Thursday April 28 2016
US Jobless Claims Rise to 257K
DOL | Joana Ferreira | firstname.lastname@example.org
The number of Americans filing for unemployment benefits was 257,000 in the week ended April 23rd, an increase of 9,000 from the previous week's revised level of 248,000, better than market expectations of 260,000. This marks 60 consecutive weeks of initial claims below 300,000, the longest streak since 1973.
The 4-week moving average was 256,000, a decrease of 4,750 from the previous week's revised average. This is the lowest level for this average since December 8, 1973 when it was 252,250. The previous week's average was revised up by 250 from 260,500 to 260,750.
The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending April 16, 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 April 16 was 2,130,000, a decrease of 5,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 4, 2000 when it was 2,110,000. The previous week's level was revised down by 2,000 from 2,137,000 to 2,135,000. The 4-week moving average was 2,157,500, a decrease of 10,500 from the previous week's revised average. This is the lowest level for this average since November 11, 2000 when it was 2,119,750. The previous week's average was revised down by 500 from 2,168,500 to 2,168,000.
Thursday April 28 2016
US GDP Growth Slows to 0.5% in Q1
BEA | Joana Taborda | email@example.com
The US economy expanded an annualized 0.5 percent on quarter in the first three months of 2016, lower than a 1.4 percent expansion in the previous period, and below market expectations of 0.7 percent growth, according to the advanced estimate released by the Bureau of Economic Analysis. It is the weakest performance since the first quarter of 2014 when the economy contracted 0.9 percent as consumer spending slowed, the drag from trade and business inventories worsened and business investment fell for the third straight quarter.
Personal consumption expenditure (PCE) contributed 1.27 percentage points to growth (1.66 percent in the previous quarter) and rose 1.9 percent (2.4 percent in the previous quarter). Spending on durable goods (-1.6 percent from 3.8 percent in the previous quarter) fell, services slowed (2.7 percent from 3.8 percent in the previous period) and nondurable goods expenditure increased at a faster 1 percent (0.6 percent in the previous quarter).
Fixed investment subtracted 0.27 percentage points to growth (0.06 percent in the previous quarter) and fell 1.6 percent (+0.4 percent in the previous quarter). Nonresidential investment shrank 5.9 percent (-2.1 percent in the previous quarter): structures fell 10.7 percent (-5.1 percent in the previous quarter), equipment investment decreased 8.6 percent (-2.1 percent in the previous quarter) while investment in intellectual property products grew 1.7 percent (rebounding from a 0.2 percent decline in the previous quarter). Residential investment jumped 14.8 percent, higher than 10.1 percent in the previous quarter.
Private inventories subtracted 0.33 percentage points from the growth, compared to a 0.22 percentage point’s decrease in the previous period. Businesses accumulated $60.9 billion worth of inventory, lower than $78.3 billion earlier reported.
Meanwhile, exports shrank 2.6 percent (-2 percent in the previous quarter) while imports edged up 0.2 percent (recovering from a 0.7 percent fall in the previous quarter), bringing the impact from trade to -0.34 percent from -0.14 percentage points in the previous quarter.
Government spending and investment added 0.2 percentage points to growth compared to a 0.02 percentage points in the previous quarter, up 1.2 percent from the fourth quarter.
Wednesday April 27 2016
Fed Leaves Rates on Hold
Federal Reserve | Joana Taborda | firstname.lastname@example.org
The Federal Reserve left the target range for its federal funds rate unchanged at 0.25 percent to 0.5 percent for the third time during its April 2016 meeting. Policymakers said labor market conditions improved but economic activity appears to have slowed although concerns regarding risks from global economic and financial developments to the US economy eased.
Excerpts from the FOMC Statement:
Information received since the Federal Open Market Committee met in March indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed. Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high. Since the beginning of the year, the housing sector has improved further but business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and falling prices of non-energy imports. Market-based measures of inflation compensation remain low; 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 currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. 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 declines in energy and import prices dissipate and the labor market strengthens further. 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 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.
