermore, all five components were above the growth threshold of 50. New orders increased 3.0 percentage points to 63.6 percent, production increased 2.0 percentage points to 62.8 percent, employment rose 3.3 percentage points to 56.5 percent from October to November, supplier deliveries decreased 1.5 percentage points to 53.2, percent and inventories fell 2.0 percentage points to 50.5 percent. The ISM Prices Index declined by 3.0 percentage points to 52.5 percent. Prices have decreased by 9.0 percentage points since February 2013’s high of 61.5 percent.
  • 12.02.2013
  • Construction Spending
  • Private construction spending rose to $625.7 billion in October, 0.5 percent below the September estimate of $629.0 billion. October’s results are 6.6 percent higher on a year-over-year basis. Residential construction spending fell 0.6 percent during the course of the month, to $326.9 billion. New multifamily construction spending grew 2.2 percent in October and is up 37.8 percent year-over-year. New single-family construction fell 0.6 percent and is up 17.8 percent since last October. Private nonresidential construction spending was at $298.9 billion, 0.5 percent below the September estimate of $300.2 billion. Eight of the eleven nonresidential construction sectors saw month-to-month increases in spending, with the educational sector posting the largest monthly increase of 6.6 percent. The communication sector saw the largest monthly decline of 8.4 percent.
  • 11.27.2013
  • Durable Goods
  • New orders for durable goods fell 2.0 percent in October. Over the past year, new orders are up 4.8 percent. New orders for transportation equipment lead the decline, falling 5.6 percent in October. Excluding volatile transportation equipment orders, new orders were down only 0.1 percent following an increase of 0.2 percent in September. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, declined 1.2 percent in October. Shipments of durable goods, which are up 3.3 percent over the past year, were up 0.2 percent in October. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, fell 0.2 percent in October after falling 0.2 percent in September. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.4 percent.
  • 11.15.2013
  • Industrial Production
  • Industrial production slightly decreased by 0.1 percent in October following a 0.7 percent increase in September. In October, manufacturing output rose 0.3 percent for a third consecutive monthly gain and is 3.3 percent above October 2012 levels. The three-month annualized growth rate increased 2.4 percent relative to the third quarter average. Durable and nondurable goods rose by 0.3 percent. Within durable goods, primary metals, fabricated metal products, furniture and related products, and miscellaneous manufacturing attributed to the increase in goods output. Motor vehicle and parts production dropped 1.3 percent. Within nondurable manufacturing production, printing and support rose by 1.8 percent, while petroleum and coal production and apparel and leather fell 0.3 percent. Mining output decreased 1.6 percent in October due to temporary shutdowns of oil and gas rigs located in the Gulf of Mexico in anticipation of tropical storm Karen. This is the first decline since February 2013 and the greatest decline in approximately three years. Utilities production declined 1.1 percent in October. Overall capacity utilization fell by 0.2 percentage points to 78.1 percent due to the slight decline in overall industrial production.
  • 11.14.2013
  • Productivity and Costs
  • According to the preliminary estimate, nonfarm business sector productivity— real output per hour of all persons— increased at an annualized rate of 1.9 percent in the third quarter of 2013. This follows a 1.8 percent increase in the second quarter and a 1.7 percent decline in the first. A 3.7 percent increase in output contributed to the improvement in productivity, which was partially offset by a 1.7 percent increase in hours. On a year-over-year basis, nonfarm business sector productivity has been flat, as both output and hours have increased 1.8 percent. Real hourly compensation, which is compensation per hour after controlling for price changes, declined 1.3 percent in the third quarter, following a 2.3 percent increase in the second quarter. Inflation-adjusted hourly compensation has increased 0.3 percent over the past year. Unit labor costs, which are measured as hourly compensation per hourly output, declined 0.6 percent in the third quarter, following a decrease of 3.5 percent in the first quarter and a 0.5 percent increase in the second. On a year-over-year basis, unit labor costs have increased 1.9 percent.
  • 11.07.2013
  • GDP
  • According to the advance estimate, real GDP increased at an annualized rate of 2.8 percent in the third quarter, following a 2.5 percent increase in the second quarter. Over the last four quarters, real GDP has increased 1.6 percent. Contributions to the third quarter increase in GDP came from consumption, residential and business fixed investment, inventories, exports, and state and local government spending. These contributions were partially offset by an increase in imports and a decline in federal government spending.

    Personal consumption expenditures increased 1.5 percent during the quarter, contributing 1.0 percentage point to GDP growth. The improvement in overall consumption was primarily driven by increases in both durable and nondurable goods consumption, which increased 7.8 and 2.7 percent, respectively. Services consumption remained essentially flat, increasing just 0.1 percent.

    Residential investment increased 14.6 percent in the third quarter, matching a similar gain in the previous quarter. This contributed 0.4 percentage points to overall GDP growth. Business fixed investment increased 1.6 percent, as a 12.3 percent increase in structures and a 2.2 percent increase in intellectual property was offset by a 3.7 percent decline in equipment. Business fixed investment contributed 0.2 percentage point while inventory investment contributed 0.8 percentage point to the third quarter improvement in GDP.

    Exports increased 4.5 percent and imports increased 1.9 percent, leading to a slight reduction in the trade deficit during the quarter. This reduction led to a positive contribution from net exports to GDP growth of 0.3 percentage point. Federal government spending continued to decline, falling 1.7 percent. However, this was offset by an increase in state and local government spending of 1.5 percent. The net result was a slightly positive contribution (0.04 percentage point) to GDP growth from government spending.

  • 11.04.2013
  • Factory Orders
  • New orders for manufactured goods increased 1.7 percent (nonannualized) in September, following a decrease of 0.1 percent in August. Year-over-year growth rates for new orders were 2.4 percent, compared to 1.4 percent in August. Excluding transportation, new orders decreased 0.2 percent for the month, while new orders of durable goods increased 3.8 percent and nondurable goods fell 0.2 percent. New orders of nondefense capital goods excluding aircraft orders decreased 1.3 percent in September, compared to a 1.0 percent increase in August. Shipments increased 0.1 percent in September, led by an increase of 0.4 percent in shipments of durable goods. Unfilled orders and inventories increased 0.9 and 0.4 percent, respectively. The unfilled orders-to-shipments ratio was 6.4, roughly where it has been since late 2009, but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio was steady at 1.3, roughly where it has been since late 2009.
  • 10.28.2013
  • Industrial Production
  • Industrial production rose by 0.6 percent in September, following a 0.4 percent increase in August. Overall industrial production rose at an annual rate of 2.3 percent in the third quarter. Manufacturing output experienced an uptick of 0.1 percent in September, following a 0.5 percent increase in August, while the three-month annualized growth rate decreased from 2 percent in August to 1.1 percent in September.

    Breaking down the manufacturing sector into durable and nondurable goods, durable goods rose by 0.5 percent and nondurable goods declined by 0.3 percent. Within durable goods furniture, computer and electronic products, and nonmetallic mineral production fell by 0.7 percent, 0.5 percent, and 0.3 percent, respectively. Motor vehicle and parts production increased by 2 percent for September. Within nondurable goods apparel and leather, plastics and rubber, and petroleum and coal products rose in output by 1.5 percent, 0.7 percent, and 0.5 percent, respectively. Mining output rose 0.2 percent after having increased by 0.6 percent in August. Mining production is 6.6 percent higher than it was in September 2012. After experiencing five consecutive months of declining production, utilities production rose by 4.4 percent. September was the first month since February that both mining and utility production increased during the same month. Overall capacity utilization increased by 0.4 percentage points, to 78.3 percent. This rate is 1.9 percentage points below its historic average.

  • 10.25.2013
  • Durable Goods
  • New orders for durable goods rose 3.7 percent in September. Over the past year, new orders are up 4.6 percent. New orders for transportation equipment increased 12.3 percent, following a decline of 1.7 percent in August. New orders excluding transportation equipment were down 0.1 percent, following a 0.4 percent drop in August. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell 1.1 percent in September. Shipments of durable goods, which are up 3.0 percent over the past year, were up 0.2 percent in September. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, fell 0.2 percent in September. This decrease followed an increase of 1.1 percent in August. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.4 percent.
  • 10.22.2013
  • Construction Spending
  • Private construction spending rose to $640.5 billion in August, 0.7 percent higher than the upwardly revised July estimate of $636.1 billion. August’s results are 11.5 percent higher on a year-over-year basis. Residential construction spending rose 1.2 percent over the month, to $340.2 billion. New multi-family construction spending grew 3.2 percent in August and is up 37.5 percent year-over-year. New single-family construction rose 1.6 percent and is up 28.2 percent since last August. Private nonresidential construction spending was at $300.3 billion, 0.1 percent above the upwardly revised July estimate of $299.9 billion. Five of the eleven nonresidential construction sectors saw month-to-month increases in spending, with the amusement and recreation sector posting the largest monthly gain of 5.4 percent. The educational sector saw the largest monthly decline of 3.7 percent.
  • 10.22.2013
  • Existing Home Sales
  • Existing single-family home sales fell 1.5 percent in September, but are up 10.9 percent annually to a seasonally-adjusted annualized rate of 4.68 million units sold. This monthly decline comes after initial estimates of August’s figures reported the highest level of sales in nearly four years. Regionally, existing home sales ranged from a 4.9 percent decline in the Midwest to a 0.9 percent increase in the West. On a year-over-year basis, all regions posted strong positive growth rates. The median price of home sales fell 4.9 percent for the month to $199,300, but remains up 11.4 percent over the past 12 months. Meanwhile, the inventory of homes available for sale stood at 1.96 million units, representing a five month supply at the current sales pace.
  • 10.01.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) increased 0.5 percentage points to 56.2 in September, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Four of the five components that constitute the PMI have increased since August. Furthermore, four out of the five components were above the growth threshold of 50—inventories being the exception at 50.0 percentage points—which is an increase of 2.5 from the previous month. New orders declined 2.7 percentage points to 60.5, production increased 0.2 percentage points to 62.6 percent, supplier deliveries increased 0.3 percentage points to 52.6 percent, and employment increased 2.1 percentage points to 55.4 from August to September. The ISM Prices Index increased by 2.5 percentage points to 56.5 percent. Prices have decreased by 5.0 percentage points since February 2013’s high of 61.5 percent.
  • 09.25.2013
  • New Home Sales
  • In August, the sale of new single-family homes rose 7.9 percent for the month and 12.6 percent on an annual basis to seasonally-adjusted annualized rate of 421,000 homes sold. The monthly improvement to home sales was strongest in the Midwest, up 19.6 percent, while the South improved the most on an annual basis, up 28.2 percent. The West was the only area to post declines both monthly and annually, down 14.6 percent and 21.2 percent, respectively. The median sales price of new single-family homes fell slightly for the month, down 0.6 percent, and is up 0.55 percent since last August to $254,600. The inventory of new homes available for sale was at a 5-month supply at the current sales place, with a 3.8 decline for the month and 8.7 percent increase since this time last year.
  • 09.25.2013
  • Durable Goods
  • New orders for durable goods rose 0.1 percent in August. Over the past year, new orders are up 13.7 percent. New orders for transportation equipment increased 0.7 percent following a large decline of 22.0 percent in July. New orders excluding transportation equipment were down 0.1 percent, following a decline of 0.5 percent in July. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, increased 1.5 percent in August. Shipments of durable goods, which are up 4.9 percent over the past year, were up 0.9 percent in August. Shipments of nondefense capital goods excluding aircraft, which map directly into GDP, increased 1.3 percent in August. This increase followed a decline of 1.4 percent in July. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 2.8 percent.
  • 09.24.2013
  • Home Price Indexes
  • In July, the S&P Case-Shiller 10- and 20-city housing price indexes improved 1.9 percent and 1.8 percent, respectively. This represents the fourth consecutive month that all 20 cities have posted monthly gains. On an annual basis, the 10-city index was up 12.3 percent and the 20-city index was up 12.4 percent. The Southwest continues to lead year-over-year gains, where Las Vegas, San Francisco, Los Angeles, and San Diego are all up more than 20 percent. Both composites are now back to spring 2004 price levels.

    The FHFA housing price index rose 1.0 percent from June to July and 8.8 percent since July 2012. Regionally, monthly price changes ranged from a 0.7 percent decline in the East South Central to a 2.2 percent increase in the Pacific. On an annual basis, all areas posted positive growth rates also trailed by the East South Central, up 3.8 percent, and led by the Pacific, up 20.8 percent. Overall, home prices are back to early 2005 levels.

  • 09.16.2013
  • Industrial Production
  • Industrial production rose 0.4 percent in August. Manufacturing production increased 0.7 percent and the three-month annualized growth rate for overall manufacturing production increased from 0.9 percent to 2.6 percent. When examining both durable and nondurable goods in the manufacturing sector, durable goods increased 1.2 percent and nondurable goods increased 0.1 percent. Within the manufacturing durable goods sector, motor vehicle and parts increased 5.2 percent. Within the manufacturing nondurable goods sector, utilities production decreased 1.5 percent and mining output rose 0.3 percent after experiencing an increase of 2.0 percent in July. The overall capacity utilization increased 0.2 percentage points to 77.8 percent.
  • 09.13.2013
  • Producer Price Index
  • The Producer Price Index (PPI) rose at an annualized rate of 3.71 percent in August. On a year-over-year basis, the PPI is up 1.4 percent. Producer prices for finished consumer foods rose 7.3 percent in August, up from 0.6 percent increase in July. Energy prices increased 10.48 percent in August, reversing a decline of 2.5 percent in July. Year-over-year energy prices are still slightly up, at 0.8 percent. Excluding volatile food and energy prices, “core” PPI was unchanged in August, the first month that has not experienced some type of gain since October 2012. At earlier stages of production, core intermediate goods prices increased 1.9 percent, while core crude prices decreased 5.1 percent.
  • 09.05.2013
  • Productivity and Costs
  • Nonfarm business sector productivity, which is measured as real output per hour of all persons, was revised up from 0.9 percent to 2.3 percent at a seasonally-adjusted annualized rate in the second quarter of 2013. This upward revision to productivity reflects both an upward revision to output and a downward revision to hours worked. Output is now estimated to have increased 3.7 percent during the quarter, compared with a previous estimate of 2.6 percent, while hours increased 1.4 percent compared with a previously estimated increase of 1.7 percent. Over the past year, productivity has increased 0.3 percent, due to year-over-year increases of 2.1 percent and 1.7 percent in output and hours worked, respectively. In the second quarter, compensation per hour increased 2.3 percent (revised down from 4.0 percent), and after controlling for price changes, real compensation per hours increased 2.3 percent (unrevised). Due to the upward revision to productivity and the downward revision to compensation per hour, unit labor costs, which is measured as hourly compensation per hourly output, was revised down from a 1.4 percent increase to a 0.0 percent increase. On a year-over-year basis, real hourly compensation has increased 0.3 percent, and unit labor costs are up 1.5 percent.
  • 09.05.2013
  • Factory Orders
  • New orders for manufactured goods decreased 2.4 percent (nonannualized) in July, following an increase of 1.6 percent in June. Year-over-year growth rates for new orders were 1.4 percent, compared to 6.8 percent in June. Excluding transportation, new orders increased 1.2 percent for the month while new orders of durable goods fell 7.4 percent and nondurable goods rose 2.4 percent. Nondefense capital goods excluding aircraft orders decreased 2 percent in July, compared to a 0.9 percent increase in June. Shipments increased 1.1 percent in July, led by an increase in shipments of nondurable goods of 2.4 percent. Unfilled orders and inventories increased 0.4 and 0.2 percent, respectively. The unfilled orders-to-shipments ratio was 6.4, roughly where it has been since late 2009, but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio was steady at 1.3, roughly where it has been since late 2009.
  • 09.03.2013
  • Construction Spending
  • Private construction spending rose to $631.4 billion in July, 0.9 percent higher than the upwardly revised June estimate of $625.6 billion. July’s results are 9.5 percent higher on a year-over-year basis. Residential construction spending rose 0.6 percent over the month, to $334.6 billion. New multifamily construction spending edged up 0.1 percent in July and is up 39.3 percent year-over-year. New single-family construction rose 0.5 percent and is up 29.3 percent since last July. Private nonresidential construction spending was at $296.8 billion, 1.3 percent above the upwardly revised June estimate of $293.0 billion. Eight of the eleven nonresidential sectors saw month-to-month increases in construction spending with the lodging sector posting the largest monthly increase of 6.1 percent. The amusement and recreation and religious sectors reported the largest monthly declines of 3.2 and 3.1 percent, respectively.
  • 09.03.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) increased 0.3 percentage points to 55.7 in the month of August, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Three of the five components that constitute the PMI have increased since July. Furthermore, four out of the five components were above the growth threshold of 50 with inventories being the exception at 47.5 percentage points, which is an increase of 0.5 from the previous month. New orders saw the largest increase of 4.9 percentage points to 63.2, a smaller increase than the 6.4 percent rise that occurred from July to August. Production declined 2.6 percentage points to 62.4 percent, supplier deliveries increased 0.2 percentage points to 52.3 percent, and employment decreased 1.1 percentage points to 53.3 from July to August. The ISM Prices Index increased by 5.0 percentage points to 54.0 percent. Prices have decreased by 7.5 percentage points since February 2013’s high of 61.5 percent.
  • 08.29.2013
  • GDP
  • The annualized percent change in real GDP for the second quarter of 2013 was revised up from 1.7 to 2.5 percent. Primarily contributing to the upward revision were positive revisions to net exports and inventories. On a year-over-year basis, real GDP has increased 1.6 percent.

    The contribution of changes in private inventories to GDP growth was revised up from 0.4 to 0.6 percent, and the contribution of net exports was revised up from −0.8 to 0.0 percent. Exports are now estimated to have increased 8.6 percent during the quarter, compared with a prior estimated increase of 5.4 percent, while imports are estimated to have increased just 7.0 percent, compared with a prior estimated increase of 9.4 percent.

    Personal consumption expenditures were essentially unrevised, increasing 1.8 percent and contributing 1.2 percentage points to GDP growth. The increases in both residential and business fixed investment were revised down slightly. Residential investment increased 12.9 percent and business fixed investment increased 4.4 percent, which compares with prior estimates of 13.4 and 4.6 percent, respectively. Overall, private fixed investment contributed 0.9 percentage points to GDP growth in the second quarter. Government spending was revised down from a 0.4 percent decline to a 0.9 percent decline, which subtracted an additional 0.1 percentage points from second quarter growth.

  • 08.26.2013
  • Durable Goods
  • New orders for durable goods fell 7.3 percent in July. Over the past year, new orders are down 0.3 percent. New orders for transportation equipment declined 19.4 percent following an increase of 11.7 percent in June. New orders excluding transportation equipment were down 0.6 percent following increases of 0.1 and 1.3 percent in June and May, respectively. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell 3.3 percent in July. Shipments of durable goods, which are up 2.1 percent over the past year, were down 0.3 percent in July. Perhaps more disconcerting is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, declined 1.5 percent in July. This decrease followed a decline of 0.8 percent in June. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 0.8 percent.
  • 08.16.2013
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 0.9 percent in the second quarter of 2013, according to the preliminary estimate. This follows 1.7 percent declines in each of the two previous quarters. The increase during the second quarter was primarily caused by a 2.6 percent increase in output, while hours increased just 1.7 percent. On a year-over-year basis, nonfarm business sector productivity was flat in the second quarter. Compensation per hour increased 4.0 percent during the second quarter after a 4.5 percent decline in the first. After controlling for price changes, real compensation per hour increased 2.3 percent during the quarter and on a year-over-year basis, is up just 0.1 percent. Unit labor costs, which are measured as hourly compensation per hourly output, increased 1.4 percent in the second quarter after an 11.8 percent increase in the fourth quarter of last year and a 4.2 percent decline in the first quarter of this year. Over the past four quarters, unit labor costs are up 1.6 percent.
  • 08.15.2013
  • Industrial Production
  • Industrial production was unchanged (nonannualized) in July, following an increase of 0.2 percent in June. The near-term trend (three-month annualized growth) of 1.1percent is down from 4.0 percent in the first quarter. On a year-over-year basis, overall production is up 1.3 percent (its lowest level since the recession). Manufacturing production fell 0.1 percent in July while the three-month annualized growth rate increased 1.3 percent, down from 4.9 percent in the first quarter. Breaking down the manufacturing sector, durable and nondurable goods declined 0.2 percent and 0.1 percent, respectively. Within durable goods manufacturing, 8 of the 11 subsectors posted no change or declined for the month; Primary metals posted the only noteworthy growth, increasing 2.6 percent. Mining output rose 2.0 percent, after having increased 1.0 percent in June. Overall capacity utilization fell 0.1 percentage points to 77.6 percent of capacity, still 2.6 percentage points below its historic average.
  • 08.13.2013
  • Import and Export Prices
  • Import prices increased 0.2 percent in July after declining for the previous four months. Petroleum prices drove the increase, rising 3.2 percent, while nonpetroleum prices fell −0.5 percent compared to June. July represents the largest monthly decrease in nonpetroleum import prices since March 2009. On a year-over-year basis, import prices increase 1.0 percent after inching up 0.1 percent on a yearly basis in June. Petroleum prices jumped 7.8 percent on a yearly basis after averaging a −4.8 percent decline in the second quarter. Nonpetroleum prices fell −0.7 percent year-over-year after falling −0.4 percent, on average, in the second quarter. As in June’s report, nonpetroleum import prices remain subdued while petroleum prices add strength to the headline number.

    Export prices fell −0.1 percent in July, marking five months of consecutive declines. On a year-over-year basis, export prices increased 0.4 percent after rising 0.8 percent in June and falling −0.8 percent in May.

  • 08.02.2013
  • Factory Orders
  • New orders for manufactured goods increased 1.6 percent (nonannualized) in June, following an increase of 3.0 percent in May. Year-over-year growth rates for new orders have jumped to 6.8 percent (from 0.8 percent in April). Excluding transportation, new orders fell 0.4 percent for the month while new orders of durable goods rose 3.9 percent and nondurable goods fell 0.6 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, increased 0.9 percent in June. Shipments decreased 0.4 percent for the month while unfilled orders and inventories of manufactured goods also rose 2.1 percent and 0.1 percent, respectively. The unfilled orders-to-shipments ratio now rests at 6.28, roughly where it has been since late 2009 but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio remains at 1.30, also roughly where it has been since late 2009.
  • 08.01.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) increased 4.5 percentage points to 55.4 from 50.9 in the month of July. The PMI is at its highest level since June of 2011 and for the sixth month in 2013, sits above the growth threshold of 50. Four of the five components that constitute the PMI have increased since June. Furthermore, four out of the five components were above the growth threshold of 50 with inventories being the exception at 47.0 percent, a decrease of 3.5 percentage points from its previous month’s reading of 50.5 percent. For the second consecutive month, production saw the largest increase of 11.6 percentage points to 65.0 percent, its highest reading since May of 2004. New orders increased 6.4 percentage points to 58.3 percent, supplier deliveries increased 2.1 percentage points to 52.1 percent, and employment increased 5.7 percentage points to 54.4 percent from June to July. The ISM Prices Index decreased by 3.5 percentage points to 49.0 percent. Prices have decreased by 12.5 percentage points since February 2013’s high of 61.5 percent.
  • 08.01.2013
  • Construction Spending
  • Private construction spending rose in June to $622.8 billion, 0.4 percent below the revised May estimate of $625.4 billion. June’s results are 9.7 percent higher than a year ago. Residential construction spending rose $332.1 billion in June, nearly the same as the revised May estimate of $332.2 billion. New multifamily construction spending fell 3.3 percent and is up 40.6 percent year-over-year. New single-family construction posted a monthly decline of 0.8 percent and is up 28.2 percent since last June. Private nonresidential construction spending was at $290.7 billion, 0.9 percent below the revised May estimate of $291.3 billion.
  • 07.31.2013
  • GDP
  • According to the advance estimate, real GDP increased at an annualized rate of 1.7 percent in the second quarter, following a 1.1 percent increase in the first quarter. Over the last four quarters, real GDP is up 1.4 percent. Contributions to the second quarter increase in GDP came from consumption, residential and business fixed investment, inventories, and exports.

    Personal consumption expenditures increased 1.8 percent during the quarter, contributing 1.2 percentage points to GDP growth, and over the past four quarters, consumption has increased of 1.9 percent. After a decline in the first quarter due primarily to a drop in investment in structures, business fixed investment increased 4.6 percent in the second quarter. Residential investment, which has averaged quarterly increases of 14.4 percent since mid-2011, increased 13.4 percent. Residential and business fixed investment contributed 0.4 and 0.6 percentage point to overall GDP growth, respectively, while the change in private inventories contributed an additional 0.4 percentage points.

    Exports increased 5.4 percent during the quarter, while imports increased 9.5 percent. The net contribution of international trade to GDP growth was −0.8 percentage points. The pullback in government spending seemed to slow somewhat in the second quarter. Government spending decreased just 0.4 percent, following declines of 6.5 percent in the fourth quarter of 2012 and a 4.2 percent in the first quarter of this year.

  • 07.25.2013
  • Durable Goods
  • New orders for durable goods rose 4.2 percent in June. Over the past year, new orders are up 10.9 percent. New orders for transportation equipment increased 12.8 percent following an increase of 14.9 percent in May. New orders excluding transportation equipment were essentially unchanged in June, following increases of 1.0 and 1.8 percent in May and April, respectively. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, increased 0.7 percent in June. Shipments of durable goods, which are up 3.4 percent over the past year, were flat in June. Perhaps more disconcerting is that shipments of nondefense capital goods excluding aircraft (which map directly into GDP) declined 0.9 percent in June. This decrease followed an increase of 1.9 percent in May. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 0.8 percent.
  • 07.22.2013
  • Existing Home Sales
  • Existing single-family home sales fell 1.1 percent for the month, but are up 14.5 percent annually to a seasonally-adjusted annualized rate of 4.5 million units sold. Regionally, all areas showed strong year-over-year growth rates ranging from an increase of 9.2 percent in the West to a 16.5 percent increase in the Midwest. On a monthly basis, all regions were relatively flat, ranging from no change in the Northeast and Midwest to a decline of 1.8 percent in the West. The median sales price rose for the fifth consecutive month to $214,700, the highest level since August 2007. Existing single-family homes inventory rose 2.6 percent to 1.9 million units, the highest level since August 2012. Meanwhile, the monthly supply of homes rose 4.0 percent, but is down 18.8 percent to a 5.2 month supply on an annual basis.
  • 07.17.2013
  • Housing Starts
  • Housing starts of single-family homes fell 0.8 percent from May to June to a seasonally-adjusted annualized rate of 591,000 units. This represents an 11.5 percent increase over the past 12 months and the lowest level of housing starts since September 2012. However, in the first half of this year housing starts have averaged an annualized rate of about 612,000 units each month. Regionally, housing starts ranged from a 4.0 percent increase in the West to a 3.9 percent decline in the South on a monthly basis. On an annual basis, housing starts were flat in the Northeast and increased 15.2 percent in the South. The issuance of building permits rose 0.6 percent from May to June and 24.6 percent since June 2012.
  • 07.16.2013
  • Industrial Production
  • Industrial production rose 0.3 percent (nonannualized) in June, following no change in May. The near-term trend (three-month annualized percent change) has slowed to 0.0 percent (from 5.9 in January). On a year-over-year basis, overall production is up 2.0 percent. Manufacturing production also rose, increasing 0.2 percent for the month while the year-over-year growth rate rests at 1.8 percent. Breaking down the manufacturing sector, durable goods production increased 0.5 percent while nondurable goods fell 0.1 percent in June. Within durable goods manufacturing, machinery, motor vehicle and parts, and miscellaneous manufacturing all increased more than 1.0 percent. Elsewhere within durable goods production, wood products, primary metals, aerospace and miscellaneous transportation equipment along with furniture and related products posted declines. Overall capacity utilization bumped up 0.1 percentage points to 77.8 percent of capacity, which is roughly where is has been since January 2012; current readings are now 2.4 percentage points below its long run average.
  • 07.02.2013
  • Factory Orders
  • New orders for manufactured goods increased 2.1 percent (nonannualized) in May, following an increase of 1.3 percent in April. Year-over-year growth rates for new orders are up 3.7 percent. Excluding transportation, new orders rose 0.6 percent for the month while new orders of durable goods and nondurable goods rose 3.7 percent and 0.6 percent, respectively. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, increased 1.5 percent. Shipments increased 1.0 percent in May while unfilled orders and inventories of manufactured goods also rose 0.8 percent and 0.1 percent, respectively. The unfilled orders-to-shipments ratio now rests at 6.21, roughly where it has been since late 2009, but still well above the pre-crisis average of 4.3. The inventory-to-shipments ratio edged down to 1.30, again roughly where it has been since late 2009.
  • 07.01.2013
  • Construction Spending
  • Private construction spending rose to $605.4 billion in May, nearly the same as the upwardly revised April estimate of $605.7 billion. May’s results are 10.6 percent higher year-over-year. Residential construction spending rose 1.3 percent over the month, to $322.3 billion. New multifamily construction spending rose 2.5 percent in May and is up 51.7 percent year-over-year. New single-family construction posted a monthly gain of 0.4 percent and is up 33.2 percent since last May. Private nonresidential construction spending was at $283.1 billion, 1.4 percent below the downwardly revised April estimate of $287.1 billion. The manufacturing and communications sectors registered the largest month-to-month declines of 8.1 and 6.3 percent, respectively. The religious and amusement and recreation sectors saw the largest monthly increases of 7.1 and 2.2 percent, respectively.
  • 07.01.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) increased 1.9 percentage points to 50.9 in the month of June, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The Index has slipped below 50 only twice since July 2009. All five components that constitute the PMI have increased since May. Furthermore, four out of the five components were above the growth threshold of 50 with employment being the exception at 48.7 percentage points, which is a decrease of 2.4 from the previous month. Production saw the largest increase of 4.8 percentage points to 53.4, a reversal of the 4.9 percent drop that occurred from April to May. New orders increased 3.1 percentage points to 51.9 percent, supplier deliveries increased 1.3 percentage points to 50.0 percent, and employment decreased 1.4 percentage points to 48.7 from May to June. Inventories increased 1.5 percentage points to 50.5 percent. The ISM Prices Index increased by 3.0 percentage points to 52.5 percent. Prices have decreased by 9 percentage points since February 2013’s high of 61.5 percent.
  • 06.26.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) decreased 1.7 percentage points to 49.0 in the month of May, indicating a general contraction in the manufacturing sector as it is below the growth threshold of 50. This is the second time it has dipped below 50 since July 2009 (the other being November 2012). Four out of the five components that constitute the PMI decreased, with inventories being the exception. Furthermore, four out of the five components were below the growth threshold of 50, with employment barely registering above at 50.1 percent. Production saw the largest decrease of 4.9 percentage points to 48.6 percent, new orders decreased 3.5 percentage points to 48.8 percent, supplier deliveries decreased 2.2 percentage points to 48.7 percent, and employment decreased 0.1 percentage points to 50.1 percent from April to May. Inventories increased 2.5 percentage points to 49.0 percent. The ISM Prices Index decreased by 0.5 percentage points to 49.5 percent. Prices have decreased by 12 percentage points since February 2013’s reading of 61.5 percent.
  • 06.25.2013
  • Durable Goods
  • New orders for durable goods rose 3.6 percent in May. Over the past year, new orders are up 7.6 percent. New orders for transportation equipment increased 10.2 percent following an increase of 8.3 percent in April. Excluding transportation equipment, new orders increased 0.7 percent in May, following an increase of 1.7 percent and a decline of 1.6 percent in April and March, respectively. Orders for nondefense capital goods excluding aircraft—which is used to evaluate the near-term outlook in equipment and software investment—increased 1.1 percent in May. Shipments of durable goods, which are up 2.4 percent over the past year, rose 1.3 percent in May. Perhaps more encouraging is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, increased 1.7 percent in May. This increase followed a decline of 2.1 percent in April. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.6 percent.
  • 06.25.2013
  • Home Price Indexes
  • The S&P Case-Shiller 10- and 20-city housing price indexes rose a seasonally-adjusted 1.8 percent and 1.7 percent, respectively from March to April. Over the past 12 months the 10-city composite is up 11.6 percent and the 20-city composite is up 12.1 percent. This is the fourth consecutive month that both composites and all 20 cities have seen positive annual growth rates. Improvements to the housing market appear to be broad-based and gaining traction as several cities continue post-record gains each month.

    The FHFA housing price index rose 0.7 percent in April, which is the fifteenth consecutive month of positive price growth. Since April 2012, the index has risen 7.4 percent and all areas showed solid improvement, ranging from a 2.9 percent increase in the Middle Atlantic to a 17.1 percent increase in the Pacific. Overall, homes sales with mortgages from either Fannie Mae or Freddie Mac are back to early 2005 levels.

  • 06.25.2013
  • New Home Sales
  • New single-family home sales rose 2.1 percent in May and 29.0 percent over the past 12 months to a seasonally-adjusted annualized rate of 466,000 units sold. Regionally, sales varied widely from a 9.0 percent decline in the South to a 40.7 percent increase in the Midwest. The median sales price of new homes was $263,900, which is a 3.2 percent decline for the month, but a 10.3 percent annual increase. The inventory of new homes for sale in May was 161,00, representing a 4.1 months’ supply at the current sales pace, which is a 12.8 percent decline since this time last year.
  • 06.18.2013
  • Housing Starts
  • The groundbreaking of single-family homes rose just 0.3 percent in May and 16.3 percent annually to a seasonally-adjusted annualized rate of 599,000 units started. Regionally, the monthly pace of housing starts ranged from a 20.3 percent decline in the West to a 12.2 percent increase in the South. On a year-over-year basis all areas posted positive growth rates, with the West showing the weakest improvement of 6.8 percent and the South leading with a gain of 19.5 percent. The authorization of single-family home building permits rose 1.3 percent from April to May and 24.6 percent over the past 12 months to a seasonally adjusted annualized rate of 622,000 permits issued.
  • 06.14.2013
  • Producer Price Index
  • The Producer Price Index rose at an annualized rate of 5.7 percent in May, the first increase in two months. On a year-over-year basis the PPI is up 1.8 percent. Producer prices for finished consumer foods in May rose 8.0 percent following a decrease of 9.5 percent in April. Energy prices increased sharply to 16.8 percent in May following a large decrease of 26.5 percent in April. Year-over-year energy prices are up a slight 0.9 percent. Excluding volatile food and energy prices, “core” PPI rose 0.7 percent in May, the smallest increase observed all year. At earlier stages of production, core intermediate good prices decreased 4.2 percent and core crude prices decreased 24.6 percent in May.
  • 06.14.2013
  • Industrial Production
  • Industrial production rose 0.1 percent (nonannualized) in May, following a decrease of 0.5 percent in April. The near-term trend (three-month annualized percent change) has slowed to −0.8 percent from 5.9 in January. On a year-over-year basis, overall production is up 1.7 percent. Manufacturing production also rose, increasing 0.1 percent for the month while the year-over-year growth rate rests at 1.7 percent. Breaking down the manufacturing sector, durable goods and nondurable goods production increased 0.2 percent and 0.1 percent, respectively in May. Within durable goods manufacturing, computers and electronic products and wood products posted the largest gains, both increasing 1.1 percent. Elsewhere within durable goods production, primary metals along with furniture and related products each declined 1.0 percent. Overall capacity utilization fell 0.1 percentage points to 77.6 percent of capacity which is roughly where it has been since January 2012. Current readings are now 2.6 percentage points below its long run average.
  • 06.13.2013
  • Import and Export Prices
  • Import prices decreased −0.6 percent in May, marking three months of consecutive declines. Both petroleum and nonpetroleum prices fell, with the former dropping −2.0 percent and the latter decreasing −0.3 percent. Petroleum prices have now declined for the past two months and nonpetroleum prices have fallen for the past three. On a year-over-year basis, import prices fell −1.9 percent, marking a full year of flat or falling yearly prices. Petroleum prices were down −6.2 percent compared to last year and nonpetroleum prices fell −0.5 percent. May’s report continued to display the same weakness seen in March and April. Import prices will likely remain weak due to the global economic slowdown.

    Export prices fell −0.5 percent in May marking three months of consecutive declines as well. On a year-over-year basis, export prices fell −0.9 percent after falling at the same pace in April.

  • 06.05.2013
  • Factory Orders
  • New orders for manufactured goods increased 1.0 percent (nonannualized) in April, following a decrease of 4.7 percent in March. Year-over-year growth rates for new orders are up just 0.6 percent. Excluding transportation, new orders fell 0.1 percent for the month while new orders of durable goods rose 3.5 percent and nondurable goods orders declined 1.0 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, increased 1.2 percent. Shipments declined 1.0 percent, whereas unfilled orders and inventories of manufactured goods increased 0.3 percent and 0.2 percent for the month, respectively. The unfilled orders-to-shipments ratio now rests at 6.26, roughly where it has been since late 2009, but still well above the pre-crisis average of 4.3. The inventory/shipments ratio edged up to 1.31, roughly where it has been since late 2009.
  • 06.05.2013
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 0.5 percent in the first quarter of 2013. This is a slight downward revision from the 0.7 percent increase in the preliminary estimate. The first quarter gain follows a 3.1 percent increase and a 1.7 percent decline in the third and fourth quarters of 2012, respectively, and over the past year, productivity has increased 0.9 percent. The increase in productivity during the first quarter was caused by a 2.1 percent increase in output compared with just a 1.6 percent increase in hours. Since the first quarter of 2012, output is up 2.4 percent while hours have increased 1.5 percent. There was a sharp downward revision to hourly compensation, which declined 3.8 percent (revised down from a 1.2 percent increase).

    The same sharp downward revision can be seen after controlling for price changes, as real hourly compensation fell 5.2 percent (revised down from a 0.3 percent increase). However, the decline in real hourly compensation in the first quarter follows a sharp 7.5 percent increase in the fourth quarter of last year, and over the past four quarters, compensation has increased 0.3 percent. Unit labor costs, which are measured as hourly compensation per hourly output, fell 4.3 percent in the first quarter, largely due to the downward revision to compensation. This follows a 1.9 percent decrease and an 11.8 percent increase in the third and fourth quarters of 2012, respectively, and unit labor costs have increased 1.1 percent over the past year.

  • 06.03.2013
  • Construction Spending
  • Private construction spending rose to $602.0 billion in April, a 1.0 percent increase from the upwardly revised March estimate of $595.9 billion. April’s results are 9.0 percent higher year-over-year. Residential construction spending fell 0.1 percent over the month, to $301.9 billion. New multifamily construction spending rose 3.4 percent in April and is up 48.6 percent year-over-year. New single-family construction posted a monthly gain of 1.4 percent and is up 38.6 percent since last April. Private nonresidential construction spending was at $300.1 billion, 2.2 percent above the downwardly revised March estimate of $293.7 billion. The manufacturing, office, communication, and religious sectors all registered declines over the month. The religious sector had the largest decline of 11.5 percent and is down 9.5 percent year-over-year. The power sector posted the largest monthly increase of 10.8 percent but is still down 2.8 percent year-over-year.
  • 06.03.2013
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) decreased 1.7 percentage points to 49.0 in the month of May, indicating a general contraction in the manufacturing sector as it is below the growth threshold of 50. This is the second time it has dipped below 50 since July 2009 (the other being November 2012). Four out of the five components that constitute the PMI decreased, with inventories being the exception. Furthermore, four out of the five components were below the growth threshold of 50 with employment barely registering above at 50.1 percent. Production saw the largest decrease of 4.9 percentage points to 48.6 percent, new orders decreased 3.5 percentage points to 48.8 percent, supplier deliveries decreased 2.2 percentage points to 48.7 percent, and employment decreased 0.1 percentage points to 50.1 percent from April to May. Inventories increased 2.5 percentage points to 49.0 percent. The ISM Prices Index decreased by 0.5 percentage points to 49.5 percent. Prices have decreased by 12 percentage points since February 2013’s reading of 61.5 percent.
  • 05.31.2013
  • Personal Income
  • Nominal personal income was essentially flat in April, declining less than 0.1 percent on a nonannualized basis. This follows two consecutive months of increases, including a 1.2 percent increase in February and a 0.3 percent increase in March. On a year-over-year basis, nominal personal income has increased 2.8 percent. Disposable personal income, which is nominal personal income less current personal taxes, declined 0.1 percent for the month, showing a slight increase in taxes (0.6 percent). Since last year, disposable personal income has increased 1.7 percent. After controlling for price changes, real disposable personal income increased 0.1 percent, following increases of 0.8 percent and 0.3 percent in February and March, respectively. Since April of 2012, real disposable personal income has increased 1.0 percent, as the year-over-year changes have gradually improved since January.

    Real personal consumption expenditures increased a little less than 0.1 percent during April, following increases of 0.4 percent in February and 0.2 percent in March. Changes in consumption have been positive each month since last November, but the slight increase in April is the smallest monthly improvement over that time period. Since last year, consumption has increased 2.1 percent. The increase in consumption during April came entirely from goods consumption, which increased 0.3 percent due to an increase in durable goods consumption of 0.7 percent and an increase in nondurable goods consumption of 0.2 percent. Services consumption was basically flat, declining less than 0.1 percent. On a year-over-year basis, goods consumption is up 3.2 percent, while services consumption has increased 1.5 percent. The modest changes in income and consumption were not enough to impact the personal savings rate, which remained at 2.5 percent.

  • 05.28.2013
  • Home Price Indexes
  • The S&P Case-Shiller national housing price index rose 1.2 percent in the first quarter of 2013 and 10.2 percent over the past four quarters. Both the 10- and 20-city indexes rose 1.4 percent in March and are up 10.3 percent and 10.9 percent, respectively on an annual basis. All 20 MSAs posted annuals gains for the third consecutive month and five posted their highest month-to-month gains in over seven years. Cleveland was among the cities with the weakest annual gains (up 4.8 percent), which is still substantial compared to recent trends. Overall home prices are continuing to climb and all three indexes are back to 2003 price levels.

    The FHFA housing price index rose 1.9 percent from Q4:2012 to Q1:2013 and 6.7 percent since Q1:2012, representing the seventh consecutive quarter of price growth. On a monthly basis the index rose by 1.3 percent in March and 7.2 percent over the past 12 months. Regionally all areas posted positive growth rates on a monthly and annual basis and overall prices are back to late 2004 levels.

  • 05.24.2013
  • Durable Goods
  • New orders for durable goods rose 3.3 percent in April. Over the past year, new orders are up 2.4 percent. New orders for transportation equipment increased 8.1 percent following a decline of 14.7 percent in March. Excluding transportation equipment, new orders increased 1.4 percent in April, following declines of 1.7 percent and 0.2 percent in March and February, respectively. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, increased 1.2 percent in April. Shipments of durable goods, which are up 2.5 percent over the past year, fell 0.6 percent in April. Perhaps more disconcerting is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, fell 1.5 percent in April. This decrease followed a gain of 0.5 percent in March. On a year-over-year basis, shipments of non-defense cap goods ex aircraft are up 1.4 percent.
  • 05.16.2013
  • Housing Starts
  • New single-family housing starts fell 2.1 percent in April, but are up 20.8 percent over the past year to a seasonally-adjusted annualized rate of 610,000 units started. Regionally, all areas posted solid double-digit annual growth rates. On a monthly basis, housing starts ranged widely from a 48.8 percent increase in the Northeast to a 12.9 percent decline in the South. The authorization of single-family building permits, which is an indicator of future demand, rose 3.0 percent in April and 27.5 percent over the past 12 months to a seasonally-adjusted annualized rate of 617,000 permits.
  • 05.15.2013
  • Industrial Production
  • Industrial production fell 0.6 percent (nonannualized) in April, following an increase of 0.3 percent in March. The near-term trend (three-month annualized percent change) has slowed to 2.5 percent from 4.6 in March. On a year-over-year basis, overall production is up 1.9 percent. Manufacturing production also declined, falling 0.4 percent for the month while the year-over-year growth rate rests at 1.4 percent, its lowest reading since early 2010. Breaking down the manufacturing sector, durable goods fell 0.7 percent while nondurable goods production was unchanged in April. Within durable goods manufacturing, computers and electronic products was the only area to show gains for the month, increasing 0.2 percent. Elsewhere within durable goods production, nonmetallic mineral products and motor vehicle and parts production declined 1.7 and 1.3 percent, respectively. Overall capacity utilization fell 0.5 percentage points to 77.8 percent of capacity, which is now 2.4 percentage points below its long-run average.
  • 05.03.2013
  • Factory Orders
  • New orders for manufactured goods decreased 4.0 percent (nonannualized) in March, following an increase of 2.0 percent in February. Year-over-year growth rates for new orders have turned negative (−0.3 percent) for the first time since last August. Excluding transportation, new orders fell 2.0 percent for the month while the durable and nondurable goods orders series declined 5.9 percent and 2.4 percent, respectively. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, increased 0.9 percent for the month pulling its three-month annualized growth rate up to 10.4 percent. Shipments and unfilled orders of manufactured goods declined 1.0 and 0.7 percent for the month. The unfilled orders-to-shipments ratio now rests at 6.20, roughly where it has been since late 2009 but still well above the pre-crisis average of 4.3. Inventories were little changed for the month; the inventory/shipments ratio edged up to 1.29, roughly where it has been since late 2009.
  • 05.02.2013
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 0.7 percent in the first quarter of 2013, according to the preliminary estimate. This follows a 1.7 percent decline in the fourth quarter of 2012, and on a year-over-year basis, productivity is up 0.9 percent. Real output increased at an annualized rate of 2.5 percent through the first three months of the year, while hours increased 1.8 percent, leading to the overall improvement in productivity. Over the past year, output and hours are up 2.5 percent and 1.5 percent, respectively. Compensation per hour increased at a rate of 1.2 percent in the first quarter. However, after controlling for price changes, real hourly compensation fell 0.3 percent. Since the first quarter of last year, real compensation has been basically flat, down just 0.1 percent. Unit labor costs, which are measured as hourly compensation per hourly output, increased 0.5 percent in the first quarter, following a 1.9 percent decline and a 4.4 percent increase in the third and fourth quarters of last year, respectively, and are up 0.6 percent since the first quarter of 2012.
  • 05.01.2013
  • ISM Manufacturing
  • The ISM report indicated growth in the manufacturing sector for the month of April, although at a slowing pace. The Purchasing Managers’ Index (PMI) decreased 0.6 percentage points to 50.7, this being its fifth consecutive month above the growth threshold of 50. April’s PMI of 50.7 was below both the 2012 average of 51.9, as well as the 2013:Q1 average of 52.9. Out of the five components that make up the PMI, all except for inventories were above 50. Inventories fell 3 percentage points to 46.5 from 49.5, new orders increased 0.9 percentage points to 52.3 from 51.4, and production increased 1.3 percentage points to 53.5 from 52.2. Supplier deliveries increased by 1.5 percentage points to 50.9 from 49.4, bringing it above the growth threshold. Employment saw a large decrease of 4 percentage points from 54.2 to 50.2 but still managed to stay above 50. Prices paid registered 50 percent, indicating that there was no change in prices from the previous month of March.
  • 05.01.2013
  • Construction Spending
  • Private construction spending fell in March to $598.4 billion, a 0.6 percent decrease from the downwardly revised February estimate of $602.0 billion. March’s results are 9.8 percent higher year-over-year. Residential construction spending increased 0.4 percent over the month, to $294.9 billion. New multi-family construction spending rose 0.3 percent in March and is still up 52.7 percent year-over-year. New single-family construction posted a monthly gain of 1.6 percent and is up 37.6 percent since last March. Private nonresidential construction spending was at $303.5 billion, 1.5 percent below the revised February estimate of $308.2 billion. Manufacturing, commercial, healthcare, educational, and power all registered declines over the month. The communication sector posted the largest monthly increase of 3.7 percent but is still down 4.1 percent year-over-year.
  • 04.26.2013
  • GDP
  • Real GDP grew in the first quarter at a seasonally-adjusted annualized rate of 2.5 percent, according to the advanced estimate. This is up from 0.4 percent in the fourth quarter, but below consensus expectations which were primarily around 3.0 percent. On a year-over-year basis, the growth rate for real GDP improved slightly to 1.8 percent.

    Primarily driving GDP growth in the first quarter were increases in real personal consumption expenditures and private inventories. Personal consumption expenditures increased 3.2 percent during the quarter, compared with an increase of 1.8 percent in the fourth quarter of 2012, and contributed 2.2 percentage points to overall growth during the first three months of the year. Changes in inventories contributed 1.0 percentage point to GDP growth this quarter, compared with a contribution of −1.5 percentage points to GDP growth in the previous quarter. Fixed investment continued to contribute positively to GDP, adding 0.5 percentage points to GDP during the quarter. This makes seven consecutive quarters of positive contributions from this category.

