Thursday October 30 2014
US GDP Growth Beats Expectations in Q3
U.S. Commerce Department | Joana Taborda | joana.taborda@tradingeconomics.com

The United States economy advanced an annualized 3.5 percent in the third quarter of 2014, slowing from a 4.6 percent increase in the previous period. Advance estimates showed a downturn in inventory, residential and nonresidential investment and deceleration in personal consumption, exports and state and local public spending.

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and deceleration in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.

Real personal consumption expenditures increased 1.8 percent in the third quarter, compared with an increase of 2.5 percent in the second. Durable goods increased 7.2 percent, compared with an increase of 14.1 percent. Nondurable goods increased 1.1 percent, compared with an increase of 2.2 percent. Services increased 1.1 percent, compared with an increase of 0.9 percent.

Real nonresidential fixed investment increased 5.5 percent in the third quarter, compared with an increase of 9.7 percent in the second. Investment in nonresidential structures increased 3.8 percent, compared with an increase of 12.6 percent. Investment in equipment increased 7.2 percent, compared with an increase of 11.2 percent. Investment in intellectual property products increased 4.2 percent, compared with an increase of 5.5 percent. Real residential fixed investment increased 1.8 percent, compared with an increase of 8.8 percent.

Real exports of goods and services increased 7.8 percent in the third quarter, compared with an increase of 11.1 percent in the second. Real imports of goods and services decreased 1.7 percent, in contrast to an increase of 11.3 percent.

Real federal government consumption expenditures and gross investment increased 10.0 percent in the third quarter, in contrast to a decrease of 0.9 percent in the second. National defense increased 16.0 percent, compared with an increase of 0.9 percent. Nondefense increased 0.5 percent, in contrast to a decrease of 3.8 percent. Real state and local government consumption expenditures and gross investment increased 1.3 percent, compared with an increase of 3.4 percent.

The change in real private inventories subtracted 0.57 percentage point from the third-quarter change in real GDP after adding 1.42 percentage points to the second-quarter change. Private businesses increased inventories $62.8 billion in the third quarter, following increases of $84.8 billion in the second quarter and $35.2 billion in the first.




Thursday October 30 2014
Jobless Claims Increase Slightly in Latest Week
Anna Fedec | anna@tradingeconomics.com

Applications for unemployment benefits rose by 3K to 287K in the week ending October 25th. Despite the increase in the latest week, the 4-week moving average was the lowest than at any time in more than 14 years.

The previous week's level was revised up by 1,000 from 283,000 to 284,000. The 4-week moving average was 281,000, a decrease of 250 from the previous week's revised average. 

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending October 18, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 18 was 2,384,000, an increase of 29,000 from the previous week's revised level. The previous week's level was revised up 4,000 from 2,351,000 to 2,355,000. The 4-week moving average was 2,377,500, a decrease of 4,500 from the previous week's revised average. This is the lowest level for this average since January 13, 2001 when it was 2,360,500. The previous week's average was revised up by 1,000 from 2,381,000 to 2,382,000. 




Wednesday October 29 2014
Fed Ends QE
US Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

The Federal Reserve decided on October 29th to end its asset purchase program and signaled a rate hike may occur sooner than anticipated if inflation and employment improve further.

Extracts from the Federal Reserve Press Release:

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. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, 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 anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, 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. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

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.




Tuesday October 28 2014
Durable Goods Orders Disappoint
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

New orders for manufactured durable goods decreased 1.3 percent in September, following a revised 18.3 percent drop in August. It is the second consecutive slide as capital goods orders decreased the most in eight months and transportation orders fell 3.7 percent.

New orders for manufactured durable goods in September decreased $3.2 billion to $241.6 billion. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders decreased 1.5 percent. Transportation equipment, also down two consecutive months, led the decrease, $2.8 billion or 3.7 percent to $73.4 billion.

Shipments of manufactured durable goods in September, up three of the last four months, increased $0.1 billion or 0.1 percent to $245.6 billion. This followed a 1.8 percent August decrease. Fabricated metal products, up eight of the last nine months, drove the increase, $0.2 billion or 0.6 percent to $30.5 billion.

Unfilled orders for manufactured durable goods in September, up seventeen of the last eighteen months, increased $3.8 billion or 0.3 percent to $1,168.7 billion.

Inventories of manufactured durable goods in September, up seventeen of the last eighteen months, increased $1.8 billion or 0.4 percent to $404.8 billion.

Nondefense new orders for capital goods in September decreased $4.6 billion or 5.4 percent to $82.0 billion. Shipments increased $0.4 billion or 0.5 percent to $80.2 billion. Unfilled orders increased $1.8 billion or 0.2 percent to $733.3 billion. Inventories increased $1.1 billion or 0.6 percent to $184.9 billion. Defense new orders for capital goods in September increased $0.6 billion or 7.4 percent to $9.4 billion. Shipments decreased $0.1 billion or 1.3 percent to $9.7 billion. Unfilled orders decreased $0.3 billion or 0.2 percent to $157.8 billion. Inventories decreased $0.3 billion or 1.2 percent to $23.6 billion.