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, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
Tuesday April 26 2016
US Durable Goods Orders Below Expectations
US Census Bureau | Joana Taborda | email@example.com
New orders for US manufactured durable goods increased 0.8 percent in March from February of 2016, rebounding from an upwardly revised 3.1 percent fall in the previous period but below market forecasts of a 1.8 percent rise. Excluding transportation, new orders dropped 0.2 percent and without defense orders fell 1 percent.
Transportation equipment, also up two of the last three months, drove the increase, $2.2 billion or 2.9 percent to $76.0 billion.
Shipments of manufactured durable goods in March, down three of the last four months, decreased $1.1 billion or 0.5 percent to $237.0 billion. This followed a 1.0 percent February decrease. Transportation equipment, also down three of the last four months, drove the decrease, $1.4 billion or 1.8 percent to $77.5 billion.
Unfilled orders for manufactured durable goods in March, down three of the last four months, decreased $1.3 billion or 0.1 percent to $1,182.5 billion. This followed a 0.4 percent February decrease. Transportation equipment, down four consecutive months, drove the decrease, $1.6 billion or 0.2 percent to $787.3 billion.
Inventories of manufactured durable goods in March, up following two consecutive monthly decreases, increased less than $0.1 billion or virtually unchanged to $394.1 billion. This followed a 0.3 percent February decrease. Fabricated metal products, up following four consecutive monthly decreases, drove the increase, $0.2 billion or 0.5 percent to $48.5 billion.
Nondefense new orders for capital goods in March decreased $0.8 billion or 1.1 percent to $71.6 billion. Shipments increased $0.2 billion or 0.3 percent to $75.1 billion. Unfilled orders decreased $3.5 billion or 0.5 percent to $738.9 billion. Inventories increased $0.6 billion or 0.3 percent to $175.2 billion.
Defense new orders for capital goods in March increased $3.8 billion or 48.4 percent to $11.6 billion. Shipments increased less than $0.1 billion or 0.1 percent to $10.0 billion. Unfilled orders increased $1.6 billion or 1.1 percent to $150.2 billion. Inventories decreased $0.3 billion or 1.4 percent to $21.5 billion.
Monday April 25 2016
US New Home Sales Fall Unexpectedly by 1.5%
US Census Bureau | Joana Ferreira | firstname.lastname@example.org
New US single-family home sales unexpectedly fell by 1.5 percent on the month to a seasonally adjusted annual rate of 511,000 in March of 2016, following a downwardly revised 0.4 percent drop in February and missing market expectations of 1 percent rise. The decline was led by a sharp drop in home sales in the West region.
Sales tumbled 23.6 percent in the West, but rose 18.5 percent in the Midwest and 5 percent in the South. New home sales were unchanged in the Northeast.
The median sales price of new houses sold in March 2016 was $288,000; the average sales price was $356,200.
The seasonally adjusted estimate of new houses for sale at the end of March was 246,000. This represents a supply of 5.8
months at the current sales rate.
Year-on-year, new home sales expanded 5.4 percent in March.
Friday April 22 2016
US Factory Activity Growth Weakest Since 2009
Markit | Joana Taborda | email@example.com
The flash Markit Manufacturing PMI for the United States came in at 50.8 in April of 2016, down from 51.5 in the previous month and below market expectations of 52. It is the lowest reading since September of 2009 as production almost stagnated, new business growth slowed and job creation was the weakest since June of 2013.
The latest upturn in production levels was only fractional and the slowest recorded by the survey since the recovery began in October 2009. Manufacturers cited generally subdued demand conditions, delays to spending decisions among clients and ongoing weakness within the energy sector.
April data pointed to a renewed slowdown in new business growth, with the latest expansion the least marked so far in 2016. Some survey respondents suggested that uncertainty in relation to the economic outlook and political climate had weighed on client spending in April. Moreover, export sales continued to act as a drag on overall new business volumes. Although only modest, the latest survey pointed to the sharpest drop in new work from abroad since November 2014.