    Offsetting those gains were decreases in net exports and government spending, which contributed −0.5 percent and −0.8 percent to the change in overall GDP, respectively. Real imports of goods and services increased 5.4 percent while exports increased 2.9 percent, leading to an overall decline in net exports. Government spending decreased −4.1 percent in the first quarter, following a −7.0 percent decline in the last quarter. Most of the change in government spending is coming at the national level, as federal government spending declined −14.8 in the final quarter of last year and −8.4 percent in the first quarter of this year.

  • 04.24.2013
  • Durable Goods
  • New orders for durable goods fell 5.7 percent in March. Over the past year, new orders are up 0.5 percent. Much of the decline in the headline number was due to a large decline in transportation equipment (down 15.0 percent in March). Excluding transportation equipment, new orders decreased 1.4 percent in March, following a decline of 1.7 percent and gain of 3.0 percent in February and January, respectively. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell 0.2 percent in March. Shipments of durable goods, which are up 4.1 percent over the past year, rose 0.4 percent in March. Perhaps more encouraging is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, rose 0.3 percent in March. This increase followed a gain of 1.2 percent in February. On a year-over-year basis, shipments of nondefense capital goods excluding aircraft are up 1.2 percent.
  • 04.16.2013
  • Industrial Production
  • Industrial production increased 0.4 percent (nonannualized) in March, following an increase of 1.1 percent in February. The near-term trend (three-month annualized percent change) has remained stable at roughly 5.0 percent over the past five months. On a year-over-year basis, overall production is up 3.5 percent. Manufacturing production edged down 0.1 percent for the month while the year-over-year growth rate rests at 2.5 percent. Breaking down the manufacturing sector durable goods fell 0.2 percent while nondurable goods production was unchanged in March. Within durable goods manufacturing, motor vehicles and parts were one of the only areas to show gains in March, increasing 2.9 percent. Overall capacity utilization rose 0.2 percentage points to 78.5 percent of capacity, which is now 1.7 percentage points below its long run average.
  • 04.02.2013
  • Factory Orders
  • New orders for manufactured goods increased $14.5 billion, or 3.0 percent (nonannualized), in February, following a decrease of 1.0 percent in January. Year-over-year growth rates for new orders may have slowed from higher levels seen earlier in the recovery, yet they are trending in the right direction in recent months, having increased 2.7 percent from last February. Excluding transportation, new orders increased 0.3 percent for the month, while the durable and nondurable goods orders series rose 5.6 percent and 0.8 percent, respectively. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, fell 3.2 percent for the month, pulling its 3-month annualized growth rate down to 10.1 percent from 42.8 percent in January. Shipments and unfilled orders of manufactured goods both increased by 0.9 percent for the month. The unfilledndash;orders-to-shipments ratio now rests at 6.28, roughly where it has been since late 2009 but still well above the pre-crisis average of 4.3. Inventories edged up for the third month in a row, increasing 0.2 percent; the inventory-to-shipments ratio edged down to 1.27, roughly where it has been since late 2009.
  • 04.01.2013
  • ISM Manufacturing
  • The ISM Manufacturing Purchasing Manufacturers Index (PMI) decreased 2.9 percentage points (pp) in March to 51.3 percent (from 54.2 percent in February) but is still the fourth consecutive month above the growth threshold of 50.0. The March PMI has also surpassed the 2012:Q4 average of 50.6 percent, but fell slightly below its 2012 average of 51.9 percent. The 2013:Q1 PMI average is 52.9, beating both the 2012 and 2012:Q4 average due to a strong January and February. Four of the five components that make up the PMI decreased in March. Specifically, new orders were down 6.4 pp to 51.4 percent, production was down 5.4 pp to 52.2 percent, supplier deliveries was down 2.0 pp to 49.4 percent, and inventories was down 2.0 pp to 49.5 percent. Employment, the fifth component of PMI, increased by 1.6 pp to 54.2 percent. Although four of the five components that make up the PMI decreased, three of them—new orders, production, and employment—were still above the growth threshold of 50 with just supplier deliveries and inventories coming in below. The rest of the report showed a somewhat strong position within the manufacturing sector with a notable change in prices decreasing 7.0 ppt. to 54.5 percent.
  • 04.01.2013
  • Construction Spending
  • Private construction spending rose to $613.0 billion in February, a 1.3 percent increase from the downwardly revised January estimate of $605.2 billion. February”s results are 12.6 percent higher on a year-over-year basis. Residential construction spending increased 2.2 percent over the month, to $303.4 billion. New multi-family construction spending fell 2.2 percent in February, but is still up 51.8 percent year-over-year. New single-family construction posted a monthly gain of 4.3 percent. Private nonresidential construction spending was at $309.6 billion, 0.4 percent above the revised January estimate of $308.3 billion. The communication sector fell 9.2 percent over the month, and the transportation sector posted its fourth straight month of declines, falling 2.4 percent since January.
  • 03.26.2013
  • Durable Goods
  • New orders for durable goods rose 5.7 percent in February. Over the past year, new orders are up 3.8 percent. Much of the increase in the headline number was due to a large increase in transportation equipment (up 21.7 percent). Excluding transportation equipment, new orders decreased 0.5 percent in February, following gains of 2.9 percent and 0.8 percent in January and December, respectively. Despite the relative strength in the near-term, on a year-over-year basis new orders excluding transportation equipment are up just 1.4 percent. Orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell 2.7 percent in February. Shipments of durable goods, which are up 4.7 percent over the past year, rose 1.0 percent in February, more than reversing a 0.7 percent decrease in January. Perhaps more encouraging is that shipments of nondefense capital goods excluding aircraft, which map directly into GDP, rose 1.9 percent in February. On a year-over-year basis, shipments of nondefense cap goods excluding aircraft are up 3.5 percent.
  • 03.26.2013
  • Home Price Indexes
  • In January, the 10- and 20-city S&P Case-Shiller housing price indexes posted positive gains of 0.2 percent and 0.1 percent on a monthly basis and gains of 7.3 percent and 8.1 percent annually. This represents the largest annual improvement to both composites since summer 2006. Nine cities showed positive monthly gains and all 20 MSAs experienced positive growth over the past 12 months. While both composites are still roughly 30 percent below their 2006 peaks, they have risen approximately 9 percent since their early 2012 trough. Overall home prices are back to autumn 2003 levels.

    From December to January, the FHFA housing price index rose 0.6 percent and 6.5 percent since January 2012. Regional monthly price changes were minimal, but annually all divisions showed positive growth and the Pacific and Mountain divisions posted double digit gains. Overall prices of homes that are owned or guaranteed by Fannie Mae or Freddie Mac are back to autumn 2004 levels.

  • 03.26.2013
  • New Home Sales
  • New single-family home sales fell 4.6 percent in February, but are up 12.3 percent over the past 12 months to a seasonally-adjusted annualized rate of 411,000 units sold. Regionally, the Northeast experienced the sharpest declines, down 13.3 percent for the month and 10.3 percent annually. The median sales price rose roughly three percent on a monthly and annual basis to $246,800. Meanwhile, the inventory of new homes for sale ticked up to 152,000 units, representing a 4.4 month supply at the current sales pace.
  • 03.21.2013
  • Existing Home Sales
  • Existing single-family home sales slipped 0.2 percent in February, but are up 8.7 percent annually to a seasonally-adjusted annualized rate of 4.36 million units sold. Monthly growth rates ranged from a decline of 3.7 percent in the Northeast to an increase of 2.9 percent in the West. Annually, all regions showed positive growth. The median sales prices rose 1.6 percent in February, and are up 11.3 percent over the past 12 months. The inventory of available homes for sale rose 6.3 percent and the monthly supply of homes rose 7 percent. Meanwhile, both the inventory and supply of homes at the current sales pace continue to post strong declines, down 19.2 percent and 25.8 percent, respectively.
  • 03.19.2013
  • Housing Starts
  • In February, the groundbreaking of new single-family homes rose 0.5 percent for the month and 25.5 percent over the past 12 months to a seasonally-adjusted annualized rate of 600,000 units. Regionally, the Northeast lead with housing starts rising 20.4 percent in February and 18.0 percent since February 2012. While the West and Midwest posted small monthly declines, all regions made positive annual gains. The authorization of single-family home building permits rose 2.7 percent in February and increased 31.5 percent since this time last year to a seasonally-adjusted annualized rate of 618,000 permits. The completion of new single-family homes rose to a seasonally-adjusted annualized rate of 547,000, which is a 3.6 percent increase for the month and 32.9 percent annually. When more building permits are issued than residences completed, the industry is perceived to be expanding, and this expansion has been underway for ten months (since May 2012).
  • 03.15.2013
  • Industrial Production
  • Industrial production increased 0.7 percent (nonannualized) in February, following no change in January. The near-term trend (three-month annualized percent change) slowed from 7.6 percent in January to 4.1 percent; on a year-over-year basis, overall production is up 2.5 percent. Manufacturing production jumped 0.8 percent for the month while the year-over-year growth rate rests at 2.0 percent. Breaking down the manufacturing sector, durable and nondurable goods increased 1.2 percent and 0.3 percent, respectively. Within durable goods manufacturing, motor vehicles and parts posted the largest increase, jumping 3.2 percent in February which helps to offset January’s decline of 4.9 percent. Fabricated metals also posted a notable increase in output following a sluggish fourth quarter, rising 2.0 percent. Overall capacity utilization jumped 0.4 percentage points to 79.6 percent of capacity which is now 0.6 percentage points below is long run average.
  • 03.14.2013
  • Current Account
  • In the fourth quarter of 2012, the U.S. current account deficit contracted to −$110.4 billion, a $2.0 billion decrease from the third quarter’s revised −$112.4 billion deficit (−$107.5 billion, previously). The fourth quarter’s narrowing marks the third consecutive quarter of contractions in the current account deficit. As a percent of GDP, the current account remained unchanged at 2.8 percent—the smallest ratio since the fourth quarter of 2009. Both imports and exports of goods, services and income increase with the former climbing more than the latter to drive the contraction in the overall deficit. Imports of goods, services, and income expanded $4.8 billion to a level of —$816.4 billion, while exports climbed $7.1 billion to a level of $740.3 billion.
  • 03.13.2013
  • Import and Export Prices
  • Import prices increased 1.1 percent in February after rising 0.7 percent in January. February’s gain is more than double the 0.5 percent consensus forecasts. Petroleum prices, up 5.2 percent, were the main driver of the gain in the overall index. Nonpetroleum import prices remained unchanged in February after posting 0.1 percent increases in January and December. On a year-over-year basis, import prices fell −0.3 percent, marking the fourth consecutive month of losses. Nonpetroleum import prices ticked up 0.2 percent compared to last year while petroleum prices continued to post year over year losses. Declining −1.4 percent year-over-year, petroleum prices marked ten consecutive months of losses. After weak prices in November and December, February’s report maintains some of the strength seen in January. Most of the gain, however, is driven by petroleum which can be prone to large swings.

    Export prices increased 0.8 percent in February after increasing 0.3 percent in January. On a year-over-year basis, export prices advanced 1.5 percent marking the fifth consecutive month of yearly gains.

  • 03.13.2013
  • Retail Sales
  • Total retail sales increased at a nonannualized rate of 1.1 percent in February, year-over-year retail sales are up 4.6 percent. Auto sales increased 1.1 percent in February, following a decrease in January of 0.4 percent. Excluding autos, retail sales increased 1.0 percent, over the past 12 months. Retail sales excluding autos are up 3.9 percent. Contributing to the monthly gain in total sales were improvements for gasoline stations (up 5.0 percent), miscellaneous store retailers (up 1.8 percent), non-store retailers (up 1.6 percent), and grocery stores (up 0.7 percent). Gasoline station sales increased due to high gasoline prices and contributed nearly half of the growth in total sales, retail sales excluding gasoline station sales rose just 0.6 percent. Sectors that saw the largest declines in February were furniture and home furnishing stores (down 1.6 percent), sporting goods, hobby, book and music stores (down 1.0 percent), and food service and drinking places (down 0.7 percent). A less volatile indicator of sales growth, “core” retail sales (which excludes sales of autos, building supplies, and gas stations) increased 0.4 percent in February, and are up 3.8 percent on a year-over-year basis.
  • 03.07.2013
  • Productivity and Costs
  • Nonfarm business sector productivity— real output per hour of all persons— was slightly revised from the preliminary estimate, decreasing at an annualized rate of 1.9 percent (revised from a 2.0 percent decline). This follows increases of 1.7 and 3.1 percent in the second and third quarters, and productivity has increased 0.5 percent over the past year, similar to the 0.4 percent improvement in 2011. Output increased 0.5 percent in the fourth quarter (revised up from 0.1 percent), while hours increased 2.5 percent (revised up from 2.2 percent), causing the overall decline in productivity. In nominal terms, hourly compensation increased 2.6 percent during the quarter. However, after controlling for price changes, real hourly compensation increased just 0.4 percent (revised up from 0.3 percent). Real compensation increased 0.2 percent in the second quarter and fell 0.9 percent in the third quarter, and on a year-over-year basis, is up 0.8 percent. Unit labor costs, which are measured as hourly compensation per hourly output, increased 4.6 percent during the fourth quarter (revised up from 4.5 percent), following declines of 0.5 and 1.9 percent in the second and third quarter, respectively, and are up 2.1 percent since the fourth quarter of 2011.
  • 03.06.2013
  • Factory Orders
  • New orders for manufactured goods fell $9.6 billion or 2.0 percent (nonannualized) in January, following an increase of 1.3 percent in December. Year-over-year growth rates for new orders continue to decrease from higher levels seen earlier in the recovery, increasing just 0.2 percent from last January. Excluding transportation new orders increased 1.3 percent for the month while the durable goods orders series decreased 4.9 percent and the nondurable goods orders increased 0.6 percent for the month. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, grew 7.2 percent for the month pulling its three-month annualized growth rate up from −21.1 percent in September to 45.6 percent. Shipments and unfilled orders of manufactured goods both slowed by 0.2 percent for the month. The unfilled orders-to-shipments ratio now rests at 6.27, roughly where it has been since late 2009 but still well above the pre-crisis average of 4.3. Inventories edged up 0.5 percent, pushing the inventory-to-sales ratio up to 1.28, roughly where it has been since late 2009.
  • 03.01.2013
  • Construction Spending
  • Private construction spending fell in January to $614.2 billion, a 2.6 percent decrease from the upwardly revised December estimate of $630.9 billion. However, January’s results are 12.2 percent higher on a year-over-year basis. Residential construction spending was essentially unchanged over the month, at $304.6 billion. Growth in new multi-family construction spending slowed to 1.7 percent in January, but is still up 54.9 percent year-over-year. New single-family construction posted a monthly gain of 3.6 percent. Private nonresidential construction spending fell sharply to $309.7 billion, a 5.1 percent decrease from the revised December estimate of $326.2 billion. The power sector dropped 14.5 percent over the month, and the transportation sector posted its third straight month of declines, falling 1 percent since December.
  • 03.01.2013
  • ISM Manufacturing
  • The ISM report continued its upward trend and indicated that the manufacturing sector expanded in the month of February. The Purchasing Managers Index (PMI) increased 1.1 percent to 54.2 percent, its third consecutive month above 50 and highest level since June 2011 where it registered 55.8 percent. The report showed a strong indication of growth within the manufacturing sector as this was the second consecutive month where each of the five components of the PMI were above the growth threshold of 50. The largest mover within the PMI?s five components was new orders, which increased 4.5 percent from its January level of 53.3 percent to 57.8 percent, the second consecutive month above 50. Production also grew in February by 4.0 percent to 57.6 percent from its previous level of 53.6 percent. The other components were as follows: inventories ticked up slightly to 51.5 percent from 51.0 percent, supplier deliveries shrank 2.2 percent to 51.4 percent from 53.6 percent, and employment shrank 1.4 percent from 54.0 percent to 52.6 percent. Furthermore, backlog of orders increased 7.5 percent to 55.0 percent from 47.5 percent. The other indexes of manufacturing trade within the report also grew with exports increasing 3.0 percent to 53.5 percent and imports increasing 4.0 percent to 54.0 percent.
  • 02.27.2013
  • Durable Goods
  • New orders for durable goods fell 5.2 percent in January. Over the past year, new orders are down 1.0 percent. Much of the decline in the headline number was due to a large decline in transportation equipment (down 19.8 percent in January). Excluding transportation equipment, new orders grew 1.9 percent in January, following gains of 1.0 percent and 1.2 percent in December and November, respectively. Despite the relative strength in the near-term, on a year-over-year basis new orders excluding transportation equipment are up just 3.0 percent. Orders for non-defense capital goods excluding aircraft—which is used to evaluate the near-term outlook in equipment and software investment—jumped up 6.3 percent in January. Shipments of durable goods fell 1.2 percent in January, more than reversing a 0.54 percent increase in December. Perhaps more disconcerting is that shipments of non-defense capital goods excluding aircraft, which map directly into GDP, fell 0.95 percent in January. On a year-over-year basis, shipments of non-defense cap goods excluding aircraft are up 2.6 percent.
  • 02.20.2013
  • Producer Price Index
  • The Producer Price Index (PPI), rose at an annualized rate of 2.5 percent in January, following three consecutive monthly declines. On a year-over-year basis the PPI is still up 1.4 percent. Producer prices for finished consumer foods rebounded from a sharp decline in December, rising 7.4 percent in January. Energy prices, on the other hand, continued to slip, decreasing 4.9 percent in January and have fallen 1.0 percent from January of last year. Excluding volatile food and energy prices, the “core” PPI rose 2.6 percent during the month, but is up just 2.0 percent over the past three months and 1.8 over the past year. At earlier stages of production, price pressure was mixed, but not markedly so in either direction.
  • 02.20.2013
  • Housing Starts
  • In January, the groundbreaking of new single-family home construction rose to a seasonally-adjusted annualized rate of 613,000 units started. This represents a 0.8 percent increase since December and a 20 percent increase over the past 12 months. Regionally, the West posted the strongest gains on a monthly and annual basis, up 4.5 percent and 46.3 percent, respectively. Elsewhere, all other regions experienced modest double digit annual improvements and the Northeast and Midwest experienced both experienced monthly declines greater than 9 percent. The issuance of single-family housing permits rose 1.9 percent over an upwardly revised December figure and 29.2 percent since last January to a seasonally adjusted annualized rate of 584,000 permits issued.
  • 02.15.2013
  • Industrial Production
  • Industrial production decreased 0.1 percent (nonannualized) in January, following a 0.4 percent increase in December. On a year-over-year basis, overall production is up 2.1 percent, the lowest year-over-year growth rate since the last recession. Manufacturing production fell 0.4 percent in January while the year-over-year growth rate continues to slow as well increasing 1.7 percent. Breaking down the manufacturing sector, durable and nondurable goods decreased 0.5 percent and 0.3 percent, respectively. Within durable goods manufacturing, motor vehicles and parts posted the largest decreases, falling 3.2 percent in December. Primary metals also posted a notable decline, falling 2.6 percent. Overall capacity utilization dropped 0.2 percentage points to 79.1 percent of capacity which is still 1.1 percentage points below is long run average.
  • 02.13.2013
  • Retail Sales
  • Total retail sales increased at a nonannualized rate of 0.1 percent in January, following increases of 0.5 percent in both November and December. Since January of 2012, retail sales are up 4.4 percent, which is roughly in line with the current near-term trend in year-over-year changes. Auto sales, which contributed to the growth in retail sales over the past few months, declined slightly in January, down 0.1 percent, following increases of 2.7 and 1.2 percent in November and December, respectively. Excluding autos, retail sales increased 0.2 percent in January, after increasing 0.3 percent in December, and have increased 3.6 percent since January of last year. Most individual sectors only saw modest gains or declines during January. Contributing to the monthly gain in total sales were improvements in sales for general merchandise stores (up 1.1 percent), non-store retailers (up 0.9 percent), and sporting goods, hobby, book, and music stores (up 0.6 percent). Sectors that saw the largest declines in January were miscellaneous store retailers (down 2.6 percent), health and personal care stores (down 1.0 percent), and clothing stores (down 0.3 percent). A less volatile indicator of sales growth, “core” retail sales (which excludes sales of autos, building supplies, and gas stations) increased 0.1 percent in January, following increases of 0.7 percent in both November and December, and are up 4.0 percent on a year-over-year basis, which is a slight improvement over the average yearly growth rate of 3.7 percent throughout the fourth quarter of last year.
  • 02.07.2013
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—decreased at an annualized rate of 2.0 percent during the fourth quarter, following increases of 1.9 and 3.2 percent in the second and third quarters, respectively. During 2012, productivity increased 0.6 percent, nearly identical to the 0.6 percent increase in 2011. The decrease in productivity during the fourth quarter was due to a 2.2 percent increase in hours worked compared with just a 0.1 percent increase in output. Hourly compensation increased 2.4 percent after increases of 1.3 and 0.8 percent during the previous two quarters. However, after controlling for price changes “real” hourly compensation increased just 0.3 percent during the final three months of the year. Since the fourth quarter of 2011 “real” hourly compensation is up 0.7 percent, a second consecutive quarter of positive year-over-year growth. Unit labor cost, which is measured as hourly compensation per hourly output, increased 4.5 percent after declines in the previous two quarters and has increased 2.0 percent since 2011.
  • 02.04.2013
  • Factory Orders
  • New orders for manufactured goods increased $8.6 billion or 1.8 percent (nonannualized) in December, following a decrease of 0.3 percent in November. Year-over-year growth rates for new orders continue to decrease from higher levels seen earlier in the recovery, increasing 0.7 percent from last December. Excluding transportation, new orders increased 0.2 percent for the month while the durable goods orders series jumped 4.3 percent and the nondurable goods orders fell 0.3 percent for the month. Nondefense capital goods excluding aircraft orders (considered a leading indicator of business investment spending) decreased 0.3 percent for the month, however its three-month annualized growth rate, 26.5 percent, has been increasing for three consecutive months. Shipments and unfilled orders of manufactured goods increased 0.4 percent and 0.8 percent for the month, respectively. The unfilled orders-to-shipments ratio now rests at 6.12 percent, roughly where it has been since late 2009. Inventories increased slightly to 0.1 percent, with the inventory/sales ratio at 1.27, remaining stable since late 2009.
  • 02.01.2013
  • Contruction Spending
  • Private construction spending increased 2.0 percent in December to $614.9 billion and is 15 percent higher than in December 2011. Residential construction spending increased 2.2 percent over the month to a seasonally-adjusted annual rate of $308.2 billion. New multi-family construction spending increased 6.2 percent in December and is up 57.4 percent year-over-year. New single-family construction posted a monthly gain of 0.8 percent. Private nonresidential construction spending increased 1.8 percent over the month to $306.7 billion and is up 7.6 percent year-over-year. The education and power sectors saw the largest gains of 6.4 and 3.7 percent, respectively. The transportation sector saw the largest decline of 3.7 percent.
  • 02.01.2013
  • ISM Manufacturing
  • The ISM Manufacturing Purchasing Manufacturers Index (PMI) increased 2.9 percentage points in January to 53.1 percent (from 50.2 percent in December) making January the second consecutive month of being above the growth threshold of 50.0. It has also surpassed both the 2012:Q4 average of 50.6 percent, as well as the 2012 average of 51.9 percent. This is the highest the PMI has been since its May 2012 level of 53.5 percent. All five components that make up the PMI were above the growth threshold of 50 and this across-the-board component growth only occurred once in 2012 in September. Specifically, the increases were as follows: new orders (up 3.6 points to 53.3 percent), production (up one point to 53.6 percent), employment (up 2.1 points to 54.0), inventories (up 8 points to 51.0 percent), and a slight decrease in supplier deliveries (down 0.1 points to 53.6 percent). Prices paid also increased by one point to 56.5 percent, its sixth consecutive month above 50.0 percent and highest level since April 2012.
  • 01.30.2013
  • GDP
  • Real GDP decreased at an annualized rate of 0.1 percent in the fourth quarter of 2012, compared to a 3.1 percent gain in the third quarter, and disappointed even the most pessimistic private forecaster (Bloomberg’s panel of forecasters ranged between an increase of 0.5 percent to 2.6 percent). Smoothing over the past two quarters, real GDP increased 1.5 percent, compared to 1.6 percent in the first half of the year. Real GDP growth for 2012 (Q4/Q4) as a whole increased 1.5 percent, compared to a 2.0 increase in 2011. Fourth quarter real GDP was primarily pulled down by two transitory factors that subtracted nearly 2.6 percentage points (pp) in Q4 real GDP growth, the largest of which was from a downward swing in private inventories that subtracted 1.3 pp from Q4 real GDP growth. This came on the heels of a positive 0.7 pp contribution to Q3 growth from inventories. The second temporary downswing came from federal government consumption and investment, which plummeted by roughly 15 percent in Q4 (its sharpest contraction since 1973:Q3), subtracting nearly 1.3 pp from output growth. This was driven largely by a sharp 25 percent decline in real national defense consumption expenditures, that overshadowed a 15.1 percent jump in Q3.

    The last bit of negative news was that real exports fell 5.7 percent in Q4, posting its first decrease since 2009:Q1, and subtracted 0.8 pp from real GDP growth. This series, which the Burea of Economic Analysis has scant data on as of the advance estimate, was up 3.2 percent over the previous four quarters.

    On the positive side, this release showed some firming in consumption and private investment. Real personal consumption expenditures rose 2.2 percent in Q4, compared to a 1.6 percent gain in Q3, and slightly above its four-quarter growth rate of 1.9 percent. Nonresidential investment jumped up 8.4 percent in Q4, after slipping down 1.8 percent in Q3. The upswing was due to a sharp jump up in equipment and software investment (up 12.5 percent). Also, residential investment continued its upward climb (albeit from a very low level), rising 15.3 percent in Q4. Residential investment is now up 14.4 percent over the past year, its strongest growth rate since mid-1992.

  • 01.28.2013
  • Durable Goods
  • New orders for durable goods jumped up 4.6 percent in December, following a modest 0.7 percent in November. Despite some signs of near-term momentum, growth in new orders for durables is roughly flat on a year-over-year basis (up just 0.2 percent). Some of the growth in durables orders has been tied to increases in transportation orders, which are notoriously noisy. Excluding this volatile category, orders rose 1.3 percent in December, but are actually down 2.8 percent on a year-over-year basis. Orders for non-defense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, increased just 0.2 percent in December, but that is on the heels of two consecutive 3.0 percent monthly gains that has pushed it’s near-term (three-month) annualized growth rate up to 28.1 percent (its highest growth rate since May 2011). Still, on a year-over-year basis, the series is down 4.3 percent. Shipments of durable goods rose 1.3 percent in December, after an upwardly revised 1.8 percent increase in December. Over the past year, shipments are up 4.8 percent. More importantly, over the last 3 months of 2012, shipments of non-defense capital goods excluding aircraft, rose 2.8 percent, compared to 3.0 percent decrease over the previous 3 months. This should prove positive sign for fourth quarter equipment and software investment. On a year-over-year basis, shipments of non-defense cap goods ex aircraft are up 2.0 percent.
  • 01.25.2013
  • New Home Sales
  • The pace of new single-family home sales fell 7.3 percent from November to December, but have risen 8.8 percent since December 2011 to a seasonally-adjusted annualized rate of 369,000 units. Regionally, the Northeast experienced the sharpest monthly decline of 29.4 percent, but also the largest annual increase of 20.0 percent. The monthly supply of new single-family homes rose to a 4.9 month supply at the current sales pace. Meanwhile the median sales price rose 1.3 percent for the month and 13.8 percent over the past 12-months. Overall, there were an estimated 367,000 new single-family homes sold throughout 2012, which is a 19.9 percent increase above the 2011 figure of 306,000 units.
  • 01.22.2013
  • Existing Home Sales
  • Sales of existing single-family homes fell 1.4 percent from November to December, but rose 11.5 percent since December 2011 to a seasonally-adjusted annualized rate of 4.35 million units sold. On an annual basis, the median sales price of existing single-family homes rose 10.9 percent to $180,300, which is the highest level since June. Meanwhile the monthly supply and inventories of homes continue to plummet, as they fell 20.9 percent and 21.2 percent, respectively since last December.
  • 01.17.2013
  • Housing Starts
  • The groundbreaking of new single-family homes in December rose to a seasonally-adjusted annualized rate of 616,000 units. This represents an 8.1 percent increase for the month and an 18.5 percent increase since December 2011, as well as the highest level of housing starts in over four years (June of 2008). Regionally, the South continues to show the strongest gains by volume while annual percent changes were the most robust in the West, up 43.3 percent, weakest in the Midwest, down 21.7 percent. The issuance of single-family home building permits rose 1.8 percent from November to December and 27.3 percent since last December to a seasonally adjusted annualized rate of 578,000 permits.
  • 01.16.2013
  • Industrial Production
  • Industrial production increased 0.3 percent (nonannualized) in December, following a 1.0 percent increase in November as production returned following Hurricane Sandy. The near-term trend (three-month annualized growth) inched up to 3.7 percent from 3.3 percent. On a year-over-year basis, overall production is up 2.3 percent but it has been slowing from earlier in the year. Manufacturing production rose 0.8 percent in December while the year-over-year growth rate continues to slow, but increasing 2.4 percent. Breaking down the manufacturing sector, durable and nondurable goods increased 1.0 percent and 0.6 percent, respectively. Within durable goods manufacturing, primary metals, and motor vehicles and parts posted increases greater than 2.0 percent in December. Overall capacity utilization edged up 0.1 percentage points to 78.8 percent of capacity, which is still 1.5 percentage points below is long run average.
  • 01.11.2013
  • Import and Export Prices
  • Import prices edged down −0.1 percent in December after falling −0.9 percent in November. December’s decline marks the second consecutive month of losses and deviates sharply from the 0.1 percent gains predicted by consensus forecasters. Nonpetroleum import prices ticked up 0.1 percent and were offset by falling petroleum prices which fell −0.8 percent. On a year-over-year basis, import prices extended last month’s decline falling −1.6 percent. Petroleum prices drove the drop of the overall index, plummeting 7 percent on a yearly basis to mark eight months of the consecutive declines. Nonpetroleum import prices stayed relatively flat in December edging up 0.1 percent after posting 0.1 percent gains in November and 0.1 percent declines in October. Like November’s import price report, December’s exhibits much of the weakness stemming from the sluggish global economy.

    Export prices ticked down −0.1 percent after falling −0.7 percent in November and posting gains throughout the third quarter. On a year-over-year basis, export prices increased 1.0 percent marking the third consecutive month of gains.

  • 01.04.2013
  • Factory Orders
  • New orders for manufactured goods were little changed in November, increasing $0.2 billion or 0.04 percent (nonannualized), following an increase of 0.8 percent in November. Year over year growth rates for new orders continue to decrease from higher levels seen earlier in the recovery, increasing 1.3 percent from last November. Excluding transportation new orders increased 0.2 percent for the month while the durable goods orders series rose 0.8 percent and the nondurable goods orders fell −0.6 percent for the month. Nondefense capital goods excluding aircraft orders (considered a leading indicator of business investment spending) grew 2.6 percent for the month pulling its three-month annualized growth rate up from −21.1 percent in September to 22.6 percent for November. Shipments and unfilled orders of manufactured goods increased 0.4 percent and 0.1 percent for the month, respectively. The unfilled orders-to-shipments ratio now rests at 6.14, roughly where it has been since late 2009. Inventories were little changed, 0.0 percent, with the inventory/sales ratio, 1.27, remaining stable since late 2009.
  • 01.02.2013
  • Construction Spending
  • Private construction spending declined 0.2 percent in November to $589.8 billion, but is still 13.3 percent higher than November 2011. Residential construction spending increased 0.4 percent over the month to a seasonally adjusted annual rate of $295.3 billion. New multi-family construction spending increased 0.5 percent in November and is up 45.9 percent year-over-year. New single family construction posted a monthly gain of 1.3 percent. Private nonresidential construction spending decreased 0.7 percent over the month to $294.5 billion and is up 8.2 percent year-over-year. The only positive sectors were transportation and communication, with monthly gains of 3.4 and 2.8 percent, respectively.
  • 01.02.2013
  • ISM Manufacturing
  • The ISM report showed that manufacturing expanded in December, as the Purchasing Managers Index (PMI) ticked up 1.2 percentage points since November to 50.7 percent. A PMI above 42.6 percent, over a period of time, generally indicates expansion; therefore this represents the 43rd consecutive month of overall growth for the economy. New orders were unchanged at 50.3 percent and has seen four consecutive months of growth. Of the five industries which reported expansion of new orders during December, apparel led the increase. Production fell 1.1 percent to 52.6 percent, which was led by a strong decline in non-metallic mineral products. Employment jumped 4.3 percent to 52.7 percent in December, indicating further growth in employment as there has been just one month of contraction within the past 39 months. Prices rose 3.0 percent to 5.5 percent, which was led by spike in prices paid by textile mills.
  • 12.28.2012
  • New Home Sales
  • Sales of new single-family homes rose 4.4 percent in November and 15.3 percent over the past 12 months to a seasonally adjusted rate of 377,000 units sold, after a downward revision to the October estimate. This represents the highest level of new home sales since April 2010. From October to November, regional sales ranged from a 21.1 percent increase in the South to a 17.8 percent decline in the West. Annually, sales in the Northeast improved 68.8 percent, while the Midwest posted a decline of 5.8 percent. The monthly supply of new homes for sale fell to a 4.7 month supply at the current sales pace. Meanwhile, the median price of new single-family homes rose to 3.6 percent for the month and 14.8 percent since November 2011 to $246,000.
  • 12.26.2012
  • Home Price Indexes
  • In October, the S&P Case Shiller Housing Price Indexes fell 0.1 percent for both the 10- and 20-city composites and posted annual increases of 3.4 percent and 4.3 percent, respectively. Anticipated seasonal weakness was seen as 12 of the 20 cities saw monthly declines in October, compared to seven in September. Included among those cites with monthly declines was Cleveland, which fell 0.9 percent in October to an index level of 101.5 but has increased 1.8 percent over the past 12 months. While annual rates of change for home prices are showing strong growth, both composites are back to fall 2003 levels.

    The FHFA housing price index rose 0.5 percent in October and 5.6 percent over the past 12-months after a downward revision to September’s estimate. Regionally, monthly price changes ranged from a 2 percent increase in the Pacific to a 1.3 percent decline in the Middle Atlantic, which includes some of the areas that were most severely impacted by Hurricane Sandy. Overall the index is back to mid-2004 levels, but still 15.7 percent below the April 2007 peak.

  • 12.24.2012
  • Durable Goods
  • New orders for durable goods rose 0.7 percent in November, following an upwardly revised 1.1 percent increase in October. Over the past year, new orders are up 4.5 percent. Excluding transportation equipment, new orders have been growing rather swiftly as of late, rising 1.6 percent in November following gains of 1.9 percent and 1.7 percent in October and September, respectively. Despite the relative strength in the near-term, on a year-over-year basis new orders excluding transportation equipment are up just 2.8 percent. Orders for non-defense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, has rebounded sharply from some softness in the third quarter, rising 3.2 percent in October and increasing 2.7 percent in November. helping to pull its 12-month growth rate above zero (up 0.1 percent). Shipments of durable goods rose 1.5 percent in November, after a relatively sharp upward revision to October&rsquo's data (from a decrease of 0.6 percent to a slight increase of 0.1 percent). Perhaps more striking is that shipments of non-defense capital goods excluding aircraft, which map directly into GDP, jumped up 1.8 percent in November, following a gain of 0.6 percent in October (revised up from a 0.4 percent decline). On a year-over-year basis, shipments of non-defense cap goods ex aircraft are up 5.3 percent.
  • 12.20.2012
  • GDP
  • Real GDP was revised up from 2.7 percent to 3.1 percent in the third quarter, according to the third estimate from the Bureau of Economic Analysis. The upward revision—which was modestly above the consensus estimate from the Bloomberg survey—was largely due to upward adjustments to real personal consumption expenditures, real exports, real state and local government spending, and a downward revision to real imports (which are a subtraction in GDP accounting). Real consumption expenditures were revised up from 1.4 percent in the second estimate to 1.6 percent. All three components (durables, nondurables, and services) were nudged up slightly. Net exports added an additional 0.2 percentage points to third-quarter real GDP growth, as real export growth was revised up from 1.1 percent to 1.9 percent and real import growth was revised down from roughly flat to −0.6 percent. Also, real state and local government spending was revised up from a decrease of 0.1 percent to a slight (0.3 percent) gain. If that gain holds through benchmark revisions it will mark the first positive quarterly increase for the series since 2009:Q3. Relative to the initial release for the third quarter, real GDP has been revised up by 1.1 percentage points. However, the primary contributors to that gain were private inventories (which added nearly 0.9 percentage points to real GDP growth after both revisions) and real exports (which were revised up from a 1.6 percent decrease in the advanced release to 1.9 percent in the third estimate). Upward revisions to these categories, given the limited information contained in the initial release and the somewhat ambiguous growth signal from inventory swings, don't necessarily point to stronger growth in Q4. Unfortunately, a more robust signal of carry-over momentum comes from real personal consumption expenditures, which were revised down 0.4 percentage points from the initial-to-final release.
  • 12.20.2012
  • Existing Home Sales
  • Existing single-family home sales rose 5.5 percent in November and 12.4 percent over the past 12 months to a seasonally adjusted annualized rate of 4.4 million units. The median price of existing homes ticked up 2 percent during the month and 10.1 percent since last November. Meanwhile, the available housing stock and monthly supply of existing homes continue to decline sharply at the current sales pace. On an annual basis the inventory of existing single-family homes fell 22.7 percent to 1.8 million units for sale and the monthly supply of homes has fallen 31 percent to a 4.9 month supply. Overall, sales are at the highest level since November 2009 when the annual pace spiked at 5.44 million.
  • 12.19.2012
  • Housing Starts
  • New residential construction starts fell 4.1 percent in November to a seasonally-adjusted rate of 565,000 units after reaching the highest monthly growth rate since 2008 in October. Over the past 12 months, housing starts have risen 22.8 percent, which was driven mainly by strong gains in the West and Midwest regions. The authorization of single-family build permits, a sign of future demand, fell 0.2 percent from October to November, but have risen 25.3 percent since this time last year to a seasonally-adjusted rate of 565,000 permits. While the construction of new residential homes is making significant strides, it is still well below the peak of 2.3 million in 2006.
  • 12.14.2012
  • Industrial Production
  • Industrial production increased 1.1 percent (nonannualized) in November, following a decline of 0.7 percent in October. November’s increase is largely due to the return from production interruptions stemming from Hurricane Sandy. The near-term trend (three-month annualized growth) returned to positive territory, 2.1 percent, however production levels continued to slow following a strong first quarter. On a year-over-year basis, overall production is up 2.5 percent. Manufacturing production rose 1.2 percent in November, while the three-month annualized growth rate increased 0.9 percent. Breaking down the manufacturing sector, durable and nondurable goods increased 1.6 percent and 0.6 percent, respectively. Within durable goods manufacturing, wood products, primary metals, electrical equipment, appliances and components, and motor vehicles and parts all posted increases greater than 2.0 percent in November. Overall capacity utilization jumped 0.7 percentage points to 78.4 percent of capacity.
  • 12.13.2012
  • Producer Price Index
  • The Producer Price Index (PPI), pulled down by a sharp decline in energy prices, fell at an annualized rate of 8.7 percent in November, following a more modest (and also energy price-related) decline of 1.8 percent in October. Over the past 12 months, the PPI is up just 1.5 percent, well below its long-run (10-year) annualized growth rate of 3.4 percent. Perhaps as a nascent sign of the summer drought in the Midwest, food prices jumped up 17.3 percent in November, following a relatively sanguine 12-month period where food prices only increased 2.2 percent. Excluding volatile food and energy prices, the “core” PPI edged up 1.3 percent during the month. After a modest decline in October and a flat reading in September, the three-month annualized growth rate in the core PPI stands at −0.4 percent—a marked deceleration compared to its year-over-year growth rate of 2.2 percent. At earlier stages of production there was a dearth of price pressure, as core intermediate goods prices were flat and core crude prices edged up just 0.9 percent.
  • 12.13.2012
  • Retail Sales
  • Total retail sales rose 0.3 percent in November, offsetting a 0.3 percent decline in October. Over the past 12 months, retail sales are up 3.7 percent. However, after excluding autos, sales have been flat over the past two months, despite increasing 3.3 percent over the past year. Sales performance was mixed across broad categories, though. For the most part, categories that exhibited gains in November were just reversing declines seen in October. The two exceptions were sales at general merchandise stores (which fell modestly in both periods) and sporting goods, hobby, book and music store sales (which rose modestly in both periods). A less-volatile indicator of sales strength—“core” retail sales (which excludes sales of autos, building supplies, and gas stations)—jumped up 0.5 percent in November, following a roughly flat reading in October. Strong gains in September and November have helped push up the near-term growth trajectory in core sales. Its three-month annualized growth rate has improved from 2.0 percent back in August to 5.4 percent as of November. That said, its 12-month growth rate stands at 3.4 percent (roughly 1.5 percent after adjusting for inflation), well below its growth rate at the start of the year of 6.1 percent.
  • 12.12.2012
  • Import and Export Prices
  • Import prices fell −0.9 percent in November after increasing 0.3 percent in October. November’s decrease came after three months of gains and was greater than the −0.5 percent decline predicted by the consensus forecast. Falling petroleum and nonpetroleum prices contributed to the overall decrease with the former driving the drop by falling −3.6 percent and the latter edging down −0.1 percent. On a year-over-year basis, petroleum prices fell −7.0 percent in November after falling 0.2 percent in October. Nonpetroleum prices remained unchanged compared to November 2011 ending a five month streak of year-over-year declines. After strong relatively strong reports in September and October, November’s report displays much of the weakness stemming from the global slowdown.

    Export prices fell −0.7 percent after posting gains throughout the third quarter. On a year-over-year basis, export prices rose 0.7 percent marking the second consecutive month of gains.

  • 12.05.2012
  • Productivity and Costs
  • The increase in nonfarm business sector productivity during the third quarter of this year, which is measured as real output per hour of all persons, was revised up from 1.9 percent (annualized) to 2.9 percent. This follows changes of −0.5 percent and 1.9 percent in the first and second quarters, respectively. Over the past year, productivity is up 1.7 percent. The improvement in productivity came from a 4.2 percent increase in output (revised up from 3.2 percent), while hours increased just 1.3 percent. Following gains of 5.8 percent and 1.3 percent in the first two quarters of the year, hourly compensation increased 0.9 percent during the third quarter (revised down from 1.8 percent). However, after controlling for price changes, “real” hourly compensation fell 1.4 percent (revised down from a 0.4 percent decline). Over the past year, “real” compensation per hour is basically flat, increasing just 0.1 percent. Unit labor costs, which is measured as hourly compensation per hourly output, fell 0.5 percent during the third quarter (revised down from zero), and over the past twelve months, is up just 0.1 percent.
  • 12.05.2012
  • Factory Orders
  • New orders for manufactured goods increased 0.8 percent (nonannualized) in October, following an increase of 4.5 percent in September. This month’s decrease pulled the near-term trend (three-month annualized growth rate) back into negative territory at −0.1 percent. With exception of two months, the near-term trend has been negative since March 2012. Year-over-year growth rates for new orders increased 3.0 percent, the highest reading since April of this year. Excluding transportation new orders increased 1.3 percent for the month, while the durable goods orders series rose 0.5 percent for the month and its three-month annualized growth rate remains negative at −17.4 percent. Nondefense capital goods excluding aircraft orders—considered a leading indicator of business investment spending—grew 2.9 percent for the month, pulling its three-month annualized growth rate up from −21.1 percent in September to 11.2 percent. Shipments and unfilled orders of manufactured goods increased 0.4 percent and 0.3 percent for the month, respectively. The unfilled orders-to-shipments ratio now rests at 6.25, roughly where it has been since late 2009. Inventories also continue to accumulate at 0.1 percent, however the inventory/sales ratio (1.28) has also remained stable around since late 2009.
  • 12.03.2012
  • Construction Spending
  • Private construction spending increased 1.6 percent from September to October to $592.1 billion and is up 15.5 percent on a year-over-year basis. Residential construction spending continued to lead the gains with an increase of 3 percent over the month. New multi-family construction spending increased 6.2 percent in October and is up 53.2 percent since October 2011. New single-family construction posted a smaller monthly gain of 3.6 percent. Private nonresidential construction spending increased 0.3 percent over the month to $297.9 billion and is up 10.7 percent year-over-year. The lodging and transportation sectors registered the largest monthly gains of 3.5 and 3.9 percent, respectively. Communications construction recorded the largest monthly decline of 6.5 percent.
  • 12.03.2012
  • ISM Manufacturing
  • The ISM Manufacturing Purchasing Manufacturers Index (PMI) decreased 2.2 percentage points in November to 49.5 percent (from 51.7 percent in October) following two consecutive months of being above the growth threshold of 50.0. It has also fallen below its 2012:Q3 average of 50.3 percent. This is the lowest the PMI has been since its July 2009 level of 49.2 percent. The only increases occurred in the production (up 1.3 points to 53.7 percent), import (up 0.5 points to 48.0 percent), and supplier deliveries (up 0.7 points to 50.3 percent) components. These modest gains were offset by the decreases in the other components. Specifically, new orders shed its recent gain in October by decreasing 3.9 points to 50.3 percent, but still managed to maintain its third consecutive month above the growth threshold. Prices paid also decreased by 2.5 points to 52.5 percent, its fourth consecutive month above 50.0 percent. The employment component decreased 3.7 percentage points to 48.4 percent, its lowest level since September 2009. This is also the first time the employment index has dropped below 50.0 since October 2009.
  • 11.29.2012
  • Real GDP
  • Real GDP was revised up sharply (from 2.0 percent to 2.7 percent) in the third quarter, according to the second estimate from the Bureau of Economic Analysis. Although, the reason for the upward revision doesn't necessarily portend a more positive growth trend. The bulk of the upward revision was due to a sizeable bump up in inventories investment, which is now estimated to have added 0.8 percentage points to third-quarter growth compared to a 0.1 percentage point takeaway in the advance release. Stronger inventory growth is an ambiguous signal for future growth as it could mean that businesses are either gearing up for stronger demand in the future or failed to properly estimate current demand. The other source of new-found third-quarter growth was an upward revision to real export growth, which were revised up from a 1.6 percent decline to a 1.1 percent increase during the quarter and representing a roughly 0.4 percentage point swing in output growth.

    On the other hand, the second estimate for 2012:Q3 GDP growth contained some slightly negative news for consumption growth and business fixed investment. Real personal consumption expenditures growth slipped from 2.0 percent to 1.4 percent during the revision, knocking down its contribution to output growth from 1.4 percentage points to 1.0 percentage point. Much of the revision was due to a revision to services consumption which was revised down from an increase of 0.8 percent during the quarter to a mere 0.3 percent gain. Digging into the details reveals that a large chunk of the downward revision to services consumption stems from a knockdown to financial services and insurance consumption—which subtracted an additional 0.2 percentage points from overall growth on its own. Equipment and software investment was revised down from a flat reading to a 2.2 percent decline in the third quarter (and, given the recent durables report, may decline further in in the fourth). This was partially offset by an upward revision to real structures investment, which was revised up from a 4.4 percent decline to a 1.0 percent decline. As a category, business fixed investment subtracted 0.2 percentage points from real GDP in 2012:Q3, a downward revision of roughly a tenth.

    Alongside the expenditures data, we also received our first glance at real Gross Domestic Income (GDI) in the report. Real GDI rose 1.7 percent in the third quarter, compared to a 0.7 percent decline in the second quarter. On a year-over-year basis, real GDI is up 2.3 percent, roughly in line with the 4-quarter growth rate of 2.5 percent for real GDP.