Friday October 24 2014
US New Home Sales Rise 0.2% in September
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses were at a seasonally adjusted annual rate of 467,000 in September 2014. It is the highest figure in six years, but the August rate was revised down by 38,000 to an annual 466,000.

In September of 2014, new home sales rose 0.2 percent over August and 17 percent year-on-year. 

The median sales price of new houses sold in September 2014 was $259,000; the average sales price was $313,200. The seasonally adjusted estimate of new houses for sale at the end of September was 207,000. This represents a supply of 5.3 months at the current sales rate. 

Sales in the Midwest rose the most in September over August (+12.3 percent), followed by the South region (+2.0 percent). Sales in the Northeast were flat and those in the West contracted 8.9 percent. 




Thursday October 23 2014
US Manufacturing Activity Slows in October
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The seasonally adjusted Markit Flash U.S. Manufacturing PMI decreased to 56.2 in October from 57.5 in September. It is the lowest figure in four months as new business posted the smallest gain this year and new export sales recorded the slowest rise since July.

Softer new business growth was the main negative influence on the headline PMI in October, as the latest rise in new orders was much weaker than in September and the slowest for nine months. A number of survey respondents commented on more cautious spending patterns among clients, especially in relation to export sales. October data pointed to only a moderate expansion of new orders from abroad, with the pace of growth easing sharply to a three-month low.

In line with softer new business gains, manufacturing output growth also slowed in October. The latest increase in production volumes was the weakest since March. Moreover, the rate of output growth has now moderated for two months in a row, which represents the first back-to-back slowdown since May 2013.

October data pointed to resilient manufacturing payrolls trends, despite a continued moderation in both output and new business growth. The rate of job creation was little-changed from September’s two-and-a-half year high and much sharper than the average seen since the survey began in May 2007.




Thursday October 23 2014
US Jobless Claims Rise in Latest Week
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

In the week ending October 18, the advance figure for seasonally adjusted initial claims was 283,000, an increase of 17,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 264,000 to 266,000.

The 4-week moving average was 281,000, a decrease of 3,000 from the previous week's revised average. This is the lowest level for this average since May 6, 2000 when it was 279,250. The previous week's average was revised up by 500 from 283,500 to 284,000. 

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 October 11, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 11 was 2,351,000, a decrease of 38,000 from the previous week's unrevised level of 2,389,000. This is the lowest level for insured unemployment since December 23, 2000 when it was 2,340,000. The 4-week moving average was 2,381,000, a decrease of 22,750 from the previous week's unrevised average of 2,403,750. This is the lowest level for this average since May 20, 2006 when it was 2,377,750.


Wednesday October 22 2014
US Inflation Rate Steady at 1.7%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

US annual inflation rate was recorded at 1.7 percent in September, the same as in August. On a monthly basis consumer prices rose 0.1 percent, as increases in shelter and food cost outweighed declines in energy prices.

Increases in shelter and food indexes outweighed declines in energy indexes to result in the seasonally adjusted all items increase. The food index rose 0.3 percent as five of the six major grocery store food group indexes increased. The energy index declined 0.7 percent as the indexes for gasoline, electricity, and fuel oil all fell.  

The index for all items less food and energy increased 0.1 percent in September. Along with the shelter index, the index for medical care increased, and the indexes for alcoholic beverages and for personal care advanced slightly. Several indexes were unchanged, and the indexes for airline fares and for used cars and trucks declined in September.

The all items index increased 1.7 percent over the last 12 months, the same increase as for the 12 months ending August. The 12-month change in the index for all items less food and energy also remained at 1.7 percent. The 12-month change in the shelter index has been gradually increasing, and reached 3.0 percent for the first time since January 2008. The food index has also risen 3.0 percent over the span, while the energy index has declined 0.6 percent.




Friday October 17 2014
US Consumer Sentiment Beats Expectations
The Thomson Reuters/University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The Thomson Reuters/University of Michigan's consumer sentiment increased to a preliminary reading of 86.4 in October from 84.6 in September. It is the highest reading in seven years.

The barometer of current economic conditions registered 98.9 in October, unchanged from September’s figure. The gauge of consumer expectations rose to 78.4 from 75.4 in the previous month. 

The one-year inflation expectations decreased to 2.8 percent in October from 3 percent in September and the five-to-ten-year inflation outlook was steady at 2.8 percent.




Friday October 17 2014
US Housing Starts Rebound in September
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,017,000. This is 6.3 percent above the revised August estimate of 957,000 and is 17.8 percent above the September 2013 rate of 863,000.

Single-family housing starts in September were at a rate of 646,000; this is 1.1 percent above the revised August figure of 639,000. The September rate for units in buildings with five units or more was 353,000.

Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,018,000. This is 1.5 percent above the revised August rate of 1,003,000 and is 2.5 percent above the September 2013 estimate of 993,000. Single-family authorizations in September were at a rate of 624,000; this is 0.5 percent (±1.1%)* below the revised August figure of 627,000. Authorizations of units in buildings with five units or more were at a rate of 369,000 in September.