Friday April 21 2017
US Factory Activity Growth Lowest in 7 Months
Markit | Joana Taborda |

The Markit US Manufacturing PMI fell to 52.8 in April of 2017 from 53.3 in March and well below market expectations of 53.5, flash figures showed. It is the lowest reading since September of 2016, indicating another slowdown in manufacturing growth from the near two-year high in January, mainly due slower expansion in output and new orders.

The main positive development was a slight rebound in manufacturing job creation from the seven-month low seen during March. 

Manufacturers were more cautious in terms of their pre-production inventories in April. The decline in stocks of inputs ended a six-month period of sustained inventory building. 

April data signalled a sharp and  accelerated rise in average cost burdens across the manufacturing sector. The rate of input cost inflation was the fastest since December 2013, which survey respondents linked to rising commodity prices (particularly metals). Meanwhile, pressure on margins from higher input costs contributed to the strongest increase in factory gate charges for almost two-and-a-half years.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The PMI data suggest the US economy lost further momentum at the start of the second quarter. The surveys are signalling a GDP growth rate of 1.1% after 1.7% in the first quarter. “The vast services economy saw the weakest monthly expansion for seven months and the manufacturing sector showed signs of growth slowing further from the two-year high seen at the start of the year, despite export orders lifting higher. “The labour market also continued to soften. The surveys signalled a marked step-down in the pace of hiring in March which has continued into April. The latest survey data are consistent with only around 100,000 non-farm payroll growth. “The survey responses indicate that some froth has come off the economy since the post-election bounce seen at the end of last year. However, with inflows of new business picking up slightly in April and business optimism about the year ahead also brightening, there’s good reason to believe that growth could revive again in coming months.” 

Thursday April 20 2017
US Jobless Claims Rise More Than Expected
DOL | Joana Ferreira |

The number of Americans filing for unemployment benefits increased by 10 thousand to 244 thousand in the week ended April 15th 2017 from the previous week's unrevised level of 234 thousand and above market expectations of 242 thousand.

Claims have now been below 300,000 for 111 straight weeks, the longest such stretch since 1970.

The 4-week moving average was 243,000, a decrease of 4,250 from the previous week's unrevised average of 247,250.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending April 8, a decrease of 0.1 percentage point from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending April 8 was 1,979,000, a decrease of 49,000 from the previous week's unrevised level of 2,028,000. This is the lowest level for insured unemployment since April 15, 2000 when it was 1,962,000. The 4-week moving average was 2,023,500, a decrease of 2,000 from the previous week's unrevised average of 2,025,500. This is the lowest level for this average since June 17, 2000 when it was 2,016,750.

Tuesday April 18 2017
US Industrial Production Rises As Utilities Output Rebounds
Federal Reserve | Joana Ferreira |

US industrial production rose by 0.5 percent month-over-month in March 2017, following a 0.1 percent gain in February and matching market expectations. Utilities output jumped 8.6 percent, the largest gain on record, while manufacturing production fell 0.4 percent, missing consensus of a 0.1 percent gain.

Utilities output jumped 8.6 percent, the largest gain on record, recovering from a 5.8 percent drop in the previous month, as the demand for heating returned to seasonal norms after being suppressed by unusually warm weather in February. Also, mining output edged up 0.1 percent after rising by 2.9 percent in the previous month.

By contrast, manufacturing production fell 0.4 percent, following a 0.3 percent increase in February and missing expectations of a 0.1 percent gain, due to a large step-down in the production of motor vehicles and parts. Factory output aside from motor vehicles and parts moved down 0.2 percent.

Compared to the same month of 2016, industrial output rose 1.5 percent, as output rose for manufacturing (0.8 percent), utilities (4.6 percent) and mining (2.9 percent).

For the first quarter as a whole, industrial production rose at an annual rate of 1.5 percent.

Capacity utilization for the industrial sector increased 0.4 percentage point in March to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.

Tuesday April 18 2017
US Housing Starts Fall More Than Expected
U.S. Census Bureau | Joana Taborda |

Housing starts in the United States slumped 6.8 percent from the previous month to a seasonally adjusted annualized rate of 1215 thousand in March of 2017, following an upwardly revised 1303 thousand in the previous month and much worse than market expectations of a 3 percent drop. It is the lowest rate in four months, led by drops in the Midwest.