  • 11.28.2012
  • New Home Sales
  • New single-family home sales fell 0.3 percent from September to October to a seasonally-adjusted annualized rate of 368,000 units sold. Over the past 12 months, new home sales have risen 17.2 percent. Regionally, sales of new home showed strong annual gains but varied widely on a monthly basis, ranging from a 32.2 percent decline in the Northeast to a 62.2 percent increase in the Midwest. The median sales price of single-family homes fell 4.4 percent to $237,000. The inventory of available homes for sale rose to 147,000, representing a 4.8 month supply at the current sales pace.
  • 11.27.2012
  • Durable Goods
  • New orders for durable goods were flat in October, following a volatile couple of months (down 13.1 percent in August and up 9.2 percent in September). Much of the headline volatility in orders is due to large swings in transportation equipment orders over the past few months. Excluding transportation equipment, new orders rose 1.5 percent in October following a 1.7 percent gain in September. Despite the relative strength in the near-term, on a year-over-year basis new orders excluding transportation equipment are down 2.3 percent over the past year. Orders for non-defense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, jumped up 1.7 percent in October, helping to pull its three-month annualized growth rate up from −20.9 percent to 6.4 percent. Still, the series is down 8.1 percent over the past year. Shipments of durable goods fell 0.6 percent in October, more than reversing a 0.5 percent increase in September. Perhaps more disconcerting is that shipments of non-defense capital goods excluding aircraft, which map directly into GDP, have fallen in each of the last 4 months and were down 0.4 percent in October. On a year-over-year basis, shipments of non-defense cap goods ex aircraft are up just 0.9 percent and have fallen sharply since a recent high of 9.6 percent in early 2012.
  • 11.21.2012
  • Housing Starts
  • Single-family housing starts edged up just 0.17 percent from September to October, but are up 35.31 percent over the past 12 months to a seasonally-adjusted annualized rate of 594,000 units started. The authorizations of single-family home building permits, which tend to be more volatile, rose 2.18 percent in October and are up 26.58 percent compared to this time last year. Regionally, housing starts continued to gain traction despite the effect from Hurricane Sandy. Annual housing starts ranged from a 11.9 percent decrease in the Northeast to a 77.6 percent increase in the West.
  • 11.19.2012
  • Existing Home Sales
  • Existing single-family home sales rose 1.9 percent to a seasonally-adjusted annual rate of 4.22 million in October from 4.14 million in September, and are 9.6 percent above the 3.85 million-unit pace in October 2011. Throughout the nation, monthly homes sales ranged from a 2.1 percent decrease in the Northeast to a 4.0 percent increase in the West. Annually, all regions are showing strong growth ranging from a 4.0 increase in the West to a 16.9 percent increase in the Midwest. The median existing single-family home price was $178,700 in October, which is 10.9 percent higher than a year ago. Home prices continue to increase gradually due to the low levels of inventory supply. The inventory and monthly supply of homes are down 20.9 percent and 27.0 percent, respectively on an annual basis.
  • 11.18.2012
  • Industrial Production
  • Industrial production decreased 0.4 percent (nonannualized) in October, largely due to production interruptions from Hurricane Sandy. The initial estimates indicate that Hurricane Sandy was responsible for a 1.0 percentage point reduction in total production levels. Thus this slowdown in production is likely to be seen a temporary effect. However, production levels have been slowing from earlier in the year. The near term trend (three-month annualized growth) dropped to −5.2 percent as production continued to slow following a stronger first quarter. On a year-over-year basis, overall production is up only 1.8 percent, the series lowest increase since February 2010. Manufacturing production fell 0.9 percent in October while the three month annualized growth rate decreased −6.6 percent. Breaking down the manufacturing sector, durable and nondurable goods decreased 0.6 percent and 1.0 percent, respectively. Within durable goods manufacturing, Machinery and electrical equipment, appliances and components both posted declines greater than 1.0 percent in October. Mining output rose 1.5 percent, after having increased 1.5 percent in September. Overall capacity utilization fell 0.4 percentage points to 77.8 percent of capacity.
  • 11.14.2012
  • Producer Price Index
  • The Producer Price Index (PPI), which the Bureau of Labor Statistics noted was unaffected by the recent hurricane, edged down 1.8 percent in October, after sharp, energy price-related increases in August and September. On a year-over-year basis, the PPI is up 2.3 percent. Excluding food and energy prices, the “core” PPI decreased 2.6 percent in October, its first decline since November 2010. Still, the core PPI is up 2.1 percent over the past year. Further back on the production line, there was a dearth of price pressure as core intermediate goods prices were flat and core crude goods prices fell 15 percent during the month. Both series are down on a year-over-year basis, though the volatility of producer prices is inversely related to the stage of processing (so crude goods are the most volatile and hardest to tease a signal out of).
  • 11.09.2012
  • Import and Export Prices
  • Import prices rose 0.5 percent in October after increasing 1.2 percent in September. October marks the third consecutive month of monthly increases with rising petroleum and nonpetroleum prices driving the gains. Petroleum and nonpetroleum prices rose for the second consecutive month with the former advancing 1.3 percent and the latter rising 0.4 percent. On a year-over-year basis, petroleum prices are up 2.0 percent in October after average 5.7 percent declines in the third quarter of this year. Nonpetroleum prices fell 0.3 percent compared to October of last year marking the fifth consecutive month of year-over-year declines. The overall import price index is up 0.4 percent on a yearly basis, the first increase since April of this year. After seeing weak reports throughout most of the second and third quarters, October’s report shows strength similar to September’s.

    Export prices were flat from September to October after increasing 0.8 percent from August to September. Nonagricultural prices rose 0.2 percent and agricultural prices fell −1.9 percent. On a year-over-year basis, export prices increased 1.4 percent, the first increase since April of this year.

  • 11.01.2012
  • ISM Manufacturing
  • The ISM Manufacturing PMI edged up 0.2 percentage points to a level of 51.7 percent in October, maintaining a narrow margin above the diffusion index’s growth threshold of 50.0 for the second consecutive month. Improvements in the new orders component (up from 52.3 percent to 54.2 percent) and the production component (up 2.9 points to 52.4 percent) overtook modest declines in the remaining components. Notably, the employment index fell 2.6 percentage points to 52.1 percent, nearly offsetting a 3.1 percentage point jump up in September. Still, the employment index has been above 50 percent since October 2009 and over that time period, manufacturing employment (as measured by the Bureau of Labor Statistics) has increased by roughly 400,000.
  • 11.01.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 1.9 percent during the third quarter. This follows a similar increase of 1.9 percent in the second quarter (revised down from 2.2 percent), and a decline of 0.5 percent during the first three months of the year. Over the last four quarters, nonfarm business sector productivity has increased 1.5 percent. The rise in productivity came from an increase in output of 3.2 percent during the third quarter, which was partially offset by a 1.3 percent increase in hours. Over the past twelve months, output and hours have increased 3.3 percent and 1.8 percent, respectively. Following increases of 5.8 percent and 3.6 percent in quarters one and two, hourly compensation increased at a rate of 1.8 percent in the third quarter and is up 2.6 percent since the third quarter of 2011. However, after controlling for price changes, “real” hourly compensation fell 0.4 percent in quarter three after increasing in the first two quarters this year. Unit labor costs, which are measured as hourly compensation per hourly output and are an indicator of inflationary pressure coming from wages, were basically flat in the third quarter, decreasing 0.1 percent. On a year-over-year basis, unit labor costs are up 1.1 percent.
  • 11.01.2012
  • Construction Spending
  • The construction industry showed signs of continued recovery with private construction spending increasing by 1.3 percent in September to $580.5 billion. The recovery was led by a 2.8 percent increase in residential construction spending. Single and multi-family spending saw monthly gains of 3.9 and 1.3 percent, respectively. Although multi-family spending registered a smaller increase than in August, it is up 48.9 percent since last September. Private nonresidential spending fell 0.1 percent in September to $294.6 billion, but is still up 8.8 percent since last year. Healthcare construction recorded the largest monthly decline of 6.3 percent.
  • 10.30.2012
  • Home Price Indexes
  • The S&P Case-Schiller home price indexes showed continued growth in August. The 10-city index increased 0.4 percent from July to August and the 20-city index grew 0.5 percent (both rates are seasonally adjusted). Nineteen cities saw monthly gains in home prices with the exception of Seattle, where prices declined by 0.1 percent. Both composite indexes posted better annual rates of return than July with the 10- and 20-city indexes up 1.3 and 2.0 percent, respectively. Only three cities saw negative annual returns in August: Atlanta with &minusl6.1 percent, New York at −2.3 percent and Chicago at −1.6 percent. Phoenix continued to lead the growth in annual returns, posting its fourth consecutive month double-digit increase of 18.8 percent. The gains in the indexes put home prices back to their summer/autumn 2003 levels.

    The FHFA housing price index rose a seasonally adjusted 0.7 percent from July to August. The estimated increase of 0.2 percent in July was revised downward to 0.1 percent. Over the past 12-months the index rose 4.7 percent, showing positive annual growth for the seventh consecutive month. All regions saw positive growth in annual returns ranging from an 11.4 percent increase in the Mountain region to a 0.4 percent increase in the Middle Atlantic. Overall, housing prices are back to mid-2004 index levels.

  • 10.26.2012
  • Real GDP
  • Real GDP rose at an annualized rate of 2.0 percent in the third quarter according to the advance estimate from the Bureau of Economic Analysis, improving from a second quarter gain of 1.3 percent and coming in roughly on par with expectations. On a year-over-year basis, real GDP is up 2.3 percent. The acceleration in real GDP growth from the second to third quarter was driven largely by an acceleration in consumption growth and residential investment, and better news on government expenditures. These improvements overcame a slowdown in business fixed investment, a downturn in exports, and a sharper decline in private inventory investment. Real consumption rose 2.0 percent in the third quarter, in line with its four-quarter growth rate and about 0.5 percentage points (pp) higher than its second-quarter growth rate. Interestingly, the improvement in consumption was, in large part, driven by a jump up in durables consumption—increasing 8.5 percent in the third quarter after slipping down 0.2 percent in the second quarter.

    Gains were seen across all major durables categories (in other words, it wasn't just autos). Nondurables consumption rose 2.4 percent in the third quarter, moderately above its year-over-year growth rate of 1.6 percent. Notably, services consumption actually decelerated in the third quarter, increasing just 0.8 percent compared with a 2.1 percent gain in the second quarter. The four-quarter growth rate in services consumption has continued to soften relative to its post-recession high-water mark of 2.1 percent in 2011:Q1 and is continuing to edge away from its longer-run growth rate.

    Importantly, both exports and imports decreased for the first time since early 2009, with real imports edging down 0.2 percent and real export growth falling 1.6 percent. Elsewhere, nonresidential fixed investment decreased 1.3 percent in the third quarter, as structures investment slipped down 4.4 percent and spending on equipment and software was virtually flat. The change in private inventories did subtract 0.1 percentage point from real GDP growth in the third quarter, but that was entirely due to further losses to farm inventories, which subtracted 0.4 pp from output growth compared to −0.2 pp in the second quarter. Interestingly, real government consumption and investment jumped up 3.7 percent in the third quarter, adding 0.7 pp to real GDP growth (its first addition to output growth since 2010:Q2). There was a large spike in national defense spending (up 13.1 percent) and a modest uptick in nondefense spending (2.9 percent) during the quarter. Also, losses to state and local governments look to be slowing, as the sector decreased just 0.1 percent in the third quarter, relative to a 1.0 percent decline on a year-over-year basis.

  • 10.25.2012
  • Durable Goods
  • After a drop of 13.1 percent (non-annualized) in August, new orders for durable goods were back in positive territory in September, increasing 9.9 percent, the largest one month increase since January of 2010. Over the past year, new orders are up 2.5 percent, an improvement over a 12-month percentage change of −6.7 percent in August. Orders for transportation goods, a typically noisy component of overall orders, were a primary contributor to both the decline in August and the increase in September. They fell 33.7 percent and increased 31.7 percent in August and September, respectively. New orders excluding transportation goods were up 2.0 percent in September, and are down 1.6 percent since last year. Orders for non-defense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, were flat in September following an increase of 0.2 percent in August and are down 7.4 percent since September of 2011. The year-over?year change in new orders for non-defense capital goods exluding aircraft has been negative in each of the last four months. Shipments of durable goods increased 0.8 percent in September, following a decline of 2.9 percent in August, and are up 6.0 percent on a year-over-year basis. Shipments of non-defense capital goods excluding aircraft, which maps directly into GDP, were down 0.3 percent, following declines of 1.6 and 1.2 percent in July and August, respectively, and are up 0.9 percent since last year. The near-term trend in the year-over-year changes for this series has slowed since earlier in the year. The current three-month trend is at 1.8 percent, compared with a first quarter average of 8.1 percent and a second quarter average of 6.4 percent. Inventories increased 0.3 percent in September, following increases of 0.9 percent in July and 0.6 percent in August, and are up 5.6 percent since September of 2011.
  • 10.24.2012
  • New-Home Sales
  • Sales of new single-family homes rose to an annualized rate of 389,000 units in September, the highest level since April 2010. This is 5.7 percent above the downwardly revised August figure and a 27.1 percent increase over the past 12 months. Regionally, all areas showed positive growth on both a monthly and an annual basis except for the Midwest, which is experiencing sharp declines. Sales there are down 37.3 percent from the previous month and 31.9 percent from the previous year. The median sales price of new single-family homes was $242,000, representing a 3.2 percent decrease on the month but an 11.7 increase since this time last year. The monthly supply of homes fell to a 4.5 month supply at the current sales pace, which is the lowest level since October 2005.
  • 10.17.2012
  • Housing Starts
  • Residential construction of single-family homes rose 11.05 percent from August to September to an annualized rate of 603,000 units, the highest level since August 2008. This represents the largest monthly gain since December 2011 and the largest annual gain since April 2010. Regionally, all areas showed growth in single-family housing starts over the past 12 months, ranging from a 12.2 percent increase in the Northeast to a 50.6 percent increase in the West. The authorization of single-family homes also showed strong improvement, rising 6.7 percent in September to an annualized rate of 545,000 permits, the highest level since July 2008.
  • 10.16.2012
  • Industrial Production
  • Industrial production increased 0.4 percent (nonannualized) in September, following a downwardly revised drop 1.4 percent in August. The near-term trend (three-month annualized growth) of —1.6 percent is up from 2.9 percent in the August. On a year-over-year basis, overall production is up 2.8 percent. Manufacturing production rose 0.2 percent in September, while the three-month annualized growth rate decreased 1.7 percent. Breaking down the manufacturing sector, durable and nondurable goods rose 0.1 percent and 0.3 percent, respectively. Within durable goods manufacturing, aerospace and miscellaneous transportation equipment and electrical equipment, appliances and components all posted increases greater than 1.0 percent in September while the production of motor vehicles and parts fell 2.5 percent for the month. Mining output rose 0.9 percent after having decreased 1.6 percent in August. Overall capacity utilization increased 0.3 percentage points to 78.3 percent of capacity.
  • 10.15.2012
  • Retail Sales
  • Nominal retail sales jumped up 1.1 percent (nonannualized) in September, following an upwardly revised 1.2 percent increase in August. This is its strongest two-month performance since November 2010. On a year-over-year basis, retail sales are up 5.4 percent. While August’s sales were largely due to rising gasoline prices and a jump up in auto sales, September’s increase reflected broad-based strength. Gains were seen across nearly all of the 13 broad sales categories except at miscellaneous store retailers (which saw sales slip down just 0.1 percent). Sales at electronics and appliance stores jumped up 4.5 percent in September, more than reversing a 1.1 percent decrease in August, and helping to pull its year-over-year growth rate up to 3.6 percent from −2.2 percent in August. There was still a little boost from sales at gasoline stations—up 2.5 percent in September—that was likely an artifact of sustained increases in gas prices. That said, sales were strong at auto dealers (up 1.3 percent), non-store retailers (up 1.8 percent), and food and beverage stores (up 1.2 percent). “Core” retail sales—which excludes sales at gasoline stations, auto dealers and of building materials—rose 0.9 percent in September, after August’s estimate was revised up from −0.1 percent to flat. As a tentative sign of momentum, the three-month annualized growth rate in core sales is up 7.5 percent, outpacing its 12-month growth rate of 4.4 percent.
  • 10.11.2012
  • Import and Export Prices
  • Import prices rose 1.1 percent in September after increasing at the same pace in August. Both petroleum and nonpetroleum prices increased as well, with the former rising 4.6 percent and the latter ticking up 0.2 percent. September marks the first increase in nonpetroleum prices since May of this year. On a yearly basis, petroleum prices are down 0.1 percent after averaging 9.4 percent yearly declines in the third quarter of this year. Nonpetroleum prices fell 0.9 percent on a yearly basis in September and the overall import price index fell as well by 0.6 percent. September’s import prices show strength relative to previous months where weak import prices were likely exerting downward pressure on import levels.

    Export prices increased 0.8 percent, down slightly from August?s 1.0 percent monthly increase. Nonagricultural prices posted gains of 0.7 percent and agricultural prices rose 1.1 percent. On a year-over-year basis, export prices fell 0.5 percent marking five consecutive months of yearly losses.

  • 10.04.2012
  • Factory Orders
  • New orders for manufactured goods decreased 5.2 percent (nonannualized) in August, following an increase of 2.6 percent in July. This month’s decrease pulled the near term trend (three-month annualized growth rate) back in to negative territory at −12.3 percent. With the exception of July, the near-term trend has been negative since March 2012. Year-over-year growth rates for new orders have posted a negative number, −2.5 percent, for the first time since October 2008. Excluding transportation new orders increased 0.7 percent for the month. The durable goods orders series decreased 13.2 percent for the month pulling down the three-month annualized growth rate to −31.4 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, actually rose 1.1 percent for the month while its three-month annualized growth rate remains in negative at −25.6 percent. Shipments of manufactured goods declined 0.3 percent for the month, as its three-month annualized growth rate has slowed to 1.4 percent from 3.9 percent in August. Unfilled orders fell 1.7 percent for the month. The unfilled orders-to-shipments ratio now rests at 6.27, roughly where it has been since late 2009. Inventories also continue to accumulate, 0.6 percent, however the inventory/sales ratio, 1.28, has also remained stable around since late 2009.
  • 10.01.2012
  • ISM Manufacturing
  • The ISM manufacturing index for September, specifically the Purchasing Manufacturers Index (PMI), increased by 1.9 percentage points to 51.5, breaking a 3-month trend of below 50. According to the ISM report, a PMI index value above 50 generally indicates an expansion in the manufacturing sector. The PMI is still below its one-year high of 54.8 from April 2012 as well as its 2011 average of 55.2. Production increased from 47.2 to 49.5, however this still indicates a contraction in production for the second time since May 2009. New orders increased 5.2 percentage points from 47.1 to 52.3, which may indicate that August’s decrease in new orders for durable goods (calculated by the Census Bureau) may be transitory. Inventories decreased from 53.0 to 50.5, which indicates a slower expansion in overall manufacturing inventories. Employment increased 3.1 percentage points from 51.6 to 54.7. Generally, an employment index above 50.5 percent corresponds to positive job growth in the manufacturing sector as measured by the Bureau of Labor Statistics. Prices increased 4 percentage points from 54.0 to 58.0. This follows August’s increase of 145 basis points to 54.0 (from 39.5), the largest such increase since September 2005.
  • 10.01.2012
  • Construction Spending
  • Private construction spending declined by 0.5 percent in August to $562.2 billion, but is still up 12.1 percent from a year ago. Private residential spending edged up 0.9 percent in August and is up 17.8 percent on a year-over-year basis. Single and multi-family spending saw monthly gains of 2.8 and 3.7 percent, respectively. These gains were tempered by a fall in home improvement spending of 1.7 percent. Private nonresidential spending slipped 1.7 percent in August to $288.7 billion but is still up 7.2 percent since last August. All nonresidential sectors except transportation and amusement and recreation saw mild to moderate declines.
  • 09.27.2012
  • Real GDP
  • Real GDP growth was revised down from 1.7 percent to 1.3 percent in the second quarter according to the third estimate from the Bureau of Economic Analysis. It's safe to say that this was a surprise to private forecasters, as the estimate came in 0.2 percentage points below the low end of the range from Bloomberg’s set of forecasters. On a year-over-year basis, real GDP is up 2.1 percent through the second quarter, down 0.2 percentage points (pp) below its previous estimate. The largest contributor to the sharp downward revision in the second quarter was a knockdown in private inventories, which is now calculated to have subtracted 0.4 pp from real GDP growth, compared to just a 0.2 pp takeaway in the previous estimate. Interestingly, the entirety of this downward revision to private inventories came from the farm sector (perhaps we are getting our first glance at the effects of the drought). Downward revisions to real personal consumption expenditures and exports also contributed to the overall knockdown in second-quarter real GDP. Real consumption was revised down from an increase of 1.7 percent to a 1.5 percent gain in the second quarter, subtracting a little over 0.1 pp from output growth. The downward revision to export growth (from 6.0 percent to 5.2 percent) also took off 0.1pp from second-quarter real GDP. Other major categories were essentially unchanged during the revision. Elsewhere, real Gross Domestic Income (GDI)—an alternative measure of national output—was revised down from an increase of 0.6 percent to a 0.2 percent increase in the second quarter, following relative strong gains in the first quarter (up 3.8 percent) and fourth quarter of last year (up 4.5 percent).
  • 09.27.2012
  • Durable Goods
  • Following three consecutive monthly increases, new orders for durable goods fell 13.2 percent (nonannualized) in August, the largest one month decrease since January of 2009. This follows increases of 1.6 percent and 3.3 percent in June and July, respectively, and over the past twelve months, new orders are now down 6.7 percent. New orders for transportation goods, a noisy component which has lead the gains in the past few months, was the primary cause of the large downturn in the headline series as new orders excluding transportation fell just 1.6 percent. Orders for transportation goods fell by 34.5 percent for the month, due primarily to a drop in orders for aircraft and parts. New orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, were positive for the month, increasing 1.1 percent, following decreases of 2.8 percent and 5.2 percent over the prior two months, and are down 3.1 percent since last August. Shipments of durable goods fell 3.0 percent following an increase of 1.9 percent in July, and are up 4.4 percent on a year-over-year basis, while shipments of nondefense capital goods excluding aircraft, which maps directly into GDP, were down 0.9 percent following a drop of 1.1 percent in July. Over the last 12 months, this series has increased just 0.9 percent, a drop off from the 12-month growth rates of 6.3 percent and 4.8 percent in June and July, respectively. Inventories increased 0.6 percent in August, following increases of 0.3 percent and 0.8 percent in each of the two prior months, and are up 5.2 percent since last year.
  • 09.26.2012
  • New Home Sales
  • Single-family new home sales fell slightly from July to August to an annualized rate of 373,000 units sold. This represents only 0.27 percent decline on a monthly basis, but a sharp 27.7 percent improvement over the past 12 months. The monthly change in new single-family home sales ranged from a 4.9 percent decline in the South, to a 20.0 percent increase in the Northeast. On an annual basis, all regions have experienced strong gains ranging from an 11.5 percent increase in the South to a 64.6 percent increase in the West. The median sales price of new single-family homes rose 11.2 percent to $256,900, while the monthly supply of homes remained unchanged at a 4.5 months’ supply.
  • 09.19.2012
  • Housing Starts and Permits
  • Single-family housing starts rose 5.5 percent in August to an annualized rate of 535,000 units, after July’s estimate was revised down. Over the past 12 months, housing starts have risen 26.8 percent, the largest annual gain since April 2010. The authorization of building permits was relatively flat, rising just 0.2 percent in August to an annualized rate of 512,000 units. However, when compared to August 2011, the authorization of building permits is up 19.4 percent, continuing the trend toward sharp annual increases seen over the past eight months.
  • 09.19.2012
  • Home Sales
  • Sales of existing single-family homes showed positive signs of growth from July to August, increasing 8.0 percent for the month and 10.0 percent over the past 12 months to an annualized rate of 4.3 million homes sold. This represents the highest level of existing single-family home sales since May 2010. The monthly change in the median sales price of homes was flat, rising just 0.5 percent. Compared to August 2011 the median sales price rose 10.2 percent, which is the highest annual increase since January 2006. The inventory of existing single-family homes rose 6.3 percent in August, while the monthly supply fell 1.6 percent. On an annual basis, both the inventory and monthly supply of existing single-family homes remains subdued, down 16.3 percent and 23.5 percent, respectively.
  • 09.18.2012
  • Current Account
  • In the second quarter of 2012, the U.S. current account deficit contracted to −$117.4 billion, a $16.2 billion decrease from the first quarter’s downwardly revised −$133.6 billion deficit (−$137.3 billion, previously). The narrowing marks the largest contraction since the first quarter of 2009. As a percentage of GDP, the current account decreased 0.4 percentage points to 3.0 percent. A main driver behind the contraction in the overall deficit was a contraction in the deficit on goods by $8.5 billion to −$185.8 billion and an increase in the surplus on income by $8.1 to $55.5 billion. Exports of goods, services, and income continue to post nominal highs marking $737.1 billion, a $8.4 billion expansion from the first quarter of 2012. Imports of goods, services, and income contracted for the first time since the second quarter of 2009, falling by $8.7 to billion to a level of −$821.0 billion.
  • 09.14.2012
  • Retail Sales
  • Total retail sales jumped up 0.9 percent in August, following a downwardly revised, but still relatively strong, 0.6 percent gain in July. However, unlike July, August’s headline increase does not reflect broad-based strength. The bulk of the overall increase was due to a 5.5 percent price-related jump in sales at gasoline stations. Perhaps the only solid reading was on auto sales, which jumped up 1.7 percent in August after two months of flat to down sales growth. Still, the components of this release that map directly into nominal PCE growth were weak in August. “Core” retail sales—which excludes sales at gasoline stations, auto dealers and of building materials—slipped down 0.1 percent in August, pausing after a sharp 0.8 percent gain in July. Still, over the last 3 months, the annualized growth rate in core sales is up 1.9 percent, barely keeping pace with inflation and well below its 12-month growth rate of 3.6 percent.
  • 09.14.2012
  • Industrial Production
  • Industrial production fell 1.2 percent (nonannualized) in August, following a downwardly revised estimate of 0.5 percent from 0.6 percent in July. Slowdowns in production associated with Hurricane Isaac are estimated to have slowed total output by 0.3 percentage points. Manufacturing production also slowed, decreasing 0.7 percent. Within the manufacturing industry, durable and nondurable goods output fell 1.1 and 0.3 percent, respectively. Within durable goods, the production of motor vehicles and parts posted the largest drop in output, falling 4.0 percent, while other categories posted smaller declines. Precautionary shutdowns of oil and gas production in advance of hurricane Isaac contributed to a 1.8 percent decline in mining activity in August. Overall capacity utilization fell 1.0 percentage points to 78.2 percent of capacity.
  • 09.12.2012
  • Import and Export Prices
  • Import prices rose 0.7 percent in August after posting declines for four consecutive months. Rising petroleum prices—up 4.1 percent from the month prior—drove the increase in the overall index and were partially offset by falling nonpetroleum prices which were down 0.2 percent. After posting declines for four consecutive months, August marks the first increase in petroleum prices which averages losses of 5.0 percent in the second quarter. On a yearly basis, petroleum prices are down 6.4 percent in August, marking four month of declines. Nonpetroleum prices and the overall import price index fell as well on a yearly basis by 0.9 percent and 2.2 percent, respectively. August marks the third and fourth months of consecutive decreases for nonpetroleum prices and the overall index. Despite an increase in import prices from July to August, weakness in sub-categories and year-over-year growth rates indicates that foreign prices have the potential to exert downward pressure on domestic prices in the coming months. Lower import prices could also contribute to lower import levels as well.

    Export prices increased 0.9 percent in August after posting gains of 0.4 percent in July. Nonagricultural prices increased 0.4 percent, the first monthly gain since April of this year. Agricultural prices jumped 5.1 percent in August after climbing 6.3 percent in July. On a year-over-year basis, export prices fell 0.9 percent, posting losses for the fourth consecutive month.

  • 09.11.2012
  • International Trade
  • In July, the U.S. trade deficit expanded by $0.1 billion to $42.0 billion, up slightly from June’s downwardly revised $41.9 billion ($4.9 billion, previously). Both imports and exports fell with the former dropping 0.8 percent to $225.5 billion and the later declining 1.0 percent to $183.7 billion. July marks the first time since April of this year that both imports and exports fell on a monthly basis. On a year-over-year basis, imports rose 0.6 percent, the lowest yearly gain since November 2009. Exports were up 2.8 percent year-over-year in July, a deceleration from June’s 7.3 percent climb and May’s 4.2 percent gain. With the trade deficit expanding less than the consensus forecast of −$44.2 billion, trade is on track to positively contribute to third quarter GDP.
  • 09.05.2012
  • Construction Spending
  • Private construction spending decreased by 1.2 percent to $558.7 billion, showing a downward trend for the first time since February. Residential construction experienced downward revisions for both May and June, while nonresidential construction had upward adjustments to enhance the overall private construction revisions. The private construction sector is up 15 percent compared to July 2011. Residential construction totaled $264.6 billion, a 19 percent increase over the year. Spending on new single-family and multifamily homes both had large increases of 19.1 percent and 44.5 percent, respectively, over the year. While residential improvements caused most of the downfall of residential construction with a decline of 5.5 percent over the month. Nonresidential construction was down over the month to $294.1 billion, a 0.9 percent decrease over the month, but still up 11.7 percent since last July. Causing the decline for the month was manufacturing, power and utility, commercial and healthcare structures. All sectors still showing improvement over the year.
  • 09.05.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at a faster rate than originally estimated in the second quarter of 2012, growing at an annualized rate of 2.2 percent (revised up from 1.6 percent). This follows a decline of 0.5 percent in the first three months of the year, and over the last four quarters, productivity has increased 1.2 percent. The upward revision to productivity growth for the second quarter comes from both the output and hours components. The quarterly annualized percent change in output was revised up from 2.0 percent to 2.4 percent, and the change in hours was revised down from 0.4 percent to 0.1 percent, each contributing to the change in the growth rate of productivity. On a year-over-year basis, output is up 3.0 percent, while hours are up just 1.7 percent. Also during the second quarter, hourly compensation increased 3.7 percent (revised up from 3.3 percent), following an increase of 5.8 percent in the first quarter. After controlling for price changes, real hourly compensation increased 2.9 percent (revised up from 2.6 percent) following an increase of 3.3 percent in the first quarter, and is up 0.3 percent since the second quarter of 2011. This marks the first time the four quarter growth rate in real hourly compensation has been positive since the first quarter of 2011. Following an increase of 6.4 percent in the first quarter, unit labor costs increased 1.5 percent in the second quarter of 2012 (revised down slightly from 1.7 percent). Over the last year, they have increased 0.9 percent.
  • 09.04.2012
  • ISM Manufacturing
  • The ISM manufacturing index for August, specifically the Purchasing Manufacturers Index (PMI), decreased by 0.2 to 49.6, slightly below its July level of 49.8. The PMI is still down from its one year high of 54.8 from April 2012. This is the lowest the PMI has been since July 2009 when it reached 49.2. According to the ISM, the past relationship between the PMI and the economy indicates that if the current level of the August PMI (49.6) was annualized, this would correspond to a 2.4 percent increase in real GDP for 2012. Production decreased from 51.3 to 47.2, indicating contraction in production for the first time since May 2009. New orders decreased from 48.0 to 47.1 and they were accompanied by an increase in inventories to 53.0 from 49.0. Employment decreased 0.4 to 51.6. Generally, an employment index above 50.5 percent corresponds to positive job growth in the manufacturing sector as measured by the Bureau of Labor Statistics. Prices increased by 145 basis points to 54.0 (from 39.5), the largest such increase since September 2005.
  • 08.31.2012
  • Factory Orders
  • New orders for manufactured goods increased 2.8 percent (nonannualized) in July. This month’s increase boosted the near term trend (three month annualized growth rate) to 11.5 percent. Year-over-year growth rates have continued to gradually slow from 6.3 percent in the first quarter of 2012 to a current reading of 1.9 percent. New orders excluding transportation increased 0.7 percent while durable and nondurable new orders rose 4.1 percent and 1.5 percent, respectively. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, decreased 4.0 percent for the month while its three-month annualized growth rate remains negative at −16.7 percent. Shipments of manufactured goods rose 2.0 percent for the month, with a three-month annualized growth rate of 4.4 percent. Unfilled orders increased 0.8 percent in July. Inventories rose 0.4 percent pulling the inventory-to-shipments ratio down to 1.27 from 1.29.
  • 08.29.2012
  • GDP
  • Real GDP was revised up from 1.5 percent to 1.7 percent in the second quarter, matching expectations. On a year-over-year basis real GDP growth stands at 2.3 percent, slightly below its longer-term (20-year) trend of 2.5 percent. The upward revision in the second quarter was primarily due to a downward revision in imports and upward adjustments to the Bureau of Economic Analysis’ estimates of consumption growth, exports growth, and state and local government spending. Private inventories and business fixed investment were nudged down a little, partially offsetting the good news in other categories.

    There were some interesting developments in the details. First, the 0.2 percentage point upward revision in consumption to 1.7 percent in the second quarter was due in large part to a sharp upward revision to services consumption—from 1.9 percent to 2.4 percent. And that revision was due to an outsized upward adjustment to housing and utilities consumption, from 3.2 percent to 5.5 percent (its swiftest quarterly increase since mid-2005). Durables consumption was also revised up from a 1.0 percent decline to roughly flat on the quarter, while consumption of nondurables was revised down from a 1.5 percent to 0.5 percent gain in the second quarter. Also, real import growth was halved during the revision, from 6.0 percent to 2.9 percent for the second quarter, and since imports enter into GDP calculation as a subtraction, this changed boosted real GDP growth by 0.5 percentage points. Finally, along with the second estimate of GDP, we got our first glance at real Gross Domestic Income (GDI) for the second quarter. Real GDI rose just 0.6 percent in the second quarter, following relatively strong gains in the first qaurter (up 3.8 percent) and 2011:Q4 (up 4.5 percent). Still, on a year-over-year basis this alternative measure of output growth is up 2.1 percent, matching the four-quarter growth rate in final sales.

  • 08.24.2012
  • Durable Goods
  • New orders for durable goods increased 4.2 percent (nonannualized) in July, following an increase of 1.6 percent in June. Overall, orders have been positive for three straight months, with the 3-month trend currently at 2.4 percent, and are up 4.9 percent since July of last year. However, as has been the case over the past few months, the rise in the overall number for July was driven primarily by an increase in the volatile orders for transportation equipment, which jumped 14.1 percent for the month following a rise of 10.8 percent in June. A large portion of the recent surge in orders for transportation equipment is coming from the airline industry, as orders for aircraft and parts has increased 29.8 percent and 35.9 percent in June and July, respectively. New orders excluding transportation have actually been negative over the past couple of months, falling 0.4 percent in July and 2.2 percent (downwardly revised) in June. The year-over-year growth rate in orders excluding transportation has moved into negative territory for the first time since 2009, dropping to −0.3 percent from 1.8 percent in the prior month. New orders for nondefense capital goods excluding aircraft, which is used to evaluate the near-term outlook in equipment and software investment, fell for the second consecutive month, dropping 3.4 percent in July. The year-over-year change in this series has turned negative over the past few months as well, dropping from 2.2 percent in May to −1.7 percent in June, and finally, to −5.6 percent last month. Shipments of durable goods were up 2.6 percent after being flat in June, and after excluding transportation, are up 0.3 percent for the month. Inventories for durable goods increased 0.7 percent in July, as the near-term (3-month) trend increased from 0.3 percent to 0.5 percent.
  • 08.16.2012
  • Housing Starts
  • After a modest downward revision to June’s report, single-family housing starts fell 6.5 percent in July to an annualized rate of 502,000 units. Regionally, housing starts where down in areas, ranging from a 2.2 percent decline in the South, to a significantly steeper 27.1 percent decline in the Northeast. Despite the drop in housing starts, the authorization of building permits rose 4.5 percent in July to an annualized rate of 513,000. This represents the highest level of building permits authorized since March of 2010.
  • 08.15.2012
  • Industrial Production
  • Industrial production increased 0.6 percent (nonannualized) in July, following two consecutive monthly increases of 0.1 percent. The near term trend (three month annualized growth) of 3.3 percent is down from 6.0 percent in the first quarter. On a year-over-year basis, overall production is up 4.4 percent. Manufacturing production rose 0.5 percent in July while the three month annualized growth rate increased 1.7 percent, down from 9.6 percent in the first quarter. Breaking down the manufacturing sector, durable and nondurable goods rose 0.9 percent and 0.1 percent, respectively. Within durable goods manufacturing, primary metals, computer and electronic products, motor vehicles and parts, aerospace and miscellaneous transportation equipment and miscellaneous manufacturing all posted increases greater than 1.0 percent in July. Mining output rose 1.2 percent, after having increased 0.5 percent in June. Overall capacity utilization increased 0.4 percentage points to 79.3 percent of capacity, still 1.0 percentage points below its historic average.
  • 08.14.2012
  • Retail Sales
  • Total retail sales rose 0.8 percent in July, more than reversing a downwardly revised 0.6 percent decrease in June. The 12-month growth rate rose to 4.1 percent in July, up 0.6 percentage points from June. Nominal sales were up across every broad category. Sales of motor vehicle and auto parts dealers were up 0.8 percent in July and are up 8.2 percent over the past year. The strongest month-to-month gains were seen at sporting goods, hobby, book, and music stores (up 1.6 percent); nonstore retailers (up 1.5 percent); miscellaneous store retailers (up 1.2 percent); and health and personal care stores (up 1.1 percent). However, these strong gains in July mostly came after sharp losses in June, a pattern indicative of mismeasurement. A measure of the underlying trend in retail sales—“core” sales (which exclude auto, gasoline, and building materials)—jumped up 0.9 percent in July (its largest increase since January), compared to a 0.2 decline in June. On a year-over-year basis the series is up 4.4 percent.
  • 08.08.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—increased at an annualized rate of 1.6 percent in the second quarter of 2012, following a 0.5 percent decline in the first quarter. On a year-over-year basis, productivity is up 1.1 percent. The release also included annual revisions which revealed a growth rate in productivity of 2.9 percent in 2009, 3.1 percent in 2010 (revised down from 4.0 percent), and 0.7 percent in 2011 (revised up from 0.4 percent).The quarterly increase in productivity was caused by a 2.0 percent increase in real output compared with only a 0.4 percent increase in hours worked. This is the lowest quarterly increase in hours worked since the fourth quarter of 2009. Since the second quarter of 2011, output is up 2.9 percent, while hours are up 1.8 percent. Hourly compensation increased 3.3 percent in the second quarter, following a 5.1 percent increase in the first quarter. After controlling for price changes, real hourly compensation was up 2.6 percent. However, on a year-over-year basis, real compensation is flat. Unit labor costs were up 1.7 percent during the quarter, and are up 0.8 percent since last year. Based on the annual revisions, unit labor costs declined 1.5 percent in 2009, declined 1.0 percent in 2010, and increased 2.0 percent in 2011.
  • 08.02.2012
  • Factory Orders
  • New orders for manufactured goods decreased 0.46 percent (non-annualized) in June and have been down three out of the last four months. On an annual basis, the year-over-year growth rate for total new orders has continued its decrease from 23.8 percent in April 2010 to their current level of 2.47 percent. New orders excluding transportation decreased 1.8 percent, while new orders for durable goods increased 1.3 percent and new orders for nondurable goods decreased 2.0 percent. Nondefense capital goods excluding aircraft orders—considered a leading indicator of business investment spending—decreased 1.7 percent for the month. Shipments of manufactured goods decreased 1.12 percent for the month while unfilled orders increased 0.3 percent for the month. Year-over-year growth for shipments of manufactured goods came in at 2.85 percent in June, down from 4.7 percent in May. Total inventories for all manufacturing industries increased 0.1 percent, increasing the inventory-to-shipments ratio up to 1.29 from 1.27.
  • 08.01.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) remained basically flat from June to July, increasing just 0.1 points to an index level of 49.8. Slight gains were seen in both the new orders and production components, going from 47.8 to 48.0 and 51.0 to 51.3, respectively. The largest increase was seen in the inventories component, which went from 44.0 in June to 49.0 in July. This was mostly offset by a drop in the employment component, which fell to its lowest level since December 2009, going from 56.6 to 52.0. Additionally, there was a slight decline in the supplier deliveries component, which dropped from 48.9 to 48.7. The price index (which is not seasonally adjusted and does not enter into overall PMI) increased for the first time since February, going from 37.0 in June to 39.5 in July. This comes after two consecutive months of declines where this index fell 24.0 points from April to June.
  • 08.01.2012
  • Construction Spending
  • Private construction spending rose in June to $567.9 billion, an increase of 0.4 percent over May and 7 percent improvement compared to last June. Upward revisions to May and April showed non-residential construction increased for both months. Residential construction spending increased 1.3 percent over the month to $265.6 billion and showed a strong increase of 12.1 percent compared to June 2011. Spending on new multi-family homes showed a strong 48.8 percent increase over the year with new single family homes increasing 3.4 percent over the year and residential improvements showing just a slight increase of 1.6 percent over the year. Non-residential construction came in at $302.3 billion, up 14 percent from this time last year. The largest section of power and utility fell slightly by 3.1 percent from last month, but is still up 26.5 percent from June 2011. There was improved spending all structures except power and commercial structures. Communication structures showed the largest increase of 4.3 percent for the month followed by manufacturing structures and office structures both increasing 3.7 percent to aid the boost in private construction.
  • 07.27.2012
  • GDP
  • Real GDP rose at an annualized rate of 1.5 percent in the second quarter, slowing a bit from a 2.0 percent increase in the first quarter. The deceleration in growth relative to the first quarter was primarily driven by a slower growth rate in real consumption (1.5 percent versus 2.5 percent), and real business fixed investment (7.5 percent to 5.4 percent). The Bureau of Economic Analysis released its annual revision alongside the second quarter release, covering data back to 2009. The year-over-year growth rate in real GDP was revised up for 2009 (from −3.5 percent to −3.1 percent); revised down from 3.0 percent to 2.4 percent growth in 2010; and was nudged up for 2011 (from 1.7 percent to 1.8 percent). Importantly, the four-quarter growth rate now appears to have held fairly constant (around 2.0 percent) during the recovery, rather than exhibit a deceleration from a recent peak of 3.5 percent in mid-2010. Among the components, the largest changes during the revision were to real private nonresidential investment and real government expenditures. The level of real private nonresidential investment as of 2012:Q1 was pushed down 1.7 percent during the annual revision, and the level of real government expenditures was revised up by 1.1 percent as of 2012:Q1 (though most of that came in 2009 and 2010). The trajectory in real personal consumption was largely unchanged during the revision.
  • 07.26.2012
  • Durable Goods
  • New orders for durable goods rose 1.6 percent (nonannualized rate) in June, following a modest upward revision to May’s orders (up from 1.1 percent to 1.6 percent). However, much of the strength in orders over the past few months is just reflecting volatile orders for transportation equipment, which jumped up a 8.0 percent in June. Excluding transportation, new orders for durables actually fell 1.1 percent in June and rose 0.8 percent in May. On a year-over-year basis, the series is up 3.1 percent, a growth rate that has slowed sharply from a local peak of 10.3 percent in February. The near-term outlook for equipment and software investment is often affected by nondefense capital goods orders excluding aircraft, which slipped down 1.4 percent in June, though that was after a 2.7 percent gain in May. Still, nondefense capital goods orders (excluding aircraft) have fallen in four of the past six months, and its 12-month growth rate has slowed from 11.9 percent in February to 0.1 percent as of June. Shipments of durables rose just 0.1 percent in June. However, after excluding transportation equipment, shipments rose 0.5 percent in June and are up 6.2 percent over the past year. Durables inventories continued to expand in June, rising 0.3 percent.
  • 07.25.2012
  • New Home Sales
  • New single-family home sales fell to a seasonally-adjusted annualized rate of 350,000 units sold in June. This is 8.4 percent lower than May’s revised rate of 382,000 units (revised up from 369,000), which drops the near-term (3-month) trend in sales growth down from 1.5 percent to nearly zero. On a year-over-year basis, new home sales are still up 15.1 percent. The largest contributor to the overall monthly decline was sales in the Northeast, which fell 60.0 percent in June to the lowest level in eight months. This follows six straight months of sales increases for the region. The South also posted a monthly decline of 8.6 percent, while sales in the Midwest and West grew 14.6 percent and 2.1 percent, respectively. The median sales price fell 1.9 percent to $232,600, while the average sales price fell 1.5 percent to $273,900. The median price has fallen three out of the last four months and the average price has posted two consecutive months of declines. Finally, the number of new single-family homes for sale increased 0.7 percent in June to 144,000 units on a seasonally-adjusted basis, following a decline of 1.4 percent in May. This represents 4.9 months of supply at the current sales rate.
  • 07.19.2012
  • Existing Home Sales
  • Existing single-family home sales fell 5.1 percent in June to an annualized rate of 3.9 million homes sold. While this represents a 4.8 percent increase over the past 12-months, this is the sharpest monthly decline since February 2011. The median sales price of existing single-family homes in June rose 5.5 percent from May and 8.0 from this time last year to $190,100. The monthly supply of existing single-family homes for sale rose 1.6 percent to a 6.5 month supply—the highest level since November 2011. Despite the modest uptick in the monthly supply, the total inventory of existing single-family homes fell 2.8 percent to 2.12 million available homes. Both the month supply and inventory of existing single-family homes continue to post significant annual declines—down 27.8 percent and 23.7 percent, respectively from last June.
  • 07.18.2012
  • Housing Starts
  • Single-family housing starts rose 4.7 percent from in June to an annualized rate of 539,000 homes under construction. This represents a 21.7 percent increase in housing starts over the past 12-months. Regionally, single-family housing starts have been strongest in the Northeast and West, where annual gains have improved by 42.1 percent and 33.7 percent, respectively. The authorization of building permits, which tend to be less volatile, rose 0.6 percent in June and are up 19.7 percent from June 2011.
  • 07.17.2012
  • Industrial Production
  • The industrial production index increased 0.4 percent in June following a 0.2 percent decline in May. The near-term trend (three-month annualized growth) of industrial production has increased to 3.8 percent from 0.0 percent in May. From this time last year, industrial production is up 4.6 percent, right in line with readings seen since the beginning of the year. Manufacturing rose 0.4 percent in June after having fallen 0.7 percent in May. Manufacturing production has slowed markedly to 1.4 percent in the second quarter from 9.8 percent in the first quarter of 2012. Breaking down the monthly manufacturing sector, durable and nondurable goods increased 0.8 percent and 0.4 percent, respectively. Most durable goods industries posted gains in June, with the machinery and motor vehicles and parts exhibiting the largest gains at 2.3 percent and 1.9 percent. Overall capacity utilization edged up 0.2 percent to 78.9 percent of capacity.
  • 07.16.2012
  • Retail Sales
  • After slipping down 0.5 percent in June, retail sales have now fallen for three consecutive months (its worst losing streak since mid-2008. The recent weakness over the past three month has pulled the series’ 12-month growth rate down 2.5 percentage points to 3.8 percent. Unfortunately, that softness has been fairly widespread. Across broad sales categories, only four out of 13 industries posted sales increases, and the largest increase was 0.5 percent (belonging to miscellaneous and nonstore retailers). In May, six of 13 broad components posting increases. Auto sales fell 0.7 percent in June, nearly reversing a 0.9 percent increase in May. Sales at gasoline stations (down 1.8 percent) were the steepest decline in June (and likely price-related), though sales at building material, garden equipment, and supplies dealers (down 1.6 percent) and at sporting goods, hobby, book, and music stores (1.6 percent) also fell precipitously. “Core” retail sales—a cleaner measure of consumer spending trajectory—which excludes autos, building supplies, and gas stations decreased 0.1 percent during the month, and as been trending down since the beginning of the year. Its near-term (three-month annualized) growth rate fell to 0.7 percent in June, its first foray into negative territory since May 2009. The series’ 12-month growth rate is still up 3.7 percent, though that's down sharply from where it was at the beginning of the year (6.1 percent).
  • 07.03.2012
  • Factory Orders
  • New orders for manufactured goods increased 0.7 percent (nonannualized) in May, following two reports of monthly declines in March and April. Despite this month’s increase the near term trend (three-month annualized growth rate) remains in negative territory at −8.0 percent. Year over year growth rates have continued to gradually decline from a high of 23.8 percent in April 2010 to a current reading of 3.0 percent. New orders excluding transportation increased 0.4 percent while durable and nondurable new orders rose 1.3 percent and 0.2 percent, respectively. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, increased 2.1 percent for the month while its three-month annualized growth rate remains negative at −6.7 percent. Shipments of manufactured goods rose 0.5 percent for the month, while its three-month annualized growth rate, 1.33 percent, has remained relatively level over the past two months. Unfilled orders were unchanged in May. Inventories declined 0.2 percent for the second consecutive month pulling the inventory-to-shipments ratio down to 1.27 from 1.28.
  • 07.02.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) dropped from 53.5 in May to 49.7 in June. This is the first time since July of 2009 that the index is showing a contraction in manufacturing, which is indicated by an index level below 50. There was a large decrease in the new orders component, which fell from 60.1 to 47.8, a drop of 12.3 points. The production component also fell for the second consecutive month, going from 55.6 in May to 51.0 in June. Both the employment and inventories components also posted declines, dropping from 56.9 to 56.6 and 46.0 to 44.0, respectively, while the supplier deliveries component increased slightly from 48.7 to 48.9. The price index (which is not seasonally adjusted and does not enter into the overall PMI) fell 10.5 points to 37.0, reflecting a drop in the price of raw materials. This component has fallen 24.0 points over the last two months, and is at its lowest level since April of 2009.
  • 06.28.2012
  • GDP
  • The growth rate of real GDP was unchanged in the first quarter—at 1.9 percent—according to the third estimate from the Bureau of Economic Analysis. That said, we’re due for an Annual Revision (covering data from 2009 to 2012:Q1) alongside the first estimate of second quarter GDP on July 27th, and it’s likely 1.9 percent won’t be the “final” estimate. Even though the top-line was unchanged in this release, there were a few key developments in the details of the report. First, real personal consumption expenditures were revised down from a 2.7 percent to 2.5 percent during this revision, and are down 0.4 percentage points (pp) from the first estimate. All three major components of consumption (durables, nondurables, services) were shaded down. Roughly offsetting the downward revision in consumption, business investment in structures was revised up from a 3.3 percent decrease to a 1.9 percent increase during the revision. Also, residential investment was nudged up from a 19.3 percent gain to a 20.0 percent gain in the first quarter, further outpacing a relatively strong 11.7 percent gain in 2011:Q4. Perhaps not surprisingly, the largest revisions were to net exports. Both the growth rate in real imports and exports were revised down sharply. Export growth fell 3.0 pp during the revision to 4.2 percent (roughly 1.0 pp below the advance estimate). Import growth got knocked down from 6.1 percent to 2.7 percent during the revision. The downward revision to imports more than offset the adjustment to export growth, leading to an increase in the contribution to the change in real GDP from net exports of roughly 0.2 pp.
  • 06.27.2012
  • Durable Goods
  • New orders for durable goods rose 1.1 percent (nonannualized rate) in May, following a modest downward revision to April’s estimate (down from a 0.1 uptick to a 0.2 percent decrease). Some of May’s increase in new orders can be attributed to a 2.7 percent rise in new orders for transportation equipment (and most of that was aircraft orders). Excluding this category, new orders rose 0.4 percent in May, following declines of 0.6 percent in April and 0.8 percent in March. The near-term trajectory in new orders excluding transportation is decidedly sluggish. It’s 3-month annualized growth rate stands at −3.7 percent, while its 6-month trend is up just 1.5 percent. This near-term softness has weighed on the series’ 12-month growth rate, which has fallen from a recent high of 10.3 percent in February to just 3.8 percent as of May. The near-term outlook for equipment and software investment is often proxied by nondefense capital goods orders excluding aircraft, which rebounded from April’s 1.4 percent decline, rising 1.6 percent in May. Still, its trajectory looks weak, as the year-over-year growth rate in nondefense capital goods orders excluding aircraft has fallen from a recent high of 12 percent in February to a mere 1.5 percent in May (its slowest growth rate since December 2009). Shipments of durables look a little stronger than new orders. Shipments rose 0.7 percent in May, and strengthening on a year-over-year basis (up 8.7 percent in May compared to a recent low of 5.9 percent in March). Even excluding transportation equipment, shipments are up 6.2 percent over the past year. Inventories grew by 0.5 percent in May and are up 5.8 percent over the past year.
  • 06.25.2012
  • New Home Sales
  • New single-family home sales rose 7.6 percent in May to a seasonally-adjusted annualized rate of 369,000 units sold. On a year-over-year basis, new single-family home sales are up 19.8 percent. Regionally, sales were strongest in the Northeast and South, increasing 36.7 percent and 12.7 percent, respectively, while sales fell in the Midwest (10.6 percent) and West (3.5 percent). The median sales price fell for the second consecutive month, declining 0.6 percent to $234,500 while the average sales price fell even further, declining 3.5 percent $273,900. Finally, the number of new single-family homes for sale rose 0.7 percent to 145,000 units on a seasonally-adjusted basis, representing 4.7 months of supply at the current sales rate.
  • 06.21.2012
  • Existing Home Sales
  • Existing single-family home sales slipped 1.0 percent to a seasonally-adjusted annual rate of 4.05 million in May (from 4.09 million in April), but are 10.4 percent above the 3.67 million unit level in May 2011. The median sales price was $182,900 in May, up 5.1 percent from last month and 7.7 percent over the past 12-months. The monthly supply and inventory of available homes for sale rose 1.6 percent and 1.4 percent, respectively. Inventory shortages in certain areas have been building all year, and this slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand.
  • 06.19.2012
  • Housing Starts and Permits
  • Single-family housing starts rose for the fourth consecutive month in May, increasing 3.2 percent to a seasonally adjusted annualized rate of 516,000 units. The improvement in May follows an upwardly revised increase of 4.0 percent in April. On a year-over-year basis, new single-family housing starts are up 26.2 percent. Regionally, housing starts ranged from a 5.4 percent decline in the Midwest to a 14.4 percent increase in the West. New single-family units authorized also improved in May, increasing 4.0 percent to 494,000 seasonally-adjusted annualized units. Moreover, compared to May 2011, new single-family housing units authorized are up 19.9 percent.
  • 06.15.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment decreased to 74.1 in June’s initial report, the index's lowest level since December. This follows an index of 79.3 in May. Unless there is a major upward revision to the initial estimate in the final report, June’s index will mark the first monthly decline in the index since August of last year. Both the current conditions component and the consumer expectations component showed noticeable declines, with conditions falling from 87.2 to 82.1 and expectations falling from 74.3 to 68.9. Inflation expectations remained relatively stable, as median short-run (one-year ahead) expectations were flat from May to June, remaining at 3.0 percent. They are 0.8 percent lower than in June 2011. Longer-term (five-to-ten years ahead) inflation expectations ticked up slightly from 2.7 percent to 2.9 percent.

