Thursday August 28 2014
US Economy Rebounds Stronger Than Expected
U.S. Commerce Department | Joana Taborda | joana.taborda@tradingeconomics.com

The United States economy advanced an annualized 4.2 percent in the second quarter of 2014, according to the second estimate released by the Bureau of Economic Analysis. The new figure comes better than an advance estimate of 4 percent, as business investment and exports contributed more to the growth.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent in the second quarter, the same increase as in the advance 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 14.3 percent, compared with an increase of 3.2 percent. Nondurable goods increased 1.9 percent in the second quarter; it was unchanged in the first. Services increased 0.8 percent, compared with an increase of 1.3 percent.

Real nonresidential fixed investment increased 8.4 percent in the second quarter, compared with an increase of 1.6 percent in the first. Investment in nonresidential structures increased 9.4 percent, compared with an increase of 2.9 percent. Investment in equipment increased 10.7 percent, in contrast to a decrease of 1.0 percent.  Investment in intellectual property products increased 4.4 percent, compared with an increase of 4.6 percent. Real residential fixed investment increased 7.2 percent, in contrast to a decrease of 5.3 percent.

Real exports of goods and services increased 10.1 percent in the second quarter, in contrast to a decrease of 9.2 percent in the first. Real imports of goods and services increased 11.0 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 3.7 percent, in contrast to an increase of 6.6 percent. Real state and local government consumption expenditures and gross investment increased 2.9 percent, in contrast to a decrease of 1.3 percent.




Thursday August 28 2014
US Jobless Claims Little Changed In Latest Week
US Department of Labor | anna@tradingeconomics.com

The number of Americans filing for unemployment benefits decreased by 1,000 to 298,000 in the week ending August 23rd. In recent weeks, claims have been near the lowest levels since 2007 as the labor market continues to improve.

In the week ending August 23, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 298,000 to 299,000.

The 4-week moving average was 299,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 300,750 to 301,000.There were no special factors impacting this week's initial claims.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 16, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 16 was 2,527,000, an increase of 25,000 from the previous week's revised level. The previous week's level was revised up 2,000 from 2,500,000 to 2,502,000. The 4-week moving average was 2,524,250, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised up by 500 from 2,527,500 to 2,528,000.




Tuesday August 26 2014
US Durable Goods Orders Surge in July
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

New orders for manufactured durable goods jumped 22.6 percent in July of 2014 boosted by higher demand for non-defense aircraft. It is the highest growth rate on record and follows a revised 2.7 percent increase in June.

New orders for manufactured durable goods in July increased $55.3 billion to $300.1 billion.

Excluding transportation, new orders decreased 0.8 percent and excluding defense, new orders increased 4.9 percent. Transportation equipment, also up five of the last six months, drove the increase, $56.6 billion or 74.2 percent to $133.0 billion.

Nondefense new orders for capital goods in July increased $51.5 billion or 60.8 percent to $136.3 billion. Shipments increased $1.1 billion or 1.4 percent to $79.1 billion. Unfilled orders increased $57.2 billion or 8.6 percent to $725.2 billion. Inventories increased $2.3 billion or 1.2 percent to $184.2 billion. 

Defense new orders for capital goods in July decreased $1.5 billion or 15.3 percent to $8.6 billion. Shipments increased $0.2 billion or 1.7 percent to $9.6 billion. Unfilled orders decreased $1.0 billion or 0.6 percent to $159.5 billion. Inventories decreased $0.2 billion or 1.0 percent. 




Monday August 25 2014
US New Home Sales Fall in July
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses fell for the second straight month by 2.4 percent to a seasonally adjusted annual rate of 412,000 in July. However, the number of new houses for sale increased 4.1 percent to 205,000, the highest in four years.

The June rate was revised upwards to 422,000. 

The median sales price of new houses sold in July 2014 was $269,800; the average sales price was $339,100. The seasonally adjusted estimate of new houses for sale at the end of July was 205,000. This represents a supply of 6.0 months at the current sales rate.

Sales in the Northeast dropped 30.8 percent from June; those in the West fell 15.2 percent and sales in the Midwest decreased 8.8 percent. In contrast, sales in the South rose 8.1 percent. 

Year-on-year, new home sales went up 12.3 percent in July.




Friday August 22 2014
Fed May Rise Rates Sooner Than Expected
anna@tradingeconomics.com

In a speech during the Economic Symposium in Jackson Hole, Fed Chair Janet Yellen brought the possibility of raising interest rates earlier than anticipated if progress in the labor market continued or if inflation moves up more rapidly.

Extracts from the Speech by Chair Janet L. Yellen at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming

At the FOMC's most recent meeting, the Committee judged, based on a range of labor market indicators, that "labor market conditions improved." Indeed, as I noted earlier, they have improved more rapidly than the Committee had anticipated. Nevertheless, the Committee judged that underutilization of labor resources still remains significant. Given this assessment and the Committee's expectation that inflation will gradually move up toward its longer-run objective, the Committee reaffirmed its view "that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current 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. But if progress in the labor market continues to be more rapid than anticipated by the Committee or if inflation moves up more rapidly than anticipated, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter. Of course, if economic performance turns out to be disappointing and progress toward our goals proceeds more slowly than we expect, then the future path of interest rates likely would be more accommodative than we currently anticipate. As I have noted many times, monetary policy is not on a preset path. The Committee will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy




Thursday August 21 2014
US Markit Manufacturing PMI Up to 4-Year High
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The seasonally adjusted Markit Flash U.S. Manufacturing PMI registered 58.0 in August, up sharply from 55.8 in July and the highest reading for over four years. Output and new orders both rose at faster rates and employment growth accelerated to strongest since March of 2013.

