Tuesday August 23 2016
US New Home Sales Jump to Nearly 9-Year High
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses in the United States surged 12.4 percent to a seasonally adjusted annual rate of 654,000 in July of 2016. It is the highest figure since October of 2007 and much better than market expectations of 580,000. Figures for June were revised down by 10,000 to 582,000.

Sales in the Northeast went up 40 percent to 35 thousand; those in the South grew 18.1 percent to 398 thousand and in the Midwest sales rose 1.2 percent to 84 thousand while those in the West were flat at 137 thousand. 

The median sales price of new houses sold declined to $294,600 from $310,500 in the previous month and $296,000 a year earlier. In contrast, the average sales price went up to $355,800 from $353,500 in the previous month and $341,900 a year earlier. 

The stock of new houses for sale fell 2.9 percent to 233,000, the lowest so far this year. This represents a supply of 4.3 months at the current sales rate.

Year-on-year, new home sales increased 31.3 percent. 




Tuesday August 23 2016
US Markit Manufacturing PMI Lower than Expected
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The Markit Flash US Manufacturing PMI came in at 52.1 in August of 2016, down from 52.9 in the previous month and lower than market expectations of 52.7. Production continued to expand although new orders growth slowed despite a faster increase in export sales and job creation also eased.

U.S. manufacturers signalled increased output for the third month running in August. Furthermore, the rate of expansion remained solid overall, having edged up slightly from July to a nine-month high. Anecdotal evidence suggested that new product launches, stronger underlying demand and new marketing strategies had supported production growth in August.

Although solid growth of output was sustained, total new orders expanded at a slower rate in August. Data indicated that relatively subdued domestic demand was a reason behind softer growth in overall new work, as export sales increased at the fastest pace in 23 months. While some companies commented that a number of clients had adopted a wait-and-a-see approach until the outcome of the presidential election, others mentioned that total new work had been boosted by new foreign client wins over the latest survey period.

Manufacturing employment increased only slightly during August. Furthermore, it was the weakest rate of payroll growth seen for four months. Greater staff numbers were generally linked to higher amounts of new work. At the same time, other firms mentioned that efforts to raise efficiency had weighed on overall jobs growth. August survey data pointed to a further rise in purchasing activity, which was generally attributed to greater amounts of incoming new work. In line with the trend for new orders, however, the rate of expansion slowed since July. Meanwhile, stocks of finished goods and purchased items both fell as companies generally adopted cautious inventory policies.

Average cost burdens faced by U.S. manufacturers rose only slightly during August. Furthermore, the rate of input price inflation was the slowest seen in the current five-month sequence of increasing costs.

Prices charged for U.S. manufactured goods were unchanged in August, thereby ending a three-month sequence of increase. According to anecdotal evidence, greater competition for new work had weighed on the overall pricing power of firms in the latest survey period.




Thursday August 18 2016
US Jobless Claims at 4-Week Low
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

The number of Americans filing for unemployment benefits decreased by 4,000 to 262,000 in the week ended August 13th, 2016. It is the lowest figure in four weeks and better than market expectations of 265,000. It marks the 76th consecutive week initial claims are below 300,000, the longest streak since 1970 and signaling the labour market strength.

The 4-week moving average was 265,250, an increase of 2,500 from the previous week's unrevised average of 262,750.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending August 6, unchanged from the previous week's unrevised rate. 

Continuing claims were at 2,175,000 during the week ended August 6 2016, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up 5,000 from 2,155,000 to 2,160,000. 

The 4-week moving average was 2,155,000, an increase of 10,750 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,143,000 to 2,144,250. 




Wednesday August 17 2016
Fed Leaves 2016 Rate Hike Option Open
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

Fed policymakers considered that near-term risks to the US outlook had diminished although the UK vote to leave the EU and other developments abroad still impart uncertainty. As a result, Fed officials decided to leave policy options open and maintain the flexibility to adjust rates based on incoming information, thus leaving the door open for a rate hike this year, minutes from FOMC meeting held on July 26-27th showed.