  • 06.15.2012
  • Industrial Production
  • The industrial production index edged down 0.1 percent in May following a 1.0 percent gain in April. From this time last year, it is up 4.7 percent. The near-term trend (three-month annualized growth) of industrial production has fallen to 1.3 percent from 3.5 percent. Construction had the sharpest monthly decline, falling 1.2 percent after a 0.7 percent increase in April, but it remains up 5.1 percent on a year-over-year basis. Over the past 12 months, business equipment has seen the strongest gains. It is up 11.3 percent, with sizable improvements in all three of its major categories: transit, information processing, and industrial/other. Manufacturing fell 0.4 percent in May after having advanced 0.7 percent in April. Breaking down the monthly manufacturing sector, durable and nondurable goods fell 0.5 percent and 0.2 percent, respectively. Durable goods industries with declines of more than 1 percent include: nonmetallic mineral products, primary metals, motor vehicles and parts, and furniture and related products. Wood products showed the largest gain of durable goods, increasing 1.0 percent. Overall capacity utilization declined 0.2 percent to 79.0 percent of capacity, still 1.3 percentage points below its historic average.

  • 06.05.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—declined faster than originally estimated in the first quarter of 2012, decreasing at an annualized rate of 0.9 percent after being revised down from a 0.5 percent drop. Over the past four quarters, productivity growth has slowed to just 0.4 percent. The revisions were the result of a 0.3 percentage point decline in output, which grew 2.4 percent in the first quarter, and a slight tick up in the rate at which hours worked grew. Hourly compensation was heavily revised in both the first quarter of 2012 and the fourth quarter of 2011. In the first quarter, compensation grew at a revised rate of 0.4 percent (1.5 percent initially), while the fourth quarter compensation numbers tumbled from a 3.9 percent gain to a 0.4 percent fall. After adjusting for price changes, real hourly compensation has now fallen 2.0 percent in the first quarter following a 1.6 percent drop in the fourth quarter. Unit labor costs were dragged down by the lower compensation numbers, increasing just 1.3 percent in the first quarter (after a 0.7 percentage point downward revision) and declining 1.5 percent in the fourth quarter. The four-quarter growth rate dropped from 2.0 percent to 0.9 percent in the first quarter, hitting its lowest mark since 2010.
  • 06.04.2012
  • Factory Orders
  • New orders for manufactured goods decreased 0.6 percent (nonannualized) in April, following a decrease of 2.1 percent in March. This month’s decrease kept the near-term trend (3-month annualized growth rate) negative at −4.7 percent following a reading of −9.8 percent last month. Year-over-year growth rates continue to slow, at 3.5 percent. Excluding transportation, new orders were down 1.1 percent following a downwardly revised March estimate of −0.7 percent. New orders for durable goods were little changed for the month following a downwardly revised March estimate of −23.8 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, fell 2.1 percent for the month while its 3-month annualized growth rate, −6.3 percent, posted two consecutive months of declines for the first time since late spring 2009. Shipments of manufactured goods declined 0.3 percent for the month, while its 3-month annualized growth rate has fallen to 0.5 percent (from 7.0 percent in February). Unfilled orders were little changed in April, falling 0.1 percent. Inventories, up two of the last 23 months, continue to accumulate, however the inventory/sales ratio has remained stable at 1.28.
  • 06.01.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) fell from 54.8 to 53.5 in May, almost entirely reversing April’s increase. All but one component of the index decreased during the month. Production posted the biggest fall, dropping from 61.0 to 55.6 after two straight months of gains. Inventories also continued to fall, decreasing for the second time in as many months. The inventories index declined from 48.5 in April to 46.0 in May. Smaller declines were also realized in the employment index, down 0.4 point to 56.9, and the supplier deliveries index, now at 48.7 after a 0.5 point drop in May. The only increase occurred in the new orders index, which added 1.9 points to an index level of 60.1. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) tumbled in May, falling 13.5 points to 47.5. This is the lowest level since December 2011, and it also represents a decline in the price of raw materials.
  • 06.01.2012
  • Construction Spending
  • After upward revisions to both February and March, private construction was up 1.2 percent over the month in April to $549.7 billion. Residential construction showed improvement of 2.8 percent (nonannualized) over last month and 7.5 percent over the year. Spending on new multi-family homes and improvements increased over April, 4.1 percent and 3.7 percent, respectively. Multi-family spending increased 31.4 percent over the last year. Nonresidential was up 17.4 percent from April 2011 levels, but had a slight 0.2 percent fall back over the month. The largest monthly growth components were healthcare and commercial structures. Manufacturing has had the largest yearly growth of 26.8 percent even with the set back of 4.6 percent last month. All sectors continue their flat, but slightly upward trend.
  • 05.31.2012
  • GDP
  • Real GDP was revised down in the first quarter from an annualized growth rate of 2.2 percent to 1.9 percent, according to the Burea of Economic Analysis’s second estimate. The downward revision was primarily the result of downward revisions to private inventories, along with relatively minor downgrades to net exports, state and local government spending, and consumption. These downward revisions were partially offset by a fairly sizeable upward revision to nonresidential fixed investment. Nonresidential fixed investment was revised up from a decrease of 2.1 percent to a 1.9 percent increase in the first quarter, and is now adding 0.2 percentage points (pp) to real GDP growth in the first quarter, as opposed a 0.2 pp subtraction in the previous estimate. Both structures and equipment and software were revised up in the second estimate. The upward adjustment to structures was the more substantial of the two (though not quite enough to turn the growth rate positive), as structures were revised up from a 12.0 percent decline to just a 3.3 percent decline in the first quarter.

    Private inventories suffered the largest knockdown during the revision, lessening its contribution to quarter one output growth by 0.4 pp to 0.2 pp. Both exports and imports were nudged up during the revision, but their net combined contribution to output growth fell by a little less than 0.1 pp. Downward revisions to other categories were relatively minor. While headline GDP growth was knocked down by 0.3 pp in the first quarter, because most of that downward revision was due to inventories, final sales was only nudged down by 0.1 pp to 1.6 percent, and its four-quarter growth rate was unchanged at 1.9 percent.

    Finally, this release contained our first look at the first quarter’ real Gross Domestic Income (GDI), which rose 2.7 percent, roughly in line with its readings over the previous two quarters of 2.6 percent. While this measure points to a little more near-term strength in the growth trajectory, over the past year the growth rate of both real GDI and real GDP stands at 2.0 percent.

  • 05.24.2012
  • Durable Goods
  • New orders for durable goods edged up 0.1 percent in April, following an upwardly revised (but still sizeable) decline of 3.7 percent in March. On a year-over-year basis, new orders are up 6.9 percent. New orders for transportation equipment rose 2.1 percent during the month, bolstering the headline estimate—which would have fallen 0.6 percent without including the category. That said, a sizeable decline in new orders for defense goods (down 19.6 percent) accounted for some of the overall weakness in April. Importantly, new orders of nondefense capital goods excluding aircraft followed up a 2.2 percent decline in March by decreasing 1.9 percent in April. The series has posted declines in four of the past six months, and is up just 2.6 percent on a year-over-year basis (its slowest growth rate since December 2009). Shipments of durables increased 0.7 percent in April, following a 1.0 percent gain in March, and are up 8.9 percent over the past year. However, after excluding transportation equipment, shipments actually fell 0.3 percent in April and are growing at an annualized trend of just 2.4 percent over the past three months. Manufacturers’ inventories continue to swell, but at a slower pace. Inventories increased 0.3 percent in April and its 12-month growth rate sits at 6.8 percent, down markedly from a recent cyclical high of 12.9 percent last August.
  • 05.16.2012
  • Industrial Production
  • Industrial production increased 1.0 percent (nonannualized) in April. On a year-over-year basis, overall production is up 5.2 percent with a near-term trend (three-month annualized growth) of 3.8 percent growth. Manufacturing production increased 0.5 percent after having fallen 0.4 percent in March. Breaking down the manufacturing sector, durable goods production rose 1.3 percent while nondurable goods manufacturing fell 0.2 percent in April. Within durable goods manufacturing, all major categories increased except wood products, with motor vehicles and parts production and furniture and related products leading the way growing 4.0 percent and 2.4 percent, respectively. Mining output jumped 1.6 percent, after having declined the previous two months. Overall capacity utilization increased 0.8 percentage points to 79.2 percent of capacity in April, still 1.4 percentage points below its December 2007 reading.
  • 05.16.2012
  • Housing Starts and Permits
  • Single-family housing starts rose 2.3 percent in April and are up 18.8 percent over the past 12 months to an annualized rate of 492,000. Regional monthly changes ranged from a 4 percent increase in the South to a 3.1 percent decline in the West. Single-family building permits, which tend to be less volatile, rose 1.9 percent in April and are up 18.4 percent on a year-over-year basis.
  • 05.10.2012
  • Import and Export Prices
  • U.S. import prices fell 0.5 percent in April, marking the first monthly decrease since October 2011. April’s decline was below consensus forecasts which had predicted a more modest 0.1 percent decrease. Petroleum prices fell 1.8 percent, driving the monthly decline of the overall index, while nonpetroleum import prices remained unchanged from March to April. On a year-over-year basis, import prices were up 0.5, decelerating from the 5.25 percent average yearly growth seen throughout the first quarter of 2012. Making 1.3 percent yearly growth in April, nonfuel import prices also weakened compared to their first quarter average of 2.5 percent. Petroleum prices fell by 1.7 percent on a year-over-year basis, posting the first decline since 2009. The slowdown in year-over-year growth rates indicate low price pressure stemming from abroad.

    Export prices ticked up 0.4 percent in April, after increasing 0.8 percent in March. Gains in both nonagricultural export prices (0.2 percent) and agricultural export prices (2.0 percent) contributed to April’s gain. April’s modest 0.7 percent year-over-year advance was the smallest yearly gain since October 2009.

  • 05.03.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—declined at an annualized rate of 0.5 percent in the first quarter of 2012, meeting expectations. After the fourth quarter’s upwardly revised 1.2 percent growth, productivity is up 0.5 percent over the past four quarters. The quarterly decline came as growth in hours worked outpaced the growth in output. Hours worked grew by 3.2 percent, its highest reading in nearly two years and a full percentage point above its year-over-year growth rate. Output grew 2.7 percent in the first quarter. Hourly compensation cooled from the second half of 2011, growing 1.5 percent. After adjusting for price changes, real hourly compensation declined 0.9 percent. The initial estimate for first-quarter unit labor costs was 2.0 percent, keeping pace with the four-quarter growth rate of 2.1 percent.
  • 05.02.2012
  • Factory Orders
  • New orders for manufactured goods decreased 1.5 percent (nonannualized) in March, following an increase of 1.1 percent in February. This month’s decrease pulled the near term trend (three month annualized growth rate) sharply negative to −5.8 percent down from 14.7 percent in December. Year over year growth rates slowed considerably as well down to 3.3 percent from a 12.1 percent reading in December. Excluding transportation new orders were flat for the month. Durable goods orders series decreased 4.0 percent for the month pulling down the three month annualized growth rate to −20.4 percent, the lowest reading since March 2009. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, fell 0.1 percent for the month while its 3-month annualized growth rate, −3.3 percent, continues to fluctuate from positive to negative readings as it has since the fall. Shipments of manufactured goods grew 0.7 percent for the month, while its 3-month annualized growth rate remains steady just below 6 percent. Unfilled orders were little changed in March increasing 0.1 percent. Over the past three months unfilled orders have increased 8.2 percent, down from 15.1 in January. The unfilled orders-to-shipments ratio now rests at 6.17. Inventories also continue to accumulate, 0.3 percent, however the inventory/sales ratio has remained stable at 1.33.
  • 05.01.2012
  • Construction Spending
  • After upward revisions to both January and February, private construction increased in March to $531.9 billion. Both nonresidential and residential spending inched up by 0.7 percent over the month. Private construction has grown by 10.3 percent over the year, nonresidential construction leading the growth at 13.1 percent, and residential following at 6.9 percent. Power and utility along with manufacturing pushed the nonresidential construction increases over March. The year-long increases are attributed to commercial and healthcare structures growing at 9.5 percent and 7 percent, respectively. New single-family home construction showed growth of 3.8 percent, outweighing the decrease of 3.1 percent in new multi-family homes for the month, and supporting the $1.65 billion increase in residential construction.
  • 05.01.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) increased from 53.4 in March to 54.8 in April. This report was stronger than consensus expectations, and the index is now at a level last seen in June 2011. All but one component of the index increased during the month. Inventories contracted in April, falling from 50.0 to 48.5, and they have yet to expand this year. The increase was led by new orders and production. New orders added 3.7 points, climbing to 58.2 and reaching its highest point since April 2011. The production index grew to 61.0, an improvement of 2.7 points and its highest level since last March. Smaller gains were recorded in the employment index (up 1.2 points) and supplier deliveries index (up 1.2 points). The prices index (which is not seasonally adjusted and does not enter into the overall PMI) recorded no change in April, maintaining gains from earlier in the year.
  • 04.27.2012
  • Real GDP
  • Real GDP in the first quarter came in below consensus expectations, growing at an annual rate of 2.2 percent, a full 0.8 percentage point lower than the growth rate in the fourth quarter. Some strength could be seen in the real consumption numbers. Consumption grew 2.9 percent in the first quarter, accelerating from its 2.1 percent fourth-quarter growth rate. Goods consumption grew 6.2 percent after durables increased another 15.3 percent, and services rebounded from a 0.4 percent increase in the fourth quarter to a 1.2 percent increase in the first. In total, consumption accounted for 2.0 percentage points of real GDP growth in the first quarter. This was also an impressive report for residential investment, which grew 19.1 percent in the first quarter after increasing 11.6 percent in the fourth quarter of 2010. The contribution to overall growth from residential investment was 0.4 percentage points.

    The weaker parts of the report centered on business fixed investment and government expenditures. Business investment fell 2.1 percent in the first quarter, breaking a string of eight consecutive quarterly increases. Both components of business investment were disappointing. Investment in business structures dropped 12.0 percent after a 0.9 percent fall in the fourth quarter, subtracting 0.4 percentage points from real GDP growth. Equipment and software decelerated dramatically, growing only 1.7 percent in the first quarter, its lowest reading in ten quarters. Business fixed investment reduced output growth by 0.2 percentage points in the first quarter. Government expenditures also weighed on output growth. Federal defense spending and investment continued the fourth quarter’s decline, dropping 8.1 percent, and nondefense spending and investment reversed course from its 4.5 percent fourth-quarter growth rate. Combined with state and local spending, government expenditures reduced real GDP by 0.6 percentage points.

    Export growth accelerated in the first quarter, growing 5.4 percent thanks to a large increase in the growth of exported services. The same was true for imports, which grew 4.3 percent after imported services advanced 11.0 percent. The two series offset each other in terms of real GDP growth. After adjusting for the change in private inventories, real final sales of domestic product increased 1.6 percent in the first quarter, outpacing the 1.1 percent increase in the fourth quarter.

  • 04.26.2012
  • Durable Goods
  • New orders for durable goods fell 4.2 percent in March, more than reversing a 1.9 percent gain in February, and pulling its 12-month growth rate down from 12.0 percent to 2.7 percent. Some of the recent weakness in new orders is due to flagging transportation orders, though excluding transportation, new durables orders still fell 1.1 percent in March. On a year-over-year basis, the series is up 5.0 percent. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—also dipped a bit in March, slipping down 0.8 percent after a 2.8 percent gain in February. Dragged down by a couple of weak reports, the 3-month (annualized) growth rate in nondefense captial goods orders (ex aircraft) stands at −6.0 percent, and its 12-month trend slipped down from 10.3 percent to 3.9 percent in March. Shipments of durables fared much better than new orders, rising roughly 1.0 percent in March (0.8 percent ex transportation shipments) and is up 6.0 percent over the past year. Manufacturers’ inventories rose 0.5 percent in March and are up 8.0 percent over the past year.
  • 04.19.2012
  • Existing Home Sales
  • Existing single-family home sales fell 2.5 percent from February to March to a seasonally-adjusted annualized rate of 3.9 million units sold. This represents a 5.9 percent increase over the past 12 months and the ninth consecutive month of positive annual growth. The median sale price of existing single-family homes rose 4.8 percent in March and 1.9 percent from last year to $163,600. Inventories fell slightly, down 0.5 percent, to 2.1 million available units for sale while the monthly supply of homes rose 3.3 percent to a 6.3 months supply at the current sales pace. Compared to last year both inventories and the monthly supply of homes has declined significantly, down 20.1 and 24.1 percent, respectively. The National Association of Realtors, NAR, notes that future home sales could be held back by tightening supply factors.
  • 04.17.2012
  • Housing Starts
  • Single-family housing starts continued to decline in March, falling 0.2 percent to a seasonally-adjusted annualized rate of 462,000 units. The decline follows an upwardly revised decline of 9.0 percent in February. Compared to March 2011, new single-family housing starts are up 10.5 percent. Regionally, changes in housing starts ranged from −10.0 percent in the Northeast to 13.7 percent in the West. New single-family housing units authorized fell 3.5 percent in March but are up 17.9 percent on year-over-year basis.
  • 04.17.2012
  • Industrial Production
  • Industrial production went unchanged (nonannualized) in March, following another flat reading in February. On a year-over-year basis, overall production is up 3.8 percent. However, the near term trend (three month annualized growth) has fallen to 3.0 percent from 6.5 percent. Manufacturing production decreased 0.2 percent after having risen 0.8 percent in February. Breaking down the manufacturing sector, durable and nondurable goods each fell 0.2 percent in March following modest gains in February of 1.1 and 0.5 percent, respectively. Within durable goods manufacturing, nonmetallic mineral products, electrical equipment, appliances and components, and furniture and related products all posted decreases greater than 1.0 percent in March. Mining output rose 0.3 percent, after having declined 4.0 percent in February. Overall capacity utilization edged down 0.1 percentage points to 78.6 percent of capacity in February, still 1.5 percentage points below its historic average.
  • 04.11.2012
  • Import and Export Prices
  • U.S. import prices climbed 1.3 percent in March after falling a revised 0.1 percent in February (up 0.4 percent, previously) and remaining flat through December and January. March’s jump was well above consensus forecasts which had predicted a 0.8 percent uptick. March also marks the largest monthly increase since April of last year. A 4.3 percent increase in petroleum import prices was the main driver behind the advance in the overall index. Nonpetroleum imports rose 0.3 percent in March, marking the largest monthly increase since May 2011. On a year-over-year basis, import prices rose 3.4 percent, the smallest gain since November 2009. Similarly, nonpetroleum import prices advanced 1.4 percent year-over-year, the smallest increase since January 2010. Although import prices rose at monthly rates unseen since last year, small increases in year-over-year prices suggest a moderation of foreign prices in the months to come. Elevated petroleum prices, however, still have the potential to weigh on GDP.

    Export prices increased 0.8 percent in March, up from February’s 0.4 percent advance. Like import prices, March’s export prices mark the largest increase since April of last year. Gains in both nonagricultural export prices (up 0.5 percent) and agricultural prices (up 2.7 percent) drove March’s advance. With year-over-year gains of 0.9 percent, export prices posted the smallest increase since October 2009.

  • 04.03.2012
  • Factory Orders
  • New orders for manufactured goods increased 1.3 percent (nonannualized) in February, following a decrease of 1.1 percent in January. Excluding transportation, new orders increased 0.9 percent for the month. The volatile durable goods orders series increased 2.4 percent following January’s decline of 3.5 percent. However, the 3-month annualized growth rate, 8.8 percent, for durable goods orders has come down from December’s reading of 34.9 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, rose 1.7 percent for the month while its 3-month annualized growth rate (7.0 percent) continues to fluctuate from positive to negative readings. Shipments of manufactured goods were slightly positive (0.1 percent) for the month, while its 3-month annualized growth rate remains steady around 6 percent. Unfilled orders continue to grow increasing 1.3 percent in February. Over the past year, unfilled orders have increased 10.6 percent, its highest reading since August 2005. The unfilled orders-to-shipments ratio now rests at 6.23. Inventories also continue to accumulate, 0.4 percent, however the inventory/sales ratio has remained stable at 1.33.
  • 04.02.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) increased from 52.4 in February to 53.4 in March, matching consensus expectations. The increase was driven by large bumps in the production and employment components. Production increased 3.0 percentage points, from 55.3 to 58.3, and employment added 2.9 percentage points, going from 53.2 to 56.1. A gain was also made in the inventories index, which rose 0.5 percentage points to 50.0 and avoided a sixth consecutive month below the growth threshold of 50.0. A decline was recorded in the new orders index, falling from 54.9 to 54.5, and the supplier deliveries index remained below 50.0, dropping from 49.0 to 48.0 and indicating a faster pace of deliveries. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) recorded a slight decline after two months of large increases, falling 0.5 percentage points to 61.0 in March.
  • 03.30.2012
  • Industrial Production Revision
  • The annual revision to industrial production and capacity utilization incorporates new data from the Annual Survey of Manufacturers, Current Industrial Reports, Quarterly Survey of Plan Capacity Utilization, U.S. Geological Survey, and the Department of Energy. In general, revisions left total production little changed while capacity was revised up; as a consequence capacity utilization was revised down.Measured from Q4 to Q4, total production for 2009 dropped to −11.4 percent from −11.1 percent while revisions left production gains for 2010 and 2011 essentially unchanged. Capacity revisions left 2008 levels relatively unchanged while 2009 and 2010 levels both were marked down. Given the revisions in production and capacity series, capacity utilization was revised lower for every year from 2008–2011. For Q4:2011, capacity utilization now rests at 77.8 percent compared to a previous estimate of 78.1 percent.
  • 03.28.2012
  • Durable Goods
  • New orders for durable goods rose 2.2 percent (nonannualized rate) in February, partially reversing a 3.6 percent decrease in January. Over the past year, durable goods orders are up 12.2 percent. Excluding transportation, new durables orders rose 1.6 percent in February, and are up 8.5 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—rose 1.2 percent in February, following a 3.7 percent decrease in January. The series has risen at an annualized rate of 3.9 percent over the past three months, compared to its 12-month growth rate of 8.4 percent, which suggests a loss of momentum in recent months. Shipments of durables edged down 0.4 percent in February, following a roughly flat reading in January, and trending at a 8.2 percent clip over the past year. Manufacturers' inventories continued to swell in February, rising 0.4 percent, and are up 9.5 percent over the past 12 months.
  • 03.16.2012
  • Industrial Production
  • Industrial production went unchanged (nonannualized) in February, following an upwardly revised estimate of 0.4 percent from 0.0 percent in January. On a year-over-year basis, overall production is up 4.0 percent. Manufacturing production increased 0.3 percent after having risen 1.1 percent in January. Breaking down the manufacturing sector, durable goods rose 0.4 percent in February, while nondurables gained 0.2 percent. Within durable goods manufacturing, nonmetallic mineral products, fabricated metal products, aerospace and miscellaneous transportation equipment, and electrical equipment, appliances and components all posted increases greater than 1.0 percent. Output for motor vehicles and parts decreased 1.2 percent for the month, but its three-month annualized growth rate continues to post strong gains of 54.2 percent. Mining output continues to slow, falling 1.2 percent, while utilities went unchanged as mild winter temperatures persist. Overall capacity utilization edged down 0.1 percentage points to 78.7 percent of capacity in February, still 1.6 percentage points below its historic average.
  • 03.14.2012
  • Import and Export Prices
  • U.S. import prices increased by 0.4 percent in February after remaining unchanged throughout January and December (although both were revised down from 0.3 percent and 0.1 percent, respectively). Import prices came in lower than consensus forecasts, which had estimated a 0.6 percent rise. Although nonpetroleum import prices declined by 0.2 percent in February, they were more than offset by fuel prices which increased 1.4 percent, leading to an increase in the overall import price index. Petroleum prices were in turn the main driver behind the gains of fuel prices advancing 1.8 percent on a monthly basis and 18.4 percent year-over-year. Falling natural gas prices offset the gain in petroleum prices, thus moderating fuel price growth which declined 10.1 percent in February and 36.5 percent year-over-year. Import prices grew by 5.5 percent on a year-over-year basis, marking the slowest yearly gain since December 2010. Nonpetroleum import prices also posted one of the smallest gains seen in the past few years, rising 1.6 percent year-over-year. Excluding petroleum, there is low potential for foreign prices to put pressure on in domestic price levels in the coming months. Elevated petroleum prices, however, have the potential to weigh on GDP in the coming months.

    Export prices advanced 0.4 percent in February after increasing 0.2 percent in January. February’s gains mark the largest monthly increase since September 2011. Nonagricultural prices grew by 0.5 percent after remaining flat in January, and were offset by a 0.9 percent decline in agricultural prices (which had previously increased by 1.1 percent). On a year-over-year basis, export prices rose by 1.5 percent, marking the smallest gain since November 2009.

  • 03.13.2012
  • Retail Sales
  • Retail sales increased 1.1 percent in February and have increased 6.5 percent on a year-over-year basis. There were also upward revisions to the reading for both December (from flat to a 0.3 percent increase) and January (from a 0.4 percent to a 0.6 percent increase). After a large jump in December (2.6 percent) and a drop off in January (1.6 percent), auto sales were up a bit in February, increasing 1.6 percent. Retail sales excluding the auto sector were up 0.9 percent in February after a 1.1 percent increase in January, and are up 6.4 percent over last February. This pulled the near-term (3-month) growth rate up from 0.4 percent to 0.6 percent. Contributing to the gains in both retail sales and retail sales excluding the auto industry, sales for gasoline stations jumped up in February with an increase of 3.3 percent (likely price related) following a 1.9 percent increase in January. The impact of the increase in gas station sales on the total can be seen by looking at the “core” retail sales, which excludes autos, building supplies and gas stations. “Core” retail sales were up only 0.4 percent in February after an increase of 1.0 percent in January. The near-term growth rate for “core” retail sales increased from 0.3 percent to 0.4 percent. Other sectors that saw the strongest sales gains in February were building materials, garden equipment, and supply dealers (1.4 percent increase), clothing and accessory stores (1.8 percent increase), electronics and appliance stores (1.0 percent increase), and sporting goods, hobby, book and music stores (1.0 percent increase). Sectors that saw decreases in February were furniture and home furnishing stores (1.2 percent decrease) and general merchandise stores (0.1 percent decrease).
  • 03.07.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—grew at an annualized rate of 0.9 percent in the fourth quarter. This estimate comes after an upward revision to the initial estimate of 0.7 percent, and incorporates the annual benchmark revision of the Bureau of Labor Statistics Current Employment Statistics. From the fourth quarter of 2010, productivity grew 0.3 percent. Quarterly productivity benefited from a slight increase in the estimate for output growth and a slight decline in the change to hours worked. Larger revisions were made to hourly compensation, which increased from a 1.9 percent fourth-quarter gain to a 3.7 percent increase. Third quarter hourly compensation was also dramatically revised, switching from a 0.3 percent decrease to a 5.7 percent increase. After adjusting for price changes, real hourly compensation grew 2.8 percent in the fourth quarter and 2.6 percent in the third quarter. These large revisions to hourly compensation pushed unit labor costs up to 2.8 percent in the fourth quarter from the initial estimate of 1.2 percent, and flipped third quarter unit labor costs from a 2.1 percent drop to a 3.9 percent gain. On a year-over-year basis, unit labor costs are now up 3.1 percent.
  • 03.01.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) came in below consensus expectations, falling from 54.1 to 52.4 in February, but remains above its growth threshold of 50. The decline was the first in three months, as not a single component of the diffusion index recorded an increase. Decreases were led by the supplier deliveries index, which tumbled 4.6 percentage points to 49.0, its lowest reading since May 2009. New orders also fell 2.7 points to an index level of 54.9, and the employment index dropped for the third straight month to an index level of 53.2 in February. A smaller decline pushed the production index from 55.7 to 55.3, and the inventories index remained constant at 49.5. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) recorded a second consecutive month of large gains, adding 6.0 points and increasing to 61.5 in February.
  • 03.01.2012
  • Construction Spending
  • After upward revisions to both November and December, private construction spending was flat in January. Nonresidential spending had a slight increase of 1.5 percent, while residential spending decreased by 1.8 percent. Since last January, private construction increased by 11.7 percent, with nonresidential leading the growth at 16.6 percent and residential following at 6.7 percent. Education and healthcare pushed the increases over December in nonresidential construction. While both manufacturing and power showed slight setbacks over December, they boast the biggest gains since last January, 38.5 percent and 28 percent, respectively. New single family houses boosted residential, increasing for the ninth consecutive month. Home improvement showed an upward trend for the second half of 2011 with January coming in at $123.5 billion, a 6.4 percent increase over a year ago.
  • 02.29.2012
  • GDP
  • Real GDP in the fourth quarter was revised up by 0.2 percentage points to an annualized growth rate of 3.0 percent, according to the second estimate from the Bureau of Economic Analysis. The upward revision was primarily the result of upward adjustments to nonresidential fixed investment, real consumption, and a downward revision to real imports (which enter into the GDP calculation as a negative). These developments were partially offset by modest downward revisions to the change in real private inventories and real exports. Nonresidential fixed investment, following a strong third quarter gain (up 15.7 percent), was revised up from a 1.7 percent increase to a 2.8 percent gain in the fourth quarter, largely as structures investment was revised up from a 7.2 percent decline to a 2.6 percent decrease. Consumption was revised up from a gain of 2.0 percent to 2.1 percent in the fourth quarter, adding roughly 0.1 percentage point to real GDP growth. Perhaps the most encouraging news was that as a result of the revisions, final sales of domestic product (GDP less inventories) was revised up from 0,8 percent to 1.1 percent. While this is still a deceleration relative to its growth rate of 3.2 percent in the third quarter, this does provide a slightly stronger demand trajectory heading into 2012. Our first take on the fourth quarter estimate of real Gross Domestic Income (GDI) was delayed until the next release because the data on fourth-quarter corporate profits was unavailable. Still, there was an interesting development in that alternative indicator of output growth: third quarter real GDI was revised up from a near flat (0.3 percent) reading to a relatively strong 2.6 percent gain.
  • 02.28.2012
  • Durable Goods
  • New orders for durable goods slipped down 4.0 percent (nonannualized rate) in January, more than reversing a 3.2 percent increase in December. However, durables orders have increased in three out of the last four months and are up 8.1 percent over the past year. Excluding transportation, new durables orders fell 3.2 percent in January and are up 5.7 percent over the last 12 months. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—fell sharply in January, plummeting 4.5 percent and more than offsetting December’s 3.4 percent gain. While the 12-month growth rate in the series stands at 5.9 percent, most of that strength occurred over the first half of last year. The 6-month annualized growth rate in nondefense capital goods excluding aircraft is actually negative (down 2.7 percent), a clear signal of slowing equipment and software investment. Shipments of durables rose 0.4 percent in January, slowing a bit from a 1.9 percent gain in December. Excluding transportation, durables shipments fell 1.1 percent during the month, though are still up 8.3 percent over the past year. Manufacturers’ inventories continued to swell in January, rising 0.7 percent, and remain somewhat elevated relative to the level of shipments. The inventory-to-shipments ratio ticked up slightly to 1.79 months in January, above its pre-recession level of 1.4 months.
  • 02.22.2012
  • Existing Home Sales
  • January sales of existing single-family homes rose to a seasonally-adjusted 4.05 million annualized units sold—the highest level since May 2010. This represents a 3.8 percent increase from December and 2.3 percent increase from January 2011. The median sales price of existing single-family homes fell 2.6 percent from last January to $154,400—the lowest level since October 2001. Inventories had an uptick of 1.5 percent from December to a level of 2.06 million units available for sale, while the monthly supply of available single-family homes fell 3.2 percent from December to a 6.1 month supply at the current sales pace—the lowest level since April 2006. Unseasonably warm weather throughout the country likely helped to boost the upward trend of existing single-family sales, however record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents were also strong contributing factors.
  • 02.16.2012
  • Housing Starts
  • New privately-owned housing starts rose 1.5 percent in January to a seasonally-adjusted annualized rate of 699,000 units. January’s increase in new privately-owned housing starts was driven by a large increase in multi-family starts—which rose 8.5 percent—compared to a 27.9 percent decline in December. Comparatively, single-family housing starts fell 1.0 percent in December to a seasonally-adjusted annualized rate of 508,000. January’s decline in single-family starts ends four consecutive months of monthly increases. Compared to January 2011, new privately-owned housing starts are up 9.9 percent, with numbers of new multi-family housing starts down 4.0 percent and the number of single-family housing starts up 16.2 percent.

    New privately-owned housing units authorized were up 0.7 percent in January to a seasonally-adjusted annualized rate of 676,000 units. January’s improvement in new privately-owned housing authorized was the result of increases in both multi-family and single-family housing units authorized. In January, single-family housing permits rose 0.9 percent to a seasonally-adjusted annualized rate of 445,000 units. On a year-over-year basis, new privately-owned housing units authorized are up 19.0 percent, with multi-family housing permits—which tend to be more volatile—up 55.0 percent and single-family housing permits up 6.2 percent.

  • 02.15.2012
  • Industrial Production
  • Industrial production went unchanged (nonannualized) in January, following an upwardly revised estimate of 1.0 percent from 0.4 percent in December. On a year-over-year basis, overall production is up 3.4 percent. Manufacturing production increased 0.7 percent after having increased 1.5 percent in December. Breaking down the manufacturing sector, durable goods rose 1.8 percent in January while nondurables fell 0.2 percent. Within durable goods manufacturing, output of motor vehicles and parts continue to be a source of strength jumping 6.8 percent in January following an upwardly revised 3.8 percent growth in December. Elsewhere within durables manufacturing, fabricated metals; machinery; computer and electronic products; electrical equipment, appliances and components; furniture and related products; and miscellaneous manufacturing all increased at rates greater than 1.0 percent. On the down side, mining and utilities slowed 1.8 percent and 2.5 percent, respectively. Interestingly, the decline in mining is the largest monthly decline in the series since March 2009. Utilities continued to slow as warmer than usual temperatures have contained demand for heating. Capacity utilization edged down 0.1 percentage points to 78.5 percent of capacity in January and has increased 16.6 percent since the recession ended.
  • 02.03.2012
  • Factory Orders
  • New orders for manufactured goods increased 1.2 percent (nonannualized) in December, following a upwardly revised monthly increase in November of 2.2 percent. The 3-month annualized growth rate now rests at 13.5 percent, up from 8.0 in November. Excluding transportation, new orders increased 0.6 percent in December. Durable goods orders increased 3.0 percent while nondurable goods fell 0.4 percent. Nondefense capital goods excluding aircraft orders (considered a leading indicator of business investment spending) rose 3.1 percent for the month, pushing its 3-month annualized growth rate back into positive territory (2.6 percent) following November’s decline (−4.1 percent). Shipments of manufactured goods increased 0.7 percent for the month, while its 3-month annualized growth rate edged up to 5.8 percent. Unfilled orders increased 1.4 percent, while inventories went unchanged with the inventories-to-shipments ratio now at 1.3.
  • 02.02.2012
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—grew at an annualized rate of 0.7 percent in the fourth quarter, following a downwardly revised third-quarter estimate of 1.9 percent growth. From the fourth quarter of 2010, productivity grew 0.5 percent. Output growth accelerated in the fourth quarter to 3.6 percent, outpacing its 2.8 percent gain in the third quarter. These output gains were offset in the productivity measure by a sizable jump in hours worked, which increased by 2.9 percent in the fourth quarter, its highest rate of growth since the second quarter of 2010. Hourly compensation posted an increase for the first time since the first quarter of 2011, growing 1.9 percent in the fourth quarter. After adjusting for price changes, real hourly compensation was also back in positive territory, increasing by 1.0 percent. The decrease in productivity and increase in hourly compensation pushed unit labor costs up 1.2 percent in the fourth quarter. On a year-over-year basis, unit labor costs increased 1.3 percent.
  • 02.01.2012
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) came in right around consensus expectations, increasing from 53.1 to 54.1 in January. The inventories component grew 4.0 points to an index level of 49.5, which is still slightly below its growth threshold of 50. New orders also added 2.8 points, increasing to 57.6, and the supplier deliveries index rose from 51.5 in December to 53.6 in January. These gains were partially offset by a slight 0.5 point decline in the employment index, which fell from 54.8 to 54.3, and by a larger drop in the production component. Production decreased by 3.2 points to an index level of 55.7. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) surged in January, increasing from 47.5 to 55.5, climbing above 50 for the first time since September. This month’s readings reflect the U.S. Department of Commerce’s recently completed annual adjustment to the seasonal factors used to calculate the indexes.
  • 02.01.2012
  • Construction Spending
  • After an upward revision to October and a slight downward revision to November, private construction spending improved 28.5 percent (annualized rate) in December. Nonresidential spending increased by 3 percent, while residential spending increased nearly 1 percent over December. Throughout 2011, private construction increased 8.3 percent. Nonresidential spending is up 11.4 percent from this time last year even with the slight slowdown in November. Manufacturing and communication pushed the increase while automotive, amusement, and lodging continued their four-month decline. On the residential side, multi-family construction has expanded by 18.8 percent, outperforming single-family home construction (3.66 percent) over the past year. Home improvement is starting to see a flat-to-upward trend: December came in at $114.1 billion, which is a 4.4 percent increase over a year ago.
  • 01.27.2012
  • Real GDP
  • Real GDP in the fourth quarter was estimated to have grown at an annual rate of 2.8 percent, falling just short of consensus expectations, according to the advance estimate from the Bureau of Economic Analysis. The real GDP growth in the fourth quarter was the largest gain since 2010:Q2, and was a full percentage point (pp) above third-quarter GDP growth. On a year-over-year basis, real GDP finished 2011 up 1.7 percent, compared with an increase of 3.0 percent in 2010.

    Fourth-quarter growth was driven by gains in consumption and investment, and by the change in private inventories. The change in private inventories contributed the most to overall growth, adding 1.94 pp, after subtracting significantly from third-quarter growth. Personal consumption numbers were equally as strong, especially goods consumption. Durable goods consumption increased 14.8 percent, and nondurable goods added 1.6 percent after falling 0.6 percent in the previous quarter. Services grew 0.2 percent in the fourth quarter, well below its 1.9 percent increase in the prior period. Personal consumption expenditures added 2.0 pp to economic growth. Business fixed investment and residential investment also added to real GDP growth, but by smaller amounts. Residential investment grew 10.9, adding 0.2 pp to GDP growth, nonresidential structures fell 7.2 percent in the fourth quarter, and equipment and software investment increased 5.2 percent. Real BFI contributed 0.4 pp to output growth. Net exports subtracted 0.1 pp from real GDP growth in the fourth quarter, as gains in imports (a negative in the calculation of GDP) were greater than increases in exports.

    By far, the largest negative component of real GDP was government consumption and investment. State and local governments continued their declines, decreasing 2.6 percent and subtracting 0.3 pp from real GDP growth. Federal expenditures and investment declined sharply, especially for defense. National defense decreased 12.5 percent over the quarter, offsetting slight gains in nondefense spending. Federal expenditures reduced real economic growth 0.6 pp as a whole. The 0.9 pp subtraction from GDP due to government spending and investment declines was the second large negative contribution in 2011 (the first quarter, government expenditures subtracted 1.2 pp), but is a historically rare occurrence. Real final sales of domestic product, which is GDP less the change in private inventories, increased 0.8 percent in the fourth quarter. This is a somewhat disappointing number, but less so when taking into consideration the historically large declines in government expenditures and investment.

  • 01.26.2012
  • Durable Goods
  • New orders for durable goods jumped up 3.0 percent (nonannualized rate) in December, and unlike November’s 4.3 percent gain, it was not heavily influenced by a spike in new orders for transportation equipment. Excluding transportation, new durables orders still increased 2.1 percent, compared to 0.5 percent gain in November, and are now up 7 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—more than reversed a 1.2 percent decrease in November, rising 2.9 percent in December. Still, the series is up at an annualized rate of just 2.8 percent over the past three months, compared to its 12-month growth rate of 5.4 percent, which suggests a loss of momentum in recent months. Shipments of durables rose 2.1 percent in December, following a 0.3 percent decline in November, and are trending at a 9 percent clip over the past year. Durables shipments excluding transportation equipment increased 2.4 percent in December, slightly better than headline shipments, and are up roughly 10 percent over the past year. Interestingly, shipments of nondefense capital goods excluding aircraft jumped up 2.9 percent in December following three consecutive monthly declines. Manufacturers’ continued to add to their inventories of durables in December, albeit at a slower pace than earlier in the year. Inventories ticked up 0.3 percent in December, compared to an average monthly gain of 1.2 percent through the first half of the 2011.
  • 01.26.2012
  • New Home Sales
  • New single-family home sales fell 2.2 percent in December to a seasonally-adjusted annual rate of 307,000 units. December’s decline ends three consecutive months of gains. Moreover, compared to December 2010, new single-family home sales are down 7.3 percent. Regionally, sales ranged from a 10.1 percent decline in the South to a 46.7 percent increase in the Northeast. The median sales price fell 2.5 percent in December to $210,300 while the average sales price rose 6.3 percent to $266,000. The seasonally adjusted estimate of new single-family homes for sale at the end of December was 157,000 units, representing 6.1 months of supply at the current sales rate.
  • 01.19.2012
  • Housing Starts
  • New privately-owned housing starts fell in December, declining 4.1 percent to a seasonally-adjusted annualized rate of 657,000 units. December’s performance was mixed as new single-family structures started improved while new multi-family housing units started—which tend to be highly volatile—fell significantly. In December, new single-family housing starts rose for the third consecutive month, increasing 4.4 percent to a seasonally-adjusted annualized rate of 470,000 units. Moreover, compared to December 2010, new single-family housing units started are up 11.6 percent, representing the largest year-over-year increase in the series since May 2010. Comparatively, new multi-family housing units started declined 20.4 percent to a seasonally-adjusted annualized rate of 187,000 units. On a year-over-year basis, new multi-family housing units started are up 78.1 percent.

    New privately-owned housing units authorized fell slightly in December, falling 0.1 percent to a seasonally-adjusted annualized rate of 679,000 units. Again, December&rsqou;s performance was mixed as new single-family housing units authorized rose while multi-family housing units authorized fell. New single-family housing authorized rose 1.8 percent to a seasonally-adjusted annualized rate of 444,000, representing the highest level since December 2010. On a year-over-year basis, new single-family authorizations are down 0.2 percent. Multi-family housing units authorized fell in December, declining 3.7 percent to a seasonally adjusted annualized rate of 235,000 units. Compared to December 2010, multi-family housing units authorized are up 27.0 percent.

