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.




Thursday October 16 2014
US Industrial Production Better Than Expected
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

US industrial output rose 1 percent in September of 2014, following a revised 0.2 percent drop in August. It is the highest gain in nearly two years, driven by a surge in mining and utilities output.

In September, manufacturing production moved up 0.5 percent with widespread gains across its components. Output increased at an annual rate of 3.5 percent in the third quarter; on average, it has advanced at a pace of about 4 percent over the past four quarters. The factory operating rate rose 0.2 percentage point in September to 77.3 percent, a rate 1.4 percentage points below its long-run average.

The production of durable goods increased 0.4 percent in September and rose at an annual rate of 6.6 percent in the third quarter; it has increased in each quarter since the third quarter of 2009. In September, the indexes for aerospace and miscellaneous transportation equipment, for furniture and related products, and for miscellaneous manufacturing all posted increases of more than 1 1/2 percent; decreases of more than 3/4 percent were registered both by wood products and by motor vehicles and parts. Capacity utilization for durable goods manufacturing increased 0.1 percentage point to 77.6 percent, a rate 0.6 percentage point above its long-run average.

The production of nondurable goods moved up 0.5 percent in September and increased at an annual rate of 1.2 percent in the third quarter. With the exception of petroleum and coal products, each of the major components of nondurables posted gains in September. The largest increases were recorded by apparel and leather and by plastics and rubber products. The operating rate for nondurable manufacturing increased 0.3 percentage point to 78.6 percent, a rate 2.1 percentage points below its long-run average.

The output of non-NAICS manufacturing industries (publishing and logging) was unchanged in September following a decrease of 0.6 percent in August. The index dropped at an annual rate of 12.5 percent in the third quarter. As a result of continuing declines in the index for publishing, the output of non-NAICS manufacturing industries has trended downward over the past 15 years.

Mining output rose 1.8 percent in September and has advanced 9.1 percent in the past 12 months. Capacity utilization at mines moved up 0.9 percentage point in September to 90.1 percent, a rate 2.8 percentage points above its long-run average. The output of utilities jumped 3.9 percent, an increase that likely reflected unseasonably high demand for air conditioning as temperatures swung from below normal in August to above normal in September. The operating rate for utilities in September increased 2.9 percentage points to 79.2 percent, a rate 6.9 percentage points below its long-run average.

Capacity utilization rates in September for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.8 percentage point to 87.6 percent, a rate 1.3 percentage points above its long-run average; at the primary and semifinished stages, utilization moved up 0.7 percentage point to 77.7 percent, a rate 3.1 percentage points below its long-run average; and at the finished stage, utilization increased 0.2 percentage point to 77.1 percent, a rate equal to its long-run average.

At 105.1 percent of its 2007 average, total industrial production in September was 4.3 percent above its level of a year earlier. For the third quarter as a whole, industrial production advanced at an annual rate of 3.2 percent, roughly its average quarterly increase since the end of 2010. 




Thursday October 16 2014
US Jobless Claims Down to 14-Year Low
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

In the week ending October 11, the advance figure for seasonally adjusted initial claims was 264,000, a decrease of 23,000 from the previous week's unrevised level of 287,000. This is the lowest level for initial claims since April 15, 2000 when it was 259,000.

The 4-week moving average was 283,500, a decrease of 4,250 from the previous week's unrevised average of 287,750. This is the lowest level for this average since June 10, 2000 when it was 283,500. 

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 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 4 was 2,389,000, an increase of 7,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,381,000 to 2,382,000. The 4-week moving average was 2,403,750, a decrease of 10,750 from the previous week's revised average. This is the lowest level for this average since June 17, 2006 when it was 2,399,000. The previous week's average was revised up by 250 from 2,414,250 to 2,414,500. 




Wednesday October 15 2014
US Budget Surplus Widens in September
US Treasury | Joana Taborda | joana.taborda@tradingeconomics.com

The US budget surplus reached USD 105.8 billion in September of 2014, up 41 percent from a year earlier and better than market expectations.

In September, receipts reached USD 352 billion, up 16.9 percent year-on-year while the outlays rose at a slower 8.9 percent to USD 246 billion.

The year-to-date deficit was USD 483 billion at the end of September of 2014, down from USD 680 billion last year. The deficit to GDP ratio reached 2.8 percent, the lowest since 2007.




Wednesday October 15 2014
US Retail Sales Disappoint in September
US Commerce Department | Joana Taborda | joana.taborda@tradingeconomics.com

US retail and food services sales dropped 0.3 percent in September from August, following a 0.6 percent increase in the previous period. It is the first drop in eight months, as consumers spend less in gasoline stations and motor vehicle stores.