Extracts From the Minutes of the Federal Open Market Committee:
While members judged that near-term risks to the domestic outlook had diminished, some noted that the U.K. vote, along with other developments abroad, still imparted significant uncertainty to the medium- to longer-term outlook for foreign economies, with possible consequences for the U.S. outlook. As a result, members agreed to indicate that they would continue to closely monitor global economic and financial developments.

After assessing the outlook for economic activity, the labor market, and inflation, as well as the risks around that outlook, members decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent at this meeting. Members generally agreed that, before taking another step in removing monetary accommodation, it was prudent to accumulate more data in order to gauge the underlying momentum in the labor market and economic activity. A couple of members preferred also to wait for more evidence that inflation would rise to 2 percent on a sustained basis. Some other members anticipated that economic conditions would soon warrant taking another step in removing policy accommodation. One member preferred to raise the target range for the federal funds rate at the current meeting, citing the easing of financial conditions since the U.K. referendum, the return to trend economic growth, solid job growth, and inflation moving toward 2 percent.

Members again agreed that, in determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee would assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. They noted that this assessment would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee expected that economic conditions would evolve in a manner that would warrant only gradual increases in the federal funds rate, and that the federal funds rate was likely to remain, for some time, below levels that are expected to prevail in the longer run. However, members emphasized that the actual path of the federal funds rate would depend on the economic outlook as informed by incoming data. In that regard, members judged it appropriate to continue to leave their policy options open and maintain the flexibility to adjust the stance of policy based on incoming information and its implications for the Committee's assessment of the outlook for economic activity, the labor market, and inflation, as well as the risks to the outlook. Most members noted that effective communications from the Committee would help the public understand how monetary policy might respond to incoming data and developments.




Tuesday August 16 2016
US Industrial Production Growth at 20-Month High
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

Industrial output in the United States went up 0.7 percent in July from June of 2016, following a downwardly revised 0.4 percent gain in the previous period and better than market expectations of a 0.3 percent increase. It is the biggest rise since November of 2014 boosted by a 0.5 percent growth in manufacturing.

Manufacturing output increased 0.5 percent, the largest gain since July 2015. Durables, nondurables, and other manufacturing (publishing and logging) all recorded gains of about 0.5 percent. Among durables, increases of more than 1 percent occurred in motor vehicles and parts, wood products, and miscellaneous goods. Within nondurables, petroleum and coal products, chemicals, and plastics and rubber products posted gains of 0.8 percent or higher, while printing and support activities registered the only decrease of more than 1 percent. 

The output of mining moved up 0.7 percent with declines in oil and gas extraction more than offset by increases in the indexes for oil well drilling and servicing and for coal. The index has increased modestly, on net, over the past three months after having fallen about 17 percent between December 2014 and April 2016.

The index for utilities rose 2.1 percent as a result of warmer-than-usual weather in July boosting demand for air conditioning. 

Capacity utilization for the industrial sector increased 0.5 percentage point in July to 75.9 percent, a rate that is 4.1 percentage points below its long-run (1972–2015) average. 

On a yearly basis, industrial production fell 0.5 percent. 




Tuesday August 16 2016
US Housing Starts Rise to 5-Month High in July
U.S. Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

Housing starts in the Unites States rose 2.1 percent to a seasonally adjusted annual rate of 1211 thousand in July 2016 compared to a downwardly revised 1186 thousand in the previous month. The figure came in above market expectations of 1180 thousand to hit the highest level since February, as building activity increased across the board. Housing starts rose the most in the Northeast.

Figures for June were revised to show housing starts rose sharply by 5.1 percent compared to an initial gain of 4.8 percent.

In July, starts of single family houses rose 0.5 percent to 770 thousand and starts of buildings with five units or more jumped 8.3 percent to 433 thousand. Housing starts rose the most in the Northeast (+15.5 percent), followed by the South (+3.5 percent) and the Midwest (+2.3 percent); but dropped in the West (-5.9 percent).