  • 01.18.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods slipped down at an annualized rate of 1.2 percent in December, following a 3.2 percent increase in November. The headline decrease came as declining producer food and energy prices (each falling in excess of 8.0 percent) more than offset gains elsewhere in the basket. Excluding food and energy prices, the “core” PPI jumped up 4.1 percent in December, its largest monthly gain since July. Still, over the past three months the annualized growth rate in the core PPI is just 1.8 percent, compared to its longer-term (12-month) growth rate of 3.0 percent. Further back on the production line, pricing pressure continued to ebb, as core intermediate goods prices fell for the third consecutive time (down 5.5 percent in December) and core crude goods were flat, following fairly sharp declines over the previous two months. On a year-over-year basis, core intermediate goods are up 4.1 percent. The 12-month growth rate in core crude goods, after surging to a series high of 50 percent in mid-2010, stands at just 3.3 percent in December.
  • 01.18.2012
  • Industrial Production
  • Industrial production increased 0.4 percent (nonannualized) in December, after falling 0.2 percent in November. On a year-over-year basis, overall production is up 2.9 percent—continuing to decelerate from a 2012 first quarter reading of 5.5 percent—but remains above its 25-year growth rate of 2.2 percent. Manufacturing production climbed up 0.9 percent in December and has risen at an annualized rate of 4.0 percent over the past three months, compared to its 12-month growth rate of 3.7 percent. After stripping out motor vehicles production, manufacturing output rose 0.9 percent in December after a 0.2 percent decline in November. Outside manufacturing, mining production posted modest gains, increasing 0.4 percent in December and is now up 6.5 percent on a year-over-year basis (for comparison, the 10-year growth rate in mining output is 0.6 percent). Electric and gas utilities output plummeted 2.7 percent in December as weather patterns have been unusual warmer than normal. Capacity utilization edged up 0.3 percentage points to 78.1 percent of capacity in December and has improved 1.3 percentage points from December 2010.
  • 01.13.2012
  • Import and Export Prices
  • U.S import prices ticked down 0.1 percent in December after rising a revised 0.8 percent in November (0.7 percent, previously). December marks the fourth decrease in the past five months signaling a low potential for foreign prices to cause increases in domestic price levels. The decline, in line with consensus forecasts, was driven by a −0.4 percent fuel import prices which were offset a 0.1 percent uptick in nonfuel import prices. On a year-over-year basis import prices were up 8.5 percent marking the third consecutive year imports increased. Non-fuel import prices turned positive in December, marking 0.1 percent gains after decreasing in November and October by 0.2 percent. Year-over-year, non-fuel import prices advanced as well, with gains of 3.4 percent, up from 3.0 percent in 2010. Drivers behind 2011’s increase were nonfuel industrial supplies (up 6.8 percent) and materials and foods, feeds and beverages (up 6.3 percent).

    U.S. export prices declined 0.5 percent in December after rising 0.1 percent in November. Decreases in both agricultural exports (down 2.6 percent) and nonagricultural exports (down 0.2 percent) contributed to the overall decline. Year-over-year, exports posted gains of 3.6 percent for 2011, a slight decrease from 2010’s 6.5 percent gain.

  • 01.03.2012
  • ISM Manufacturing Index
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) came in above consensus expectations for the second straight month, increasing from 52.7 to 53.9 in December. Gains were reported in the production, new orders, and employment components. The production component grew 3.3 points to an index level of 59.9, while new orders increased for the third straight month to 57.6. For the first time in three months, the employment component moved in a positive direction, climbing 3.3 points to an index level of 55.1. These gains were partly offset by a modest decline in the inventories component, which fell to an index level of 47.1. Supplier deliveries were flat for the month, remaining at 49.9 and below the growth threshold of 50. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) continued to rebound from its October reading of 41.0, increasing to 47.5 in December.
  • 01.03.2012
  • Factory Orders
  • New orders for manufactured goods increased 1.8 percent (nonannualized) in November, following two consecutive monthly decreases and pushing its 3-month annualized growth rate up to 6.4 percent from −0.9 percent in October. Excluding transportation new orders increased 0.3 percent in November. Durable goods orders continued to be a source of strength increasing 3.7 percent while nondurable goods rose just 0.3 percent. Nondefense capital goods excluding aircraft orders, considered a leading indicator of business investment spending, fell 1.2 percent for the month causing its 3-month annualized growth rate to turn negative, −2.9 percent, for the first time since February. Shipments of manufactured goods were slightly positive for the month while its 3-month annualized growth rate remains at 3.3 percent. Unfilled orders increased 1.3 percent and pushed the unfilled orders-to-shipments ratio to 6.16 from 6.07 in October. Inventories continue to accumulate, 0.5 percent, with the inventories-to-shipments ratio now at 1.34.
  • 12.23.2011
  • Durable Goods
  • New orders for durable goods jumped up 3.8 percent (nonannualized rate) in November, though that was almost entire due to a sharp spike in orders of transportation equipment—which rose 14.7 percent during the month. Excluding transportation, new durables orders increased 0.3 percent in November, following an upwardly revised 1.5 percent gain in October, and is up 7.2 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—slipped down 1.2 percent in November and after a 0.9 percent decline in October, makes its third monthly decrease in the past five months. Despite some near-term softness, the series is still up 6.5 percent over the past year. Shipments of durables fell 0.4 percent in November, following a 1.5 percent jump in October. Durables shipments excluding transportation equipment rose 0.2 percent during the months and are up 9.1 percent over the past year. After a brief pause in September, manufacturers? resumed stocking inventories of durables, adding 0.4 percent in October and 0.6 percent in November. The nominal value of inventories relative to the pace of shipments edged up from 1.8 months to 1.82 months in November, continuing its steady northward climb. And, while it is still down from its recent peak of 1.9 months in May 2009, the I/S ratio is well above its level of 1.5 months at the start of the previous recession.
  • 12.22.2011
  • GDP
  • Real GDP in the third quarter was knocked down again, slipping down to an annualized growth rate of 1.8 percent, according to the third estimate from the Bureau of Economic Analysis (BEA). This is 0.2 percentage points (pp) below the second estimate. On a year-over-year basis, real GDP is up 1.5 percent, continuing to retreat from its recent high of 3.5 percent in 2010:Q3. Perhaps the most important aspect of today’s release is that personal consumption expenditures were revised down from a 2.3 percent gain to 1.7 percent in the third quarter. Yesterday’s Quarterly Services Survey tipped us off to the possibility of a sharp downward revision in hospital services consumption that could effect the BEA’s estimate for services growth, and that’s pretty much what happened. Services consumption was revised down a full percentage point to 1.9 percent, causing much of the overall downward revision.

    On a brighter note, goods consumption (both durables and nondurables) was nudged up slightly and is now estimated to have increased 1.4 percent in the third quarter, compared to a 1.6 percent decline in the second quarter. Still, overall consumption is now trending at a 4-quarter growth rate of 2.0 percent, below its recent high of 3.0 percent at the end of 2010. Revisions to other broad expenditure categories were modest at best. The largest revision outside consumption was to the change in private inventories, which was revised up and is now estimated to have subtracted roughly 1.4 percentage points from real GDP growth in the third quarter, compared to a 1.6 percentage point take-away according to the second estimate. Due to the downward revision to consumption, real final sales (GDP less the change in private inventories) were revised down from a 3.6 percent increase to a 3.2 percent gain in the third quarter. This is still its largest quarterly gain of the year, and marked acceleration from a 1.6 percent increase in the second quarter. However, another alternative measure of output growth—real Gross Domestic Income (GDI), which is calculated from the income-side of the NIPAs—belies the relative (though downwardly revised) strength in final sales. Real GDI rose just 0.3 percent in the third quarter and is up just 1.1 percent over the past year.

  • 12.20.2011
  • Housing Starts
  • New privately-owned housing starts improved significantly in November, increasing 9.3 percent to 685,000 seasonally-adjusted annualized units. The improvement was driven by increases in both single-family and multifamily housing starts. In November, single-family housing starts increased for the second consecutive month, improving 2.3 percent to 447,000 seasonally-adjusted annualized units. November’s improvement follows an upwardly revised increase of 3.6 percent; however, compared to November 2010, single-family housing starts are down 1.5 percent. Comparatively, multifamily housing starts improved 25.3 percent to 238,000 seasonally-adjusted annualized units. November’s performance marks the highest level of multifamily starts since September 2008 (283,000 seasonally-adjusted annualized units). On a year-over-year basis, multifamily housing starts are up 145.4 percent.

    New privately-owned housing units authorized improved for the second consecutive month, increasing 5.7 percent to 681,000 seasonally-adjusted annualized units. Single-family housing permits increased 1.6 percent 435,000 seasonally-adjusted annualized units. While multifamily housing permits rose even more, increasing 13.9 percent to 246,000 seasonally-adjusted annualized units. On a year-over-year basis, total housing units authorized are up 20.7 percent, with single-family housing permits up 3.6 percent and multifamily housing permits, which tend to be more volatile, up 70.8 percent.

  • 12.15.2011
  • Industrial Production
  • Industrial production edged down 0.2 percent (nonannualized) in November, after jumping up 0.7 percent in October. On a year-over-year basis, overall production is up 3.7 percent. Manufacturing production fell 0.4 percent in November, almost completely reversing its 0.5 percent gain in October. Some of the manufacturing weakness was tied to auto production—which plummeted 3.4 percent during the month. However, even after excluding the auto sector, manufacturing production still fell 0.2 percent. Both durable and nondurable manufacturing output slipped in November. The manufacturing sector as a whole is up 3.8 percent over the past year. Outside manufacturing, mining production posted its ninth straight monthly gain, ticking up 0.1 percent in November, helping to push its 12-month growth rate up to 6.7 percent. Electric and gas utilities output slipped down 0.7 percent in November, nearly reversing an upwardly revised 0.8 percent increase in October. Capacity utilization declined by 0.2 percentage points to 77.8 percent in November but is still more than 10 percentage points above its recent cyclical low of 67.3 percent in June 2009.
  • 12.13.2011
  • Retail Sales
  • Retail sales edged up 0.2 percent in November following an upwardly revised 0.6 percent gain in October, and are up 6.8 percent on a year-over-year basis. While auto sales posted another fairly strong gain (up 0.7 percent in November) retail sales excluding that sector were still up 0.2 percent during the month. However, cross-category performance was mixed. The strongest gains were seen at electronics and appliance stores (up 2.1 percent) and nonstore retailers (up 1.5 percent) perhaps offering evidence of swifter-than-usual holiday sales. Those gains were partially offset by sales decreases in miscellaneous store retailers, building material and supplies dealers, and food and beverage stores.“Core” retail sales (sales excluding autos, building supplies, and gas stations)—a less noisy indicator of the trend in consumption growth—rose 0.2 percent in November, echoing the top-line figure. The 3-month annualized growth rate in core retail sales stands at 6.2 percent, continuing to hover just above its 12-month growth rate of 5.5 percent, which may be a tentative sign of continued strength.
  • 12.06.2011
  • Factory Orders
  • New orders for manufactured goods fell 0.4 percent (nonannualized) in October after posting a 0.1 percent revised decline in September (which had marked a 0.3 percent increase before revisions). On a year-over-year basis, new orders continued to post double-digit gains of 10.8 percent in October, up slightly from September’s 10.1 percent yearly gain, but down from the 12.7 percent average yearly growth seen through August. Although factory orders marked a headline decrease, several categories showed strength including shipments (up 0.6 percent) and inventories (up 0.9 percent) with the nondurable inventory sub-category climbing 1.7 percent. Offsetting the increases were weakness in the categories of transportation goods (down 5.1 percent), durable goods (down 0.5 percent), nondurables (down 0.3 percent), and non-defense capital goods excluding aircraft (down 0.8 percent). Looking at the 3-month annualized growth rate, capital goods orders are up 6.1 percent and core capital goods rose at a 10.4 percent pace.
  • 12.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) came in above consensus expectations, jumping from 50.8 to 52.7 in November to the diffusion index’s highest level since June 2011. November’s gain was driven largely by substantial gains in the production and new orders components. The production component jumped up a whopping 6.5 percent to an index level of 56.6 in November, its strongest monthly gain since July 2009. New orders also posted a sizeable gain in November, increased 4.3 points. This comes on the heels of a 2.8 point improvement in the series in October, and now the series has risen 7.5 points from a recent index low of 49.2 in July. Gains in production and new orders were partly offset by moderate declines in the employment and supplier deliveries components. The index for manufacturing employment fell 1.7 points to 51.8 in November, following a slight 0.3 point decrease in October; while the supplier deliveries index edged just south of its growth threshold of 50 for the first time since May 2009.
  • 11.30.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—grew at an annualized rate of 2.3 percent in the third quarter, following a downward revision from a 3.1 percent increase. The revision reflects reduced output growth, which had its estimate fall from 3.8 percent to 3.2 percent, and higher growth in hours worked, which is now estimated to be 0.8 percent. Hourly compensation was revised down for the third quarter as well, from a 0.6 percent increase to a 0.2 percent decline. An even larger downward revision was made to second quarter hourly compensation, showing that the series declined 0.2 percent rather than having increased 2.7 percent. After adjusting for price changes, real hourly compensation was revised down 0.8 percentage points in the third quarter and 2.8 percentage points in the second quarter. The third-quarter decline in hourly compensation nearly offset the decline in productivity, leaving unit labor costs relatively unchanged at a 2.5 percent drop. However, unit labor costs in the second quarter were dragged down by the drop in hourly compensation, as the second quarter estimate fell from a 2.8 percent increase to a 0.1 percent decline. On a year-over-year basis, unit labor costs were revised from 1.2 percent growth to just 0.4 percent.
  • 11.28.2011
  • New Home Sales
  • Sales of new single-family homes rose 1.3 percent in October to a seasonally-adjusted annual rate of 307,000 units. October’s increase is down from September’s revised 3.4 percent gain (previously 5.7 percent). On a year-over-year basis, sales of new single-family homes jumped 8.9 percent in October after falling 4.11 percent in September. Sales activity was strongest in the Midwest and West regions, where sales rose 22.2 percent and 14.9 percent, respectively. Conversely, sales were flat in the Northeast and declined in the South by 9.5 percent. The median sales price of a new single-family home fell for the fourth consecutive month in October, declining 0.5 percent to $212,300. Year-over-year, however, the median new-home price is up 4 percent. The number of new single-family homes for sale was flat in October at a seasonally adjusted annual rate of 162,000 units, representing 6.3 months of supply at the current sales rate.
  • 11.23.2011
  • Durable Goods
  • New orders for durables fell 0.7 percent (nonannualized rate) in October after a sharp downward revision to September’s orders—which were revised down from a 0.8 percent decline to a 1.6 percent drop. Despite the near-term softness, the year-over-year growth rate in new orders stands at 7.5 percent. Much of that weakness in the near term has been tied to orders for transportation equipment (largely aircraft orders). Excluding transportation, new durables orders rose 0.7 percent in October, are trending at an annualized growth rate of 4.5 percent over the past three months, and are up 11.7 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—plummeted 1.8 percent in October and was revised down from a 2.4 percent increase to 0.9 percent gain in September. Still, the longer-term (12-month) growth rate in the series improved to 9.2 percent in October. Shipments of durables jumped up 1.3 percent in October, more than reversing a 0.5 percent decrease in September, and are up 9.2 percent over the past year. Durables shipments excluding transportation equipment rose 0.2 percent in October, following up a slight 0.1 percent decrease in September. After a brief pause in September, manufacturers’ resumed stocking inventories of durables, adding 0.5 percent in October. Durables inventories have grown nearly 20 percent since the end of the recession (June 2009).
  • 11.22.2011
  • GDP
  • Real GDP in the third quarter was revised down from 2.5 percent to 2.0 percent, pulling its four-quarter growth rate down 0.1 percentage points (pp) to 1.5 percent, according to the second estimate from the Bureau of Economic Analysis (BEA). The 0.5 pp headline knock-down in the third quarter looks a lot worse on the surface than the details would suggest. Importantly, the estimate of real final sales of domestic product (GDP less inventories) was untouched during the revision and still stands at 3.6 percent, compared to a gain of just 1.6 percent in the second quarter. The bulk of the downward revision came as the change in private inventories was adjusted down from a $5.4 billion increase to an $8.5 billion decline, which subtracted an additional 0.5 pp from real GDP growth during the quarter. Swings of this magnitude are fairly common because the BEA has scant current-quarter evidence on inventories at the time of the advance estimate and it relies heavily on extrapolating near-term trends. Elsewhere, the growth rate in real consumption was nudged down from 2.4 percent to 2.3 percent, shaving off a tenth of a percentage point (pp) from its, still sizable, 1.6 pp contribution to real GDP growth. Nonresidential fixed investment was revised down slightly—from a 16.3 percent jump up to a 14.8 percent gain in the third quarter, still above its 4-quarter growth rate of 8.9 percent. Residential investment was essentially unrevised, and so was real government consumption (which remained flat). Real exports were actually revised up slightly during the revision—from 4.0 percent to 4.3 percent—despite continued angst from across the pond. Also, real imports were revised down from 1.9 percent to 0.5 percent in the third quarter, though since they enter into GDP accounting as a subtraction, this added nearly 0.3 pp to output growth. Perhaps the only worrisome news in this report is the first look at real GDI (gross domestic income). Real GDI rose just 0.4 percent in the third quarter. While this is a very slight improvement from a scant 0.2 percent growth rate in the second quarter, it is down markedly from its 2010 growth rate of 2.5 percent.
  • 11.21.2011
  • Existing Home Sales
  • Sales of existing single-family homes rose 1.6 percent in October from a downwardly revised September figure of 4.31 million units to a seasonally adjusted annual rate of 4.38 million units sold. Across the Nation, the Northwest was the only area to show a negative monthly change where sales declined 5.2 percent. The West showed the most monthly improvement by gaining 3.8 percent in sales from September. Compared to this time last year, total existing single-family home sales have improved by 13.8 percent, while the median price of homes has declined by 5.8 percent to $161,600. Inventories continue to fall and are down to 2.86 million units, a 12.2 percent decline from last year. The supply of housing also declined to a 7.8 months supply, which is a 23.5 percent annual decline—the lowest supply level since January.
  • 11.17.2011
  • Housing Starts
  • October single-family housing starts rose 3.9 percent from a downwardly revised September figure to a seasonally-adjusted annual rate of 430,000 units. Across the nation, housing started were varied from an 11.3 percent increase in the South to a 10.2 percent decline in the West. On a year-over-year basis, total single-family housing starts were down just 0.9 percent from October 2010, which is a considerable improvement from the 7.4 percent decline in September. Overall single and multi-family housing units were down 0.3 percent from September and up 16.5 percent from October 2010.

    The authorization of single-family home construction also improved in October by 434,000 seasonally-adjusted units, which is a 5.1 percent increase from September and a 6.6 percent increase from October 2010. The Northeast showed the most improvement with a 13.1 percent increase in authorizations, while the Midwest fell 4.1 percent which is the first negative month-to-month percent change since February for the region. Total authorizations of single and multi-family housing units were up 10.9 and 17.7 percent from last month and this time last year, respectively.

  • 11.16.2011
  • Industrial Production
  • Industrial production jumped up 0.7 percent (nonannualized) in October, following a downwardly revised 0.1 percent decrease in September. However, that downward revision that led to the first decrease in IP since the spring was almost entirely due to a downward revision in mining output (from a 0.8 percent gain to a 0.5 percent decline). On a year-over-year basis, overall production is up 3.9 percent. Manufacturing production accelerated in October, increasing 0.5 percent, compared to increases of 0.3 percent in both September and August. Some of the strength in manufacturing production was tied to a 3.1 percent spike in autos production during the month. Excluding autos, manufacturing output rose 0.3 percent in October and is up 3.8 percent over the past year (compared to a 4.1 percent growth rate for manufacturing as a whole). Outside manufacturing, mining production, spiked up 2.3 percent in October, more than reversing the downwardly revised 0.5 percent decrease in September, and helping to push its 12-month growth rate up from 4.5 percent to 6.0 percent during the month. Electric and gas utilities output edged up 0.1 percent, following sizeable declines of 3.4 percent and 1.6 percent in September and August, respectively. Capacity utilization rose from 77.3 percent in September to 77.8 percent in October, and has steadily improved from its recent cyclical low of 67.3 percent in June 2009.
  • 11.03.2011
  • Productivity and Costs
  • Nonfarm business sector productivity?real output per hour of all persons—rose at an annualized rate of 3.1 percent in the third quarter. Second-quarter productivity was revised up from a 0.7 percent decline to a slight 0.1 percent loss, entirely due to upwardly revised output growth. The third quarter growth was driven by output, which grew 3.8 percent over the quarter, while hours increased just 0.6 percent. Hourly compensation increased 0.6 percent. After adjusting for price changes, real hourly compensation fell 2.4 percent, pulling its four-quarter change down to a 1.4 percent decrease. As a result of the stronger productivity numbers and weaker compensation growth, unit labor costs fell 2.4 percent in the third quarter. On a year-over-year basis, unit labor costs have increased 1.2 percent.
  • 11.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) fell 0.8 index point to 50.8 in October. This small decline keeps the index near the recent low of 50.6, and leaves the index just 0.8 point above its growth threshold of 50. The manufacturing PMI is 5.3 points below its 12-month average of 56.1. The decline in the overall index was largely driven by a sharp decline in the inventories index, which fell 5.3 points to 46.7, its lowest reading in over a year. A smaller 1.1 point drop also occurred in the production index, falling to 50.1 in October and erasing a 2.6 point gain in September. Losses of 0.3 point and 0.1 point were also recorded for the employment index and supplier deliveries index, respectively. The only positive component in October was the new orders index, which added 2.8 points. The new orders index now stands at 52.4, its first venture above the growth threshold of 50 in four months. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) fell 15.0 points to 41.0 in October, the lowest point for that index since April 2009.
  • 11.01.2011
  • Construction Spending
  • After downward revisions to July and August, private construction spending ticked up 0.6 percent (annualized rate) in September. Residential and non-residential spending both increased, 0.9 percent and 0.3 percent, respectively. Looking over the past 12-months, private construction spending is up almost 4.0 percent with non-residential spending driving the gain. Non-residential spending is up 7.4 percent from this time last year, with September marking its fourth straight annual percentage increase. Commercial, educational, transportation, and power are driving the increase while sectors like lodging and religious are struggling to break out of trend declines or flat activity. Within commercial, warehouse construction spending is the best performer, posting annual gains for the past five months with September spending up 38 percent since September 2010. On the residential side, multi-family construction (up 6.5 percent over the year) continues to outperform single-family home construction (−0.1 percent since this time last year). Home improvement spending continues on a bumpy path. After posting double-digit percentage gains in the spring, the past couple of months its been down slightly.
  • 10.27.2011
  • New Home Sales
  • Sales of new single-family homes rose 5.7 percent in September to a seasonally-adjusted annual rate of 313,000 units. September’s improvement follows an upwardly revised 0.3 percent decline in August. On a year-over-year basis, sales of new single-family homes fell 0.9 percent in September. Sales activity was strongest in the South and West regions, where sales rose 11.2 percent and 9.7 percent, respectively. Conversely, sales declined in the Northeast (4.2 percent) and Midwest (12.2 percent). The median sales price of a new single-family home fell for the third consecutive month in September, declining 3.1 percent to $204,400. The number of new single-family homes for sale was flat in September at a seasonally-adjusted annual rate of 163,000 units, representing 6.2 months of supply at the current sales rate.
  • 10.27.2011
  • GDP
  • Real GDP rose at an annualized rate of 2.5 percent in the third quarter, keeping the 4-quarter growth rate at 1.6 percent. Third quarter’s growth rate tops gains made in both the second and first quarters, which grew 1.3 percent and 0.4 percent, respectively. The acceleration relative to the previous two quarters primarily reflects a pickup in consumption growth and real BFI growth, and a deceleration in the decline of state and local government spending. These gains were somewhat offset by smaller increases in private inventories.

    PCE was the big driver of this quarter’s accelerated growth, increasing its contribution to real economic output from 0.5 percentage points (pp) to 1.7 pp. Durable goods made a big rebound from its 5.3 percent drop in the second quarter, jumping 4.1 percent in the third. Services also gained in the quarter, increasing its growth rate from 1.9 percent to 3.0 percent. Real BFI still came in strong as well, growing 16.3 percent, and contributing 1.5 pp to real growth. The jump was thanks to gains in equipment and software investment growth, which accelerated from 6.2 percent to 17.4 percent. This increase in software investment was somewhat offset but a decline in structures investment to 13.3 percent. A slight slowdown occurred in residential investment growth. Government spending came in flat, as gains in federal spending offset the losses in state and local spending. Federal spending was relatively flat, but there was a slower drop in state and local spending in the third quarter, which declined only 1.3 percent. Net exports continued to add 0.2 pp after increases in both exports (4.0 percent) and imports (1.9 percent). Private inventories slowed to an addition of $5.4 billion, dropping its contribution to real GDP to &minius;1.1 pp. Given the slowdown in inventories accumulation, along with large gains in consumption and fixed investment, final sales of domestic product grew 3.6 percent in the third quarter, adding a full 2.0 percentage points to second quarter’s figure.

  • 10.26.2011
  • Durable Goods
  • New orders for durables fell 0.8 percent (nonannualized rate) in September, following a 0.1 percent decline in August. The 12-month growth rate also dropped in September, falling from a slightly revised 12.4 percent to just 4.9 percent, hitting its lowest mark since December 2009. Excluding transportation, new orders grew 1.7 percent in September after August's numbers were revised down to a 0.4 percent loss. New orders excluding transportation are now up 8.1 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—rose 2.4 percent, following a downwardly revised (but still positive) 0.5 percent increase in August. After September's data and revisions, the 12-month growth rate in the series remained at 8.6 percent. Shipments of durables fell 0.7 percent in September, but the drop was somewhat offset by an upwardly revised August (0.1 percent). Durables shipments are up 7.3 percent on a year-over-year basis. Durables shipments excluding transportation equipment fell 0.1 percent during the month but are still up 9.3 percent over the past year. Durables inventories added to recent gains, climbing another 0.1 percent.
  • 10.25.2011
  • Housing Price Indexes
  • The S&P Case-Shiller Housing Price Index rose 0.2 percent from July to August. Ten of the 20 cities covered saw positive month-to-month increases, including Cleveland—up 0.3 percent. On a year-over-year basis the 10- and 20-City composites have improved slightly but remain in negative territory, down 3.5 and 3.8 percent, respectively. Although 16 of the 20 MSAs have improved their annual rates. Detroit and Washington D.C. are the only two with positive figures, while Minneapolis remains the weakest on the index, down 8.5 percent. Both indexes are now back to their mid-2003 levels.

    The FHFA Housing Price Index fell 0.1 percent from July to August. Compared to August 2010, housing prices have fallen by 4 percent which is nearly even with July’s annual figures. Across the country, monthly prices changes were modest. Prices ranged from a 1.3 percent decline in the West North Central to a 0.9 percent increase in the South Atlantic. On an annual basis, all nine census divisions experienced price declines from 7.6 percent in the Mountain region to 1.9 in the East South Central. On the whole, prices are 19.1 percent below the April 2007 peak.

  • 10.20.2011
  • Existing Home Sales
  • Sales of existing single-family home sales fell 3.6 percent from August to September but remain 12.2 percent higher than this time last year. Across the nation there were no positive month-to-month changes where sales rates ranged from no change in The Northwest to a 7.9 decline in the West. Median home prices fell 3.9 percent from September 2010, to $165,000. Inventories of existing single-family homes fell to an 8.2 months supply or a 3.2 percent decline from August to just under 3 million units which is an 11.2 percent decline from September 2010.
  • 10.19.2011
  • Housing Starts
  • New privately-owned housing improved in September, increasing 15.0 percent to 658,000 seasonally-adjusted annualized units. Single-family housing starts improved slightly, increasing 1.7 percent to 425,000 seasonally-adjusted annualized units. The improvement follows an upwardly revised 2.8 percent decline in August. On a year-over-year basis, single-family housing starts are down 4.9 percent. Single-family housing starts improved in the Northeast and Midwest regions, increasing 20.6 percent and 46.0 percent, respectively. Single-family housing starts declined in the South, falling 9.4 percent and were flat in the West. Multi-unit housing starts (which tend to be more volatile than single-family housing starts) rose 51.0 percent in September to 233,000 seasonally-adjusted annualized units and are up 55.3 percent on a year-over-year basis.

    Total housing units authorized declined in September, falling 5.0 percent to 594,000 seasonally-adjusted annualized units. Authorized permits for single-family homes declined 0.2 percent to 417,000 seasonally-adjusted annualized units. On a year-over-year basis, authorized permits are up 3.5 percent over September 2010’s pace. Authorized permits for multi-unit structures fell 14.5 percent to 177,000 seasonally adjusted annualized units and are up 11.3 percent on a year-over-year basis.

  • 10.18.2011
  • PPI
  • The Producer Price Index (PPI) for finished goods jumped up at an annualized rate of 9.8 percent in September, after a flat reading in August. The 12-month growth rate in the PPI rose from 6.5 percent to 7.0 percent during the month and is just 0.2 percentage points below its recent cyclical high of 7.2 percent in July. Energy prices—driven by rising gasoline prices—spiked up 31.3 percent in September after three consecutive decreases. The PPI for finished consumer foods increased 6.9 percent in September after a 13.8 percent increase in August and is now up 8.1 percent on a year-over-year basis. Excluding food and energy prices, the (“core”) PPI rose 2.7 percent in September, compared to a 0.7 percent increase in August. Over the past three months, the annualized growth rate in the core PPI is 3.0 percent, modestly above its 12-month growth rate of 2.5 percent. Further back on the production line, pricing pressure was subdued relative to recent trends, as core intermediate goods rose 1.9 percent and core crude goods—which are up 21 percent over the past year—rose 12.6 percent in September.
  • 10.17.2011
  • Industrial Production
  • Industrial production increased 0.2 percent (nonannualized) in September, following downwardly revised estimates in August (up 0.2 percent to flat) and July (up 1.1 percent to 0.9 percent). On a year-over-year basis, overall production is up 3.2 percent, continuing to decelerate from its recent cyclical high of 7.7 percent in May 2010, but remains above its 25-year growth rate of 2.2 percent. Manufacturing production climbed up 0.4 percent in September and has risen at an annualized rate of 5.8 percent over the past three months, compared to its 12-month growth rate of 3.9 percent. After stripping out motor vehicles production, manufacturing output rose 0.3 percent in September after a 0.3 percent gain in August. Outside manufacturing, mining production continued to post strong gains, jumping up 0.8 percent in September and is now up 5.2 percent on a year-over-year basis (for comparison, the 10-year growth rate in mining output is 0.6 percent). Electric and gas utilities output slipped down 1.8 percent in September, following up a 2.9 percent decline in August. Capacity utilization edged up 0.1 percentage points to 77.4 percent of capacity in September and has steadily improved from its recent cyclical low of 67.3 percent in June 2009.
  • 10.13.2011
  • Factory Orders
  • New orders for manufactured goods slipped down 0.2 percent (nonannualized) in August, following a downwardly revised 2.1 percent gain in July. Still, the series has risen swiftly over the past year and is up 14.1 percent. While July’s increase was largely due to a bounce back in transportation orders, the overall trajectory was unaffected by swings in that sector, as new orders of transportation goods still fell 0.2 percent in August. Despite the headline decrease, nondefense capital goods (excluding aircraft) orders jumped up 2.9 percent in August, following an upwardly revised 0.2 percent gain in July. This should be a positive sign for Q3 equipment and software investment. Shipments of manufactured goods, which were revised down from a 1.6 percent gain in July to 1.2 percent, slipped down 0.2 percent in August, pulling its 3-month growth rate annualized growth rate down from 7.1 percent to 6.4 percent. The near-term growth rate in shipments is well below its 12-month percent change of 12.1 percent, which signals a softening trajectory (though one that is still robust relative to historical standards). Inventory accumulation continued in August, as manufacturers added 0.4 percent to their current stockpiles. However, the pace of accumulation has slowed over the past four months or so, compared to its average monthly increase over the prior 12 months of 1.1 percent. The months’ supply of inventories relative to shipments remained at 1.3 months in August, consistent with its levels from the beginning of 2010, where the series settled following a swift decline from its recent high during the last recession of nearly 1.5 months.
  • 10.03.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) rose 1.0 index point to 51.6 in September. This small increase contrasts with a six-month slowdown from a recent high of 61.4 that left the index just 0.6 points above its growth threshold of 50 as of August. Still, the manufacturing PMI is 5 points below its 12-month average of 56.6. The gain in the overall index was largely driven by gains in the production and employment components. The production index jumped up 2.6 points to 51.2 in September, after a brief dip into the red in August. It remains below its level of 52.3 in July. The employment index rose 2.0 points during the month, more than reversing a 1.8 point dip in August. One other component registered an increase in September: Supplier deliveries increased 0.8 points to 51.4. On the other hand, the new orders index remained slightly in the red at 49.6 in September, and inventories edged down 0.3 points to 52.0. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) increased 0.5 points to 56.0 in September, but it is still well below a recent cyclical high of 76.5 in May.
  • 10.03.2011
  • Construction Spending
  • In August, private construction spending was essentially flat (+0.4 percent) after the July number was revised down. Residential (+0.7 percent) and nonresidential (+0.2 percent) spending both posted slight gains over the month. On the residential side, there was not a stand-out sector; single-family, multifamily, and improvements all posted similarly sized small upward movements. Looking over the year, spending on single-family construction is down 3.5 percent, while spending on multifamily construction is up 13.3 percent and spending on improvements is up 10.5 percent. On the nonresidential side, lodging had the steepest decrease over the month (−6.9 percent), while power had the strongest month (+2.9 percent). Over the year, lodging is also the weakest sector (−31.7 percent), and power is the strongest (25.9 percent). Overall, total private construction spending is up 5.6 percent since August 2010.
  • 09.29.2011
  • Real GDP
  • Real GDP was revised up in the second quarter from an annualized growth rate of 1.0 percent to 1.3 percent, according to the third estimate from the Bureau of Economic Analysis. On a year-over-year basis, real GDP growth is now up 1.6 percent. Personal consumption expenditures, while still relatively soft in the second quarter, were revised up from a 0.4 percent gain to 0.7 percent, adding 0.2 percentage points to real GDP growth. Most of the upward adjustment to consumption came from services, which were revised up from 1.4 percent to 1.9 percent during the quarter. Net exports were the other contributor to the overall upward revision, as real exports were adjusted up to 3.6 percent from 3.1 percent in the previous estimate. Real imports were knocked down from 1.9 percent to 1.4 percent. Together, these revisions to foreign activity added 0.2 percentage points to real GDP growth in the second quarter. Elsewhere, the investment picture was virtually unchanged during the revision, with residential investment increasing 4.2 percent and business fixed investment rising 10.3 percent in the second quarter.

    The only significant downward revision was to the change in private inventories, which edged down by a little over a billion dollars, subtracting slightly less than 0.1 percentage points from output growth. Given the upwardly revisions to consumption and exports, final sales of domestic product was boosted by 0.4 percentage points to 1.6 percent in the second quarter, compared to a flat reading in the first quarter. Over the past year, final sales are up 1.9 percent. Perhaps offsetting the upward revision to real GDP, real Gross Domestic Income (GDI)—an alternative measure of output growth calculated from the income side of the NIPA accounts—was revised down from 1.5 percent to 1.3 percent in the second quarter. Still, on a year-over-year basis, real GDI, at 2.0 percent, is running slightly higher than the growth rate in real GDP.

  • 09.28.2011
  • Durable Goods
  • New orders for durable goods slipped down 0.1 percent (nonannualized) in August, following a 4.1 percent jump-up in July, and rebounding from an 1.3 percent decrease in June (that was revised up from a 2.1 percent drop). Even though the series has decreased in four of the last eight months, its 12-month growth rate improved, rising from 9.5 percent in July to 12.3 percent in August, and is well above its recent low of 6.7 percent in April. Excluding transportation, new orders fell 0.1 percent in August and are only up 7.8 percent over the past year. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—rose 1.1 percent in August, following an upwardly revised (but still negative) 0.2 percent decrease. The 6-month annualized growth rate in the series improved to 18.4 percent in August, well above its 12-month growth rate of 8.6 percent. Shipments of durables decreased 0.2 percent in August after a downwardly revised 2.1 percent increase in July, and are up 8.0 percent over the past year. Durables shipments excluding transportation equipment jumped up 1.3 percent during the month and are up 9.2 percent over the past year. Durables inventories continued to swell in August, increasing 0.9 percent.
  • 09.21.2011
  • Existing Home Sales
  • Existing single-family home sales rose 8.5 percent to a seasonally-adjusted annual rate of 4.47 million units sold in August. This is up from the 4.12 million units sold in July, and 20.2 percent above the 3.72 million unit sales pace of August 2010. Regionally, the West was most active as sales rose 18.9 percent, while median homes prices declined 14.1 percent for the region. The median price of existing single-family homes fell in all regions to a U.S. average of $168,400 in August, down 5.4 from one year ago. Inventories also fell to a supply level of 8.3 months which is down 26.5 percent from last year.
  • 09.20.2011
  • Housing Starts
  • Housing starts continued to remain weak in August, falling 1.4 percent to 417,000 annualized units. August’s decline follows a downwardly revised 5.8 percent decline in July. On a year-over-year basis, single family housing starts are down 2.3 percent. Single-family housing starts improved the South, increasing 7.6 percent; however, housing starts fell in the Northeast, Midwest, and West, falling 14.6 percent, 22.7 percent, and 2.2 percent, respectively. While single-family housing starts remained weak in August, authorized permits improved, increasing 2.5 percent to 413,000 annualized units. On a year-over-year basis, authorized permits are up 2.0 percent over August 2010’s pace.
  • 09.15.2011
  • Industrial Production
  • Industrial production increased 0.2 percent (nonannualized) in August, following a 0.9 percent jump up in July. Over the past year, industrial production is up 3.4 percent. Manufacturing production climbed up 0.5 percent in August, following a 0.6 percent in July. Like July’s reading, manufacturing output was bolstered by a relatively large jump up in autos production—which has averaged a 3.1 percent gain over July and August (but still hasn’t returned to its level prior to the Japanese earthquake). After stripping out motor vehicles production, manufacturing output rose 0.4 percent in July and is trending at an annualized growth rate of 3.2 percent over the past three months, slightly below its year-over-year growth rate of 3.6 percent. Outside manufacturing, electric and gas utilities output more than reversed a 2.8 percent (weather-induced) jump, falling 3.0 percent in August. Mining output continued its string of steady increases, rising 1.2 percent in August, and is now up 5.6 percent over the past year. Capacity utilization was revised down a few tenths of a percent over the previous three months (May through July), but rose roughly 0.1 percentage points to 77.4 percent of capacity in August.

  • 09.14.2011
  • Retail Sales
  • Retail sales were flat in August, underwhelming expectations for a slight 0.2 percent increase. Perhaps even more disappointing is that it follows a downwardly revised 0.3 percent increase in July (down from 0.5 percent). Another downward surprise was a 0.3 percent decline in auto sales during August, reversing a 0.3 percent gain in July. Excluding motor vehicle and parts dealers, retail sales rose just 0.1 percent in August, and is trending at an annualized rate of just 2.2 percent over the past three months, compared to a year-over-year growth rate of 7.3 percent. Sales were mixed across broad categories, with the largest increase coming from sporting goods, hobby, book, and music stores (up 2.4 percent). On the other hand miscellaneous store retailers saw a 2.2 percent decline in sales, nearly offsetting a 2.4 percent increase in July. Interestingly, sales at clothing and clothing accessories stores fell 0.7 percent during the month. Given that these data are not adjusted for price changes, it could signal a decline in apparel prices in tomorrow’s CPI report (especially given the recent decline in cotton prices). “Core” retail sales (sales excluding autos, building supplies, and gas stations) were unchanged in August, it’s worst monthly performance since December 2010. The 3-month annualized growth rate in core retail sales has fallen to 2.9 percent as of August, down from a recent high of 10.2 percent in March. Over the past year, the series is up 5.2 percent.
  • 09.14.2011
  • PPI
  • The Producer Price Index (PPI) for finished goods was unchanged in August, after rising at an annualized rate of 2.5 percent in July, following a 4.3 percent decline in June. The 12-month growth rate slipped from 7.2 percent to 6.5 percent as a result of August’s flat reading. Energy prices fell 11.2 percent in August, restraining overall producer prices. Still, the PPI excluding food and energy prices rose just 0.7 percent in August, following a somewhat elevated 5.5 percent increase in July. Over the past three months, the annualized growth rate in the core PPI is 3.4 percent, modestly above its 12-month growth rate of 2.5 percent. Further back on the production line, pricing pressure was mixed, as core intermediate goods rose slipped down 1.2 percent and core crude goods—which are up 24 percent over the past year—rose 21.2 percent in August.
  • 09.01.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—fell to a 0.7 percent decline in the second quarter after previously being estimated as a decrease of 0.3 percent. This is now a steeper decline than the 0.6 percent drop reported in the first quarter. Productivity is now up just 0.7 percent since last year, slower than the first quarter’s 1.2 percent gain. Real output was the culprit for the drop in productivity, as it was downwardly revised from 1.8 percent to 1.3 percent. Hours were unchanged at 2.0 percent. Hourly compensation received an extra 0.8 percentage point, jumping to 2.7 percent growth in the second quarter. However, after adjusting for price changes, real compensation remained negative at a 1.4 percent decline. The downward revisions to productivity and upward revisions to compensation boosted unit labor costs—compensation per hour divided by output per hour—from an initial estimate of 2.2 percent to a revised estimate of 3.3 percent. First quarter unit labor cost growth was also revised to 6.2 percent from 4.8 percent after revisions to first-quarter compensation. On a year-over-year basis, unit labor costs are now up 1.9 percent, its fastest pace since 2008.
  • 09.01.2011
  • Construction Spending
  • In July, spending on private construction ticked down 0.9 percent to a seasonally-adjusted annual rate of $514.5 billion. Declines in both residential and non-residential spending contributed to the top side decline. Despite the monthly decline, large upward revisions to spending levels for May and June suggest an upward (rather than flat) trend in private construction spending. In fact, private construction spending is up 5.5 percent over the year with both residential and non-residential showing increases of 5.3 percent and 5.7 percent, respectively over their July 2010 levels. On the residential side, that gain is entirely attributable to spending on residential improvements (up 21.8 percent over the year) as spending on single-family and multi-family construction is down over a 12-month period. In terms of non-residential spending, several sectors are showing over the year gains, including commercial (especially automotive and warehouse), educational, and power.
  • 09.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) continued to stagnate, edging to from 50.9 in July to 50.6 in August, hovering just 0.6 points above the ISM’s growth threshold of 50. Performance was mixed across the five components that comprise the PMI. On the positive side, the new orders index improved from 49.2 to 49.6 in August (though remained below the diffusion index’s threshold of 50), the inventories index rose from 49.3 to 52.3 during the month, and supplier deliveries edged up as well. On the other hand, the production index slipped down from 52.3 to 48.6 during the month, its first dip below 50 since May 2009. The index has now fallen 20.4 points since March 2011. The employment index ticked down from 53.5 in July to 51.8 in August, its lowest value since November 2009, and like the production index, has fallen precipitously since early this year and has declined 12.4 points since a recent cyclical high in February. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) continued to ebb, falling 3.5 points to 55.5 in August and is now down 30 points since April.
  • 08.31.2011
  • Factory Orders
  • New orders for manufactured goods increased 2.4 percent (nonannualized) in July, pulling its 3-month annualized growth rate up to 10.8 percent, from −2.8 percent in June. Year-over-year new order growth rose 13.9 percent compared to 13.5 percent in June. Excluding transportation, new orders inched up 0.9 percent in July and are up 14.7 percent over the past year. The 3-month annualized growth rate for new orders excluding transportation rebounded slightly from its slow 2.3 percent growth in June, increasing to 5.4 percent in July. Nondefense capital goods excluding aircraft orders fell 0.9 percent. Durable goods orders rose 4.1 percent while nondurable goods orders added 1.0 percent in July. Shipments of manufactured goods grew 1.6 percent in July, pulling its 3-month annualized growth rate up from 0.6 percent in June to 9.0 percent. Inventory accumulation continued to recent slow pace, increasing just 0.5 percent in July and 6.6 percent over the past three months, well below its 12.8 percent pace since last July.
  • 08.26.2011
  • Real GDP
  • Real GDP was revised down by 0.3 percentage points to 1.0 percent in the second quarter, bringing its 4-quarter growth rate down to 1.5 percent (its slowest growth rate since 2009:Q4), though the details aren’t as bad as the top-line number looks. Much of the downward revision came from exports and inventories, two series the BEA has scant data on as of the advance release. Second quarter real export growth was roughly chopped in half during the revision—from 6.0 percent to 3.1 percent—subtracting 0.4 percentage points from the initial estimate. Imports were nudged up slightly to a 1.9 percent increase in the second quarter. Private inventories (the other major source of the downward revision) were knocked down by roughly $9 billion, switching its contribution to output growth from adding 0.2 percentage points to subtracting 0.2 percentage points in the second quarter. Real personal consumption expenditures were revised up from an initial flat reading to a slight 0.4 percent increase in the second quarter, but that added a little over two tenths to real GDP growth. Another positive was the upward revision to nonresidential investment. Overall BFI was revised up from a 5.8 percent increase to a 9.9 percent gain in the second quarter, as the estimates for both structures and equipment & software investment were boosted. Interestingly, structures investment growth was nearly doubled—from an 8.2 percent gain to a 15.8 percent increase—and now more than offsets its first quarter decrease of 14.4 percent. On a year-over-year basis, structures investment is up 3.4 percent, its strongest growth rate since 2008:Q3. Along with the second estimate of real GDP, we get our first glance at Gross Domestic Income (GDI)—which is calculated using an income approach instead of an expenditure approach. The signal coming from real GDI is actually a shade better than real GDP. Real GDI rose 1.5 percent in the second quarter, following a 2.4 percent increase in the first. And, over the past 4 quarters is up 2.0 percent, compared to just a 1.5 percent growth rate from real GDP.
  • 08.24.2011
  • Durable Goods
  • New orders for durable goods jumped up 4.0 percent (nonannualized) in July, rebounding from an 1.3 percent decrease in June (that was revised up from a 2.1 percent drop). A strong July reading combined with upward revisions have turned its 3-month annualized growth rate from a 7.1 percent decline to a 20.3 percent increase. The 12-month growth rate in durables orders improved from 8.6 percent in June to 9.2 percent in July. Much of July’s increase was driven by new orders for autos, which spiked up 11.5 percent during the month. Still, excluding transportation equipment, new orders rose 0.7 percent in July, pushing its near-term (3-month) annualized trend up from 5.1 percent to 8.5 percent, just slightly softer than its 12-month trend of 9.6 percent. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—fell 1.5 percent in July, following a modest 0.6 percent gain in June. This led to a slight loss of momentum in its near-term trend, but its year-over-year growth rate still stands at a robust 10.8 percent. Shipments of durables, increased 2.5 percent in July, following an upwardly revised 1.1 percent gain in June, and are now up up 7.0 percent over the past year. As was the case with new orders, shipments of autos comprised much of the overall gain. Though after excluding transportation equipment, shipments still increased 0.9 percent in July. Durables inventories continued to swell in July, increasing 0.8 percent and, at a year-over-year growth rate of 12.6 percent, remain near its current cyclical high.
  • 08.17.2011
  • PPI
  • The Producer Price Index (PPI) for finished goods rose at an annualized rate of 2.5 percent in July, following a 4.3 percent decline in June. Over the past year, producer prices are up 7.2 percent. Energy prices fell 7.2 percent in July after a near 30 percent drop in June, while producer prices for finished consumer foods rose 7.1 percent during the month. Excluding food and energy items, (“core”) producer prices jumped up 5.5 percent in July, though the release noted that an outsized jump in tobacco prices accounted for roughly 25 percent of the increase. Over the past three months, the annualized growth rate in the core PPI is 3.9 percent, modestly above its 12-month growth rate of 2.5 percent. Further back on the production line, pricing pressure was relatively subdued for these series, as core intermediate goods rose just 2.5 percent, and core crude goods—which are up 27 percent over the past year—rose 8.2 percent in July.
  • 08.16.2011
  • U.S. Trade Prices
  • In July, U.S. import prices increased 0.3 percent, rebounding from June’s 0.5 percent decline. Still, import prices are up 14 percent from a year ago, its highest growth rate since August 2008. The monthly gain was broad based across most major categories with a 0.6 percent gain in fuel driving the increase after declining 2.1 percent in June. Petroleum prices continued to post double-digit gains on a year-over-year basis with July marking a 48.9 percent increase.

    Non-oil import prices advanced 0.2 percent after declining 0.1 percent in June. July’s increase can be attributed to higher prices for consumer goods (up 0.4 percent) and nonfuel industrial supplies and materials (up 0.7 percent). While most import price categories posted gains for July, imported auto prices fell by 0.3 percent, the first decline since the beginning of the year. On a year-over-year basis, non-oil import prices advanced 5.5 percent, its strongest growth rate since September 2008.

    U.S. export prices fell 0.4 percent in July, its first decrease since July 2010. Gains in nonagricultural prices (up 0.2 percent) were offset by declining prices for agricultural commodities (down 4.3 percent). Although export prices declined on a monthly basis, they were up 9.8 percent from a year ago.