Retail sales in clothing stores recorded the highest fall in August (-1.2 percent), followed by building material and garden equipment dealers (-1.1 percent) and gasoline stations (-0.8 percent). Retail sales in motor vehicles stores dropped 0.8 percent, following a 1.9 percent rise in August. Sales in furniture stores also contracted 0.8 percent. 

In contrast, sales in electronics and appliance stores rose 3.4 percent and those in food and beverages dealers were flat in September. 

Core sales, which strip out automobiles, gasoline, building materials and food services fell 0.2 percent in September. Retail sales excluding automobiles decreased 0.2 percent.

Year-on-year retail sales rose 4.3 percent. Total sales for the July through September 2014 period were up 4.5 percent from the same period a year ago.




Thursday October 09 2014
US Jobless Claims Down to 287K
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

In the week ending October 4, the advance figure for seasonally adjusted initial claims was 287,000, a decrease of 1,000 from the previous week's revised level. There were no special factors impacting this week's initial claims.

The previous week's level was revised up by 1,000 from 287,000 to 288,000.

The 4-week moving average was 287,750, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since February 4, 2006 when it was 286,500. The previous week's average was revised up by 250 from 294,750 to 295,000. 

The advance seasonally adjusted insured unemployment rate was 1.8 percent for the week ending September 27, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 27 was 2,381,000, a decrease of 1,000 from the previous week's revised level. This is the lowest level for insured unemployment since May 27, 2006 when it was 2,381,000. The previous week's level was revised up 4,000 from 2,398,000 to 2,402,000. The 4-week moving average was 2,414,250, a decrease of 27,750 from the previous week's revised average. This is the lowest level for this average since July 1, 2006 when it was 2,406,250. The previous week's average was revised up by 750 from 2,441,250 to 2,442,000. 


Wednesday October 08 2014
Fed Raises Concerns Over Strong Dollar
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

Minutes from Federal Reserve’s last meeting showed policymakers are concerned about recent dollar appreciation and the effects it might have on growth and inflation. FOMC minutes also highlighted divergences among the Committee’s language and the risk of a market misunderstanding.

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

During participants' discussion of prospects for economic activity abroad, they commented on a number of uncertainties and risks attending the outlook. Over the intermeeting period, the foreign exchange value of the dollar had appreciated, particularly against the euro, the yen, and the pound sterling. Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the U.S. external sector. Several participants added that slower economic growth in China or Japan or unanticipated events in the Middle East or Ukraine might pose a similar risk. At the same time, a couple of participants pointed out that the appreciation of the dollar might also tend to slow the gradual increase in inflation toward the FOMC's 2 percent goal.

In their discussion of the appropriate path for monetary policy over the medium term, meeting participants agreed that the timing of the first increase in the federal funds rate and the appropriate path of the policy rate thereafter would depend on incoming economic data and their implications for the outlook. That said, several participants thought that the current forward guidance regarding the federal funds rate suggested a longer period before liftoff, and perhaps also a more gradual increase in the federal funds rate thereafter, than they believed was likely to be appropriate given economic and financial conditions. In addition, the concern was raised that the reference to "considerable time" in the current forward guidance could be misunderstood as a commitment rather than as data dependent. However, it was noted that the current formulation of the Committee's forward guidance clearly indicated that the Committee's policy decisions were conditional on its ongoing assessment of realized and expected progress toward its objectives of maximum employment and 2 percent inflation, and that its assessment reflected its review of a broad array of economic indicators. It was emphasized that the current forward guidance for the federal funds rate was data dependent and did not indicate that the first increase in the target range for the federal funds rate would occur mechanically after some fixed calendar interval following the completion of the current asset purchase program. If employment and inflation converged more rapidly toward the Committee's goals than currently expected, the date of liftoff could be earlier, and subsequent increases in the federal funds rate target more rapid, than participants currently anticipated. Conversely, if employment and inflation returned toward the Committee's objectives more slowly than currently anticipated, the date of liftoff for the federal funds rate could be later, and future federal funds rate target increases could be more gradual. In addition, some participants saw the current forward guidance as appropriate in light of risk-management considerations, which suggested that it would be prudent to err on the side of patience while awaiting further evidence of sustained progress toward the Committee's goals. In their view, the costs of downside shocks to the economy would be larger than those of upside shocks because, in current circumstances, it would be less problematic to remove accommodation quickly, if doing so becomes necessary, than to add accommodation. A number of participants also noted that changes to the forward guidance might be misinterpreted as a signal of a fundamental shift in the stance of policy that could result in an unintended tightening of financial conditions.




Friday October 03 2014
US Service Sector Growth Slows in September
ISM | Joana Taborda | joana.taborda@tradingeconomics.com

The ISM non-manufacturing index registered 58.6 percent in September, down 1 percentage point from August's reading of 59.6 percent. While business activity decreased, the employment index rose to its highest in nine years.