Single-family housing starts, the largest segment of the market shrank 6.2 percent to 821 thousand. In addition, the volatile multi-family segment declined 6.1 percent to 385 thousand. Starts slumped in the Midwest (-16.2 percent to 155 thousand), the West (-16 percent to 284 thousand) and the South (-2.9 percent to 645 thousand) but rose 12.9 percent in the Northeast (to 131 thousand). 

Building permits increased 3.6 percent to a seasonally adjusted annual rate of 1260 thousand, more than market expectations of a 2.8 percent rise. Building permits for multi-family units jumped 18.3 percent to 401 thousand while single-family authorizations dropped 1.1 percent to 823 thousand. Permits went up in the West (16.7 percent to 315 thousand), the Northeast (15.5 percent to 134 thoudand) and the South (6 percent to 619 thousand) while fell 22 percent to 192 thousand in the Midwest.  

Friday April 14 2017
US Inflation Rate Down To 2.4% In March
BLS | Joana Taborda |

Consumer prices in the United States increased 2.4 percent year-on-year in March of 2017, lower than 2.7 percent in February and below market expectations of 2.6 percent. It is the lowest inflation rate in three months due to a slowdown in energy and services cost. On a monthly basis, consumer prices went down 0.3 percent, the first drop in 13 months.

Year-on-year, energy prices rose 10.9 percent, lower than 15.2 percent in February. In addition, prices of services less energy rose less (2.9 percent from 3.1 percent) and cost of used cars and trucks fell more (-4.7 percent from -4.3 percent). In contrast, inflation rose for transportation services (3.8 percent from 3.6 percent in February) and food (0.5 percent from a flat reading) and was steady for shelter (3.5 percent) and medical care (3.4 percent).
Annual core inflation, which excludes food and energy eased to 2 percent from 2.2 percent in the previous month. It is the lowest core inflation since November of 2015 and below market expectations of 2.3 percent.
On a monthly basis, the energy index declined 3.2 percent, with the gasoline index falling 6.2 percent, and other major energy component indexes decreasing as well. In addition, a drop in the index for wireless telephone services also had a downward pressure. The food index rose 0.3 percent, with the index for food at home increasing 0.5 percent, its largest gain since May 2014.
Excluding food and energy, consumer prices fell 0.1 percent, its first decline since January of 2010. The shelter index rose 0.1 percent, and the indexes for motor vehicle insurance, medical care, tobacco, airline fares, and alcoholic beverages also increased in March. These increases were more than offset by declines in several indexes, including those for wireless telephone services, used cars and trucks, new vehicles, and apparel.

Friday April 14 2017
US Retails Sales Drop 0.2% in March
Anna |

Retail sales in the United States decreased by 0.2 percent month-over-month in March 2017 after February figures were revised to a 0.3 percent drop which previously was reported as a 0.1 percent gain. The primary drivers of the decline were lower spending at auto dealerships and gas stations. It was the first consecutive two-month drop in more than two years.

Retail control-group sales, which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials outlets and gasoline stations, rose 0.5 percent after falling 0.2 percent in February. 

Sales declined in six of 13 major retail categories in March. 

Purchases at auto dealers decreased 1.2 percent in March after a 1.5 percent drop. Receipts at gasoline service stations fell 1 percent in March after decling 0.3 percent in February.  Retail sales excluding autos were little changed for a second straight month.

Sales also declined at: building materials outlets  (-1.5 percent vs +2.6 percent in February); furniture stores (-0.3 percent vs +0.2 percent ); sporting goods, hobby, book and music stores (-0.8 percent vs +0.4 percent); food services and drinking places (-0.6 percent vs -0.3 percent)).

Purchases rose at: electronics and appliances stores (2.6 percent vs -1.9 percent)), food and bevereage stores (0.5 percent vs 0 percent), health and personal care stores (0.1 percent vs 0.9 percent), clothing and clothing accessories (1 percent vs -2.7 percent) and  general merchandise stores (0.3 percent vs -0.4 percent).

Thursday April 13 2017
US Consumer Sentiment At 3-Month High
University of Michigan | Joana Taborda |

The University of Michigan's consumer sentiment for the United States rose to 98 in April of 2017 from 96.9 in the previous month, according to preliminary estimates. Figures beat market forecasts of 96.5, boosted by an improvement in current financial and economic situation.