  • 08.16.2011
  • Single-Family Housing Starts and Permits
  • Single-family housing starts retreated in July, falling 4.9 percent to 425,000 annualized units. July’s decline follows downwardly revised 7.5 percent increase in single-family housing starts in June. On a year-over-year basis, single-family housing starts were down 0.9 percent in July. Moreover, with the downward revisions in June (447,000 from 453,000), single-family housing starts have not improved on a year-over-year basis since May 2010. Single-family housing starts improved in the Northeast and West regions, increasing 7.5 percent and 4.6 percent respectively while declining 22.6 percent in the Midwest region 4.2 percent in the South region. Authorized permits for single-family housing improved in July, increasing 0.5 percent to 404,000 annualized units; however, single-family housing permits were down 1.2 percent from July 2010’s pace.
  • 08.09.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—decreased 0.3 percent in the second quarter of 2011. Output increased 1.8 percent from 0.9 percent in the first quarter. Hours also continued to increase, 2.0 percent, from the first quarter estimate of 1.5 percent. Compensation and unit labor costs increased 1.9 percent and 2.2 percent, respectively in the second quarter. The NIPA revisions were incorporated into this release which show the first quarter of 2011 was revised down to −0.6 percent from an initial estimate of 1.8 percent. For 2010, nonfarm business sector productivity growth was revised up to 4.1 percent from 3.9 percent. However the 2010 unit labor cost revision to −2.0 percent, marks the largest annual decline in the series since it began in 1948. Productivity was also knocked down in 2009 and 2008 falling from 3.7 percent to 2.3 percent and 1.0 percent to 0.6 percent, respectively.
  • 08.03.2011
  • Factory Orders
  • New orders for manufactured goods decreased 0.8 percent (nonannualized) in June, pulling its 3-month annualized growth rate down to −4.5 percent, from 14.5 percent in May. Year-over-year new order growth rose 12.9 percent compared to 13.1 percent in May. Excluding transportation, new orders edged up 0.1 percent in June and are up 13.4 percent over the past year. However, the 3-month annualized growth rate for new orders excluding transportation, 1.3 percent in June, is markedly down from 13.1 percent in May. Nondefense capital goods excluding aircraft orders rose 1.1 percent. Durable goods orders decreased 1.9 percent while nondurable goods orders were flat (0.0 percent) for June. Shipments of manufactured goods increased 0.2 percent in March, pulling its 3-month annualized growth rate down to -1.0 percent from 11.0 percent in May. Inventory accumulation has slowed increasing only 0.2 percent for the month.
  • 08.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) continued to show signs of slowing, after a slight tick up in June, as the PMI fell from 55.3 to 50.9 in July (just above the ISM’s growth threshold of 50). Every sub-index that comprises the PMI lost ground in July. Notably, the index for new orders slipped down 2.4 index points to a level of 49.2, below the diffusion index&rsqo;s growth threshold of 50 for the first time since June 2009. The employment index decreased the most in July, falling from 59.9 to 53.5, its steepest monthly decline since October 2008. Also, the production index, which had reached a cyclical high of 69.0 in March has now fallen all the way to 52.3 as of July. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) continued its recent decline, slipping from 76.5 in May to 59.0 in June (its lowest level in a year).
  • 07.29.2011
  • GDP
  • Real GDP rose at an annualized rate of 1.3 percent in the second quarter, according to the advance estimate by the BEA. While, that would have been a deceleration compared to what we previously knew about the first quarter, it is now an acceleration compared to first quarter growth of just 0.4 percent (more on the revisions in a minute). The (now) acceleration relative to the first quarter primarily reflects a slowdown in import growth, an upturn in federal spending, and an acceleration in real BFI. Importantly, real personal consumption expenditures, which rose 2.1 percent in the first quarter, slowed to a near flat 0.1 percent gain in the second quarter, its smallest quarterly increase since the recession ended. Both durable and nondurable goods consumption decelerated relative to their respective first quarter gains. Durables consumption fell 4.4 percent in the second quarter, relative to a 11.8 percent jump up in the first, while nondurables consumption ticked up just 0.1 percent during the quarter. Services consumption rose 0.8 percent in the second quarter, below its 4-quarter growth rate of 1.1 percent. Real business fixed investment rose 6.3 percent in the second quarter, compared with a gain of 2.1 percent in the first quarter. The acceleration was driven by a rebound in structures investment, which jumped up 8.2 percent after a 14.4 percent decrease in the first quarter. Residential investment also accelerated during the quarter, rising 3.8 percent compared to a 2.5 percent decline in the first quarter. Real import growth slowed from 8.3 percent in the first quarter to 1.3 percent in the second, subtracting just 0.2 percentage points from real GDP growth after subtracting 1.4 percentage points in the first. Real exports rose 6.0 percent in the second quarter and are up 7.9 percent over the past year. Federal government spending rose 2.2 percent in the second quarter, following a 9.4 percent decline in the first. However, state & local government expenditures slipped down 3.4 percent in the second quarter, following a 3.3 percent decrease in the first, and are now down 2.5 percent over the past year (its slowest growth rate since 1981). The “flexible” annual revision took a large chunk out of real GDP growth relative to what we thought we knew. Importantly, the level of real GDP in the second quarter of 2011 is still below its level at the start of the recession. 2008(Q4/Q4) real GDP growth was revised down from −2.8 percent to −3.3 percent, 2009(Q4/Q4) growth was revised down from a 0.2 percent gain to a decrease of 0.5 percent, and 2010(Q4/Q4) growth was actually revised up—from 2.8 percent to 3.1 percent. After the revision, the recession got deeper (from −2.8 percent to −3.5 percent), and the recovery period (since 2009:Q2) was revised down from 2.8 percent to 2.6 percent. Moreover, the recent trajectory in output growth has slowed. Real GDP growth over the last two quarters has grown just 0.8 percent, compared to a 2.4 percent growth rate over the last two quarters of 2010. As for the “source” of the downward revision, real personal consumption appears to have been knocked down the most. Its level as of the first quarter was revised down by roughly a full percentage point. The release also noted that the average annual growth rate from 2007-2010 for real disposable income (which influences consumers ability to consume) was cut in half—from 1.2 percent to 0.6 percent. The savings rate was roughly unchanged.
  • 07.27.2011
  • Durable Goods
  • New orders for durables slipped down 2.1 percent in June, surprising expectations of a modest increase. Down two out of the last three months, new orders growth appears to be losing some traction as its 3-month annualized growth rate sits at −10.4 percent, compared to its year-over-year growth rate which is still holding up at 7.6 percent. Some of the softness in June can be tied to transportation equipment (both motor vehicles and aircraft orders fell during the month). However, excluding transportation, durables orders edged up just 0.1 percent in June, compared to a 0.7 percent increase in May. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—slipped down 0.4 percent in June, following a 1.7 percent gain in May. The series has increased in just two of the past six months and the near term softness is starting to take a toll on its 12-month growth rate—which was knocked down from 11.0 percent to 5.6 percent during the month. Shipments of durables, up five out of the last six months, rose 0.5 percent in June and are up 7.6 percent over the past year. Shipments of nondefense capital goods excluding aircraft rose 1.0 percent in June and are also up 7.6 percent over the past year. Durables inventories, after posting five consecutive monthly gains above 1.0 percent, increased 0.4 percent in June (its smallest monthly increase since March 2010).
  • 07.15.2011
  • Industrial Production
  • Industrial production rebounded from a 0.1 percent (nonannualized) decrease in May, rising 0.2 percent in June. Over the past year, industrial production is up 3.4 percent. Manufacturing production was flat in June and virtually unchanged during the second quarter, as supply chain disruptions stemming from the Japanese earthquake curtailed production of autos and related industries. Motor vehicle and parts production slipped down 2.0 percent in June and fell 4.4 percent on the quarter as a whole. Excluding autos, manufacturing ouput rose 0.2 percent in June and is up 3.7 percent over the past year. Outside manufacturing, mining output continued its recent string of relatively robust growth, increasing 6.6 percent in June and 6.1 percent over the past year. Also, electric and gas utilities output rose 11.6 percent in June after falling 21.4 percent in May. Capacity utilization, after edging down a combined .34 percentage points over the past two months, ticked up a tenth of a percent in June to 76.7 percent, still well below pre-recession level of 81.1 percent.
  • 07.14.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods fell at an annualized rate of 4.3 percent in June, largely as energy prices dipped roughly 30 percent during the month after an 8-month string of double-digit increases. Still, the headline PPI is up 7.3 percent over the past year. Producer prices for finished consumer foods partially reversed a 16 percent drop in May, rising 7.8 percent in June. Excluding volatile food and energy items, (“core”) producer prices jumped up 4.1 percent in June, its largest monthly increase since January, pushing up its 12-month growth rate from 2.1 percent in May to 2.3 percent in June. Further back on the production line, pricing pressure was relatively subdued for these series, as core intermediate goods rose just 3.8 percent, and core crude goods—which are up 25 percent over the past year—rose 13.7 percent in June.
  • 07.13.2011
  • Trade Prices
  • In June, U.S. import prices fell 0.5 percent, marking the first monthly decrease since June of last year. Still, import prices are up 13.6 percent on a year-over-year basis, the swiftest growth rate since August 2008. The decrease from June to May was largely driven by declining fuel prices: petroleum fell 1.6 percent and natural gas dropped 1.4 percent. Although petroleum prices declined month-to-month, they were up 49.8 percent on a yearly basis.

    Non-oil import prices fell a modest 0.1 percent, relative to a 0.4 percent increase in May. While June marks the first monthly decline since July 2010, non-oil import prices continue to increase year-over-year (up 4.9 percent). The decrease from May to June can be attributed to a 0.4 percent decline in the prices of nonfuel industrial supplies and materials and a 1.9 percent decrease in foods, feeds, and beverages. The falling prices in these categories offset the effects of increasing prices for automotive vehicle (up 0.3 percent) and consumer goods (up 0.1 percent).

    U.S. export prices rose 0.1 percent in June after falling 0.2 percent in May. Year-over year, export prices rose 9.9 percent marking the largest increase since July 2008. June’s advance was mainly driven by rising agricultural export prices (up 0.7 percent) given that nonagricultural prices remained flat from May to June.

  • 07.01.2011
  • Construction Spending
  • Private construction spending slid down 0.4 percent in May and is now down 5.8 percent over the past year, a marked improvement from May 200, when spending was down 24.3 percent on a year-over-year basis. Contributing to the top-side monthly decline was a 2.1 percent drop in residential spending that was only partially offset by a 1.2 percent increase in non-residential spending. The drop in residential was caused by a 3.8 percent decline in spending on home improvements and a 2.1 percent decline in spending on multi-family properties while single-family spending was essentially flat. Over the year, however, multi-family spending (down 6.8 percent) is slightly outperforming single family spending (down 11.9 percent). On the non-residential side, there are no real standout sectors. While lodging, office, amusement and recreation, transportation, power, and manufacturing all posted small to moderate increases over the month, none of them are showing monthly gains on a consistent basis.
  • 07.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) rebounded modestly in June—rising 1.8 index points to 55.3—after plummeting 6.9 points to 53.5 in May, perhaps reinforcing that some of the recent softness in manufacturing was tied to transitory factors. At a level of 55.3 the PMI is still indicating a manufacturing sector expansion, though at a somewhat slower pace than through the first quarter of this year (which averaged 61.1). All of the broad categories that comprise the PMI improved in June, with the largest improvement coming from inventories—which increased 5.4 points to 54.1 during the month. The employment index increased by 1.7 points to 59.9, though remains below April’s level of 62.7. The new orders and production indexes rose 0.6 points and 0.5 points, respectively in June. Also, the supplier deliveries index (which increases when delivery times slow), rose from 55.7 to 56.3 in June. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) continued its recent decline, slipping from 76.5 in May to 68.0 in June, and is down 17.5 points from its level in April.
  • 06.24.2011
  • GDP
  • Real GDP was revised up by 0.1 percentage points (pp) to 1.9 percent in the first quarter, according to the third estimate released by the Bureau of Economic Analysis. The revision was primarily due to a downward revision to imports and an upward adjustment to private inventories that was mostly offset by downward revisions to exports, BFI, and state and local government spending. The largest category, consumption, was essentially unrevised from the second estimate, increasing 2.2 percent in the first quarter, compared to 4.0 percent in the fourth quarter. Real imports were revised down in the first quarter from a 7.6 percent gain to a 5.1 percent increase. Since imports enter into GDP accounting as a negative, the knockdown in the growth rate added nearly 0.4 pp to real GDP growth in the first quarter. Private inventories swelled by a little more than previously estimated, adding 0.1 pp to output growth. The contribution to first quarter output growth from business fixed investment was knocked down by 0.1 pp during the revision as the increase in equipment and software investment was revised down from 11.6 percent to 8.7 percent. Real export growth was revised down from 9.2 percent to 7.7 percent in the first quarter. Also, real government spending subtracted an additional 0.1 pp (1.2 pp in total) after the revision, largely as state and local government spending (already a drag on growth) was revised down from a 3.1 percent decrease to a 4.1 percent decline.
  • 06.24.2011
  • Durable Goods
  • New orders for durables increased 1.9 percent in May, after plunging 2.7 percent in April (though that decrease was revised up from a 3.6 percent decline). Over the past year, new orders are up 9.0 percent. Excluding transportation, durables orders more than reversed a 0.4 percent decline in April, rising 0.6 percent in May, and are now up 7.2 percent on a year-over-year basis. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—increased 1.6 percent in May, compared to a 0.8 percent decrease April. The series has increased in just two of the past five months, but is still up 10.5 percent over the past year. Shipments of durables, after 1.4 percent in April (its first decrease in five months), ticked up 0.3 percent in May. Durables inventories continued to swell, rising by 1.2 percent in May. Inventories are now up 13 percent over the past year (its highest growth rate since the early 1980s).
  • 06.16.2011
  • Current Account
  • In the first quarter of 2011, the U.S. current account deficit increased to $119.3 billion, widening by $7.1 billion from the fourth quarter’s revised $112.2 billion (previously $113.3 billion). As a percentage of GDP, current account grew to 3.2 percent in the first quarter, up from 3.0 percent in the fourth quarter. The first quarter expansion of the current account deficit was caused by an increase in the deficit on goods and services, which advanced $22.1 billion from $118.7 billion to total $140.8 billion. Driving the deterioration of the deficit of goods and services—or trade gap—was a $23.3 billion jump in the goods deficit from $159.2 billion to $182.5 billion. The combination of an increase in surplus on income to $54.8 billion from $39.9 billion, an advance of surplus on services to $41.7 billion from $40.5 billion, and a decrease in net unilateral transfers to $33.2 billion from $33.4 billion partially offset the expansion of the trade gap and prevented a larger deterioration of the current account deficit.
  • 06.15.2011
  • Industrial Production
  • Industrial production remains in a slump after the supply chain disruption caused by the natural disasters in Japan and the Southern United States. After having nearly zero gain in April, total production in May ticked up only 0.1 percent. While manufacturing, durables, and outdoor mining production rose by 0.4, 0.22, and 0.5 percent, respectively, the production of consumer goods, autos, and utilities fell by 0.1, 0.5, and 2.8 percent, respectively. Capacity utilization for the total industry also remains flat for the second month at 76.7 percent, 3.4 percent higher than May of 2010. Overall total industrial production is at 93 percent of its 2007 average and down 3.7 percent from the historical average from 1972-2010.
  • 06.02.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—rose at a revised annualized rate of 1.8 percent in the first quarter 2011, up from an initial 1.6 percent gain, but still slipping from a 2.9 percent gain in the fourth quarter 2010. Productivity advanced just 1.3 percent over the past four quarters. The upward productivity revision in the first quarter came after a bump in first-quarter output, from 3.1 percent to 3.2 percent. Hours remained unchanged after revisions, growing at an annualized rate of 1.4 percent. Hourly compensation increased 2.5 percent in the first quarter, coming in just below the original first-quarter estimate of 2.6 percent. After adjusting for price changes, real compensation was notched down 0.1 percentage point to a 2.6 percent drop. Hourly compensation, both nominal and real, was also revised down sharply in the fourth quarter of 2010. The nominal fourth-quarter gain fell from 1.9 percent to 0.1 percent, and the real measure was revised down from a 0.8 percent decrease to a 2.6 percent decline, helping to push the real measure from a 0.3 percent increase to a 0.2 percent decline on a year-over-year basis. After revisions, unit labor costs—compensation per hour divided by output per hour—are now estimated to have grown 0.7 percent in the first quarter rather than 1.0 percent, and the year-over-year estimate has fallen from a 1.2 percent gain to a softer 0.7 percent increase.
  • 06.02.2011
  • Factory Orders
  • New orders for manufactured goods decreased 1.2 percent (nonannualized) in April. Year-over-year new order growth rose 10.5 percent, down from 13.8 percent in March. New orders for nondefense capital goods decreased 7.1 percent in April and increased 4.9 percent on a year over year basis. Durable goods orders decreased 3.6 percent while nondurables rose 0.7 percent in April. Shipments of manufactured goods fell 0.2 percent in April. In April, inventory stocks continued to accumulate, increasing 1.3 percent and are up 12.3 percent over the past year.
  • 06.01.2011
  • ISM Manufacturing
  • It appears that the manufacturing sector is not immune to the weakness that has been creeping into other areas of the economy, as the ISM’s Manufacturing Purchasing Managers Index (PMI) plummeted 6.9 points to 53.5 in May (its largest monthly decrease since January 1984). While the index remains above 50 (the growth threshold for this diffusion index), its level slipped to a 21-month low (back to September 2009). Every subindex that enters into the overall PMI registered decreases in May, led by a 10.7 point drop in the new orders index (from 61.7 in April to 51.0 in May) and a 9.8 point decrease in the production index (falling to 54.0). The employment index fell 4.5 points to 58.2 in May, but remains high relative to its 20-year average level (48.4). Also, the manufacturing index slipped from 53.6 to 48.7 in May. Perhaps the only positive sign in the report was that the prices index (which is not seasonally adjusted and does not enter into the overall PMI) decreased for the first time in six months, falling from 85.5 in April to 76.5 in May.
  • 05.26.2011
  • Real GDP
  • Real GDP was unchanged during the second estimate, rising at an annualized rate of 1.8 percent (coming in at the low end of expectations), compared to a 3.1 percent gain in the fourth quarter. While the top line number was essentially unchanged, there were some interesting revisions to the major components. Importantly, real personal consumption growth was (somewhat unexpectedly) revised down from 2.7 percent to 2.2 percent, subtracting 0.4 percentage point from growth. All three major components of consumption (durables, nondurables, and services) were knocked down during the revision. Upward revisions to nonresidential investment and private inventories offset the downward adjustment to consumption. The uptick in nonresidential investment growth was entirely due to a lessening of the decrease in structures investment—from −21.8 percent to −16.8 percent. Equipment and software investment growth was unchanged, rising 1.6 percent in the first quarter. An upward revision to private inventories added 0.3 percentage point to output growth. Also, both exports and imports were revised up moderately: exports from a gain of 5.0 percent to 9.2 percent during the second estimate, and imports were adjusted up from 4.4 percent to 7.6 percent. As some of the first quarter’s growth was swapped from consumption to inventory accumulation, final sales of domestic product (a measure some use to gauge actual demand) was knocked down by 0.2 percentage point to 0.6 percent, its smallest quarterly gain since the third quarter of 2009.
  • 05.25.2011
  • Durable Goods
  • New orders for durables fell 3.6 percent in April, nearly offsetting an upwardly revised 4.4 percent increase in March. Over the past year, new orders are up 5.3 percent. Excluding transportation, durables orders slipped down 1.6 percent in April, but are still up 6.8 percent on a year-over-year basis. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—fell 2.6 percent in April, though this came on the heels of a relatively strong 5.4 percent gain in March (that was revised up from 3.7 percent). The series has been fairly choppy lately, decreasing in four of the past seven months. Still, its near-term (3-month) annualized growth rate rose to 10.6 percent in April, while its 12-month growth rate stands at 11.2 percent. Shipments of durables fell for the first time in five months, decreasing 1.0 percent in April. Shipments ex transportation fell as well, slipping down 0.4 percent during the month. Durables inventories continued to swell, rising by 0.9 percent in April and are up 12.7 percent over the past year (its highest growth rate since the early 1980s).
  • 05.17.2011
  • Industrial Production
  • Industrial production was unchanged in April, following a 0.7 percent increase in March (that was revised down from 0.8 percent) and a 0.3 percent decrease in February (that was adjusted down from a 0.1 percent gain). The 12-month growth rate in industrial production edged down from 5.3 percent in March to 5.0 percent in April. Manufacturing output, following nine consecutive monthly increases, fell 0.4 percent in April. The decline in April, combined with lowered estimates for February and March’s gains, pushed the 3-month annualized growth rate in manufacturing production down from 6.0 percent to 1.4 percent, while its year-over-year growth rate edged lower—from 5.9 percent to 4.7 percent—but remained well above its 20-year average of 2.4 percent. Durables production more than reversed a 0.9 percent gain in March, falling 1.0 percent in April, driven in large part by a 8.9 percent decrease in motor vehicles and parts production (though across-industry performance was mixed during the month). Nondurables output rose 0.1 percent in April and is up 2.0 percent over the past year. Outside manufacturing, mining output rose 0.8 percent in April, while utilities production jumped up 1.7 percent. Total industry capacity utilization ticked down 0.1 percentage point to 76.9 percent, its second decline in three months (after roughly a year and a half of continuous improvement).
  • 05.03.2011
  • Factory Orders
  • New orders for manufactured goods increased 3.0 percent (nonannualized) in March, following an upwardly revised 0.7 percent gain in February. Year-over-year new order growth rose 11.5 percent compared to 10.2 percent in February. Excluding transportation, new orders jumped 2.6 percent in March and are up 9.8 percent over the past year. Nondefense capital goods excluding aircraft orders rose 4.1 percent. Durable and nondurable goods orders increased 2.9 percent and 3.1 percent, respectively. Shipments of manufactured goods increased 2.7 percent in March, following a 0.6 percent increase in February. Inventories continued to pile up, increasing 1.1 percent, and are up 10.3 percent over the past year.
  • 05.02.2011
  • ISM Manufacturing
  • The ISM?’s Manufacturing Purchasing Managers Index (PMI) edged down slightly in April (slipping from an index value of 61.2 to 60.4) though stayed well above the diffusion index’s threshold for manufacturing sector growth of 50. Four out of the five components of the PMI decreases in April, led by declines in the production index (down 5.2 points to 63.8) and the supplier deliveries index (down 4.6 points to 60.2). Partially offsetting declines in other components, the inventories index rose from 47.4 in March to 53.6 in April (its highest level since November 2010). Also, the prices index, which is not seasonally adjusted and does not factor into the overall PMI, continued its recent climb, ticking up 0.5 point to 85.5 in April, though is still somewhat below its recent peak of 91.5 in June 2008.
  • 04.28.2011
  • GDP
  • Real GDP rose at an annualized rate of 1.8 percent in the first quarter (in line with expectations), compared to a 3.1 percent gain in the fourth quarter of 2010. The deceleration in output growth was primarily due to a sharp increase in imports (which enter in as a subtraction in GDP accounting), a slowdown in the growth rates of consumption, exports, and business fixed investment, and a larger decrease in government spending. These factors were partially offset by a jump in private inventories which added 0.9 percentage point to real GDP growth in the first quarter, after subtracting 3.4 percentage points in the fourth quarter. The year-over-year growth rate in real GDP edged down again, slipping from 2.8 percent in the fourth quarter to 2.3 percent in the first quarter, moving further away from its recent high of 3.2 percent in the third quarter. Real personal consumption rose 2.7 percent in the first quarter, compared to a 4.0 percent gain in the fourth quarter, largely as the growth in goods consumption slipped down from 9.3 percent to 4.7 percent.

    Services consumption edged up from a 1.5 percent gain in the fourth quarter to 1.7 percent in the first quarter. Despite the first quarter hiccup, the 4-quarter growth rate in consumption stands at 2.8 percent, its highest level since the first quarter of 2007, and has now risen back to its 20-year average growth rate. Real business fixed investment rose just 1.8 percent in the first quarter, following a 7.7 percent increase in the fourth quarter. A sharp decrease in structures investment—down 22 percent in the first quarter—was to blame for the slowdown in BFI growth. Contrasting the decrease in structures, equipment and software investment rose 11.6 percent, accelerating from a 7.7 percent increase in the fourth quarter. Equipment and software investment has now posted double-digit gains in five of the last six quarters and is up 15 percent over the past year. On the other hand, residential investment slipped down 4.1 percent in the first quarter, and has fallen in 18 of the last 21 quarters. Real exports rose 5.0 percent in the first quarter—a slowdown from the growth rate over the last three quarters of 8.2 percent—contributing 0.6 percentage point to real GDP growth, compared to 1.1 percentage points in the fourth quarter. Real imports bounced back from a 12.6 percent decrease in the fourth quarter, rising 4.4 percent, though this is below its 4-quarter growth rate of 9.2 percent.

    Total government consumption and investment fell 5.2 percent in the first quarter, following a 1.7 percent decrease in the fourth, pulling its 4-quarter growth rate down 0.2 percent. Federal consumption and investment plummeted 7.9 percent in the first quarter (its largest quarterly decline since the first quarter of 2000, largely on a 11.7 percent decline in defense spending. State and local government expenditures and investment fell 3.3 percent in the first quarter and is down 1.2 percent over the past year. An alternative snapshot of actual demand stemming from in the U.S.—final sales to domestic purchasers (which excludes inventories and net exports)—rose 2.4 percent in the first quarter, slowing from a 4.4 percent gain in the fourth quarter. The series is still up 3.4 percent over the past four quarters.

  • 04.27.2011
  • Durable Goods
  • New orders for durables rose 2.5 percent in March, following an upwardly revised 0.7 percent gain in February (the initial release had February’s new orders falling 0.9 percent). Over the past year new orders are up 10.5 percent. Excluding transportation, durables orders rose 1.3 percent, following a 0.6 percent increase in February. However, on a year-over-year basis, the series has been trending down from an elevated growth rate of 14.0 percent in December to 6.0 percent in March. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—jumped up 3.7 percent in March, but have yet to recover back to December’s level after a sharp 5.9 percent decrease in January. Its short run (3-month) annualized growth rate is down 7.3 percent (heavily influenced by January’s decrease). On a year-over-year basis, new orders of nondefense capital goods excluding aircraft have edged down from a near 19 percent growth rate in December, but are still up 9.2 percent. Shipments of durables jumped up 1.8 percent in March, and rose 1.3 percent after excluding transportation shipments. Durables inventories continued to grow, as manufacturers added 1.3 percent in March. Over the past year, inventories have swelled by 11.5 percent.
  • 04.15.2011
  • Industrial Production
  • Industrial production rose 0.8 percent in March, following an upwardly revised 0.1 percent gain in February. Over the last 12 months, industrial production is up 5.9 percent, though its near-term (3-month annualized) growth rate is sitting slightly below that at 4.1 percent. Manufacturing production increased 0.7 percent in March and is up 6.7 percent over the past year. Output gains across manufacturing sectors were broad based, as durables production rose 1.0 percent (its seventh straight increase) and nondurable output increased 0.5 percent. Outside manufacturing, mining output rose 0.6 percent in March and utilities production jumped up 1.7 percent after two relatively large monthly declines. Overall, capacity utilization increased 0.5 percentage point to 77.4 percent.
  • 04.14.2011
  • PPI
  • The Producer Price Index (PPI) for finished goods continued its upward climb, rising at an annualized rate of 8.6 percent in March. Again, energy prices (up 35 percent) were a large driver of the overall increase. Food prices actually edged down in March, decreasing 2.4 percent, but that was following a massive 58.4 percent spike in February (its largest increase since November 1974). On a year-over-year basis, the headline PPI is up 5.8 percent, its highest level since last March, though well below the near 10 percent growth rate seen during the mid-2008 energy price shock. Excluding volatile food and energy items, producer prices rose 3.5 percent in March and is trending at an annualized growth rate of 4.2 percent over the past three months, well above its 12-month growth rate of 1.9 percent. At earlier stages of production, pricing pressure was mixed, as core intermediate goods rose 11.4 percent and core crude goods slipped down 24.8 percent in March.
  • 04.12.2011
  • Import and Export Prices
  • U.S. import prices rose 2.7 percent in March, the sixth consecutive month to mark an increase by more than 1 percent. On a year-over-year basis, import prices increased by 9.7 percent, reflecting the largest gain since April 2010. The jump from February’s 1.4 percent import price gain to March’s 2.7 percent can be attributed to rising petroleum import prices, up 10.5 percent from the previous month and 31.3 percent from a year ago. Excluding petroleum, March’s import prices rose by a modest 0.3 percent, down from February’s 0.6 percent gain. Although gains in nonpetroleum import prices fell from March to February, they were up from a year ago by 4.2 percent, marking the largest increase since October 2008. The increase can be attributed to rising food import prices, up 4.2 percent from the previous month and 19 percent compared to a year ago. The 19 percent year-over-year change reflects the largest increase since 1994 in food import prices.

    U.S. export prices increased 1.5 percent in March, relatively unchanged from February’s 1.4 percent gain. On a year-over-year basis, export prices increased 9.5 percent. Nonfarm imports rose 1.3 percent marking the third consecutive monthly gain greater than 1 percent.

  • 04.01.2011
  • Construction Spending
  • In February, for the third straight month, private construction spending declined and now stands 10.8 percent below its February 2010 level. After declining in December and January, nonresidential construction registered a small increase in February (+0.9 percent), which was offset by a 3.7 percent decline in residential construction. Residential declines were split pretty evenly between single family homes (−1.7 percent) and multifamily homes (−1.5 percent). On the nonresidential side, seven sectors saw declines over the month while four sectors—transportation, communication, power, and manufacturing—all increased. Manufacturing posted the largest over-the-month increase at 5.6 percent, but the industry is still 30.6 percent below its levels in February of last year. Transportation, which increased 2.0 percent over the month, is the only private construction sector that’s increased over the last 12 months. Spending on transportation is 19.9 percent above its February 2010 levels.

  • 04.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) declined modestly to 61.2 in March. Overall, the March index is still 0.8 index point higher than it was in March of 2010 and has maintained 20 consecutive months of growth. New orders, while on an upward trend, fell 4.7 index points to 63.3 from February to March. Production continued to increase rapidly, jumping 2.7 index points to 69.0, its highest value since January 2004. Growth in supplier deliveries also increased 3.7 index points, rising from 59.4 to 63.1 during the month. The prices index, which is not seasonally adjusted and does not factor into the overall PMI, continued its recent climb, edging up from 82.0 to 85.0 in March, though it remains below its recent peak of 91.5 in June 2008.

  • 03.31.2011
  • Factory Orders
  • New orders for manufactured goods dropped 0.1 percent (nonannualized) in February, reversing the 3.3 percent gain in January. Year-over-year new order growth dipped to 9.3 percent from 9.9 percent in January. Durable goods orders contracted 0.6 percent over the month, largely driven by transportation equipment (aircraft materials in particular), primary metals and machinery. Excluding transportation equipment, durable goods orders actually rose 0.1 percent. On a similar note, nondurable orders inched up 0.3 percent. Manufacturers’ inventories expanded 0.8 percent while shipments increased by 0.3 percent. Unfilled shipments increased 0.5 percent and are up 4.5 percent since last February.
  • 03.25.2011
  • GDP
  • Real GDP was revised up in the fourth quarter, from a 2.8 percent increase to a 3.1 percent gain, according to the third estimate from the Burea of Economic Analysis. The upward revision was primarily a result of an upward adjustment to private inventories that lessened its drag on fourth quarter real GDP growth by 0.3 percentage point. An upward revision to nonresidential fixed investment also bolstered the headline number, as both equipment and software and structures investment were revised up. Notably, structures investment was revised up from 0.9 percent in the advance estimate for the fourth quarter to a 7.7 percent annualized gain currently. On the other hand, export growth was revised down by a percentage point to an increase of 8.6 percent, partially offsetting upward revisions in other areas. Alternative measures of demand—final sales of domestic product (which subtracts inventories) and final sales to domestic purchasers (GDP less net exports and inventories)—were largely unchanged during the revision. The growth rate in final sales of domestic product remained at a robust 6.7 percent gain, while final sales to domestic purchasers ticked up 0.1 percentage point to 3.2 percent.
  • 03.24.2011
  • Durable Goods
  • New orders for durables fell 0.9 percent (nonannualized rate) in February, following an increase in January that was revised up from 2.7 percent to 3.6 percent. Compared to recent estimates of aircraft orders (a 54 percent decline in December and 187 percent spike in January), February dropped in at a tame 8.7 percent. Excluding transportation, durables fell 0.6 percent, recovering somewhat from January’s upwardly revised 3.0 percent drop. The 3-month annualized growth rate in durables new orders excluding transportation now stands at a 3.6 percent decline, and the 12-month growth rate is currently 8.5 percent. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—fell 1.3 percent in February. Its 12-month growth rate slipped to 9.3 percent in February (down from 16.0 percent in January) and its 3-month annualized growth rate tumbled to a 13.4 percent decline. Shipments of durables excluding transportation rose at the same 0.1 percent rate as in January and are up 8.5 percent over the past year. Durables inventories continued to grow, with February adding another 0.9 percent.
  • 03.21.2011
  • Exisitng Home Sales
  • Single-family home sales fell sharply in February after three months of growth. Overall sales were down 9.6 percent from January and declined across the country from 6.5 percent to 12.4 percent. The amount of existing sales in February was 4.25 million, down from 4.7 million in January and 2.75 percent below the level in February 2010 of 4.37 million. Housing inventory rose 1.7 percent to 2.97 million, while the median price of existing single-family homes fell to $157,000, which is 4.2 percent below its level last February. Although down, sales of existing single-family home still remain 20.23 percent above the cyclical low of 3.39 million that was reached last July.
  • 03.17.2011
  • Industrial Production
  • Industrial production edged down 0.1 percent (nonannualized) in February, following an upwardly revised 0.3 percent increase in January. Over the last 12 months, industrial production is up 5.5 percent. February’s decline in headline output can be traced to a 4.5 percent decline in utilities output, which was attributed to “unseasonably warm weather in February.” Manufacturing production increased 0.4 percent in February after a 0.9 percent gain in January, and it is up 6.9 percent over the past year. Durable goods production increased 0.9 percent in February, as gains were broad based across major categories with motor vehicles and parts (+4.2 percent) leading the increases. Nondurable output was unchanged and is up 3.2 percent over the last 12 months. Mining output rose 0.8 percent reflecting, higher extraction rates of crude oil and natural gas in February. Overall, capacity utilization dipped slightly (−0.1 percentage point) to 76.3 percent.

  • 03.16.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods surged in February, rising at an annualized rate of 21.2 percent largely as food and energy prices spiked (up 58.4 percent and 47.6 percent, respectively). On a year-over-year basis, the headline PPI is up 5.6 percent, its highest level since last March, though well below the near 10 percent growth rate seen during the mid-2008 energy price shock. Excluding volatile food and energy items, producer prices rose a modest 2.8 percent in February, compared to a 6.4 percent jump up in January. The series is up 1.9 percent over the past 12 months, below its longer-run (30-year) growth rate of 2.2 percent. Further back on the line of production, pricing pressure remains on the upside as core intermediate goods rose 14.4 percent and core crude goods spiked up 31.3 percent, leading to year-over-year growth rates for the two series of 5.4 percent and 28.3 percent, respectively.
  • 03.15.2011
  • Import and Export Prices
  • Rising crude oil and food prices made February the fifth consecutive month to mark an increase in import prices above 1 percent. Import prices increased 1.4 percent from January, which was revised down to 1.3 percent (previously 1.5 percent). Year-over-year growth rose to 6.9 percent compared to January’s 5.4 percent, showing the highest increase since May 2010. Petroleum prices jumped 3.4 percent from last month, marking a five-month consecutive increase. Excluding petroleum, import prices increased slightly by 0.6 percent, down from January’s 0.8 percent gain. Although nonpetroleum import prices showed decreased gains compared to the previous month, they grew on a year-ago basis by 3.5 percent indicating the largest gain in more than two years. Food and beverage import prices decelerated from last month (2.5 percent) to 0.8 percent. Nonetheless, the year-over-year change of food and beverage prices, currently 15.8 percent, has charted double-digit growth since October 2010.

    Export prices increased 1.3 percent in February showing a modest 0.1 percent gain from January (1.2 percent). On a year-over-year basis, export prices increased 8.6 percent. Similar to last month, gains were broad based across categories.

  • 03.11.2011
  • Retail Sales
  • Retail sales jumped up 1.0 percent in February following upwardly revised estimates for January’s sales figures—from 0.3 percent to 0.7 percent. Sales gains were relatively broad-based in February, led by autos sales (up 2.3 percent), miscellaneous store retailers (up 2.0 percent), and gasoline stations (up 1.4 percent). Only three of the 14 major categories of retail sales posted sales declines in February. Notably, sales at furniture and home furnishing stores fell 0.8 percent in February, and are down 4.0 percent over the past year. Recent gains in gasoline stations have likely been driven by price increases, as the series is up at an annualized rate of 26 percent over the past six months, perhaps adding an upward bias to overall sales recently. A less-noisy measure of the trend in retail sales—sales excluding autos, building supplies, and gas stations—rose 0.6 percent in February, following an upwardly revised 0.6 percent gain in January (up from 0.4 percent). Over the past three months, this “core” measure of retail sales is trending at an annualized rate of 4.5 percent, equaling its 12-month growth rate.
  • 03.04.2011
  • Factory Orders
  • New orders for manufactured goods jumped up 3.1 percent (nonannualized) in January, following an upwardly revised 1.4 percent gain in December. Excluding transportation, new orders rose 0.7 percent in January and are up 11.6 percent over the past year. Nondefense capital goods excluding aircraft orders fell −6.2 percent in January. However, this series is trending at an annualized rate of 3.1 percent over the past three months, below its 12-month growth rate of 14.7 percent. Shipments of manufactured goods increased 1.8 percent in January and are up 8.9 percent over the past year. Inventories continued to pile up, increasing 1.3 percent in January.
  • 03.03.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—remained at a 2.6 percent increase after fourth quarter revisions, outpacing the 2.3 percent rise in the third quarter. Although the revision kept productivity constant, output was revised down from 4.5 percent to 4.0 percent, and hours were revised lower by 0.4 percentage point to 1.4 percent. Hourly compensation for the third and fourth quarter were both upwardly revised, bumping the gain to 2.5 percent in the third quarter and 2.0 percent in the fourth quarter. Real hourly compensation, after adjusting for price changes, fell 0.6 percent, but was revised up to 0.6 percent on a year-over-year basis following large upward revisions in the second and third quarter. As a result of the stronger compensation numbers, unit labor costs, while still relatively weak, were revised up on a year-over-year basis—from −0.2 percent to −0.1 percent.
  • 03.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) continued its upward climb, rising to an index value of 61.4 in February, its highest level since May 2004. All the components of the ISM’s PMI increased in February except for the inventories index (which slipped down from 52.4 to 48.8 in February). Notably, the employment index jumped up by 2.8 index points to 64.5 (its highest value since January 1973). The production index jumped up from 63.5 to 66.3 during the month, while the new orders and supplier deliveries indexes posted modest increases. Also, the prices index, which is not seasonally adjusted and does not factor into the overall PMI, continued its recent climb, edging up from 81.5 to 82.0 in February, though remains below its recent peak of 91.5 in June 2008.
  • 03.01.2011
  • Construction Spending
  • Total construction spending ticked down in January, as a 5.1 percent increase in residential spending was offset by a decline of 3.3 percent in the larger contributor to total spending, non-residential construction. These movements combined for a monthly decrease of 0.7 percent in total construction spending.

    Driving the decline in non-residential were lodging, which decreased by 20.2 percent, and power, which decreased by 10.9 percent. Public safety, conservation and development, and water supply were among a handful of segments that increased slightly over the month. Private construction spending exhibited the same dynamic: monthly increases in residential spending offset by decreases in nonresidential with lodging and power driving the decline.

    Looking over the longer term, total construction spending has decreased −5.9 percent since January 2010. Residential spending decreased 7.0 percent over that period and non-residential spending decreased 5.3 percent. The largest long term declines were seen in lodging (−44.9 percent), manufacturing (−25.5 percent) and office (−22.6 percent). Water supply, conservation and development, and highway and street construction were bright spots, all posting double-digit percent increases in spending over the year.

  • 02.28.2011
  • Personal Income
  • Nominal personal income jumped up 1.0 percent (non-annualized) in January, largely as tax changes boosted disposable personal income by 0.7 percent. Still, employee compensation rose 0.4 percent during the month. Had the tax changes not occurred, the release noted that disposable personal income would have just edged up 0.1 percent in January, following a 0.4 percent gain in December. Nominal personal consumption expenditures increased 0.2 percent in January, though after adjusting for price effects, slipped down 0.1 percent during the month (its first monthly decline in nine months). Still, real consumption is up 2.8 percent over the past year, in line with its 20-year average. As a result of the large jump in disposable income outpacing consumption growth, the personal savings rate increased by 0.4 percentage point to 5.8 percent in January (its first increase since last June).
  • 02.25.2011
  • GDP
  • Real GDP in the fourth quarter of 2010 was revised down from an annualized gain of 3.2 percent to 2.8 percent, surprising expectations of a slight upward revision. Despite the 0.4 percentage point knock-down, the level of GDP (as of the fourth quarter) is still slightly above its pre-recession (2007:Q4) level. The downward adjustment to fourth quarter growth primarily reflected an upward revision to imports (which enter in as a subtraction in GDP accounting), a somewhat sharp downward revision to state and local government expenditures, and a downward adjustment to personal consumption expenditures. Real imports fell 12.4 percent in the fourth quarter, revised up from a 13.6 percent decline, which subtracted 0.2 percentage point from real GDP growth. On the other hand, exports were revised up from 8.5 percent to 9.6 percent in the second estimate, adding a little over 0.1 percentage point to growth. State and local government expenditures were revised down from a 0.9 percent decrease to a 2.4 percent decrease (now matching its decline in the fourth quarter of 2008) in the fourth quarter. Personal consumption expenditures in the fourth quarter were knocked down by 0.3 percentage point to 4.1 percent during the revision, thought that is still its strongest quarterly growth since the fourth quarter of 2006. Interestingly, business fixed investment was revised up in the fourth quarter from 4.4 percent to 5.3 percent, largely on an upward boost to structures investment (from 0.9 percent to 4.5 percent). An alternative snapshot of actual demand stemming from in the U.S.—final sales to domestic purchasers (which excludes inventories and net exports)—was knocked down slightly due to revisions, edging down from 3.4 percent to 3.1 percent in the fourth quarter, though that is still slightly above its long-term (25 year) average of 2.7 percent.
  • 02.24.2011
  • Durable Goods
  • New orders for durables rose 2.7 percent (nonannualized rate) in January, following a slight decrease in December that was revised up sharply from −2.5 percent to −0.4 percent. However, much of the headline movements lately have been influenced by volatile aircraft orders which fell 54 percent in December, but surged 176 percent in January. Excluding transportation, durables orders plummeted 3.6 percent in January, its largest monthly decline in two years. That said, the near-term trend is still strongly positive. The 3-month annualized growth rate in durables new orders stands at 16.4 percent, continuing to outpace its 12-month growth rate (currently 10.9 percent). An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—fell 6.9 percent in January, more than reversing an upwardly revised 4.3 percent gain in December. Its 12-month growth rate slipped to a still strong 14.1 percent in January (down from 19.0 percent in December) and its 3-month annualized growth rate dwindled down to 1.1 percent during the month. Shipments of durables excluding transportation increased 0.5 percent in December and are up 9.9 percent over the past year. Also, durables inventories continued to swell, rising 0.7 percent in January (its 13 consecutive monthly gain).
  • 02.23.2011
  • Existing Home Sales
  • The January report for existing single-family home sales showed continued improvement with sales increasing 2.4 percent to an annualized pace of 4.69 million units. Strength was seen in the Midwest, West, and South regions, where existing single-family home sales rose 1.0 percent 2.9 percent and 6.9 percent, respectively. January existing single family home sales fell 4.6 percent in the Northeast after increasing 16.0 percent in December. Year-over-year sales growth improved in January to 4.9 percent,up from −3.2 percent in December. Months’ supply of existing homes at the current sales pace continued to improve, declining 5.1 percent to 7.5 months and is at its lowest level since January 2010. Despite the improvement in sales of existing single-family homes, prices continued to fall. The median home price slipped 5.8 percent over the month to $159,400 and is down 2.7 percent year-over-year. January’s report noted that all cash sales, commonly associated with distressed home sales, rose to 32.0 percent, up from 26.0 percent a year ago. The increase in cash sales could explain the decline in the median existing single-family home price despite the pickup in sales.
  • 02.16.2011
  • Housing Starts
  • Single-family housing starts continued to decline in January, falling 1.0 percent. The decrease follows an 8.4 percent decline in December. The pace of starts is currently 413,000 annualized units, 19.2 percent below January 2010’s pace. Single-Family housing starts improved in the Midwest and West, increasing 25.5 percent and 5.4 percent respectively. However, single-family housing starts declined in the Northeast and the South, falling 12.8 percent and 7.7 percent. Single-family housing permits declined 4.8 percent, falling to 421,000 annualized units and are 17.3 percent below January 2010’s pace.
  • 02.16.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods increased at an annualized rate of 9.6 percent in January, largely due to an increase in energy prices (up 21.0 percent). The series is now up 3.6 percent on a year-over-year basis. Excluding food and energy prices, the “core” PPI jumped 6.4 percent in January, compared to just a 2.8 percent increase in December. Over the past three months, the core PPI is now trending at a 3.5 percent annualized growth rate, and it is up 1.6 percent over the last year. Further back on the line of production, pricing pressure remains on the upside as core intermediate goods rose 5.0 percent and core crude goods spiked up 25.7 percent.
  • 02.15.2011
  • Industrial Production
  • Industrial production slipped down 0.1 percent in January, following an upwardly revised 1.2 percent jump up in December. However much of the headline movements in production came as colder-than-usual temperatures in December abated in January, contributing to a 4.1 percent spike up in utilities output in December that was somewhat reversed in January (down 1.6 percent). Manufacturing production increased 0.3 percent in January after a 0.8 percent gain in December, and is up 5.6 percent over the past year. Looking at market groups, production of business equipment continued to increase, rising by 0.9 percent over the month. Transit, information processing, industrial and other all posted monthly increases. Consumer goods production increased 0.1 percent with durable goods increasing production by 1.4 percent and nondurables decreasing by 0.3 percent over the month. Automotive goods accounted for most of the increase in durable goods, increasing by 3.0 percent over the month. Miscellaneous goods ticked up by 0.6 percent while home electronics and appliances, furniture, and carpeting both decreased. Elsewhere, mining output fell 0.7 percent in January, but is still up 7.5 percent over the past year. Total Industry Capacity utilization fell 0.1 percentage point to 76.1 percent, though that was largely due a 0.1 percentage point increase in industrial capacity, its first monthly gain since May 2009.
  • 02.15.2011
  • Retail Sales
  • Retail sales rose 0.3 percent in January, slightly below expectations of a 0.5 percent gain. The modest increase in January follows a slight downward revision to December’s increase—from 0.6 percent to 0.5 percent. On a year-over-year basis, retail sales are up 7.8 percent. Across broad categories, sales were mixed, with the largest gains coming from gas stations (up 1.4 percent), food and beverage stores (up 1.3 percent), and nonstore retailers (up 1.2 percent). On the downside, building material and supply store sales slipped down 2.9 percent during the month, more than reversing a 1.8 percent gain in December. Also, sporting goods, hobby, book, and music store sales decreased 1.3 percent during the month, though the series is still up 3.0 percent on the year. A somewhat cleaner measure of the trend in retail sales—sales excluding autos, building supplies, and gas stations—rose 0.4 percent in January, though revisions knocked December’s 0.2 percent gain down to −0.1 percent. Over the past three months, this “core” measure of retail sales is trending at an annualized rate of 4.1 percent, a shade below its 12-month growth rate of 5.1 percent.
  • 02.15.2011
  • Import and Export Prices
  • January marked the fourth consecutive rise in import prices, all exceeding 1.0 percent. Import prices advanced 1.5 percent over the month, strengthening year-over-year growth to 5.3 percent. Petroleum prices started off the year with a 3.4 percent increase following strong gains averaging 4.6 percent in the last three months of 2010. However, even when petroleum is removed from the picture, nonpetroleum import prices still managed a sizeable 1.1 percent increase, the largest advance since April 2008, landing year-over-year growth at 3.2 percent. Imported food and beverage prices jumped 2.6 percent in January and gains have surpassed 2.0 percent in four of the past six months. Consequently, the series has charted double-digit 12-month growth for the past four months (currently at 14.8 percent).

