Wednesday November 25 2015
US Consumer Sentiment Revised Down in November
University of Michigan | Joana Ferreira | firstname.lastname@example.org
The University of Michigan's final reading on the overall index of consumer sentiment came in at 91.3 in November of 2015, lower than a first reading of 93.1 but higher than a final reading of 90 in October. Although consumers were more optimistic over their current conditions and their future economic situation, markets were expecting a stronger sentiment in line with preliminary estimates. Meanwhile, inflation expectations for the next 5 to 10 years increased.
The barometer of current economic conditions came in at 104.3, compared to a preliminary reading of 104.8 and a final reading of 102.3 in October. The gauge of consumer expectations went up to 82.9 from 82.1 in the previous month but missing 85.6 initially reported.
Americans expect the inflation rate in the next year will came at 2.7 percent up from a first estimate of 2.5 percent and staying at the same level as in the previous month. Over the next 5 to 10 years, they expect consumer prices to increase at a faster 2.6 percent, up from 2.5 percent first reading and from 2.5 percent in the previous month.
Wednesday November 25 2015
US New Home Sales Rise 10.7%
US Census Bureau | Joana Taborda | email@example.com
Sales of new single-family houses in October 2015 were at a seasonally adjusted annual rate of 495,000, up 10.7 percent from last month but below market expectations. The inventory of properties for sale reached the highest since early 2010 while both median and average prices decreased.
Figures for September were revised downwards to show new home sales shrank 12.9 percent (-11.5 percent previously) to 447 thousand from 468 thousand previously reported.
Sales in the Northeast jumped 135.3 percent, sales in the South rose 8.9 percent and those in the Midwest increased 5.3 percent while sales in the West dropped 0.9 percent.
The median sales price of new houses sold decreased to $281,500 ($307,800 in September); the average sales price was $366,000 ($369,600 in September).
The stock of new houses for sale at the end of October was 226,000 (223,000 in September). This represents a supply of 5.5 months at the current sales rate (6 in September).
Year-on-year, new home sales grew 4.9 percent.
Wednesday November 25 2015
US Consumer Spending Rises Less Than Forecast
Anna | firstname.lastname@example.org
Consumer Spending in the US increased only 0.1 percent in October, the same as in the previous month while income gains accelerated to 0.4 percent and the saving rate jumped to the highest level in almost three years.
Disposable income, or the money remaining after taxes, rose 0.4 percent in October from the prior month after adjusting for inflation. It was up 3.9 percent over the past year.
The saving rate which measures the share of a person’s disposable income that is saved, climbed to 5.6 percent, the highest since December 2012, from 5.3 percent in September.
The price index for personal consumption expenditure, Fed’s preferred inflation gauge, rose 0.1% from September and climbed only 0.2% from a year earlier. It is 42nd consecutive month in which prices have fallen short of the Fed’s 2 percent annual target. Excluding the volatile food and energy categories, the price measure was little changed from September and rose 1.3 percent in the 12 months ended in October.
Wages and salaries increased $45.0 billion in October, compared with an increase of $2.5 billion in September. Private wages and salaries increased $43.0 billion, compared with an increase of $1.5 billion. Government wages and salaries increased $2.0 billion, compared with an increase of $1.0 billion.
Wednesday November 25 2015
US Durable Goods Orders up 3%
US Census Bureau | Joana Taborda | email@example.com
New orders for US manufactured durable goods surged 3 percent in October of 2015, recovering from a downwardly revised 0.8 percent fall in September. It is the first rise in three months and well above market expectations, boosted by transport orders.
Excluding transportation, new orders increased 0.5 percent and excluding defense, new orders jumped 3.2 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $6.1 billion or 8.0 percent to $82.1 billion.
Shipments of manufactured durable goods in October, down two of the last three months, decreased $2.5 billion, or 1.0 percent, to $240.1 billion. This followed a 0.2 percent September increase. Transportation equipment, also down two of the last three months, led the decrease, $2.0 billion or 2.5 percent to $78.8 billion.
Unfilled orders for manufactured durable goods in October, up following two consecutive monthly decreases, increased $3.5 billion or 0.3 percent to $1,192.0 billion. This followed a 0.5 percent September decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $3.3 billion or 0.4 percent to $798.2 billion.
Inventories of manufactured durable goods in October, down five of the last six months, decreased $0.7 billion, or 0.2 percent, to $397.4 billion. This followed a 0.6percent September decrease. Primary metals, down nine consecutive months, led the decrease, $0.3 billion or 0.9 percent to $35.7 billion.
