Friday September 30 2016
US Consumer Sentiment Revised Up in September
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The final reading of the University of Michigan's consumer sentiment for the United States increased to 91.2 in September of 2016 from a preliminary reading of 89.8 and a final of 89.8 in the previous month. It is the highest reading in three months and better than market expectations of 90. Consumers were more confident about the future and less pessimistic over current conditions than initially anticipated.

The gauge of current economic conditions declined less than estimated (final of 104.2 compared to a preliminary of 103.5 and a final of 107 in August). In addition, the barometer of consumer expectations rose more (82.7 from a preliminary of 81.1 and a final of 78.7 in August). 

Americans expect the inflation rate in the next year to be 2.4 percent (2.3 percent in the preliminary estimate and 2.5 percent in August) and to be higher at 2.6 percent over the next 5 years (2.5 percent in both preliminary and August).




Friday September 30 2016
US Personal Spending Unchanged in August
BEA | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer spending in the United States was flat in August from July of 2016, after rising an upwardly revised 0.4 percent in the previous period. It is the worst performance in five months and worse than market expectations of a 0.1 percent gain.

Spending declined for both durable (-1.3 percent) and nondurable (-0.2 percent) goods but rose 0.3 percent for services.

Personal income went up 0.2 percent, lower than a 0.4 percent rise in July but in line with expectations. It primarily reflected increases in compensation of employees, personal income receipts on assets, and government social benefits to persons. Real DPI increased 0.1 percent in August.

The PCE price index increased 0.1 percent from July. Excluding food and energy, the PCE price index went up 0.2 percent in August. 





Thursday September 29 2016
US Jobless Claims Rise Less Than Expected
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 3,000 to 254,000 in the week ended September 24th compared with the previous week's revised level of 251,000 and below market expectations of 260,000. The four-week average, which smooths out week-to-week volatility in the claims data, dropped to 256,000, matching an April reading as the lowest average since 1973.

This marks 82 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The 4-week moving average was 256,000, a decrease of 2,250 from the previous week's revised average of 258,250. That matched an April reading as the lowest average since 1973.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending September 17, 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 September 17 was 2,062,000, a decrease of 46,000 from the previous week's revised level. This is the lowest level for insured unemployment since July 1, 2000 when it was 2,052,000. The previous week's level was revised down by 5,000 from 2,113,000 to 2,108,000. The 4-week moving average was 2,115,250, a decrease of 23,750 from the previous week's revised average. This is the lowest level for this average since November 4, 2000 when it was 2,110,500. The previous week's average was revised down by 1,250 from 2,140,250 to 2,139,000. 




Thursday September 29 2016
US GDP Growth Revised Up to 1.4% in Q2
BEA | Joana Taborda | joana.taborda@tradingeconomics.com

The US economy expanded an annualized 1.4 percent on quarter in the three months to June of 2016, better than a second estimate of 1.1 percent. It is the strongest growth rate in three quarters. Consumer spending continued to boost growth although it expanded less than expected while exports rose at a faster pace and business investment posted the first gain in three quarters.

Personal consumption expenditure (PCE) contributed 2.88 percentage points to growth (2.94 percent in the second estimate) and rose 4.3 percent (4.4 percent in the second estimate). Spending on both durable goods (9.8 percent compared to 9.9 percent in the second estimate) and services (3 percent compared to 3.1 percent in the second estimate) rose slightly less than anticipated while non-durable goods growth was unchanged at 5.7 percent. 

Fixed investment subtracted 0.18 percentage points from the growth (-0.42 percent in the advance estimate) and shrank 1.1 percent (-2.5 percent in the second estimate). Nonresidential investment went up 1 percent, better than a 0.9 percent fall in the second estimate while residential investment fell 7.7 percent (unchanged from the second estimate). 

Private inventories subtracted 1.16 percentage points from the growth, compared to a 1.26 percentage points decrease earlier estimated. Businesses lost $9.5 billion worth of inventory, compared to a $12.4 billion loss in the second estimate. It is the first time since 2011 inventories fell.

Meanwhile, exports increased at a faster 1.8 percent (1.2 percent in the second estimate) while imports rose at a slower 0.2 percent, compared to a 0.3 percent gain in the second estimate, thus bringing the impact from trade to a higher 0.18 percent (0.1 percent earlier reported). 