Meanwhile, building permits edged down 0.1 percent to 1152 thousand from 1153 in June, following a 1.5 percent rise in the previous month but lower than an expected 0.6 percent gain. Single-family permits were down 3.7 percent to 711 thousand while authorizations in buildings with five units or more climbed 6.5 percent to 411 thousand. Decreases were recorded in the Northeast (-10.2 percent) and the West (-8 percent); while increases were recorded in the Midwest (+10.5 percent) and the South (+2.6 percent).

Year-on-year, housing starts rose 5.6 percent and building permits went up 0.9 percent.




Tuesday August 16 2016
US Inflation Rate Slows to 7-Month Low of 0.8%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the United States rose 0.8 percent year-on-year in July of 2016, following a 1 percent increase in the previous two months and below market expectations of 0.9 percent. It is the lowest inflation figure since December last year as shelter cost rose at a slower pace, food inflation eased to a fresh 6-1/2-year low and energy cost fell further.

Year-on-year, prices of services less energy increased 3.1 percent, slowing from a 3.2 percent rise in June: inflation accelerated for medical care (4.1 percent from 3.8 percent in June), was steady for transportation services (3 percent) and slowed for shelter (3.3 percent from 3.5 percent in June). Food inflation eased for the third straight month to 0.2 percent from 0.3 percent in June, reaching a new low since March of 2010. In addition, energy prices fell more (-10.9 percent from -9.4 percent in June).

Annual core inflation which excludes food and energy eased to 2.2 percent from 2.3 percent in the previous month and below market expectations of 2.3 percent.  

On a monthly basis, consumer prices were unchanged in July, in line with forecasts and following a 0.2 percent rise in the previous two months. The energy index declined 1.6 percent after rising in each of the last four months, mainly due to a sharp decrease in the gasoline index. Food prices were unchanged: the food at home index declined 0.2 percent as four of the six major grocery store food group indexes decreased, while the index for food away from home rose 0.2 percent.

Excluding food and energy, consumer prices edged up 0.1 percent, its smallest increase since March. 




Friday August 12 2016
US Consumer Sentiment Improves Slightly in August
University of Michigan | Joana Ferreira | joana.ferreira@tradingeconomics.com

The University of Michigan's consumer sentiment for the United States came in at 90.4 in August 2016 from 90 in July but well below market expectations of 91.5, preliminary figures showed. Consumer expectations improved firmly while current conditions deteriorated.

The barometer of consumer expectations went up to 80.3 from 77.8 in the previous month while the gauge of current economic conditions declined to 106.1 from 109 in July.

Americans expect the inflation rate in the next year to be 2.5 percent from 2.7 percent in July. Over the next 5 years, they expect consumer prices to accelerate to 2.6 percent, the same as in previous month. 




Friday August 12 2016
US Retail Sales Unchanged in July
US Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

Retail sales in the United States were flat in July from June 2016 compared to an upwardly revised 0.8 percent gain in the previous period while missing market expectations of 0.4 percent rise.

Sales at nonstore retailers went up 1.3 percent, the same pace as in the previous month, and those at motor vehicle and part dealers rose 1.1 percent compared to a 0.5 percent growth in May. Additional upward pressure came from sales at health and personal care stores (+0.1 percent); miscellaneous store retailers (+0.3 percent); furniture and home furniture stores (+0.2 percent). 

By contrast, sales at building material and garden equipment and supplies dealers dropped 0.5 percent after growing by 4.2 percent in June; and those at gasoline stations fell 2.7 percent, following a 2.2 percent gain.

Compared with the same month of the previous year, retail sales advanced 2.3 percent, slowing from a 2.7 percent gain in June.




Thursday August 11 2016
US Jobless Claims Below 300K for Longest Streak Since 1970
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits decreased by 1,000 to 266,000 in the week ended August 6th compared with the previous week's revised level of 267,000. The figure came in above market expectations of 265,000. This marks 75 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The 4-week moving average was 262,750, an increase of 3,000 from the previous week's revised average. The previous week's average was revised down by 500 from 260,250 to 259,750.

The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending July 30, unchanged 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 July 30 was 2,155,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,138,000 to 2,141,000. The 4-week moving average was 2,143,000, an increase of 500 from the previous week's revised average. The previous week's average was revised up by 750 from 2,141,750 to 2,142,500.