The barometer for current economic conditions jumped to 115.2 from 113.2 in March, the highest level since November of 2000.

The gauge of future expectations increased to 86.9 from 86.5.

Americans expect the inflation rate to be 2.5 percent next year and 2.4 percent in the next 5 years, both unchanged from the previous month.

"While partisanship had no impact on the Current Conditions Index (Democrats and Republicans differed by just 0.4 points), the data suggest the beginning of a convergence on the Expectations Index, with the figure for Democrats rising 7% and falling for Republicans by 7%, although the gap still remained an astonishing 50.5 Index points. Much more progress on shrinking the partisan gap is needed to bring economic expectations in line with reality. A slow pace of convergence will make it more difficult to disentangle political fervor from what appears to be a growing sense among consumers that the economy will experience fundamental changes in the years ahead. It can be anticipated that optimism will commingle with uncertainty, causing uneven spending patterns across months. Moreover, differential price trends for assets, products, and imports will cause uneven trends in incomes, wealth, and spending across products as well as economic subgroups."

Thursday April 13 2017
US Initial Jobless Claims Edge Down To 234K
DOL | Joana Taborda |

The number of Americans filing for unemployment benefits decreased by 1 thousand to 234 thousand in the week ended April 8th 2017 from the previous period, below expectations of 245 thousand. It is the lowest figure in six weeks. The 4-week moving average that removes week-to-week volatility fell by 3 thousand to 247.25 thousand.

The previous week's level was revised up by 1,000 to 235,000. The previous week's moving average was revised up by 250 to 250,250.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending April 1, unchanged from the previous week's unrevised rate.

Continuing claims decreased by 7,000 to 2,028,000. The previous week's level was revised up 7,000 to 2,035,000. The 4-week moving average was 2,025,500, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 1,750 to 2,024,750. 

Wednesday April 12 2017
US Budget Deficit Beats Estimates In March
US Treasury | Yekaterina Guchshina |

The US government posted a USD 176 billion budget deficit in March of 2017, compared to a USD 108 billion gap a year earlier and above market expectations of USD 167 billion. Outlays increased 17 percent to USD 393 billion while receipts fell by 5 percent to USD 217 billion.

In March, social security accounted for USD 79 billion of total outlays, medicare for USD 75 billion, defense for USD 46 billion, interest on debt for USD 30 billion and other expenses for the remaining USD 151 billion. Regarding receipts, social security and other payroll taxes accounted for USD 96 billion, individual income taxes for USD 84 billion, corporate income taxes for USD 13 billion and other taxes and duties for the remaining USD 24 billion.

Outlays for military active duty and retirement, veterans' benefits, supplemental security income, and medicare payments to health maintenance organizations and prescription drug plans accelerated into March, because April 1, 2017, the normal payment date, fell on a non-business day.

When adjusting for calendar effects, the March 2017 deficit was USD 140 billion.

The fiscal 2017 year-to-date deficit widened to USD 527 billion compared with USD 459 billion in the same period of fiscal 2016.

Friday April 07 2017
US Unemployment Rate Falls To Near 10-Year Low
BLS | Joana Ferreira |

US unemployment rate fell to 4.5 percent in March 2017 from 4.7 percent in the previous month, better than market expectations of 4.7 percent. It was the lowest jobless rate since May 2007, as the number of unemployed persons declined by 326,000 to 7.2 million while the labor force participation rate was unchanged at an 11-month high of 63 percent.

Among the major worker groups, the unemployment rates for adult women (4.0 percent), Whites (3.9 percent), and Hispanics (5.1 percent) declined in March. The jobless rates for adult men (4.3 percent), teenagers (13.7 percent), Blacks (8.0 percent), and Asians (3.3 percent) showed little or no change.

The number of persons unemployed less than 5 weeks declined by 232,000 to 2.3 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed over the month at 1.7 million and accounted for 23.3 percent of the unemployed. Over the past 12 months, the number of long-term unemployed was down by 526,000.

The labor force participation rate remained at 63.0 percent in March, and the employment-population ratio, at 60.1 percent, changed little. The employment-population ratio has edged up over the year, while the labor force participation rate has shown no clear trend. 

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.6 million, was little changed in March but was down by 567,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

There were 1.6 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 460,000 discouraged workers in March, down by 125,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in March had not searched for work for reasons such as school attendance or family responsibilities.