Government spending and investment subtracted 0.3 percentage points from the growth, more than -0.27 percent in the second estimate. It went down 1.7 percent (compared to a 1.5 percent decline earlier estimated).




Wednesday September 28 2016
US Durable Goods Orders Flat in August
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

New orders for US manufactured durable goods were unchanged in August from July of 2016, following a downwardly revised 3.6 percent gain in the previous period and better than market expectations of a 1.4 percent fall. Yet, non-defense capital goods orders excluding aircrafts, a proxy for business spending increased 0.6 percent, the third consecutive gain.

Excluding transportation, new orders decreased 0.4 percent and excluding defense, orders shrank 1.0 percent. Electrical equipment, appliances, and components, down following two consecutive monthly increases, drove the decrease, $0.2 billion or 2.5 percent to $9.6 billion. 

Shipments of manufactured durable goods, down following two consecutive monthly increases, decreased $0.8 billion or 0.4 percent to $231.7 billion. This followed a virtually unchanged July increase. Transportation equipment, down three of the last four months, drove the decrease, $0.9 billion or 1.1 percent to $79.9 billion.

Unfilled orders for manufactured durable goods, down three consecutive months, decreased $1.5 billion or 0.1 percent to $1,123.4 billion. This followed a 0.2 percent July decrease. Transportation equipment, also down three consecutive months, drove the decrease, $1.8 billion or 0.2 percent to $769.2 billion. 

Inventories of manufactured durable goods, up two consecutive months, increased $0.5 billion or 0.1 percent to $383.7 billion. This followed a 0.4 percent July increase. Machinery, up two of the last three months, led the increase, $0.3 billion or 0.5 percent to $65.7 billion. 

Nondefense new orders for capital goods decreased $3.1 billion or 4.4 percent to $66.9 billion. Shipments decreased $1.4 billion or 1.9 percent to $70.1 billion. Unfilled orders decreased $3.1 billion or 0.4 percent to $696.3 billion. Inventories increased $0.3 billion or 0.2 percent to $169.7 billion.

Defense new orders for capital goods in August increased $2.3 billion or 23.6 percent to $11.9 billion. Shipments decreased $0.2 billion or 2.3 percent to $10.3 billion. Unfilled orders increased $1.5 billion or 1.1 percent to $137.2 billion. Inventories decreased $0.4 billion or 2.0 percent to $20.7 billion. 




Monday September 26 2016
US New Home Sales Fall Less than Expected
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses in the United States fell 7.6 percent to a seasonally adjusted annual rate of 609,000 in August of 2016, better than market expectations of an 8.8 percent decline. Figures for the previous month were revised up by 5,000 to 659,000, the highest since 2007.

Sales in the Northeast recorded the biggest drop (-34.3 percent to 23 thousand), followed by the South (-12.3 percent to 343 thousand) and the Midwest (-2.4 percent to 81 thousand) while sales in the West rose 8 percent to 162 thousand. 

The median sales price of new houses sold declined to $284,000 from 293,100 in the previous month and 300,200 a year earlier. In contrast, the average sales price increased to $353,600 from $352,000 in July an 348,800 a year earlier. 

The stock of new houses for sale increased 1.7 percent to 235 thousand. This represents a supply of 4.6 months at the current sales rate.

Year-on-year, new home sales increased 20.6 percent. 




Friday September 23 2016
US Factory Activity Growth Slows More than Expected
Markit Economics | Joana Taborda | joana.taborda@tradingeconomics.com

The flash Markit manufacturing PMI for the United States declined to 51.4 in September of 2016 from 52 in August and below market expectations of 51.9. New business growth eased further, output slowed and export orders fell for the first time in four months while payrolls increased.

Softer rates of output and new business growth were the main factors weighing on the headline PMI during September. Moreover, the latest expansion of manufacturing production was the weakest for three months. Survey respondents suggested that relatively subdued economic conditions had acted as a brake on new order volumes, while there were also reports that the strong dollar had dampened export sales. Reflecting this, latest data signalled that new work rose at the slowest pace since December 2015, while export orders dropped for the first time in four months. 

