Monday September 29 2014
US Consumer Spending Beats Expectations
Bureau of Economic Analysis | Joana Taborda | joana.taborda@tradingeconomics.com

US personal spending increased 0.5 percent in August, after being flat in July and personal income rose 0.3 percent. The saving rate decreased by 20 bps to 5.4 percent.

Personal income increased $47.3 billion, or 0.3 percent, and disposable personal income (DPI) increased $35.2 billion, or 0.3 percent, in August. Personal consumption expenditures increased $57.5 billion, or 0.5 percent.  In July, personal income increased $35.9 billion, or 0.2 percent, DPI increased $24.6 billion, or 0.2 percent, and PCE increased $0.5 billion, or less than 0.1 percent, based on revised estimates.

Private wages and salaries increased $30.4 billion in August, compared with an increase of $17.4 billion in July. Goods-producing industries' payrolls increased $6.0 billion, compared with an increase of $1.2 billion; manufacturing payrolls increased $3.6 billion, in contrast to a decrease of $0.8 billion.  Services-producing industries' payrolls increased $24.6 billion, compared with an increase of $16.2 billion.  Government wages and salaries increased $1.4 billion, compared with an increase of $1.1 billion.

Personal saving was $705.3 billion in August, compared with $730.5 billion in July. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.4 percent in August, compared with 5.6 percent in July. 





Friday September 26 2014
US Consumer Sentiment Confirmed at 14-Month High
The Thomson Reuters/University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The Thomson Reuters/University of Michigan's final reading on the overall index of consumer sentiment came in at 84.6 in September, unchanged from the preliminary estimate and up from 82.5 in August. It is the highest figure since July of 2013.

The barometer of current economic conditions increased marginally to a final 98.9 from a preliminary 98.5. It went down from 99.8 in August.

The final gauge of consumer expectations decreased slightly to 75.4 from a preliminary 75.6 but rose from 71.3 in August. 

Inflation expectations were unchanged from the preliminary estimate. The one-year inflation expectations decreased to 3 percent in September from 3.2 percent in August and the five-to-10-year inflation outlook slowed to 2.8 percent from 2.9 percent.




Friday September 26 2014
US GDP Growth Revised Up to 4.6%
U.S. Commerce Department | Joana Taborda | joana.taborda@tradingeconomics.com

The United States economy advanced an annualized 4.6 percent in the second quarter of 2014, according to the final estimate released by the Bureau of Economic Analysis. It is the highest growth rate in 2-1/2 years, as business investment and exports grew more than expected.

This upturn in the percent change in real GDP primarily reflected upturns in exports and in private inventory investment, accelerations in nonresidential fixed investment and in PCE, and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration in imports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 2.0 percent in the second quarter, 0.1 percentage point more than in the second estimate; this index increased 1.4 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent, compared with an increase of 1.3 percent.

Real personal consumption expenditures increased 2.5 percent in the second quarter, compared with an increase of 1.2 percent in the first. Durable goods increased 14.1 percent, compared with an increase of 3.2 percent. Nondurable goods increased 2.2 percent; it was unchanged in the first quarter. Services increased 0.9 percent, compared with an increase of 1.3 percent.

Real nonresidential fixed investment increased 9.7 percent in the second quarter, compared with an increase of 1.6 percent in the first. Investment in nonresidential structures increased 12.6 percent, compared with an increase of 2.9 percent. Investment in equipment increased 11.2 percent, in contrast to a decrease of 1.0 percent. Investment in intellectual property products increased 5.5 percent, compared with an increase of 4.6 percent. Real residential fixed investment increased 8.8 percent, in contrast to a decrease of 5.3 percent.

Real exports of goods and services increased 11.1 percent in the second quarter, in contrast to a decrease of 9.2 percent in the first. Real imports of goods and services increased 11.3 percent, compared with an increase of 2.2 percent.

Real federal government consumption expenditures and gross investment decreased 0.9 percent in the second quarter, compared with a decrease of 0.1 percent in the first. National defense increased 0.9 percent, in contrast to a decrease of 4.0 percent. Nondefense decreased 3.8 percent, in contrast to an increase of 6.6 percent. Real state and local government consumption expenditures and gross investment increased 3.4 percent, in contrast to a decrease of 1.3 percent.

The change in real private inventories added 1.42 percentage points to the second-quarter change in real GDP after subtracting 1.16 percentage points from the first-quarter change. Private businesses increased inventories $84.8 billion in the second quarter, following increases of $35.2 billion in the first quarter and $81.8 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 3.2 percent in the second quarter, in contrast to a decrease of 1.0 percent in the first.




Thursday September 25 2014
US Durable Goods Orders Fall Sharply
US Census Bureau |Joana Taborda | joana.taborda@tradingeconomics.com

New orders for manufactured durable goods shrank 18.2 percent in August, following a revised 22.5 percent surge in July. Excluding transportation, new orders rose 0.7 percent.

New orders decreased USD 54.5 billion to USD 245.4 billion in August. Excluding defense, new orders decreased 19.0 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, USD 55.6 billion or 42.0 percent to USD 76.8 billion.

Inventories of manufactured durable goods in August, up sixteen of the last seventeen months, increased $1.7 billion or 0.4 percent to $403.0 billion. Nondefense new orders for capital goods in August decreased $49.5 billion or 36.3 percent to $86.8 billion.

Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased USD 3.7 billion or 1.5 percent to USD 246.1 billion. This followed a 3.7 percent July increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, USD 3.9 billion or 5.1 percent to USD 72.5 billion.

Unfilled orders for manufactured durable goods in August, up sixteen of the last seventeen months, increased USD 7.4 billion or 0.6 percent to USD 1,165.0 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 5.3 percent July increase.




Thursday September 25 2014
US Jobless Claims Rise Below Expectations
DOL | Nuno Fontes | nuno@tradingeconomics.com

In the week ending September 20, the advance figure for seasonally adjusted initial claims was 293,000, an increase of 12,000 from the previous week's revised level. The 4-week moving average was 298,500, a decrease of 1,250 from the previous week's revised average.

The previous week's level was revised up by 1,000 from 280,000 to 281,000. The previous week's average was revised up by 250 from 299,500 to 299,750. 

There were no special factors impacting this week's initial claims. 

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 13, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 13 was 2,439,000, an increase of 7,000 from the previous week'srevised level. The previous week's level was revised up 3,000 from 2,429,000 to 2,432,000. The 4-week moving average was 2,460,250, a decrease of 22,250 from the previous week's revised average. This is the lowest level for this average since June 9, 2007 when it was 2,458,250. The previous week's average was revised up by 750 from 2,481,750 to 2,482,500. 




Wednesday September 24 2014
US New Home Sales Surge in August
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses increased 18 percent in August of 2014 to a seasonally adjusted annual rate of 504,000. It is the highest reading since May of 2008.

The July rate was revised upwards to 427,000.

The median sales price of new houses sold in August 2014 was $275,600; the average sales price was $347,900. The seasonally adjusted estimate of new houses for sale at the end of August was 203,000. This represents a supply of 4.8 months at the current sales rate.

Sales in the West rose the most in August over July (+50 percent), followed by the Northeast region (+29.2 percent) and the South (+7.8). Sales in the Midwest were flat.

Year-on-year, new home sales increased 33 percent. 




Tuesday September 23 2014
US Factory Activity Robust in September
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The seasonally adjusted Markit Flash U.S. Manufacturing PMI came in at 57.9 9 in September, unchanged from August’s fifty-two-month high. Manufacturing employment rose at its fastest pace in two-and-a-half-years, boosted by further strong rises in output and new orders.

A continued strong improvement in overall business conditions in September reflected further marked rises in output and new business volumes. The latest upturn in production volumes stretched the current period of continuous expansion to five years. September data meanwhile pointed to one of the strongest increases in new work since the survey began in May 2007. 

Anecdotal evidence suggested that improving domestic economic conditions and confidence towards the business outlook underpinned the latest increase in new business volumes. Moreover, there was a further boost from increasing export sales across the manufacturing sector in September. Although the pace of new export order growth eased slightly since August, the latest expansion was still one of the sharpest recorded over the past three years.

Increased levels of new work from both domestic and export clients contributed to a robust and accelerated pace of job creation in September. Payroll numbers rose at the fastest rate since March 2012 (and joint-strongest rise for seven years), with survey respondents citing improving demand conditions and associated efforts to boost capacity.




Thursday September 18 2014
US Housing Starts Fall Sharply in August
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 956,000, 14.4 percent below the revised July estimate of 1,117,000. It is the biggest drop since April of 2013.

Single-family housing starts in August were at a rate of 643,000; this is 2.4 percent below the revised July figure of 659,000. The August rate for units in buildings with five units or more was 304,000. Year-on-year, housing starts rose 8 percent above the August 2013 rate of 885,000.

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 998,000. This is 5.6 percent below the revised July rate of 1,057,000, but is 5.3 percent above the August 2013 estimate of 948,000. Single-family authorizations in August were at a rate of 626,000; this is 0.8 percent below the revised July figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 343,000 in August.




Thursday September 18 2014
US Jobless Claims Down to 8-Week Low
DOL | Nuno Fontes | nuno@tradingeconomics.com

In the week ending September 13, the advance figure for seasonally adjusted initial claims was 280,000, a decrease of 36,000 from the previous week's revised level. It is the lowest figure since late June.

The previous week's level was revised up by 1,000 from 315,000 to 316,000. The 4-week moving average was 299,500, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 304,000 to 304,250. 

There were no special factors impacting this week's initial claims. 

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 6, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 6 was 2,429,000, a decrease of 63,000 from the previous week's revised level. This is the lowest level for insured unemployment since May 19, 2007 when it was 2,417,000. The previous week's level was revised up 5,000 from 2,487,000 to 2,492,000. The 4-week moving average was 2,481,750, a decrease of 18,250 from the previous week's revised average. This is the lowest level for this average since June 23, 2007 when it was 2,477,250. The previous week's average was revised up by 1,250 from 2,498,750 to 2,500,000. 


Wednesday September 17 2014
US Fed Renews Zero Interest Rate Pledge
Federal Reserve | anna@tradingeconomics.com

The Federal Reserve confirmed its commitment to keep interest rates near zero for a “considerable time” after asset purchases are completed and said the economy is expanding at a moderate pace and inflation is below its goal.

Extracts from the FOMC statement from Sept 16-17 meeting:

Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee's longer-run objective. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced and judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in October, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $5 billion per month rather than $10 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $10 billion per month rather than $15 billion per month.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will 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 developments. The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.


When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.