Nondefense new orders for capital goods in October increased $9.7 billion or 13.2 percent to $83.2 billion. Shipments decreased $1.2 billion or 1.4 percent to $78.8 billion. Unfilled orders increased $4.4 billion or 0.6 percent to $757.8 billion. Inventories increased less than $0.1 billion or virtually unchanged to $175.6 billion.
Defense new orders for capital goods in October increased $0.1 billion or 1.0 percent to $9.6 billion. Shipments increased $0.2 billion or 1.5 percent to $10.7 billion. Unfilled orders decreased $1.1 billion or 0.7 percent to $146.8 billion. Inventories decreased $0.6 billion or 2.6 percent to $21.9 billion.
Wednesday November 25 2015
US Jobless Claims Drop to 4-Week Low
DOL | Joana Ferreira | firstname.lastname@example.org
The number of Americans filling for unemployment benefits was 260,000 in the week ended November 21st, a sharp decrease of 12,000 from the previous week's upwardly revised level of 272,000 and way below market expectations of 270,000.
The 4-week moving average was 271,000, unchanged from the previous week's revised average. The previous week's average was revised up by 250 from 270,750 to 271,000.
The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending November 14, 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 November 14 was 2,207,000, an increase of 34,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 2,175,000 to 2,173,000. The 4-week moving average was 2,181,750, an increase of 15,250 from the previous week's revised average. The previous week's average was revised down by 500 from 2,167,000 to 2,166,500.
Tuesday November 24 2015
US GDP Growth Revised Up to 2.1% in Q3
BEA | Joana Taborda | email@example.com
The US economy advanced an annualized 2.1 percent on quarter in the three months to September of 2015, up from the 1.5 percent reported last month, according to the second estimate released by the Bureau of Economic Analysis. While consumer spending grew less than previously estimated, inventories expanded almost twice as much.
Personal consumption expenditure was the biggest contributor to growth (2.05 percentage points) but increased less than anticipated (up 3 percent compared to an advance estimate of 3.2 percent). Spending on durable goods grew 6.5 percent, less than 6.7 percent in the advance estimate and spending on services increased 2.2 percent compared to 2.6 percent in the advance estimate. Consumption of nondurable goods was up 4 percent compared to 3.5 percent reported last month.
Fixed investment added 0.54 percentage points to growth, expanding 3.4 percent (2.9 percent in the advance estimate) and boosted by a 7.3 percent rise in residential investment and a 2.4 percent gain in nonresidential.
In contrast, private inventories subtracted 0.59 percentage points from the growth, less than a 1.44 percentage points in the advance estimate. Businesses accumulated $90.2 billion worth of inventory in the third quarter, instead of the $56.8 billion previously reported.
Meanwhile, exports rose only 0.9 percent (1.9 percent reported in the advance estimate) and imports increased 2.1 percent (1.8 percent in the advance estimate), bringing the impact from trade to -0.22 percentage points (0 in the advance estimate).
Government spending and investment added 0.29 percentage points to growth, up 1.7 percent and unchanged from the first estimate.
Thursday November 26 2015
Fed On Track to Raise Rates in December
Joana Taborda | firstname.lastname@example.org
The Federal Reserve is expected to start raising rates at its December 2015 meeting, as long as incoming data continues to show the economy is resilient. Yet, markets seem to have anticipated the monetary tightening for some time as most housing and labour market indicators continue to show an improvement. However, the inflation outlook remains subdued as oil prices remain at a 6-year low.
The inflation rate has been below the Fed’s 2 percent medium-term target since August last year. The highest downward pressure comes from falling oil prices while housing cost has been risng since 2012 and wage growth stayed above the inflation rate since the beginning of last year.
The labour market has been strengthening: initial jobless claims have been below 300,000 since March, nonfarm payrolls and average weekly working hours increased to a pre-financial crisis level while unemployment rate fell to nearly 7-year low of 5 percent in October.
The economy have been growing at an average annualized rate of 2.61 percent on quarter in the last two years. In addition, the dollar have been strengthening, the Dow Jones remins on the upward trend and yields on 10-year government bonds stay below pre-financial crisis level.
Monday November 23 2015
US Factory Activity at 2-Year Low
Markit | Joana Taborda | email@example.com
The Markit flash US Manufacturing PMI came in at 52.6 in November of 2015, down from 54.1 in October and the lowest since October of 2013. Figures came well below market expectations as job growth slowed and strong dollar and weaker global demand hurt new export orders.
Although still robust, manufacturing production growth moderated since the previous month and was slightly weaker than its average for 2015 so far. At the same time, latest data highlighted the softest expansion of incoming new work for just over two years. Reports from survey respondents generally cited a cyclical slowdown in demand patterns and ongoing weakness in export sales. Reflecting this, the index measuring new orders from abroad dipped back inside negative territory in November. Lower levels of new work from abroad were linked to a combination of the strong dollar and weaker global economic conditions.