The Non-Manufacturing Business Activity Index decreased to 62.9 percent, which is 2.1 percentage points lower than the August reading of 65 percent, reflecting growth for the 62nd consecutive month at a slower rate. The New Orders Index registered 61 percent, 2.8 percentage points lower than the reading of 63.8 percent registered in August. The Employment Index increased 1.4 percentage points to 58.5 percent from the August reading of 57.1 percent and indicates growth for the seventh consecutive month. The Prices Index decreased 2.5 percentage points from the August reading of 57.7 percent to 55.2 percent, indicating prices increased at a slower rate in September when compared to August. According to the NMI, 12 non-manufacturing industries reported growth in September. Respondents’ comments indicate that business seems to be leveling off and there is a slight slowing in the momentum of the past few months of strong growth. They continue to remain optimistic about business conditions and the overall direction of the economy.

The 12 non-manufacturing industries reporting growth in September — listed in order — are: Construction; Retail Trade; Utilities; Information; Health Care & Social Assistance; Transportation & Warehousing; Management of Companies & Support Services; Wholesale Trade; Professional, Scientific & Technical Services; Accommodation & Food Services; Real Estate, Rental & Leasing; and Finance & Insurance. The five industries reporting contraction in September are: Arts, Entertainment & Recreation; Mining; Educational Services; Public Administration; and Other Services.




Friday October 03 2014
US Trade Deficit Shrinks in August
US Department of Commerce | anna@tradingeconomics.com

US trade gap unexpectedly decreased in August to the lowest level in seven months as exports reached a record high.

August exports of $198.5 billion and imports of $238.6 billion resulted in a goods and services deficit of $40.1 billion, down from $40.3 billion in July, revised. August exports were $0.4 billion more than July exports of $198.0 billion. August imports were $0.2 billion more than July imports of $238.3 billion.

In August, the goods deficit increased $0.1 billion from July to $59.9 billion, and the services surplus increased $0.3 billion from July to $19.8 billion. Exports of goods increased $0.1 billion to $138.8 billion, and imports of goods increased $0.1 billion to $198.7 billion. Exports of services increased $0.4 billion to $59.6 billion, and imports of services increased $0.1 billion to $39.9 billion.

The goods and services deficit increased $0.6 billion from August 2013 to August 2014. Exports were up $7.9 billion, or 4.1 percent, and imports were up $8.4 billion, or 3.7 percent.

The July to August increase in exports of goods reflected increases in capital goods ($1.0 billion); consumer goods ($0.8 billion); industrial supplies and materials ($0.7 billion); and other goods ($0.4 billion). Decreases occurred in automotive vehicles, parts, and engines ($1.7 billion) and foods, feeds, and beverages ($0.6 billion).

The July to August increase in imports of goods reflected increases in capital goods ($1.8 billion) and consumer goods ($0.7 billion). Decreases occurred in automotive vehicles, parts, and engines ($1.4 billion); other goods ($0.5 billion); foods, feeds, and beverages ($0.3 billion); and industrial supplies and materials ($0.2 billion).

The August 2013 to August 2014 increase in exports of goods reflected increases in capital goods ($2.4 billion); consumer goods ($1.6 billion); industrial supplies and materials ($1.4 billion); other goods ($0.8 billion); and automotive vehicles, parts, and engines ($0.5 billion). Foods, feeds, and beverages were virtually unchanged.

The August 2013 to August 2014 increase in imports of goods reflected increases in capital goods ($4.1 billion); consumer goods ($2.0 billion); automotive vehicles, parts, and engines ($1.4 billion); foods, feeds, and beverages ($0.9 billion); and other goods ($0.1 billion). A decrease occurred in industrial supplies and materials ($1.0 billion).

The August figures show surpluses, in billions of dollars, with Hong Kong $2.8 ($2.1 for July), Australia $1.4 ($1.6), Singapore $1.0 ($0.9), and Brazil $1.0 ($0.5). Deficits were recorded, in billions of dollars, with China $30.2 ($30.9), European Union $11.0 ($13.2), Germany $7.1 ($6.4), Japan $4.7 ($6.2), OPEC $3.2 ($6.2), Canada $2.3 ($3.0), Ireland $2.2 ($1.8), India $1.9 ($2.1), South Korea $1.8 ($2.5), Saudi Arabia $1.5 ($2.8), and Venezuela $1.3 ($2.2).

Advanced technology products exports were $28.9 billion in August and imports were $33.4 billion, resulting in a deficit of $4.5 billion. August exports were $1.7 billion more than the $27.1 billion in July, while August imports were $0.7 billion less than the $34.0 billion in July.