    Export prices climbed 1.2 percent in January, doubling December’s 0.6 percent gain and lifting year-over-year growth up to 6.8 percent, its highest since late 2008. Gains were broad-based, pervading all major categories except consumer goods excluding autos, where prices slipped 0.4 percent.

  • 02.03.2011
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—rose at an annualized rate of 2.6 percent in the fourth quarter, and is up 1.7 percent over the past four quarters. The productivity gain in the fourth quarter came as output rose 4.5 percent, faster than the 1.8 percent increase in hours. Hourly compensation increased 1.9 percent in the fourth quarter, compared to an upwardly revised 2.3 percent gain in the third quarter. However, after adjusting for prices changes, “real” compensation fell 0.6 percent and is up just 0.3 percent on a year-over-year basis. Unit labor costs—compensation per hour divided by output per hour—slipped down 0.6 percent in the fourth quarter and is down 0.2 percent on a year-over-year basis, implying a dearth of wage pressure on pricing decisions.
  • 02.03.2011
  • Factory Orders
  • New orders for manufactured goods increased 0.2 percent (nonannualized) in December, following an upwardly revised 1.3 percent gain in November. Excluding transportation, new orders rose 1.7 percent in December and are up 10.1 percent over the past year. Nondefense capital goods excluding aircraft orders rose 1.9 percent in December and is trending at an annualized rate of 8.1 percent over the past three months; still strong, but below its 12-month growth rate of 16.3 percent. Shipments of manufactured goods increased 2.0 percent in December, following a 1.6 percent increase in November, and is up 6.8 percent over the past year. Also, inventories grew for the seventh consecutive month, rising 1.1 percent in December.
  • 02.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) jumped up 60.8 in January, its highest level since May 2004. Updated seasonal factors for 2010 bumped up November and December’s levels, leaving the PMI up 1.5 points (at 58.5) through December. Gains were seen across all broad categories in January, and were particularly strong among the new orders component (up 5.8 points to 67.8) and the employment index (up 2.8 points to 61.7). January’s increase in the employment index elevated the series to its highest level since March 1973, and may bode well for Friday’s employment report. Also, the prices index, which is not seasonally adjusted and does not factor into the overall PMI, jumped up from 72.5 to 81.5 in January to its highest level since July 2008, as 64 percent of the respondents reported paying higher input prices relative to December (just 1 percent reported paying lower prices).
  • 02.01.2011
  • Construction Spending
  • Total construction spending took a surprise dip in December, falling 2.5 percent against expectations for a 0.2 percent increase, and downward revision flipped November’s 0.4 percent gain to a 0.2 percent drop. Private residential outlays and public nonresidential outlays were jointly responsible for the bulk of December’s setback. Total private spending dropped 2.2 percent over the month, with residential outlays down 4.1 percent and nonresidential outlays down 0.5 percent. Meanwhile, nonresidential public spending dipped 2.6 percent, with the heaviest declines stemming from educational, highway and street, conservation and development, and office outlays. Total spending currently falls 6.4 percent below its level in December 2009. Private residential spending is 6.8 percent below its year-ago level, while the shortfall for private nonresidential spending is even larger, at 12.3 percent.
  • 01.28.2011
  • GDP
  • Real GDP rose at an annualized rate of 3.2 percent in the fourth quarter, according to the advance estimate released by the Bureau of Economic Analysis (BEA), coming in below the median estimate from the Bloomberg survey of 3.5 percent growth. For 2010:Q4, real GDP grew 2.8 percent. The increase in output during the fourth quarter was primarily driven by gains in consumption, net exports, and business fixed investment, which were partially offset by a slowing in inventory accumulation (contributing negatively to growth). Real personal consumption expenditures rose 4.4 percent in the fourth quarter, contributing 3.0 percentage points to real GDP growth (its strongest quarter since 2006:Q1) and pulling its 4-quarter growth rate up from 1.8 percent to 2.7 percent. The fourth quarter gain came as growth in consumer durables spiked up to 21.6 percent, its highest quarterly gain since 2001:Q4. Durables growth accelerated across most major categories, but were particularly strong in autos, posting a 45.1 percent increase in the fourth quarter. Business fixed investment rose 5.8 percent in the fourth quarter, compared to a 10.0 percent gain in the third quarter. Equipment and software investment increased 5.8 percent, following four consecutive quarters of double-digit growth. Interestingly, the BEA estimated that structures investment eked out a 0.9 percent gain in the fourth quarter, following 9 quarters of declines. This isn’t the first time the BEA has expected structures to turn the corner. Their first estimate for the third quarter had structures increasing by 3.8 percent, and that was revised down to −3.6 percent. On the residential side, fixed investment increased 3.4 percent in the fourth quarter, compared to a −27.3 percent decline in the third. Private inventory accumulation slowed from $121.4 billion in the third quarter to $7.2 billion in the fourth quarter, subtracting 3.7 percentage points from output growth. As a result, final sales—GDP less inventories—jumped up 7.1 percent in the fourth quarter, compared to a paltry 0.9 percent in the third quarter. Net exports contributed 3.4 percentage points to real GDP growth in the fourth quarter, as exports increased 8.5 percent and imports fell 13.6 percent. On a year-over-year basis, exports are up 8.9 percent, while imports are up 10.6 percent (despite its fourth quarter decline. An alternative snapshot of actual demand stemming from in the U.S.—final sales to domestic purchasers (which excludes inventories and net exports)—rose 3.4 percent in the fourth quarter, and is trending at 2.9 percent over the past four quarters.
  • 01.27.2011
  • Durable Goods
  • New orders for durables slipped 2.5 percent in December, but that was due largely to a dramatic drop in aircraft orders (down 54.9 percent). Excluding transportation, durables rose 0.5 percent during the month, following a 4.5 percent gain in November. On the year, durable goods orders excluding transportation rose 11.5 percent. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—rose 1.4 percent in December, bringing its fourth quarter annualized gain to 9.0 percent (still relatively strong but slightly below its year-over-year growth rate of 15.5 percent). Shipments of durables excluding transportation increased 1.1 percent in December, and are now up five out of the last six months, bringing its annualized 6-month growth rate up to 7.8 percent, just below its 12-month trend of 8.6 percent. 2010 was a restocking year for manufacturers: after including a 0.7 percent increase in December, inventories grew every month, bringing its 12-month growth rate to 9.0 percent (its highest growth rate since May 2007).
  • 01.20.2011
  • Existing Home Sales
  • The December report for existing single-family home sales was very positive, for the most part, with sales jumping up 11.8 percent to an annualized pace of 4.64 million units and beating the upper limit of analysts’ consensus range. Strength was shared across all four regions of the U.S., and year-over-year sales growth climbed all the way up from −27.3 percent to −2.5 percent. Months’ supply of existing homes at the current sales pace is its lowest since May, easing down from 9.3 months to 7.8 in December and further off July’s high of 11.9 months. Although sales ended the year on a high note, the average sales pace held for 2010 was the poorest since 1997. The median home price slipped down 0.9 percent over the month to $169,300 but was virtually flat with the year-ago median price in December 2009.
  • 01.19.2011
  • Housing Starts
  • Single-family housing starts took a substantial dip in December, falling 9.0 percent and taking back all of November’s downwardly revised 5.8 percent gain. The pace of starts is currently 417,000 annualized units, the slowest since May 2009 and 14.2 percent below last December’s pace. Weather likely had a heavy hand in the setback, as last month ranked seventh largest snow cover recorded in December in forty-five years, according to the National Climatic Data Center. All four regions of the U.S. contributed to the drop in starts except for the West, where starts jumped 23.1 percent. On a positive note, building permits for single-family homes increased for a third consecutive month. Permits rose 5.5 percent in December but remain 14.9 percent below the year-ago pace.
  • 01.18.2011
  • The Employment Situation
  • Nonfarm payrolls rose by 103,000 in December, following upwardly revised increases of 71,000 in November and 210,000 in October (on net adding 70,000 to the previous estimates). Payrolls expanded by a little over 1.1 million in 2010 (an average monthly gain of 94,000), but still remain well below pre-recession levels (to the tune of 7.2 million). Over the past three months, payrolls have increased, on average, by 128,000 a month. However, most of those gains have come from temporary help services, health care, and (to a lesser extent) leisure and hospitality sectors. Goods-producing payrolls were virtually flat in December, falling 2,000, and are up just 135,000 over the past 12 months. Construction employment decreased by 16,000 during the month, with a large portion of that stemming from job losses in heavy and civil engineering (down 13,000). Retail trade payrolls rose 12,000 in December, partially offsetting a 19,400 decrease in November, and edging out its average monthly gain of 10,000 in 2010. Temporary help services continued its string of gains, increasing by 16,000 in December, bringing its total gain for 2010 to a little over 300,000. Health care employment rose by 36,000 in December, slightly above its average gain of 22,000 over the past 12 months. Other measures we've been tracking for signs of improvement on the establishment side of the report—average hours and earnings—were little changed in December. The average workweek for all private employees remained at 34.3 hours, though the manufacturing workweek declined by 0.1 hours to 40.2 hours (factory overtime stayed at 3.1 hours). Also, average hourly earnings for all employees ticked up by 0.1 percent (3 cents) to $22.78. On the household side, the number of unemployed persons fell by 556,000, its largest monthly decrease since July 1983. However, that decrease came as the number of employed rose by 297,000 and 260,000 people exited the labor force. The labor force participation rate slipped down 0.2 percentage point to 64.3 percent, down 1.7 percentage points since the beginning of the recession to its lowest level since the mid '80s. While the surprise drop in the unemployment rate will likely garner most of the attention, the employment-to-population ratio—a somewhat less noisy barometer of the labor market—edged up 0.1 percentage point to 58.3 percent in December. Compared to its level in December 2009, the employment-to-population ratio has only improved by 0.1 percentage point.
  • 01.14.2011
  • Retail Sales
  • Retail sales undershot expectations, rising 0.6 percent in December, following an upwardly revised 0.8 percent gain in November. On a year-over-year basis, retail sales are now up 7.9 percent. Across broad categories, sales were mixed: autos, gasoline stations, furniture and home furnishing stores, health and personal care, and nonstore retailers all posted gains. However, sales at electronics and appliance stores, food and beverage stores, clothing stores, department stores, and miscellaneous store retailers decreased. A somewhat cleaner measure of the trend in retail sales—sales excluding autos, building supplies, and gas stations—increased 0.2 percent in December and are trending at an annualized rate of 5.9 percent over the past three months, in line with its 12-month growth rate of 5.6 percent.
  • 01.14.2011
  • Industrial Production
  • Industrial production rose 0.8 percent (nonannualized) in December, following a downwardly revised 0.3 percent increase in November, though October’s increase was revised and on net, prior revisions left the level of industrial production up slightly. The annualized growth rate in industrial production over the past three months is 4.0 percent, a little below its longer-term (12-month) trend of 5.9 percent. Manufacturing output rose 0.4 percent in December and is up 5.8 percent over the past year. On the durables side, production rose 0.4 percent, though that was largely driven by a 3.7 percent increase in primary metals output. The output of most other durables industries decreased in December. Nondurables output rose 0.5 percent in December, though across nondurable industries, gains were mixed. Mining output partially rebounded from a 0.7 percent decrease in November, rising 0.4 percent in December, and is up a whopping 10.1 percent over the past year (its strongest growth rate since October 2006). ticked down 0.1 percent in November, following a 0.2 percent decline in October, but those decreases came on the heels of a nearly 20 percent annualized growth rate over the previous three months. Utilities output jumped up 4.3 percent in December as colder-than-usual weather increased demand for heating. Overall capacity utilization rose from 75.4 to 76.0 in December and the factory operating rate improved by 0.3 percentage point to 73.2 percent (though is still 5.9 percentage points below its level at the start of the recession).
  • 01.13.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods jumped up at an annualized rate of 14.0 percent in December, following a 9.7 percent increase in November, and leaving the series up 4.0 percent on the year. The release noted that about 75 percent of the overall increase in December came from energy prices (which spiked up 55 percent). Excluding volatile food and energy prices, the (“core”) PPI rose 2.1 percent in December, compared to a 3.5 percent increase in November. Still, the core PPI trending at an annualized growth rate of −0.5 percent over the past three months and is up just 1.4 percent over the past year. Further back on the line of production pricing pressure remains on the upside, as core intermediate goods and core crude goods prices are trending at 12-month growth rates of 4.6 percent and 28.1 percent, respectively.
  • 01.12.2011
  • Import and Export Prices
  • Import prices advanced 1.1 percent last month, making December the third consecutive increase exceeding 1.0 percent and bumping year-over-year growth up nearly a full percentage point, to 4.8 percent. December’s increase was largely driven by petroleum prices, which rose 3.9 percent and have gained an average 4.3 percent per month in the fourth quarter of 2010. The most pronounced increases over the past twelve months have come from petroleum and prices for foods, feeds and beverages, up 13.7 percent and 13.1 percent, respectively. Excluding petroleum, import prices increased 0.4 percent in December and have grown 2.7 percent since December 2009.

    Export prices also continued to rise, climbing at a slower 0.7 percent pace in December after a 1.5 percent gain in November. Year-over-year growth remained at 6.5 percent, its highest since September 2008 before prices began their precipitous decline.

  • 01.04.2011
  • Factory Orders
  • New orders for manufactured goods jumped up 0.7 percent (nonannualized) in November, reversing a 0.7 decline in October. Excluding transportation, new orders rose 2.4 percent in November, and are up 8.9 percent over the past year. Nondefense capital goods excluding aircraft orders rose 2.6 percent in November after a 3.2 percent drop in October. The series is trending at an annualized rate of 4.9 percent over the past three months, below its 12-month growth rate of 15.0 percent. Shipments of manufactured goods increased 0.8 percent in November and is up 5.9 percent over the past year. Inventories continued to accumulate during the month, rising 0.8 percent, and are back up to its level reached in February 2009.
  • 01.03.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) improved to an index value of 57.0 in December (its highest level since May) after a slight (0.3 point) dip in November to 56.6. The overall improvement was driven by increases in the new orders and production components, each jumping up by more than 4 points to levels above 60 in December. Partially offsetting these gains were decreases in the employment component, from 57.5 to 55.7 in December, and a relatively large 4.9 point drop in the inventories index (its largest monthly decline since April 2010).
  • 01.03.2011
  • Construction Spending
  • Total construction spending rose 0.4 percent in November on gains to both residential and nonresidential outlays, as well as total private and public spending. November marked the smallest of three consecutive advances, landing year-over-year growth in its best shape since April 2008, from −8.8 percent up to −6.0 percent. Total private construction managed a paltry 0.3 percent gain over the month, due to a 0.7 percent increase in residential spending, as nonresidential spending slipped down 0.1 percent on declines in manufacturing, communication, and office outlays. Private nonresidential spending continues to be the main setback in overall construction expansion. Private spending still falls below year-ago levels (−11.5 percent), but has improved from a trough of −23.8 percent in July 2009. Private residential has made the most progress on a year-over-year basis, with growth currently at −5.3 percent, compared to −16.5 percent for private nonresidential spending. Public outlays rose 0.7 percent in November, boosting 12-month growth to 4.2 percent. The gain in public spending was driven by office, educational, water supply, and conservation and development outlays.
  • 12.28.2010
  • House Price Indexes
  • Today’s release of the monthly S&P/Case-Shiller House Price Index shows that home prices continue to fall across the country. In the three months ending in October, the 10-city composite index dropped 0.9 percent, and the 20-city composite fell 1.0 percent, marking a fourth consecutive decline for both measures. Year-over-year growth in the 10-city index slowed to a mere 0.2 percent, its lowest since January, while year-over-year growth in the 20-city index slumped even further, returning to negative territory at −0.8 percent. Of the twenty major markets tracked by S&P/Case-Shiller, eleven hit fresh lows since prices began to dip in 2006 and 2007 (Chicago, Las Vegas, Miami, New York City, Atlanta, Charlotte, Detroit, Phoenix, Portland, Seattle, and Tampa).

    The Federal Housing Finance Agency’s (FHFA) purchase-only index managed a 0.7 percent increase in October following four uninterrupted declines. However, September’s 0.7 percent decline reported last month was revised downward to a 1.2 percent drop, leaving year-over-year growth little changed, at −3.4 percent. All nine Census divisions tracked by the FHFA House Price Index still fall below their year-ago levels, led by East South Central, Mountain, and Pacific. Six of those nine divisions showed mild price increases in October, resulting in the overall monthly gain.

  • 12.23.2010
  • Durable Goods
  • New orders for durable goods slipped down 1.3 percent in November, though that was largely due to continued volatility in aircraft orders. Excluding transportation equipment, new orders rose 2.4 percent and are up 10.6 percent over the past year. New orders for nondefense capital goods excluding aircraft rose 2.6 percent in November, not quite reversing an upwardly revised 3.6 percent decrease in October. On a year-over-year basis, the series is up 14.4 percent through November, though is only trending at an annualized growth rate of 2.8 percent over the past three months. Shipments of durables ticked down 0.3 percent during the month, its third decrease in the past four month. Shipments are, however, still up 4.3 percent over the past year. Inventories continued to expand in November, rising 0.6 percent and matching its increase in October.
  • 12.23.2010
  • New Home Sales
  • Home sales turned out a decent report card in November, with new single-family home sales rising 5.5 percent, following yesterday’s report of a 6.7 percent gain in existing single-family home sales. November’s increase in new home sales is consistent with a stable but still-depressed market, as the annual sales pace of 290,000 units still sits roughly level with all-time lows held since May. The sales pace has yet to recover from its dive back in May, which is evident by current year-over-year growth of −21.2 percent. There was quite a bit of regional disparity in November sales performance. The West’s sizeable increase (37.3 percent) pulled the most weight, while the South showed a more moderate increase, and activity in the Northeast and Midwest declined. Meanwhile, the inventory of new single-family homes on the market continued to drop. Inventory fell an additional 2.0 percent in November to 197,000 units. Inventory this low has not been seen since 1968. Months’ supply eased from 8.8 to 8.2 months at the current sales pace, aided by the rise in sales and concurrent drop in inventory. Months’ supply remains elevated compared to the golden years of 2000-2005, when the average was 4.1 months. However, significant easing has occurred since highs around 12.0 months were reached in early 2009.
  • 12.22.2010
  • GDP
  • Third quarter real GDP was revised up during the third estimate, from 2.5 percent to 2.6 percent, though rounding somewhat overstates the actual change, which was from 2.53 percent to 2.56 percent. While real was largely unchanged in aggregate, the details were a little more pessimistic. The current revision was largely due to a higher estimate for the change in private inventories which was almost completely offset by a relatively large downward revision to consumption. Private inventories added 1.6 percentage points to real GDP growth in the third quarter, revised up by 0.3 percentage point over the second estimate. Real personal consumption was revised down from 2.8 percent to a gain of 2.4 percent in the third quarter, though is still slightly higher than a 2.2 percent increase in the second quarter. All of the knockdown to consumption came from service (revised down from an increase of 2.5 percent to 1.6 percent), as durable and nondurable spending was actually revised up slightly. Real consumption’s contribution to output growth in the third quarter slipped down 0.3 percentage point to 1.7 percentage points during the revision. With the downward revision in consumption, final sales of real GDP (GDP less the change in private inventories), were adjusted down from 1.2 percent to 0.9 percent, equal to its second quarter gain. Outside of consumption and inventories, little else was effected by the revision. Taking a quick peek at revisions to prices reveals that the PCE price index excluding food and energy was revised down from an annualized rate of 0.8 percent to 0.5 percent in the third quarter, with the majority of the downward revision coming from services prices—which were revised down from 1.1 percent to 0.7 percent.
  • 12.22.2010
  • Home Sales
  • Existing single-family home sales took a step in the right direction in November, increasing a sizeable 6.7 percent following a 2.0 percent retreat in October. The sales pace continued to recover from July’s plunge, climbing to 4.2 million annual units, its highest since June. However, year-over-year growth sank to its lowest since the 1981–1982 downturn, dropping from −25.6 percent to −27.3 percent in November. Inventory of existing single-family homes for sale declined 1.8 percent, representing 9.3 months’ supply at the current sales rate, still elevated but down from 10.1 months in October. The national median sales price was virtually unchanged over the month, dropping a slight 0.1 percent due to a lone mild drop in the South. The median price is up 1.2 percent on a year-over-year basis, with the Northeast leading all four regions (up 10.7 percent).
  • 12.15.2010
  • Industrial Production
  • Industrial production rose 0.4 percent (nonannualized) in November, more than rebounding from a downwardly revised −0.2 percent in October (though on net prior revisions left the level of industrial production in October largely unchanged). The annualized growth rate in industrial production over the past six months is 2.9 percent, a little below its longer-term (12-month) trend of 5.4 percent. Manufacturing output rose 0.3 percent in November, though that was partially depressed by a relatively large 6.0 percent decline in motor vehicles and parts production. Excluding the auto sector, manufacturing output jumped up 0.7 percent during the month, and is up 5.4 percent over the past year. Mining output ticked down 0.1 percent in November, following a 0.2 percent decline in October, but those decreases came on the heels of a nearly 20 percent annualized growth rate over the previous three months. Utilities output rose 1.9 percent during the month, its first increase in four months. Overall capacity utilization firmed up a little, rising from 74.9 percent in October to 75.2 percent in November, October; and the factory operating rate increased 0.2 percentage point to 72.8 percent in November.
  • 12.01.2010
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—was revised up from 1.9 percent to 2.3 percent in the third quarter, rebounding from a 1.8 percent decrease in the second quarter. The upward revision in productivity came as output was revised up by 0.7 percentage points to 3.7 percent, while hours worked were adjusted up from 1.1 percent to 1.4 percent. Real (inflation-adjusted) hourly compensation was revised up from 0.4 percent to 0.8 percent in the third quarter, but the most interesting revision was to compensation. Real hourly compensation was revised up sharply in the second quarter—from 0.1 percent to 3.7 percent. The revision appears to be tied to a benchmark revision to the manufacturing series that bumped up real hourly compensation for the manufacturing sector from −0.6 percent to 5.5 percent in the second quarter and from −1.4 percent to 0.1 percent in the third quarter. As a result of the stronger compensation profile, unit labor costs, while still solidly negative, were revised up on a year-over-year basis—from −1.9 percent to −1.1 percent.

  • 12.01.2010
  • ISM Manufacturing
  • The ISM's Manufacturing Purchasing Managers Index (PMI) edged down slightly in November, from an index value of 56.9 to 56.6, yet it is still above the ISM's manufacturing sector growth threshold of 50.0. While the headline index was relatively unchanged, the components showed a little more movement. Notably, the production index slipped down 7.7 points to 55.0, and the new orders index fell 2.3 points to a level of 56.6. These decreases were roughly balanced by gains in supplier deliveries (up 6.0 points) and inventories (up 2.8 points). The employment index was little changed during the month.

  • 12.01.2010
  • Constuction Spending
  • Total construction spending surprised expectations for a mild decline in October, instead turning out a 0.7 percent gain on solid performance in private residential outlays. The increase follows an identical and upwardly-revised gain in September, although total spending still falls 9.3 percent short of its year-ago level. Total private outlays rose 0.8 percent over the month, as a 2.5 percent increase in residential spending was countered by a 0.7 percent drop in nonresidential spending. Private nonresidential spending saw broad declines in all areas except for transportation and power. On a year-over-year basis, private residential spending is off 9.2 percent, while private nonresidential spending is down an even more substantial 20.7 percent. Public spending, meanwhile, rose 0.4 percent in October on increases in the majority of nonresidential categories, particularly in power and highway spending. Year-over-year growth in public spending currently sits at 2.2 percent, up from 1.2 percent in September.

  • 11.24.2010
  • Durable Goods
  • New orders for durable goods retrenched in October, falling 3.3 percent (nonannualized) after an upwardly revised 5.0 percent jump up in September. The 12-month growth rate in durable goods orders slipped slightly during the month, but is still up 10.5 percent through October. New orders for nondefense capital goods excluding aircraft fell 4.5 percent in October, following a 1.9 percent increase in September and a 5.1 percent gain in August. The series’ near-term (3-month annualized) trend stands at 9.4 percent and is up 15.2 percent on a year-over-year basis. Shipments of durables, which are up 5.8 percent over the past year, fell 0.9 percent in October. Inventories, however, continued to expand, rising 0.4 percent in September, its tenth consecutive increase.
  • 11.23.2010
  • Real GDP
  • Real GDP in the third quarter was revised up from an annualized quarterly growth rate of 2.0 percent to 2.5 percent (slightly above expectations), according to the second estimate from the Bureau of Economic Analysis. The revision was largely due to upward adjustments to personal consumption expenditures, exports, and state and local government spending. A slight downward revision to private inventories shaved 0.1 percentage point (pp) off this component’s contribution to output growth, partially offsetting the upward revisions. Real personal consumption was revised up from a gain of 2.6 percent to an increase of 2.8 percent, adding an additional 0.2 pp to growth. Export growth was revised up from an increase of 5.0 percent to a 6.3 percent gain, and imports were relatively unrevised at a nearly 17 percent growth rate, a combined contribution of 0.3 pp to output growth. The investment picture remained roughly the same. On the business side, structures investment fell 5.8 percent in the third quarter, compared to its 4-quarter growth rate of −14.0 percent; while equipment and software continued to grow strongly during the quarter—up 16.8 percent (revised up from a 12.0 percent gain). Residential investment was revised up, but that was from a decrease of 29.1 percent to a decrease of 27.5 percent, still more than reversing a tax-credit-induced 25.6 percent gain in the second quarter. Primarily because of the upward adjustments to consumption and exports, real final sales (GDP less change in private inventories) were revised up by 0.6 pp to an increase of 1.2 percent, a slight acceleration over a 0.9 percent increase in the second quarter. While the growth rate in final sales is still relatively soft, at least the recent trend appears to be that demand gained some traction when compared with the second quarter, instead of losing a bit.
  • 11.17.2010
  • Housing Starts
  • Single-family housing starts dropped 1.1 percent in October following downwardly revised increases in August and September. August was revised from a 1.4 percent gain down to a 1.2 percent gain, and September’s increase was adjusted from 4.4 percent down to 2.1 percent. These revisions along with October’s decline left the pace of starts at 436,000 annual units, not far above record lows reached last January and roughly 75 percent below pre-bust levels in late-2005. Single-family starts currently sit 8.2 percent below the year-ago pace. Multi-family starts had a much tougher October than the single-family series, plummeting 43.5 percent and causing total starts to reach an 18-month low pace of 519,000 annual units. However, since multi-family construction is volatile and comprises a considerably smaller portion of total starts, single-family starts give a more reliable picture of monthly home construction trends. Permits for single-family homes, which indicate the probable future direction of starts, rose for the first time in six months, increasing 1.0 percent in October. Permits are low but stable, at 406,000 annual units, roughly where they have been since July.

  • 11.16.2010
  • Industrial Production
  • Industrial production was virtually flat (up just 0.1 percent at an annualized rate) in October. September’s decrease of 1.9 percent was upwardly revised from a 2.6 percent decline. In October, a 6.6 percent annualized gain in manufacturing was offset by a 34.1 percent decline in utilities output and a slight tick down in mining (down −0.9 percent). The overall gain in manufacturing was driven by a 10.7 percent jump up in durables manufacturing, while nondurables production rose 2.7 percent. On a year-over-year basis, manufacturing production is up 6.1 percent, though over the past three months the series is trending a little lower, at an annualized rate of 2.6 percent. Overall capacity utilization was flat at 74.8 percent in October, though the factory operating rate increased from 72.3 percent to 72.7 percent during the month (its highest level since August 2008).

  • 11.04.2010
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—rebounded from a 1.8 percent decline in the second quarter, increasing 1.9 percent in the third quarter. On a year-over-year basis, productivity is up 2.5 percent. The gain in the third quarter came as output rose 3.0 percent, faster than the 1.1 percent increase in hours. Compensation jumped up 1.8 percent in the third quarter after two consecutive quarterly decreases, leaving its four quarter growth rate up just 0.5 percent. After adjusting for price effects, the 4-quarter percent change in compensation is still negative, down 0.8 percent. Unit labor costs, down three of the past four months, were virtually flat in the third quarter and down 1.9 percent on a year-over-year basis, implying a dearth of wage pressure on pricing decisions.
  • 11.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) rebounded from a dip down to an index level of 54.4 in September, jumping back up to 56.9 in October, its highest level since May. The rebound was largely driven up increases in the new orders (up 7.8 points) and production (up 6.2 points) sub-indexes. The increase in new orders was the largest monthly gain since January 2009. Elsewhere, the employment index edged up from 56.5 in September to 57.7 in October, but is still below its recent cyclical high of 60.4 in August. Also, the indexes for supplier deliveries and inventories slipped lower in October, falling 1.1 points and 1.7 points, respectively.
  • 11.01.2010
  • Construction Spending
  • Total construction spending grew a mild 0.5 percent in September due to a 1.8 percent increase in residential construction, as nonresidential spending was unchanged over the month. Downward revisions left July with a deeper decline of 2.6 percent and flipped August’s 0.4 percent gain to a 0.2 percent drop. Private construction outlays were flat in September following four consecutive declines, as a 1.8 percent gain on the residential side was roughly offset out by a 1.6 percent drop on the nonresidential side. Public construction spending rose for a second straight month (by 1.3 percent), bumping year-over-year growth to 1.3 percent, positive for the first time since last September. Public outlays were led by transportation (up 5.1 percent), healthcare, and office construction. Overall, September−s report was a positive one, beating expectations for a 0.5 percent decline in total spending. However, the larger picture remains very weak, as clearly shown by the still-deeply-negative year-ago spending comparisons. Total spending is down 10.4 percent since September 2009, residential spending is down 5.3 percent, and nonresidential spending still sits way south, at −12.4 percent.
  • 10.29.2010
  • Real GDP
  • Real GDP rose at an annualized rate of 2.0 percent in the third quarter, according to the advance release by the BEA, which happened to be just one-tenth of a percentage point shy of our estimate. On a year-over-year basis, real GDP is trending at 3.1 percent. The third quarter increase, which is a slight acceleration over the second quarter’s 1.7 percent gain, was primarily due to increases in personal consumption, inventory investment, and business fixed investment. Tempering increases in those areas were a decrease in residential investment and continued double-digit increases in imports (which, in GDP accounting, enter in as a negative). Importantly, real personal consumption rose 2.6 percent in the third quarter (on top of our estimate), compared to a 2.2 percent increase in the second quarter. All three components of consumption posted third quarter gains, with the biggest change between the second and third quarter coming from services consumption—which increased from a 1.6 percent gain to a 2.4 percent increase (its largest quarterly increase since 2007:Q1), contributing 1.8 percentage points (pp) to the overall increase in output. Inventories continued to bolster headline growth, adding 1.4 pp to third quarter growth, though that is down slightly from its average contribution of 2.1 pp over the past three quarters. Business fixed investment rose 9.8 percent during the third quarter compared to a 17.2 percent gain in the second, largely as investment in equipment and software only increased 12.0 percent, compared a 24.8 percent jump in the second quarter. Structures investment actually increased 3.8 percent during the quarter, following eight straight quarterly declines. However, the pattern in residential investment reflected the end of the homebuyers tax credit, as the series fell 29.1 percent, more than reversing an incentive-induced 25.6 percent gain in the second quarter. The four-quarter growth rate in residential investment is still down 6.2 percent. Also, as was the case last quarter, import growth swamped export growth, 17.4 percent versus 5.0 percent, leading to a negative contribution from net exports (−2.0 pp). Final sales of domestic product, a somewhat clearer picture of demand as it subtracts inventory contributions, continued to post subdued growth. Final sales rose just 0.6 percent during the third quarter, compared to a 0.9 percent gain in the second quarter. While some may argue that the effect of the homebuyer tax credit is partly to blame for the slight deterioration in final sales over the last quarter, its four-quarter growth rate only stands at 1.1 percent.
  • 10.27.2010
  • Durable Goods
  • New orders for durable goods jumped up 3.3 percent (nonannualized) in September, following a 1.0 percent decrease in August. The overall pattern for headline durables goods over the last five months or so has been largely dictated by volatility in aircraft orders. Excluding transportation, new orders slipped down 0.8 percent in September, helping to pull its 6-month annualized percent change down to −0.7 percent after 12 months with a double-digit 6-month growth rate. New orders for nondefense capital goods excluding aircraft edged lower during the month (−0.6 percent) after a 4.8 percent gain in August, leaving its near-term (3-month annualized) trend at −5.4 percent, though the series is still up 13.9 percent on a year-over-year basis. Shipments of durables, which are up 6.2 percent over the past year, fell 0.4 percent in September. Inventories, however, continued to expand, rising 0.5 percent in September, its ninth consecutive increase.
  • 10.27.2010
  • New Home Sales
  • New single-family home sales grew a sizeable 6.6 percent in September following a 1.1 percent increase in August. The annual sales pace was boosted to 307,000 units, a pace slightly above—but by no means comfortably above—record lows recently reached this year. Several more reported climbs will be needed before new home sales can definitively be declared above the low-water mark. The current sales pace, after all, remains more depressed than at any point prior to the current housing downturn, and sales are 21.5 percent slower than the year-ago pace. The median sales price of new single-family homes rose for a second straight month, climbing 1.5 percent in September and lifting prices 3.3 percent on a year-over-year basis. Inventory of new single-family homes for sale dropped 1.0 percent further over the month and in fact has not seen a single increase since January. Months’ supply of new homes eased from 8.6 months down to 8.0 at the current sales rate, further off May?s recent high of 9.2 months.
  • 10.19.2010
  • Housing Starts
  • Single-family housing starts posted a second consecutive gain in September, rising 4.4 percent after a downwardly revised increase of 1.4 percent in August. At 452,000 annual units, the current pace of starts falls 10.8 percent short of last September’s pace. Month-over-month gains varied widely by region, with the Midwest down 8.2 percent, the South unchanged, the West up 2.3 percent, and the Northeast up a whopping 66.7 percent. Meanwhile, building permits for single-family homes were little changed over the month, edging up 0.5 percent to an annualized pace of 405,000 units, basically where it has been since July. Permits are below last year’s pace nationally (−14.4 percent), and that is echoed in all four regions of the U.S.
  • 10.18.2010
  • Industrial Production
  • Industrial production more than reversed a 2.1 percent annualized gain in August, slipping down 2.6 percent in September, perhaps another tentative sign that the inventory cycle is abating. Manufacturing output fell 1.8 percent and while it is still up 5.4 percent on a year-over-year basis, its 3-month annualized growth rate down from its a recent high of 13.1 percent in May to 2.6 percent in September. Durables manufacturing fell 2.9 percent in September on broad-based declines across sectors, while nondurables output inched up 1.4 percent. Mining output rose 8.5 percent in September, following robust gains of 20.4 percent and 11.3 percent in August and July, respectively. On the other hand, utilities production fell 20.2 percent in September, helping to pull its 3-month annualized growth rate down to −9.1 percent over the past three months. Overall capacity utilization slipped down for the first time since June of 2009, falling from 74.85 percent of capacity in August to 74.67 percent.
  • 10.13.2010
  • Import and Export Prices
  • Import prices dropped 0.3 percent (nonannualized) in September following a 0.6 percent increase in August, and year-over-year growth slowed from 4.0 to 3.5 percent. Fuel prices drove September’s overall decline, falling 3.1 percent over the month with contributions from petroleum products (down 3.1 percent) and natural gas (down 4.4 percent). Import prices excluding fuel advanced 0.3 percent, leaving the series up 2.6 percent on a year-over-year basis.

    Export prices, on the other hand, rose for a second consecutive month in September, growing 0.6 percent after a 0.8 percent advance in August. Year-over-year growth picked up steam from 4.2 percent to 5.0 percent. Both agricultural and nonagricultural exports contributed to September’s increase, growing 2.4 and 0.3 percent, respectively. Prices for food, feeds, and beverages were up 2.2 percent, consumer goods were up 1.0 percent, and industrial supplies and materials advanced 0.8 percent.

  • 10.04.2010
  • Factory Orders
  • New orders for manufactured goods dropped 0.5 percent in August, reversing the 0.5 percent gain in July and leaving year-over-year growth essentially unchanged at 9.5 percent. Durable goods orders contracted 1.5 percent over the month, largely driven by transportation equipment, aircraft materials in particular. Excluding transportation equipment, durable goods orders actually rose a moderate 1.7 percent. Nondurables, on the other hand, inched up 0.3 percent. Orders for nondefense capital goods excluding aircraft—considered a leading indicator of business investment spending—rebounded 5.1 percent in August after plummeting 5.3 percent in July, pushing the series’ 12-month growth rate back up to 20.2 percent from 13.9. Manufacturers’ inventories expanded 0.1 percent while shipments declined by 0.6 percent, causing the inventory-to-shipments ratio to rise from 1.26 to 1.27, matching its November 2009 level.
  • 10.01.2010
  • ISM Manufacturing
  • As a further sign that the inventory cycle is waning, the ISM’s Manufacturing Purchasing Managers Index (PMI) slipped further away from a cyclical high of 60.4 in April—edging down from an index value of 56.3 in August to 54.4 in September. Four out of the five components of the ISM?s diffusion index declined in September, with the only increase coming from manufacturers’ inventories (up from 51.4 to 55.6). The new orders component fell from 53.1 to 51.1 during the month, while the production index is slipped down 3.4 index points to 56.5. Manufacturing employment, as measured by the ISM, continued to expand in September, though at a lesser rate than in August, as the employment index decreased from 60.4 to 56.5.
  • 10.01.2010
  • Construction Spending
  • Total construction spending beat expectations in August but was carried entirely by sizeable growth in public construction. Construction outlays edged up a modest 0.4 percent from July’s ten-year low, to an annualized pace of $811.8 billion. However, spending is still 8.8 percent below its year-ago level. Private construction outlays saw the smallest of four consecutive declines in August, dipping 0.9 percent to the lowest annual spending pace since January 1998. Private residential spending slipped 0.3 percent, and private nonresidential fell 1.4 percent, down in every spending category except education. While year-over-year growth in private nonresidential spending remains deeply depressed at &minis;24.2 percent, private residential spending had actually enjoyed five steady months of positive year-over-year growth up until August, when it again dipped south of the equator to −1.7 percent. Total public construction, on the other hand, grew a strong 2.5 percent over the month and was up in every area except for power and education.
  • 09.30.2010
  • GDP
  • Real GDP was revised up 0.1 percentage point to an annualized growth rate of 1.7 percent in the second quarter, according to the third estimate. However, second quarter growth is still 0.7 percentage point below the initial reading. The slight uptick relative to the second estimate was primarily the result of upward revisions to consumption and private inventories that were offset by an upward adjustment to imports and a downward revision to government spending. Real personal consumption expenditures were revised up from 2.0 percent to 2.2 percent according to the third estimate, well above the initial estimate of 1.6 percent. Personal consumption is now trending at a 4-quarter growth rate of 1.7 percent. Private inventories grew by a little more than the second estimate suggested in the second quarter, contributing an additional 0.2 percentage points to growth. Elsewhere, government spending was revised down from 4.3 percent to 3.9 percent in the second quarter. Also, imports were revised up from 32.4 percent to 33.5 percent, now its strongest quarterly gain since 1984:Q1.
  • 09.24.2010
  • Durable Goods
  • New orders for durable goods, now down three of the past four months, slipped down 1.3 percent in August, following an upwardly revised 0.7 percent gain. However, much of the overall weakness over the last four months has been tied to aircraft orders. Excluding transportation, orders rose 2.0 percent in August and are still trending at an annualized rate of 9.7 percent over the past six months. Importantly, new orders for nondefense capital goods excluding aircraft jumped up 4.1 percent during the month, almost reversing a 5.3 percent drop in July (that has been revised up from a roughly 8.0 drop according to the initial reading, and is beginning to look a lot like measurement error or seasonal noise). Over the past 6 months, new orders for nondefense capital goods excluding aircraft are up a whopping 23.1 percent (annualized rate), somewhat above its longer-term 12-month growth rate of 19.0 percent. Shipments of durables fell 1.6 percent in August, though were flat after excluding transportation equipment. Inventories continued to rise in August, up 0.4 percent, but at a slower rate than over the past three months (1.0 percent).
  • 09.24.2010
  • New Home Sales
  • New single-family home sales held steady in August after falling 7.7 percent in July. The current annual sales pace of 288,000 units sits essentially level with May’s pace of 282,000, a record low for the 47-year-old series. The year-over-year growth rate in sales remains heavily in the red at −28.9 percent, although the series experienced a brief positive stint in the spring wrap-up months of the housing stimulus. The inventory of new homes for sale declined a slight 1.4 percent in August, causing a miniscule descent in months’ supply, from 8.7 to 8.6. Months’ supply had made much progress between January 2009 and April 2010, dropping from 12.1 months down to just 6.3. However, the series has since swollen again due to lack of sales, as opposed to a ballooning inventory. The number of new homes for sale in August was 206,000 units, the lowest level since 1968.
  • 09.23.2010
  • Existing Home Sales
  • In line with expectations, existing single-family home sales rose 7.4 percent in August on the heels of three progressively larger declines, spanning May to July. August’s increase, while a welcome turnaround, stands small next to the magnitude of July’s 27.4 percent nosedive. The annual sales pace rose from 3.37 million units in July to 3.62 million in August, still 19.2 percent below the pace in August 2009 and not far off a fifteen-year low. National Association of Realtors chief economist, Lawrence Yun, describes the current housing market as subpar, as it is struggles to recover without the support of the home buyer tax credit. “Despite very attractive affordability conditions,” he adds, “a housing market recovery will likely be slow and gradual because of lingering economic uncertainty.” Inventory of existing single-family homes for sale crept up by 1.5 percent in August, yet months’ supply of homes on the market managed to relax slightly, from 11.9 months to 11.3, due to the pickup in sales. This small drop in months’ supply is hardly cause for celebration, though, because an 11.3-month backlog is still higher than any other month since June 1985. The median price for existing single-family homes sagged 2.0 percent during the month of August but appears to have begun stabilizing, as prices are up 1.2 percent over the past year.
  • 09.21.2010
  • Housing Starts
  • Single-family housing starts broke their three-month losing streak in August, posting a 4.3 percent rise. Revisions lowered June and July’s previous estimates, however, leaving their respective declines at 2.0 percent and 6.7 percent. At 438,000 annual units, the current pace of starts still sits well below April’s recent high of 563,000, although year-over-year growth improved from −16.0 percent to −9.1 percent. August’s boost in starts held true for all regions of the U.S. except for the Northeast, where starts dropped a fairly steep 28.0 percent. Permits for single-family starts, on the other hand, retreated 1.2 percent during the month and year-over-year growth dipped further to −16.8 percent. Next month’s release will bring not only preliminary estimates for September starts and permits, but also the Census’ revisions to July and August figures.
  • 09.16.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods exceeded forecasts in August and grew an annualized 4.8 percent, the largest advance since March. Headline growth was led by energy prices, which rose a healthy 29.7 percent in their first increase in five months. Meanwhile, the core index slowed in August. The core PPI, which omits food and energy prices for a more stable measure of price behavior, was up a very modest 0.7 percent after climbing 4.2 percent in July. Consequently, year-over-year change in the core eased 0.2 percentage point to 1.3 percent. However, this is still consistent with the series?’ pattern of a slow, steady up-trend since October 2009’s trough of 0.7 percent. Upstream, both core intermediate and core crude goods’ prices reversed course in August, with core intermediate prices inching up 0.7 percent after two months of decline and core crude goods jumping 61.1 percent following three straight drops.
  • 09.15.2010
  • Import and Export Prices
  • Import prices jumped up at an annualized rate of 6.9 percent in August, following a slight 1.0 percent gain in July. The spike was, in large part, due to a 28 percent climb in petroleum import prices. Nonpetroleum imports rose 2.2 percent during the month, reversing a 2.1 percent decline in July. Over the past 12 months, nonpetroleum import prices have risen 3.1 percent, edging off of recent highs as the series has been falling at an annualized pace of 1.8 percent over the past three months.

    Export prices jumped up 10.3 percent (annualized rate) in August, roughly netting out declines of 2.0 percent and 8.4 percent in July and June, respectively. On a year-over-year basis, export prices are up 4.1 percent. Volatile agricultural prices spiked during the month, rising 63.5 percent and causing much of the headline increase in export prices. Still, nonagricultural export prices rose 6.2 percent in August, following two consecutive decreases.

  • 09.15.2010
  • Industrial Production
  • Industrial production increased at an annualized rate of 1.9 percent in August after a downwardly revised 7.8 percent gain in July (revised down from a 12.3 percent increase). Manufacturing output rose modestly during the month, up 2.6 percent compared to an 8.9 percent gain in July. The short-term (3-month annualized) growth rate in manufacturing production edged down to 2.3 percent in August, it’s slowest growth rate since last June and tentative evidence that the inventory cycle is abating. Outside manufacturing, mining output jumped up 15.6 percent in August, following an 11.4 percent increase in July. Also, utilities output fell 17.1 percent during the month, though is still up 6.0 percent over the past year. Capacity utilization edged up slightly, rising from 74.6 percent to 74.7 percent in August.
  • 09.02.2010
  • Factory Orders
  • New orders for manufactured goods inched up 0.1 percent in July, following decreases of 0.6 percent in June and 1.8 percent in May. Importantly, new orders of nondefense capital goods excluding aircraft plummeted 7.2 percent in July (which is actually an upward revision of 0.8 percentage point from the advance report on durable goods), pushing the 12-month growth rate down from 19.5 percent to 11.6 percent. Shipments of factory goods jumped up 1.1 percent, though after a somewhat dour second quarter the series has fallen at an annualized percent change of 4.7 percent over the past three months. Manufacturers added 1.0 percent to inventories in July, pulling the 12-month growth rate up to 2.5 percent (the strongest growth rate since November 2008).
  • 09.01.2010
  • ISM Purchasing Managers Index
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) unexpectedly ticked up from 55.5 in July to 56.3 in August, interrupting a string of three months in which the rate of manufacturing growth slowed relative to April’s recent peak of 60.4. The overall increase was largely due to increases in the production index (up from 57.0 to 59.9 in August), and the employment index, which jumped up from 58.6 to 60.4 in August—its highest level since November 1978 (which may portend well for the manufacturing sector in Friday’s employment report). Elsewhere, inventories rose modestly during the month, though both new orders and supplier deliveries edged lower in August.
  • 09.01.2010
  • Construction Spending
  • Total construction spending slipped for the third month in a row, dropping 1.0 percent in July to the lowest annualized rate of spending since July 2000. The 0.1 percent gain initially reported for June was revised downward to a 0.8 percent decline. Year-over-year growth in total spending currently sits at a depressed −10.7 percent. Both private and public construction spending shared blame for July’s retreat, the former dropping 0.8 percent over the month and the latter falling 1.2 percent. The decline in private outlays was entirely attributable to a 2.6 percent pull-back on the residential side, as private nonresidential construction broke its fifteen-month streak of decline, rising 0.8 percent. The decline in public construction was caused by a 1.3 percent drop on the nonresidential side.
  • 08.27.2010
  • Real GDP
  • Real GDP was revised down in the second quarter, from an annualized growth rate of 2.4 percent to 1.6 percent, faring slightly better than most expectations. The downward revision was primarily the result of downward adjustments to inventory investment and exports, and an upward revision to imports. Private inventory accumulation was knocked down by $12.5 billion, pulling its contribution to output growth down from 1.1 percentage points (pp) to 0.6 pp in the second quarter. Residential investment was virtually untouched, as was the headline growth rate in business fixed investment, though its composition changed. Private investment in equipment and software was revised up from an increase of 21.9 percent to 24.9 percent (now its strongest quarterly growth rate since the mid-1980s). Investment in structures was revised down from a gain of 5.1 percent to nearly flat growth (0.4 percent) in the second quarter. Still, that is a marked improvement over a loss of 17.8 percent in the first quarter. The concurrent downward adjustment to exports and upward revision to imports subtracted an additional 0.6 pp over the advance estimate and left the contribution from net exports at −3.4 pp.

    Much of the overall downward revision to real GDP growth was “as expected,” though there was at least one positive development. Personal consumption expenditures were revised up from a 1.6 percent increase to a gain of 2.0 percent, adding an additional 0.2 pp to growth. Now the second quarter growth rate in consumption is slightly higher than the 1.9 percent gain in the first quarter, compared to a previous deceleration. Final sales (GDP less inventories)—a somewhat clearer picture of demand—rose 1.0 percent in the second quarter, compared to 1.1 percent in the first, and its four-quarter growth rate rose from 0.9 percent to 1.1 percent. Also with the second estimate, we get our first look at Gross Domestic Income—a measure of aggregate demand that uses information from the income side of the accounts, including corporate profits and other data from the IRS. Real GDI rose 2.3 percent in the second quarter, though that is a deceleration from a 4.1 percent gain in the first quarter. However, its year-over-year growth rate improved from 2.2 percent to 3.2 percent, which is firmer ground than final sales would suggest.