In response to slower output and new business growth, manufacturers signalled greater caution in terms of their purchasing activity and inventories during November. The latest rise in input buying was the weakest since January 2014, while stocks of finished goods dropped for the fourth month running. Meanwhile, latest data showed that preproduction inventories were broadly unchanged, which contrasted with the pattern of modest growth seen throughout most of the past year-and-a-half.
Manufacturing payroll numbers were reported to have increased again in November, continuing the trend seen for much of the past six years. However, the latest expansion of employment levels was only modest and weaker than seen on average over the recovery period. Softer rates of job hiring reflected greater caution in terms of the business outlook and reduced pressure on operating capacity. This was highlighted by a drop in backlogs of work for the first time in 12 months.
Meanwhile, average cost burdens fell for the third month running, which was overwhelmingly linked to lower transportation and commodity prices. Factory gate charges increased only fractionally in November, and the rate of output charge inflation remained well below the long-run survey average.
Thursday November 19 2015
US Jobless Claims Down to 271K
DOL | Joana Taborda | firstname.lastname@example.org
The number of Americans filing for unemployment benefits fell by 5,000 to 271,000 in the week ended November 14, matching market expectations. It is the lowest figure in three weeks.
The 4-week moving average was 270,750, an increase of 3,000 from the previous week's unrevised average of 267,750.
The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending November 7, unchanged from the previous week's unrevised rate.
The advance number for seasonally adjusted insured unemployment during the week ending November 7 was 2,175,000, a decrease of 2,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 2,174,000 to 2,177,000.
The 4-week moving average was 2,167,000, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 1,000 from 2,165,250 to 2,166,250.
Wednesday November 18 2015
Fed Likely to Hike Rates in December
Federal Reserve | Joana Taborda | email@example.com
US Federal Reserve may start raising rates in December, provided that unanticipated shocks do not affect the economic outlook, incoming data continue to show improvement in the labour market and inflation returns to target, minutes of the meeting held in October showed.
Extracts From the Minutes of the Federal Open Market Committee:
In assessing whether economic conditions and the medium-term economic outlook warranted beginning the process of policy normalization at this meeting, members noted a variety of indicators, including some weaker-than-expected readings on measures of labor market conditions, and almost all members agreed it was appropriate to wait for additional information to clarify whether the recent deceleration in the pace of progress in the labor market was transitory or reflected more persistent factors that might jeopardize further progress. They indicated that they would be assessing a range of labor market indicators over the period ahead to confirm further improvement in the labor market. Members, however, expressed a range of views regarding the extent of further progress in labor market indicators they would need to see to judge it appropriate to raise the target range for the federal funds rate in December.
Members continued to anticipate that inflation would gradually return to the Committee's 2 percent objective over the medium term, but most of them were not yet sufficiently confident of that outlook to begin the normalization process. They generally agreed that their confidence would increase if, as anticipated, economic activity continued to expand at a pace sufficient to increase resource utilization. Other factors important to the inflation outlook were the expectation that the influence of lower energy and commodities prices and the stronger dollar would subside, and that longer-term inflation expectations would remain stable. In this regard, a couple of members expressed concern about the continued decline in market-based measures of inflation compensation. Moreover, the risk was noted that downward pressures on inflation from the appreciation of the dollar could persist.
After assessing the outlook for economic activity, the labor market, and inflation and weighing the uncertainties associated with the outlook, all but one member agreed to leave the target range for the federal funds rate unchanged at this meeting. Members generally agreed that, in light of some weaker-than-expected readings on measures of labor market conditions and in the absence of greater confidence about the inflation outlook, it would be prudent to wait for additional information bearing on the medium-term outlook before initiating the process of policy normalization. One member, however, preferred to raise the target range for the federal funds rate by 25 basis points at this meeting.
In its postmeeting statement, rather than framing its near-term policy path in terms of how long to maintain the current target range, the Committee decided to indicate that, in determining whether it would be appropriate to raise the target range at its next meeting, it would assess both realized and expected progress toward its objectives of maximum employment and 2 percent inflation. Members emphasized that this change was intended to convey the sense that, while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting, provided that unanticipated shocks do not adversely affect the economic outlook and that incoming data support the expectation that labor market conditions will continue to improve and that inflation will return to the Committee's 2 percent objective over the medium term. Members saw the updated language as leaving policy options open for the next meeting. However, a couple of members expressed concern that this wording change could be misinterpreted as signaling too strongly the expectation that the target range for the federal funds rate would be increased at the Committee's next meeting.