August data indicated a further steep rise in production levels across the manufacturing sector. The rate of output growth picked up slightly since July and was one of the fastest seen over the past four years. Survey respondents mainly cited improving domestic economic conditions and an associated upturn in client spending.

Volumes of new work received by manufacturing companies rose at a sharp pace during August and, in line with the trend for production, the rate of expansion held close to its strongest since early 2010. Manufacturers also benefitted from a solid rebound in new export orders in August, with the pace of expansion picking up from July’s six-month low. Moreover, the latest increase in new business from abroad was the steepest for three years. Stronger demand patterns, an accumulation of backlogs for the seventh month running, and improving confidence towards the business outlook all contributed to a further increase in manufacturing payroll numbers in August. Moreover, job creation picked up since July and the latest rise in staffing levels was the fastest for almost a year-and-a-half.




Thursday August 21 2014
US Jobless Claims Fall in Latest Week
U.S. Department of Labor | Joana Taborda | joana.taborda@tradingeconomics.com

In the week ending August 16, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 14,000 from the previous week's revised level. Continued claims fell to 2,500 thousand, the lowest level in seven years.

The previous week's level was revised up by 1,000 from 311,000 to 312,000. The 4-week moving average was 300,750, an increase of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 295,750 to 296,000. 

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

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 9, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 9 was 2,500,000, a decrease of 49,000 from the previous week's revised level. This is the lowest level for insured unemployment since June 16, 2007 when it was 2,453,000. The previous week's level was revised up 5,000 from 2,544,000 to 2,549,000. The 4-week moving average was 2,527,500, a decrease of 2,000 from the previous week's revised average. The previous week's average was revised up by 1,250 from 2,528,250 to 2,529,500.


Wednesday August 20 2014
Fed Exit Strategy May Occur Sooner Than Anticipated
Federal Reserve | anna@tradingeconomics.com

US Federal Reserve officials said that tightening of monetary policy may happen sooner than expected and would give warning on any changes well before interest rates rise, according to minutes of its last policy meeting.

Extracts from the minutes of Federal Open Market Committee meeting held in July:

Meeting participants continued their discussion of issues associated with the eventual normalization of the stance and conduct of monetary policy, consistent with the Committee’s intention to provide additional information to the public later this year, well before most participants anticipate the first steps in reducing policy accommodation to become appropriate.

With respect to monetary policy over the medium run, participants generally agreed that labor market conditions and inflation had moved closer to the Committee’s longer-run objectives in recent months, and most anticipated that progress toward those goals would continue. Moreover, many participants noted that if convergence toward the Committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated.

In their discussion of monetary policy in the period ahead, members judged that information received since the Federal Open Market Committee met in June indicated that economic activity rebounded in the second quarter. Household spending appeared to be rising moderately, and business fixed investment was advancing, while the recovery in the housing sector remained slow. Fiscal policy was restraining economic growth, although the extent of the restraint was diminishing. The Committee expected that, with appropriate policy accommodation, economic activity would expand at a moderate pace with labor market indicators and inflation moving toward levels that the Committee judges consistent with its dual mandate.


Tuesday August 19 2014
US Inflation Rate Down to 2%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

US annual inflation rate slowed to 2 percent in July from 2.1 percent in the previous two months, in line with market expectations and driven by a fall in energy cost.

The Consumer Price Index for All Urban Consumers increased 0.1 percent in July on a seasonally adjusted basis. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.

The all items index posted its smallest seasonally adjusted increase since February; the indexes for shelter and food rose, but were partially offset by declines in the energy index and the index for airline fares. The food index rose 0.4 percent in July, with the food at home index also rising 0.4 percent after being unchanged in June. The decrease in the energy index was its first since March and featured declines in the indexes of all the major energy components.

The index for all items less food and energy increased 0.1 percent in July, the same increase as in June. Along with the shelter index, the indexes for medical care, new vehicles, personal care, and apparel all increased in July. Along with the index for airline fares, the indexes for recreation, for used cars and trucks, for household furnishings and operations, and for tobacco all declined in July.

The all items index increased 2.0 percent over the last 12 months, a slight decline from the 2.1 percent figure for the 12 months ending June. The index for all items less food and energy rose 1.9 percent over the last 12 months, the same figure as for the 12 months ending June. The energy index has increased 2.6 percent, and the food index has risen 2.5 percent over the span.




Tuesday August 19 2014
US Housing Starts Beat Expectations in July
US Census | Nuno Fontes | nuno@tradingeconomics.com

Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,093 thousand. This is 15.7 percent above the revised June rate of 945 thousand. Building permits rose 8.1 percent.

Single-family housing starts in July were at a rate of 656 thousand; this is 8.3 percent above the revised June figure of 606,000. The July rate for units in buildings with five units or more was 423 thousand. Year-on-year, housing starts rose 7.5 percent from the July 2013 level of 977 thousand.

Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,052 thousand. This is 8.1 percent above the revised June rate of 973 thousand and is 7.7 percent above the July 2013 estimate of 977 thousand.

Single-family authorizations in July were at a rate of 640 thousand; this is 0.9 percent above the revised June figure of 634 thousand. Authorizations of units in buildings with five units or more were at a rate of 382 thousand in July.