  • 08.25.2010
  • New Home Sales
  • This morning’s new home sales report brought another bout of bad housing market news to follow-up the abysmal existing home sales figures released yesterday. July single-family home sales fell 12.4 percent to an annual sales pace of 276,000 units, erasing June’s downwardly revised gain of 12.1 percent and setting a new record-low pace for the 47-year-old series. New home prices were the lowest in over six and a half years. The median sales price declined 6.0 percent over the month to $204,000 and sits 4.8 percent lower than the year-ago median. The inventory of new homes for sale is its lowest since 1968 and unchanged from June, at just 210,000 units. July’s drop in purchases bumped the months’ supply of new single-family homes up to 9.1 months from 8.0 in June. Although much lower than last January’s peak of 12.1 months, the current backlog is again elevated compared to the past twelve months, when months’ supply has exceeded 9.0 only twice.
  • 08.25.2010
  • Durable Goods
  • New orders for durable goods inched up 0.3 percent in July, after two consecutive monthly decreases. However, a jump up in aircraft orders accounted for much of the overall increase. Orders excluding transportation equipment plunged 3.8 percent in July, pulling its 3-month annualized growth rate down into negative territory (−8.7 percent) for the first time since last May. Still, its longer-term trend (12-month growth rate) is a relatively healthy 9.5 percent. An important input into nonresidential investment—orders for nondefense capital goods excluding aircraft—fell 1.5 percent in July, following a string of five consecutive monthly gains. Its 3-month growth rate fell from 12.8 percent to 4.5 percent during the month. Shipments of durables rose 2.2 percent in July, compared to a 0.2 percent tick-up in June and still managed to gain 0.6 percent after excluding transportation equipment. Over the past 12 months, shipments are up 9.3 percent. Manufacturers added to inventories for the seventh consecutive month, adding an additional 0.6 percent in July, though that is somewhat less that the average over the prior three months of 1.1 percent.
  • 08.24.2010
  • Existing Home Sales
  • Existing single-family homes sales plummeted a record 27.1 percent in July, following declines of 1.6 percent in May and 5.6 percent in June. The massive retreat in sales was widespread across all regions of the U.S., lowering the annual sales pace to 3.37 million units, the slowest pace since May 1995. Needless to say, year-over-year sales growth took a sharp dive as well, falling from 6.7 percent clear down to −25.6 percent. The inventory of existing single-family homes for sale climbed 1.2 percent, causing months of supply to balloon from 8.6 months in June to 11.9 months in July. Months of supply now sits at its highest level since February 1983. The median sales price of existing single-family homes is up a very modest 0.9 percent from July 2009, stemming from positive year-over-year growth in the Northeast and the West, while prices are still down mildly in the South and the Midwest regions. Lawrence Yun, Chief economist at the National Association of Realtors, expects sales to continue being soft for at least the next few months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he comments in the release.
  • 08.17.2010
  • Housing Starts
  • The housing market improved modestly in July with privately owned housing prices increasing 1.7 percent. Privately owned housing starts were at a seasonally adjusted annual rate of 546,000. While July housing starts marked an improvement over June’s performance, the figure is still down 7.0 percent for the twelve month period ending in July. Multi-family starts were the primary drive for the July’s improvement, increasing 32.6 percent after declining 33.3 percent in June. Conversely, single family starts fell for the third consecutive month, declining 4.2 percent. On a regional basis, housing starts were led by the South with 3.9 percent increase. In Northeast, West, and Midwest, housing starts were down 25.9 percent, 4.9 percent, and 1.1 percent respectively. Finally, July building permits stood at a seasonally adjusted annual rate of 565,000, 3.1 percent below the revised June rate of 583,000 and down 3.7 percent for the twelve month period ending in July. Additionally, single family were at a rate of 416,000, 1.2 percent below the revised June figure.
  • 08.17.2010
  • Industrial Production
  • Industrial production jumped forward in July at a 12.3 percent (annualized rate) following a previous estimate of 0.0 annualized percent increase in June. July’s growth rate more than doubled analysts’ expectations of a 6.0 percent increase. Manufacturing, up 14.3 percent annualized, was the driver behind the large gain seen in July, although most of that comes from motor vehicles and parts which soared 212 percent (annualized)—primarily due to seasonality issues and the lack of plant shutdowns over this summer. However, manufacturing without motor vehicles and parts grew at a respectable 8.3 percent (annualized). Over the past 12-months industrial production has grown 7.7 percent, down from 8.2 percent year-over-year in June, although over the 12-month growth rate over the last 3 months averages to 8.0 percent. Capacity utilization moved up from 74.1 percent to 74.8 percent in July and has climbed half-way back from its pre-recession level, around 81 percent.
  • 08.03.2010
  • PCE
  • The Personal Consumption Expenditure (PCE) price index declined an annualized 1.7 percent in June after dropping 0.9 percent in May, again largely reflecting falling energy prices. The PCE price index excluding food and energy (core PCE) rose 0.5 percent after advancing 1.5 percent in May. The core PCE’s 12-month growth sits at 1.4 percent, but shorter-term 3-month growth has sagged to its slowest pace since February 2009, at 0.9 percent (annualized).
  • 08.03.2010
  • Factory Orders
  • New orders for manufactured goods fell by 1.2 percent in June, in line with expectations. New orders excluding transportation fell by 1.1 percent, the third consecutive monthly decline. Although overall inventories fell by 0.1 percent, inventories of durable goods rose for the sixth straight month. Following a 4.7 percent increase in May, orders for nondefense capital goods excluding aircraft rose 0.2 percent during the month and are trending at a strong 6 month annualized growth rate of 18.4 percent. Shipments in both durable and nondurable sectors also saw a decline in June, falling at 0.3 and 1.3 percent, respectively. Lastly, unfilled orders fell slightly in June, its first decline in 3 months.
  • 08.02.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) continued to edge away from a recent high of 60.4 in April. The index slipped down an additional 0.7 index point in July to an index level of 55.5 (which is still above the diffusion index’s growth threshold for the manufacturing sector of 50), bringing the cumulative decrease over the last three months to 4.9 points. Much of the overall decline in July was due to decreases in the new orders and production indexes; falling 5.0 points and 4.4 points, respectively. Encouragingly, the employment index rose from a level of 57.8 in June to 58.6 in July, its eighth consecutive month above 50. Also, it seems manufacturers added inventories in July (albeit a slight accumulation), as the ISM's inventories index jumped up from 45.8 to 50.2.
  • 08.02.2010
  • Construction Spending
  • Total construction spending eked out a small gain in June, increasing 0.1 percent and surprising expectations for a mild decline. The gain stemmed entirely from a 1.5 percent rise in public construction, as private construction receded for a second month in-a-row, by 0.6 percent. Private construction fell on both fronts—residential (0.8 percent) and nonresidential (0.5 percent), particularly in the areas of manufacturing, commercial, and communication spending. Year-over-year growth in total private spending continued its ascent in June to −10.0 percent, up from −11.6 percent in May and a trough of −23.8 percent last July. The improvement has been fairly one-sided, though, as private residential construction is now up 11.8 percent over the past 12 months and private nonresidential construction continues to fall. Its 12-month growth rate remains near record lows, at −24.1 percent.
  • 07.30.2010
  • Real GDP
  • Real GDP rose at an annualized rate of 2.4 percent in the second quarter, in line with consensus estimates. The “good” news is that slowdown followed an upward revision (during the annual benchmark) of 1.0 percentage point to first quarter real GDP, which now stands at 3.7 percent. Over the past four quarters, output has grown 3.2 percent. The “bad” news is that output over the past three years was a little weaker than what we previously thought. The year-over-year growth rate in real GDP was revised down from 2.5 percent to 2.3 percent 2007, from −1.9 percent to −2.8 percent for 2008, and actually ticked up from 0.1 percent to 0.2 percent for 2009. Said another way, the current level of real GDP as of the first quarter of 2010 is 0.8 percent lower than the previous estimate. The BEA noted that the largest contributors to the benchmark revision were downward adjustments to consumption and state and local government spending, as well as an upward revision to imports (which enter in as a negative in GDP accounting). Turning back to the second quarter, consumption rose 1.6 percent, nearly matching a 1.9 percent gain in the first and pushing its 4-quarter growth rate up to 1.6 percent. Private investment accelerated markedly from the first to second quarter of 2010, increasing from an annualized growth rate of 3.4 percent to 19.1 percent. Nonresidential fixed investment jumped up 17.0 percent in the second quarter, its largest quarterly increase since 2006:Q1. Equipment and software continued its rapid increase, rising 21.9 percent during the quarter, following a 20.5 percent and 14.6 percent in the previous two quarters. Interestingly, investment in structures turned around a string of seven negative quarters, increasing 5.1 percent. The series is still down 14.4 on a year-over-year basis, however. Residential investment, likely influenced by tax incentives, jumped up 27.8 percent in the second quarter, adding 0.6 percentage points (pp) to real GDP growth, after subtracting 0.3 pp in Q1. Continued inventory accumulation added 1.1 pp to output growth during the quarter, compared to a 2.6 pp contribution in the first quarter. Elsewhere, exports increased by 10.4 percent though that was outpaced by a 28.8 percent spike-up in imports, subtracting 2.8 pp from growth, on net. Real final sales of GDP (GDP less inventories) eked out a slight 1.3 percent gain in the second quarter, a tad firmer than a 1.1 percent increase in the first quarter which helped to pull its 4-quarter growth rate up from 0.9 percent to 1.2 percent. Also, the personal savings rate rose from 5.5 percent in the first quarter to 6.2 percent, edging back up towards its recent peak of 7.2 percent in 2009:Q2.
  • 07.28.2010
  • Durable Goods
  • New orders for durable goods slipped down for the second consecutive month, decreasing 1.0 percent in June, surprising expectations of a modest increase. While some of the weakness in the headline series over the past few months has come from falling aircraft orders, the three-month annualized growth rate in new orders excluding transportation equipment plummeted from 23.0 percent to −0.9 percent in June, its first negative growth rate since May 2009. Shipments of durables, despite decreases of 0.7 percent in May and 0.3 percent in June, are still holding on to a positive three-month annualized growth rate (3.6 percent), though that is well below their growth rate over the past 12 months (10.8 percent). An important input into nonresidential investment—orders for nondefense capital goods excluding aircraft—edged up 0.2 percent in June, following a 1.5 percent increase in May. The near-term (three-month annualized) growth rate of the series has faltered somewhat from a recent high of 21.6 percent in April, though it is still trending at a relatively robust 8.5 percent. Manufacturers added to inventories for the sixth consecutive month, accumulating an additional 0.9 percent in June. However, the 12-month growth rate in inventories is positive (at 0.1 percent) for the first time since December 2008.
  • 07.15.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods fell a greater-than-expected 5.9 percent (annualized) in June, owing to a sharp 23.2 percent drop in consumer foods and a modest decline in energy prices. June marks the third straight decline in headline producer prices, causing year-over-year growth in the index to weaken from 5.3 percent to 2.8 percent. The core PPI, which excludes the fickle food and energy prices, advanced 0.7 percent in June, its smallest increase in three months. Year-over-year growth in the core index softened from 1.3 percent to 1.1 percent, staying roughly in-line with its path since last November. Further back in the production line, pricing pressures were on the downside, as core intermediate goods prices dropped 4.5 percent and core crude goods prices took a 44 percent fall.
  • 07.15.2010
  • Industrial Production
  • Industrial production limped forward in June, edging up just 0.9 percent (annualized) following a large 17.4 percent jump in May. While June’s growth was soft, it beat analysts’ expectations for a mild decline. The driver behind the gain was a 37.8 percent increase in utilities output, as record-setting summer heat caused people to crank the A-C for a month straight, and to a smaller extent by a 4.9 percent rise in mining activity. Manufacturing output, which accounts for roughly 75 percent of the index’s weight, countered these increases with a 4.5 percent retreat. Overall industrial production has advanced in all but one of the past 12 months, boosting year-over-year growth to 8.2 percent, its strongest since January 1998.

    Capacity utilization was virtually unchanged in June at 74.1 percent, and so far has climbed nearly half-way back to its pre-recession level around 81 percent.

  • 07.14.2010
  • Retail Sales
  • Total retail sales fell for the second consecutive month, slipping down 0.5 percent (nonannualized) in June. Yet the series (which is not adjusted for price changes) is still up 4.8 percent over the past year. Across major components, sales were mixed in June. Relatively large decreases were seen in motor vehicle and parts sales (down 2.3 percent); gasoline stations (down 2.0 percent); sporting goods, hobby, book, and music stores (down 1.4 percent); furniture and home furnishing stores (down 1.1 percent); and building material and supply dealers (down 1.0 percent). On the other hand, sizeable gains were seen in electronics and appliance stores (up 1.3 percent); department stores (up 1.1 percent); and nonstore retailers (up 1.0 percent). “Core” retail sales (sales excluding autos, building supplies, and gas stations), a measure designed to give us a clearer look at the underlying sales trend, inched up 0.2 percent in June. However, this follows a downwardly revised 0.2 percent decline in May and a 0.4 percent decrease in April. Smoothing across time, the three-month annualized growth rate in core retail sales fell into negative territory in June (down 1.5 percent), its first foray below zero since July 2009.
  • 07.02.2010
  • Factory Orders
  • New orders for manufactured goods slipped down 1.4 percent (nonannualized) in May, following a downwardly revised 1.0 percent increase in April. New orders excluding transportation fell 0.6 percent during the month, after falling 0.7 percent in April, but are still up 15.3 percent on a year-over-year basis. Losses in May were felt across both durable and nondurable sectors, falling 0.6 and 2.1 percent, respectively. However, orders for nondefense capital goods excluding aircraft increased for the fourth consecutive month, rising 1.4 percent in May, and are now trending at a relatively strong 3-month growth rate of 17.7 percent. Manufacturers’ shipments fell 1.3 in May, more than giving up a 0.6 percent gain in April. Interestingly, inventories fell 0.4 percent in May, its first decrease since last December.
  • 07.01.2010
  • Construction Spending
  • Total construction spending declined less than expected in May, slipping 0.2 percent after gaining 2.3 percent in April. On a year-ago basis, construction outlays improved to −8.0 percent from −9.5 percent in April, and the series is in its best shape since July 2008. May’s mild decline was driven by a 0.5 percent tumble in private spending, with a 0.4 percent decline on the residential side and a 0.6 percent drop on the nonresidential side. Public construction spending grew 0.4 percent during the month, the smallest of three straight increases, and year-over-year growth bumped up from −4.2 percent to −2.9. Year-over-year growth in total private spending currently sits at −10.7 percent, which believe-it-or-not marks substantial progress, considering its position below 20 percent up until the turn of 2010. However, that progress has come almost exclusively from residential construction, which has seen positive 12-month growth now for three months, while 12-month growth in nonresidential outlays appears to have merely stabilized near record lows.
  • 07.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) slipped down to an index level of 56.2 in June, down from 59.7 in May and a cyclical high of 60.4 in June. Still, this is well above the diffusion index growth threshold of 50.0 for the manufacturing sector. Also, according to the release, “?given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time.” That said, every component that comprises the PMI except for inventories (which were roughly flat) decreased significantly in June, led by a whopping 7.2 index point decline in new orders to 58.5.
  • 06.25.2010
  • Real GDP
  • First quarter real GDP was revised down yet again, from an annualized gain of 3.0 percent in the first quarter to 2.7 percent during the third estimate. The lower estimate was largely due to an upward revision to imports and a downward revision to consumption that was partially offset by upward adjustments to exports and inventories. Personal consumption rose 3.0 percent during the first quarter according to the third estimate, 0.6 percentage point below the BEA’s initial guess, but still its largest quarterly gain since 2007:Q1. Business investment weakened slightly during the revision, from a 3.1 percent to a 2.2 percent increase in the first quarter, as both equipment and structures were revised lower. The swing in inventories (from a slight loss in the fourth quarter to accumulation in the first quarter) was revised up by 0.2 percentage points, now adding 1.9 percentage points to growth in the first quarter. Net exports subtracted 0.8 percentage points from growth (in GDP calculation), as imports outpaced export growth in the first quarter. Final sales of real GDP—which subtract out inventories and thus give us a purer read on demand—were revised down from 1.4 percent to 0.8 percent in the first quarter, a little less than half of the fourth quarter’s gain of 1.7 percent. Final sales to domestic purchasers (a read on domestic demand), which rose 1.6 percent in the first quarter, after a 1.4 percent gain in the fourth. Both measures are trending slightly above 1.0 percent over the past four quarters, well below “trend” growth.
  • 06.24.2010
  • Durable Goods
  • Both new orders and shipments of durables fell in May, slipping down 1.1 percent and 0.4 percent, respectively. However, the overall declines were largely tied to decreases in aircraft and parts. Excluding transportation equipment, orders rose 0.9 percent in May, while shipments ticked up 0.4 percent. Recent strength has led to double-digit year-over-year growth rates for both series. Notably, the 12-month growth rate in shipments of transportation equipment rose to 13.7 percent in May, its second highest growth rate on record (back to 1992) exceeded only by a 13.9 percent gain in February 2005. Orders for nondefense capital goods excluding aircraft rebounded after a 2.7 percent drop in April, rising 2.1 percent during the month, helping to elevate its 3-month annualized growth rate to 26.2 percent; above its 12-month growth rate of 17.3 percent. Manufacturers’ added to their inventory of durables for the fifth straight month, as the series rose by 0.8 percent in May. Still, after a massive draw-down during the recession, its 12-month growth rate still sits below zero, at −3.1 percent.
  • 06.16.2010
  • Industrial Production
  • Industrial production continued to expand in May, rising at an annualized rate of 16.0 percent following an 8.7 percent gain in April. Over the past year, industrial production is up a whopping 7.6 percent, its highest growth rate since January 1998. While some of the overall gain came as utilities usage jumped up 4.8 percent on a warmer than unusual May (increasing air conditioning usage), the manufacturing sector continued to post healthy gains. Manufacturing output jumped up 11.2 percent in May, mostly on strength in durables production, nearly matching April’s gain, and is now trending at an annualized rate of 12.7 percent over the last three months. Over the past year, manufacturing production is up 7.9 percent, its highest growth rate in 12 years. Elsewhere, mining output dipped down slightly in May, falling 1.9 percent, though this came after a four-month string of double-digit increases that has left its 12-month growth rate up 9.6 percent. Capacity utilization continued to improve in May, rising 1.0 percentage point to 74.7 percent, and has now climbed about half-way back to its level of 80.6 at the start of the recession.
  • 06.03.2010
  • Productivity and Costs
  • Nonfarm business sector productivity was revised down from an annualized pace of 3.6 percent to 2.8 percent in the first quarter, as output was revised down and hours worked were adjusted upward. Still, the year-over-year growth rate in productivity is 6.1 percent, its highest growth rate since 2002:Q1 and only its second occurrence above 6.0 percent since the early 1960?s. Real output was nudged down from 4.4 percent to 4.0 percent in the first quarter, following a 7.0 percent gain in the fourth quarter of last year. Hours worked were revised up from a 0.8 percent increase to 1.1 percent in the first quarter, but are still down 3.0 percent over the past year. Nominal compensation was adjusted down from 1.9 percent to 1.5 percent in the first quarter and was virtually flat after adjusting for price effects. Unit labor costs still fell 1.3 percent during the quarter, compared to a 1.6 percent decline according to the advance estimate. Still, unit labor costs are down a substantial 4.2 percent on a year-over-year basis.
  • 06.03.2010
  • Factory Orders
  • New orders for manufactured goods increased 1.2 percent (nonannualized) in April and are now up 18 percent on a year-over-year basis. However, new orders excluding transportation slipped down 0.5 percent in April, following a relatively large 3.8 percent spike in March, and are now up 15.6 percent over the past year. Orders for nondefense capital goods excluding aircraft were flat in April after a 2.3 percent increase in March, yet its 12-month growth rate improved from 6.5 percent to 9.0 percent. Manufacturers’ shipments increased 0.6 percent during the month, while inventories rose 0.5 percent. The I/S ratio for manufactured goods continues to decline from its peak reading of 1.46 months in January 2009, slipping down to 1.24 months in April.
  • 06.02.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) edged down from a recent high of 60.4 in April to an index value of 59.7 in May. However, that slight retrenchment was largely due to a 3.8 point drop in the inventories index to 45.6. Notably, the employment index continued to improve in May, jumping up 1.3 points to an index value of 59.8, its highest level in six years. The other indexes comprising the overall PMI (new orders, production, and supplier deliveries) were little changed during the month, remaining solidly above the ISM’s diffusion index growth threshold of 50.
  • 06.01.2010
  • Construction Spending
  • Total construction spending beat expectations in April, rising 2.7 percent on substantial gains in both private and public construction. Total construction is still 10.5 percent below its year-ago level, though this is entirely due to weakness on the nonresidential side, as residential construction has actually grown 4.6 percent since last April. Private spending increased 2.9 percent over the month, with residential construction gaining 4.4 percent and nonresidential advancing 1.7 percent. Within private residential spending, construction of single-family homes climbed 3.4 percent and is now up about 29 percent from last year, boding well for recovery in that segment of the housing market. Within private nonresidential construction, spending on power structures expanded 5.2 percent and manufacturing structures saw its third consecutive increase, although power structures so far is the only component to exhibit positive year-over-year growth emerging from the recession. April’s 2.4 percent rise in public construction was led by highway and street construction, water supply structures, and sewage and waste disposal. 12-month growth in total public and private construction is still negative, at −13.5 and −4.4 percent, respectively.
  • 05.27.2010
  • Real GDP
  • The second estimate for real GDP in the first quarter came in at 3.0 percent, 0.2 percentage point (pp) below the advance estimate and 0.5 pp lower than the Bloomberg survey’s median expectation of an upward revision to 3.5 percent. The lower estimate reflects downward revisions to personal consumption expenditures and nonresidential fixed investment, as well as an upward revision to imports, which were only partially offset by upward revisions to exports and change in private inventories. Personal consumption expenditures were revised down 0.1 pp to a 3.5 percent increase in the first quarter, contributing 0.1 pp less to real GDP growth. Real imports were revised from 8.9 percent to 10.4 percent during the quarter, slicing 0.2 pp from real GDP growth. The nonresidential investment revision, from 4.0 percent to 3.1 percent, subtracted 0.1 percent from output growth. Real exports were revised up from 5.8 percent to 7.2 percent, adding 0.2 pp to output growth. Private inventories in the advance estimate were shown to have fallen by $31.1 billion in the first quarter, while the second estimate changed this number to $33.9 billion, tacking on an additional 0.1 pp to real GDP growth. Modest adjustments to residential investment and government spending had a very minimal effect on the revision to output growth. Corporate profits were released alongside the GDP report, rising 5.5 percent ($81.4 billion) during the first quarter, the fifth consecutive quarterly increase. On a year-over-year basis, profits are up 31.0 percent, their second consecutive quarter in positive territory after eleven straight quarters of declines.
  • 05.26.2010
  • Durable Goods
  • New orders for durable goods jumped up 2.9 percent (nonannualized) in April, following an upwardly revised unchanged reading in March. The increase brings the series to its highest level since September 2008, as it has been unsteadily climbing toward its pre-recession levels since hitting a cyclical low in March 2009. April’s overall climb was largely due to a 16.1 percent rise in new orders for transportation equipment. Excluding transportation, new orders fell 1.0 percent, pulling down the 12-month growth rate to 18.0 percent from a series high of 19.2 percent in March. Orders for nondefense capital goods excluding aircraft fell 2.4 percent after jumping 6.5 percent in March. Still, the series’ 12-month growth rate rose to 21.4 percent, a series high, and its 3-month annualized growth rate climbed to 31.5 percent. Shipments increased 1.4 percent in April, the second straight increase after two consecutive months of declines. Manufacturers added 0.7 percent to inventories, the fourth consecutive month of gains after declining every month since September 2008. On a year-over-year basis, the series has been steadily climbing since hitting a recent low in October 2009, but is still down 5.4 percent.
  • 05.18.2010
  • Housing Starts
  • Single-family housing starts jumped 10.2 percent in April, resulting from increases in all regions of the U.S. except for the West. April marks the largest of four consecutive increases and brings the annualized rate of housing starts to 593,000, the highest since August 2008. Despite solid increases in recent months and the fact that the pace of starts is up 55 percent from last year, the current pace is still just 57 percent of its average between 1980 and 2000. So while starts appear to be on a sound path of ascent, they have quite a ways to climb before reaching an acceptable “norm.” Permits for single-family housing starts dropped 10.7 percent in April but are still up 22 percent year-over-year.
  • 05.14.2010
  • Industrial Production
  • Industrial production (IP) jumped up at an annualized rate of 10.0 percent in April, following an upwardly revised 2.5 percent gain in March, though February’s estimate was adjusted down to a 1.3 percent loss. Over the past 12 months, industrial production is up 5.2 percent, its highest growth rate since June 2000. However, IP is still 9.0 percent below its level at the beginning of the recession. Manufacturing output rose 13.1 percent in April, nearly matching its monthly gain in March of 13.3 percent, as gains were broad-based across categories (with the exception of some transportation categories). Over the past year, manufacturing production is up 6.0 percent, its highest growth rate in 10 years. Outside manufacturing, mining output rose 18.1 percent in April (its fourth consecutive double-digit gain), and utilities production slipped down 14.5 percent during the month. Capacity utilization continued to improve in April, rising from 73.1 percent to 73.7 percent, though it is still well below its December 2007 level of 80.6 percent.
  • 05.04.2010
  • Factory Orders
  • New orders for manufactured goods increased 1.3 percent (nonannualized) in March, following an upwardly revised 1.3 percent jump in February. New orders excluding transportation rose 3.1 percent in March and are now up 15.6 percent over the past year. Orders for nondefense capital goods excluding aircraft increased 2.3 percent in March with the 12-month growth rate up 4.9 percent. Manufacturers’ shipments increased 2.2 percent during the month, while inventories rose 0.3 percent. The I/S ratio for manufactured goods continues to decline from its peak reading of 1.47 months in January 2009 to 1.27 months.
  • 05.03.2010
  • Construction Spending
  • Total construction spending inched up 0.2 percent in March following four consecutive monthly declines. March’s gain was attributable to a 2.3 percent rise in public nonresidential spending, as private spending fell on both the residential and nonresidential fronts. Despite the 1.1 percent drop in private residential construction, year-over-year growth climbed positive for the first time since June 2006, at 1.2 percent. The overall picture of construction, though, remains a weak one. Total spending is still down 12.3 percent from its year-ago level, only modestly improved from last September’s trough of −15.8 percent. And both public and private nonresidential spending have reached record year-over-year lows, at −6.8 percent and a whopping −25.5 percent, respectively.
  • 05.03.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) continued improve in April, increasing 0.8 index point to 60.4 (its highest level since June 2004), following a 3.1 point jump in March. The overall gain in April was due to increases in the new orders, production, and employment sub-indexes. The new orders index jumped up from 61.5 to 65.7 in April, continuing its rebound from an all-time low of 22.9 in December 2008. The production index rose 5.8 points to 66.9 during the month, marking its eleventh month above the diffusion index growth threshold of 50. Also, the employment index surged to 58.5 its highest level since January 2005. Offsetting strong gains in the other components, inventories slipped from 55.3 to 49.4 and the supplier deliveries index fell from 64.9 to 61.3.
  • 04.30.2010
  • Real GDP
  • Real GDP increased at an annualized rate of 3.2 percent in the first quarter, slightly less than the median expectation of 3.4 percent from the Bloomberg survey, and is now up 2.5 percent on a year-over-year basis. As was the case in the fourth quarter of 2009, the change in private inventories helped to boost the overall gain, accounting for roughly half of the overall gain in real GDP (adding 1.6 percentage points to growth) in the first quarter. Final sales, which exclude inventories from the calculation, rose 1.6 percent in the first quarter, edging down from 1.7 percent in the fourth quarter of last year. That said, final sales to domestic purchasers, a snapshot of demand in the United States (excluding inventories and net exports from the calculation), increased 2.2 percent, compared to 1.4 percent in the fourth quarter. Consumption surged in the first quarter, rising 3.6 percent, its strongest quarter since the first quarter of 2007, adding 2.6 percentage points (pp) to output growth and pushing its four-quarter growth rate up to 1.8 percent. Spending on durables jumped up 11.3 percent in the first quarter, compared to a 0.4 percent increase last quarter. Nondurables and services posted modest increases in the first quarter, rising 3.9 percent and 2.4 percent, respectively. Nonresidential fixed investment rose 4.0 percent in the first quarter, despite investment in structures continuing to plummet, slipping down 14.0 percent. Residential investment, which likely suffered from a lull after the original expiration of the home-buyers tax credit in November, fell 10.9 percent in the first quarter following two consecutive gains. On a year-over-year basis, residential investment is still down 4.2 percent. Exports grew 5.8 percent in the first quarter, after surging 20.3 percent in the second half of 2009. Imports increased 8.9 percent in the first quarter, following gains of 21.3 percent and 15.8 percent in the third and fourth quarters, respectively.
  • 04.23.2010
  • Durable Goods
  • New orders for durable goods slipped down 1.3 percent (nonannualized) in March, following an upwardly revised 1.1 percent gain in February. However, the overall decline was mostly due to an outsized decline in aircraft and parts orders (down 42.2 percent). Excluding transportation, new orders rose 2.8 percent in March, pushing up its 12-month growth rate to a relatively strong 13.5 percent. Orders for nondefense capital goods excluding aircraft?a leading indicator or investment spending—jumped up 4.0 percent during the month, pushing its 3-month annualized growth rate up to 6.2 percent, and its 12-month growth rate up to 12.6 percent (highest since September 2006). Shipments of durables rose 1.2 percent in March, following two consecutive slight declines. Also, manufacturers added to inventories for the third month in a row, increasing 0.2 percent in March, though the series is still down 7.2 percent on a year-over-year basis.
  • 04.16.2010
  • Housing Starts
  • Single-family housing starts declined a slight 0.9 percent in March resulting entirely from a large 33.7 percent drop in the Midwest, as all other regions gained over the month. The pace of housing starts in January and February was revised upward, boosting their respective month-over-month increases to 5.4 percent and 5.7 percent, respectively. The current annual sales pace in March sits at 531,000 single-family units, up nearly 49 percent from the series’ record low last February of 357,000 units. But in recent months the sales pace has trended relatively flat and remains depressed by any standard over the past five decades since the Census Bureau began keeping track. Total housing starts, on the other hand, rose for a third consecutive month in March, due to an 18.8 percent gain in the more volatile multi-family starts series.
  • 04.15.2010
  • Industrial Production
  • Industrial production rose at an annualized rate of 1.1 percent in March, following an upwardly revised 3.6 percent gain in February. Industrial production finished the quarter at a strong 7.8 percent, its largest annualized quarterly gain since 1999:Q4. Manufacturing production jumped up 11.0 percent (annualized rate) in March, after a slight 2.4 percent gain in February that was likely restrained by winter storms. Factory production rose 6.6 percent in the first quarter and is up 4.7 percent over the past year. In March, durables manufacturing rose 17.9 percent, while nondurables rose 6.6 percent. Mining output jumped up 30.8 percent, finishing the first quarter up 17.6 percent, and is up 5.2 percent over the past year. Utilities production posted an outsized decrease in March, slipping down nearly 55 percent at an annualized rate, though the release noted that was a function of warmer than usual weather. Capacity utilization continued to improve in March, rising from 73 percent to 73.2 percent, though is still well below its ten year average of 77.3.
  • 03.31.2010
  • Factory Orders
  • New orders for manufactured goods increased 0.6 percent (nonannualized) in February, following a relatively large 2.5 percent jump in January, its sixth consecutive gain. Unlike January’s increase, which was mostly due to a spike-up in aircraft orders, new orders excluding transportation rose 0.7 percent in February, and are now up 9.2 percent over the past year. Orders for nondefense capital goods excluding aircraft rebounded from a sharp 4.4 percent decrease in January, rising 2.0 percent in February. That said, its recent trend has been slowing. The 3-month annualized growth rate in nondefense capital goods orders excluding aircraft, has slipped from a recent peak of 21.3 percent in November to 1.9 percent as of February, well below its year-over-year growth rate of 8.2 percent. Manufacturers’ shipments fell 0.1 percent during the month (its first decline in six months), while inventories rose 0.5 percent. This lead to the first uptick in the I/S ratio for manufactured goods since May 2009, which increased from 1.28 months to 1.29 months in February.
  • 03.26.2010
  • Real GDP: Third Estimate for Fourth Quarter 2009
  • Real GDP was revised down from 5.9 percent (annualized rate) to 5.6 percent in the fourth quarter, according the third estimate from the BEA. While the downward adjustment wasn't expected by most analysts (Bloomberg’s forecast range was 5.7 percent to 6.0 percent), it is just 0.1 percentage point below the initial estimate of 5.7 percent for the fourth quarter. Real GDP rose 0.1 percent from the fourth quarter of 2008 to the fourth quarter of 2009, marking the first year-over-year increase in more than one year. The overall revision from the second to the third estimate was due to minor downward revisions to consumption, investment in structures, and inventories. Changes in private inventories were trimmed slightly, resulting in a 0.1 percentage point decrease in their contribution to output growth, which still stands at almost 4 percent. Consumption was revised down again to 1.6 percent in the third estimate and is now 0.4 percentage point below the advanced estimate for the fourth quarter. The negative adjustment to business fixed investment during the revision came as investment in structures fell further into the red, going from −13.9 percent to −18.1 percent. The equipment and software component actually nudged a little higher (from 18.2 percent to 19.0 percent) in the fourth quarter.
  • 03.24.2010
  • Durable Goods
  • New orders for durable goods rose 0.5 percent (nonannualized) in February, following a relatively strong 3.9 percent jump-up in January. However, January’s surge was mostly due to a spike in aircraft orders. Excluding transportation, new orders increased 0.9 percent in February, rebounding from a 0.6 percent decline in January. Its 3-month annualized growth rate is still up 9.2 percent and is outpacing its longer-term (12-month) trend of 7.9 percent. Orders for nondefense capital goods excluding aircraft increased 1.1 percent in February, regaining some of January’s 3.9 percent drop. While its 12-month growth rate remained a solid 7.9 percent, over the past three months the series is up a mere 0.5 percent (annualized rate), hinting at some upcoming softness in investment goods. Shipments of durable goods decreased for the second consecutive month, slipping down 0.6 percent (nonannualized) in February. On the other hand, manufacturers added 0.3 percent to inventories in February, following a 0.1 percent gain in January.
  • 03.16.2010
  • Housing Starts
  • Single-family housing starts were virtually unchanged in February, dropping a slight 0.6 percent. After hitting rock-bottom back in February 2009, the series climbed solidly through July and has been charting a relatively level path thereafter. Although the seasonally-adjusted annual rate of single-family starts has risen nearly 40 percent from the record low last February, it still sits below any recession low prior to the current episode. The more volatile total starts series, meanwhile, posted a larger (but not atypical) drop of 5.9 percent in February following a 6.6 percent gain in January. Permits for single-family homes, like starts, were little changed over the month, dropping just 0.2 percent and tracking a stable but depressed course around roughly 500,000 annual units. While permits are 32.0 percent above the year-ago pace, they are still incredibly low compared to peak rates in 2005 exceeding 1.7 million units.
  • 03.15.2010
  • Industrial Production
  • Industrial production ticked up 0.9 percent (annualized rate) in February, despite winter storms in the Northeast that likely restrained production. The 3-month annualized growth rate in production stands at a relatively strong 5.9 percent, and has remained above 5.0 percent since last August. Manufacturing production dipped down 2.1 percent in February as output across industries was mixed. The largest decrease was to motor vehicles production, which fell 41 percent in February, after a 74 percent gain in January. On the upside, petroleum and coal output jumped up 29.7 percent during the month, reversing a 31 percent decrease in January. Also, the production of computer and electronic products jumped up 12.3 percent in February, nearly matching its 6-month growth rate of 12.5 percent. Helping to bolster the overall increase in February, mining output jumped up 26.9 percent, while utilities production increased 6.3 percent during the month. Capacity utilization increased for the eighth consecutive month, ticking up from 72.5 percent to 72.7 percent in February, but remains well below its pre-recession (November 2007) level of 80.5 percent.
  • 03.04.2010
  • Factory Orders
  • New orders for manufactured goods rose 1.7 percent (nonannualized) in January, following a 1.5 percent gain in December. However, excluding transportation, new orders increased just 0.1 percent. Orders for nondefense capital goods excluding aircraft slipped down sharply in January (−4.1 percent), downwardly revised from the advance report on durables which pegged the loss at 2.9 percent. Shipments of manufactured goods lost a little traction in January, increasing just 0.3 percent after an average gain of 1.4 percent over the prior four months. Manufacturers increased their inventories by 0.2 percent in January, reversing a 0.2 percent decline in December. At 1.29 months, the manufacturing inventory-to-shipments ratio is well off its peak of 1.47 reached last January, though it remains slightly elevated from pre-recession levels. Read more
  • 03.04.2010
  • Productivty and Costs
  • Nonfarm business sector productivity was revised up from a strong 6.2 percent (annualized rate) gain to 6.9 percent in the fourth quarter, and is now up a whopping 5.8 percent on a year-over-year basis (its highest growth rate since 2002:Q1). The stronger fourth quarter reading was a result of an upward revision to output (revised up from 7.2 percent to 7.6 percent), while hours worked suffered a slight downward adjustment (from 1.0 percent to 0.6 percent). It is still the first increase in hours since 2007:Q2, though its four-quarter growth rate is still solidly negative (−5.7 percent). Compensation estimates were also shaded to the downside, resulting in a 5.9 percent drop in unit labor costs in the fourth quarter, compared to an initial reading of −4.4 percent. Unit labor costs have plummeted over the past year, down 4.7 percent—its sharpest decline on record (going back to 1947).
  • 03.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) declined 1.9 points in February to an index value of 56.5. Although moderating in February, the diffusion index has now been above its growth threshold of 50 for seven consecutive months. The decline in the overall index stems from declines in production (7.8 points) and new orders (6.4 points) while all other components of the index improved during the month. The employment index increased from 53.3 to 56.1 indicating that the labor market in the manufacturing sector is continuing to improve. Inflation concerns remain in check as the prices index declined 3.0 points to 67.
  • 03.01.2010
  • Construction Spending
  • Total construction spending in January dropped 0.6 percent, as a 1.4 percent decline in nonresidential construction more than offset a moderate increase in residential spending. The fall in nonresidential construction was most notably driven by cutbacks in the areas of lodging, manufacturing, and communication. Total spending has retreated ten out of the past twelve months, putting the 12-month growth rate at −9.3 percent, a bit of an improvement over its low last September of −15.8 percent. Private construction spending posted a 0.6 percent drop in January and sits 14.3 percent below its level in January 2009. Public construction in January retreated 0.7 percent but still sits 2.1 percent above its year-ago level. Private residential construction continues to chart a choppy course, rising 1.3 percent in January after two larger consecutive declines. However, its 12-month growth rate climbed from −11.9 percent to −6.4 percent last month and has risen from an all-time low of −35 percent just last March, showing a slow recovery in the housing market.
  • 02.26.2010
  • GDP
  • Real GDP was up from 5.7 percent to 5.9 percent in Q4, in line with expectations. As expected, change in private inventories were revised up from a 3.4 percentage points (pp) contribution to output growth to 3.9 pp. Also contributing to the upward revision were positive adjustments to business fixed investment (from a gain of 2.9 percent to a 6.5 percent increase) and real exports were pushed up from an 18.1 percent increase to 22.4 percent increase. On the other hand, consumption was revised down slightly—from 2.0 percent to 1.7 percent—contributing 0.2 pp less. There were also modest adjustments to imports and state and local government spending, that served to temper the overall upward adjustment. Analysts may shade their Q1 growth projections down slightly on the upward adjustment to inventories (which implies a lower contribution from private inventories in Q1). Also, final sales were adjusted down from 2.2 percent to 1.9 percent, and while this is a slight improvement from 1.5 percent in the third quarter of last year, it doesn’t seem to be pointing toward an impending snapback.
  • 02.25.2010
  • Durable Goods
  • New orders for durable goods jumped up 3.0 percent (nonannualized) in January, though that was all on the back of a 51.3 percent surge in aircraft orders. Excluding transportation, new orders slipped down 0.6 percent during the month, after a 2.0 percent gain in December. Still, over the past 12 months, new orders excluding transportation are up 8.6 percent. Orders for nondefense capital goods excluding aircraft reversed course in January, slipping down 2.9 percent, compared to a 3.3 percent gain in December. That said, both its 3-month annualized and 12-month growth rates are strongly positive, up 14.7 percent and 10.7 percent, respectively. Shipments dipped down 0.2 percent in January after four consecutive monthly increases. Inventories were flat during the month, though that comes after 14 straight monthly declines.
  • 02.17.2010
  • Industrial Production
  • Industrial production increased at an annualized rate of 11.8 percent in January, following increases of 8.2 percent and 7.0 percent in December and November, respectively. As of January, the 12-month growth rate in industrial production was up 0.9 percent, its first positive reading after nearly two years of declines. Manufacturing production jumped up 12.6 percent in January, following a virtually flat (−0.9 percent) reading in December. Both durable and nondurable goods production surged in January, rising 18.4 percent and 8.7 percent, respectively. Moreover, the release noted that output for all the major durable goods industries rose during the month, except for furniture and related products. Manufacturing production is now up 7.7 percent over the past three months, outpacing its year-over-year growth rate of 1.7 percent. Mining output rose 8.9 percent in January, rebounding from a slight 1.8 percent dip in December. Utilities production increased 8.3 percent during the month, follow an out-sized (and cold-snap induced) 108.4 percent gain (6.3 percent nonannualized) in December. Capacity utilization continued to improve in January, rising from 71.9 percent to 72.6 percent.
  • 02.17.2010
  • Housing Starts
  • Total housing starts increased 2.8 percent in January, making up for the 0.7 percent slip in December. Since reaching a trough last April, starts have stabilized and been relatively flat, now sitting at an annual pace of 591,000 units. Put in perspective though, this compares to an average starts pace of 1,556,000 annual units between the last cyclical trough and peak, from January 1991 to January 2006. January’s gain was shared by all regions except the Midwest, which posted a 3.2 percent decline. Single-family housing starts, which are typically less-volatile than the total series, increased very modestly, by just 1.5 percent. Permits for single-family homes inched up 0.4 percent, the smallest of three consecutive increases, but due to a sizeable drop in multi-family unit permits, the total series actually retreated 4.9 percent. Year-over-year, total permits are up 16.9 percent.
  • 02.04.2010
  • Factory Orders
  • New orders for manufactured goods outpaced expectations in December, rising 1.0 percent, after a 1.0 percent increase in November. Much of the unexpected strength came from an upward revision to durable goods orders, revised up from a 0.3 percent increase to 1.0 percent in December. The 12-month growth rate in new orders has pared its losses since reaching a cyclical low of −23.4 percent reached in April, and now stands at 3.6 percent (its first positive reading since September 2008). Orders for nondefense capital goods excluding aircraft jumped up 2.2 percent in December, after surging 3.2 percent in November, though is still down 1.0 percent on a year-over-year basis. Shipments increased 1.9 percent during the month, posting its fourth consecutive gain, while inventories ticked down a slight 0.1 percent after a 0.2 percent gain in November.
  • 02.04.2010
  • Productivity and Costs
  • Nonfarm business sector productivity continued to surge in the fourth quarter of 2009, increasing at an annualized rate of 6.2 percent, its third consecutive quarterly increase in excess of 6.0 percent, pushing its four-quarter growth rate up to 5.1 percent (its highest level since 2002:Q1). The rapid increase in productivity came as real output surged ahead 7.2 percent in the fourth quarter that was slightly tempered by an actual increase in hours worked (up 1.0 percent). That marks the first increase in hours worked since the second quarter of 2007. However, hours are still down 5.1 percent on a year-over-year basis. Compensation per hour rose a slight 1.5 percent during the quarter, compared to gains of 5.6 percent and 6.8 percent over the past two quarter. Though after adjusting for price effects, “real” compensation per hour slipped down 1.9 percent, reversing a 1.8 percent “real” gain in the third quarter. The combination of increased output and decreased compensation pulled unit labor costs down to −4.4 percent, following a 1.5 percent decrease last quarter. On a year-over-year basis, the series—which some use as a proxy for incipient inflation—is down 2.8 percent, its lowest growth rate since 2002:Q1.
  • 02.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Manufacturing Purchasing Managers Index (PMI) continued to improve in January, rising 3.5 index points to 58.4 (its highest level since August 2004) . The diffusion index has now been above its growth threshold of 50 for six consecutive months. All components of the overall index improved during the month, led by a strong (6.5 point) increase in the production index. Interestingly, the inventories index, at a 46.5, is the only component of the manufacturing PMI that remains below 50.
  • 02.01.2010
  • Construction Spending
  • Total construction spending dropped 1.2 percent in December and is down 9.9 percent from December 2008. Nearly all months in 2009 saw declines, putting the current seasonally-adjusted annual rate of spending at its lowest level since August 2003. Both private and public construction had equal drops of 1.2 percent in December, but the largest driver behind the overall retreat was a sizeable 2.8 percent drawback in private residential construction. Although still very depressed, the year-over-year growth rate in private residential construction managed to climb to −10.9 percent, its best rate in over three years, since October 2006. Private nonresidential construction actually increased slightly, by 0.2 percent.
  • 01.29.2010
  • GDP
  • Real GDP surged in the fourth quarter, increasing at an annualized rate of 5.7 percent (above most analysts estimates), following a 2.2 percent gain in the third quarter and pulling its four-quarter growth rate up to 0.1 percent (positive for the first time since 2008:Q3). Much of the fourth quarter’s increase was driven by a relatively large upswing in change in private inventories, which added 3.4 percentage points to real GDP growth, its largest quarterly contribution since 1984:Q1. Also contributing to the strong showing: real exports jumped up 18.1 percent during the quarter, roughly matching its increase from the third quarter and adding 1.9 percentage points (pp) to output growth. Offset some of the gain in exports, real imports rose 10.5 percent, leading to an overall contribution to growth from net exports of 0.5 pp. Personal consumption increased 2.0 percent in the fourth quarter, following a 2.8 percent increase in the third quarter, pulling its four-quarter growth rate up to 1.1 percent (from −0.2 percent previously). The two major components that comprise nonresidential investment continued to follow competing trends, though gains in equipment and software (E&S) edged out continued losses in structures leading to an overall contribution of 0.3 pp from BFI. Structures slipped down another 15.4 percent in the fourth quarter and are now down a whopping 24.7 percent on a year-over-year basis (a new post-war low). On the other hand, E&S jumped up 13.3 percent in the fourth quarter.

    Final sales of domestic product—which is GDP less the change in private inventories—rose 2.2 percent in the fourth quarter, again beating expectations (with help from a relatively large jump in exports). However, final sales to domestic purchasers (GDP less inventories and net exports)—a measure some consider a closer proxy of domestic demand—rose just 1.7 percent in the fourth quarter, following a 2.3 percent gain in the third quarter.

  • 01.28.2010
  • Durable Goods
  • New orders for durable goods rose 0.3 percent in December, following a 0.4 percent drop in November (that was revised down from a slight gain). Still, its 12-month growth rate continued to improve, from −6.9 percent to −3.1 percent, as some of the most dramatic declines of the recession start to roll-off the calculation. The three-month annualized growth rate in new orders has slipped back down below zero in December, to −0.7 percent. Excluding transportation, new orders rose 0.9 percent in December, pulling its 12-month growth rate up to 0.5 percent, positive for the first time since July 2008. Orders for nondefense capital goods excluding aircraft jumped up 1.3 percent in December, following a strong 3.1 percent gain in November, putting its three-month annualized growth rate at 10.9 percent. Growth in shipments was also robust in December, rising 2.9 percent (its fourth consecutive increase). Durable goods inventories continued to shrink in December, contracting by 0.2 percent, though at a pace that has been abating from an average 1.4 percent decline during the first quarter of the 2009.
  • 04.02.2008
  • Factory Orders
  • New orders for manufactured goods surprised expectations of a 0.8 percent decrease, by falling 1.7 percent (nonannualized rate) in February, following a 2.3 percent drop in January. New orders for nondefense capital goods (excluding aircraft) decreased 2.4 percent during the month. Shipments of manufactured goods fell 1.0 percent in February, but are 1.3 percent over the last 6 months. Inventories continued to accumulate in February, rising 0.5 percent, and are up 5.5 percent over the 12 months.