Backlogs of work increased only marginally in September, with the latest accumulation of unfinished business the slowest since May. Despite a lack of pressure on operating capacity, manufacturers indicated a rebound in job creation from the four-month low seen during August. Companies that reported a rise in payroll numbers cited increased investment spending, the launch of new products and continued optimism regarding the longer-term business outlook. 

Purchasing activity picked up again in September, which marked five months of sustained growth. At the same time, stocks of inputs decreased at the slowest pace since February. However, manufacturers remained cautious in terms of their holdings of finished goods during September, with the latest fall the fastest recorded for almost one year. A number of firms commented on deliberate reductions to post-production inventories amid efforts to boost cash flow. 

Meanwhile, latest survey data highlighted that input cost inflation remained subdued across the manufacturing sector. Higher input prices have been recorded in each of the past six months, but the rate of inflation in September was among the slowest seen over this period. Subdued cost inflation and intense competition for new work resulted in a reduction in manufacturers’ output charges during September. Although only marginal, the decline in factory gate prices was the fastest since April.




Thursday September 22 2016
US Initial Jobless Claims Down to 2-Month Low
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

The number of Americans filing for unemployment benefits fell by 8,000 to 252,000 in the week ended September 17th 2016. It is the lowest figure in two months and below market expectations of 262,000. It marks the 81st consecutive week initial claims are below 300,000, the longest streak since 1970 and signaling the labour market strength.

The 4-week moving average, seen as a better measure of labor market trends as it removes week-to-week volatility decreased by 2,250 to 258,500.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending September 10, a decrease of 0.1 percentage point from the previous week's unrevised rate. 

Continuing claims for the week ending September 10 were down by 36,000 to 2,113,000. The previous week's level was revised up 6,000 from 2,143,000 to 2,149,000. The 4-week moving average was 2,140,250, a decrease of 8,000 from the previous week's revised average. The previous week's average was revised up by 1,500 from 2,146,750 to 2,148,250. 


Wednesday September 21 2016
Fed Keeps Rates on Hold
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

The Federal Reserve left the target range for its federal funds rate unchanged at 0.25 percent to 0.5 percent for the sixth time during its September 2016 meeting. Policymakers said that the case for a rate hike has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives. Three out of ten members voted for a rate hike.

The committee lowered its GDP growth forecasts for 2016 to 1.8 percent from 2 percent in the June projection. The unemployment rate is expected to be higher at 4.8 percent this year (4.7 percent in June) and PCE inflation is estimated to be lower at 1.3 percent (1.4 percent in June). For 2017, forecasts were left unchanged: the GDP is expected to grow 2 percent; the unemployment rate is seen at 4.6 percent and PCE inflation at 1.9 percent.

FOMC Statement: 

Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year. Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to 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 and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.





Tuesday September 20 2016
US Housing Starts Fall More than Expected
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the United States shrank 5.8 percent to a seasonally adjusted annualized rate of 1142 thousand in August from July of 2016, after rising a downwardly revised 1.4 percent in the previous period. Figures came much worse than market expectations of a 1.7 percent decline, reaching the lowest in three months. Permits for future construction fell 0.4 percent to 1139 thousand.

Starts declined 14.8 percent to 543 thousand in the South but increased in the West (+1.8 percent to 287 thousand), the Midwest (+5.6 percent to 171 thousand) and in the Northeast (+7.6 percent to 141 thousand).

Groundbreaking on single-family homes, the largest segment of the market, declined 6 percent to an annualized rate of 722,000, reaching the lowest since October. Falls were recorded in the South (-13.1 percent to 370 thousand) and in the Northeast (-13.8 percent to 50 thousand) while single-family starts increased in the West (+6.3 percent to 186 thousand) and the Midwest (+6.4 percent to 116 thousand). Housing starts for the volatile multi-family segment slumped 6.9 percent to 403 thousand, also the lowest in three months. 

For building permits, the South recorded the only decrease (-3.4 percent to 567 thousand) while permits rose in the West (0.7 percent to 272 thousand), the Midwest (+4.2 percent to 197 thousand) and the Northeast (+5.1 percent to 103 thousand). Multi-family permits were down 8.4 percent to 370 thousand while single-family rose 3.7 percent to 737 thousand. 

Year-on-year, housing starts rose 0.9 percent while building permits went down 2.3 percent.