Backlogs of work fell for the third successive month in April, thereby suggesting a lack of pressure on operating capacity across the manufacturing sector. The latest decrease in workin-hand (but not yet completed) was the fastest for just over six-and-a-half years. This contributed to a near-stalling of jobs growth among manufacturing firms in April, with the latest rise in payroll numbers only fractional and the weakest since June 2013.
Manufacturers indicated that tighter inventory management strategies persisted in April, led by the sharpest drop in stocks of purchases since the start of 2014. At the same time, post- production inventories decreased at a moderate pace and manufacturers recorded a renewed fall in purchasing activity. Despite softer demand for inputs, latest data signalled the sharpest deterioration in vendor performance since September 2015, which some survey respondents linked to insufficient stocks and capacity cuts among suppliers.
Average cost burdens increased slightly in April, thereby ending a seven-month period of sustained input price declines. Manufacturers noted that higher labor costs and rising prices for metals and plastics had contributed to the overall increase in their cost burdens.
Factory gate charges decreased for the third month running in April, albeit at only a marginal pace. Companies that reported a drop in their output charges generally cited subdued market conditions and corresponding pressure on operating margins.
Thursday April 21 2016
US Jobless Claims Drop to Lowest Since 1973
DOL | Joana Ferreira | firstname.lastname@example.org
The number of Americans filing for unemployment benefits was 247,000 in the week ended April 16th, a decrease of 6,000 from the previous week's unrevised level of 253,000, staying below market expectations of 263,000. It was the lowest reading since November 24, 1973 when it was recorded at 233,000.
This marks 59 consecutive weeks of initial claims below 300,000, the longest streak since 1973.
The 4-week moving average was 260,500, a decrease of 4,500 from the previous week's unrevised average of 265,000.
The advance seasonally adjusted insured unemployment rate was 1.6 percent for the week ending April 9, 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 April 9 was 2,137,000, a decrease of 39,000 from the previous week's revised level. This is the lowest level for insured unemployment since November 4, 2000 when it was 2,110,000. The previous week's level was revised up 5,000 from 2,171,000 to 2,176,000. The 4-week moving average was 2,168,500, a decrease of 10,750 from the previous week's revised average. This is the lowest level for this average since November 11, 2000 when it was 2,119,750. The previous week's average was revised up by 1,250 from 2,178,000 to 2,179,250.
Tuesday April 19 2016
US Housing Starts Fall 8.8% in March
U.S. Census Bureau | Joana Taborda | email@example.com
Housing starts in the Unites States fell 8.8 percent to a seasonally adjusted annual rate of 1089 thousand in March of 2016, compared to an upwardly revised 1194 thousand in the previous month. It is the lowest reading since October last year and well below market expectations of 1170 thousand. Building permits slumped 7.7 percent, hitting a one-year low.
Figures for February were revised to show housing starts jumped 6.9 percent compared to an initial 5.2 percent increase.
In March, starts of single family houses went down 9.2 percent to 764 thousand, the lowest since October and starts of buildings with five units or more declined 8.5 percent to 312 thousand, the lowest in a year. Housing starts dropped the most in Midwest (-25.4 percent), followed by the West (-15.7 percent) and the South (-8.4 percent) but jumped in the Northeast (+61.3 percent).
Building permits came in at 1086 thousand, down from 1177 in February. Single-family permits were down 1.2 percent to 727 thousand and authorizations in buildings with five units or more shrank 20.6 percent to 324 thousand. Decrease were recorded in all regions: the Northeast (-17.9 percent), the West (-15.5 percent), the South (-3.2 percent) and the Midwest (-3.1 percent).
Year-on-year, housing starts rose 14.2 percent and building permits went up 4.6 percent.
Friday April 15 2016
US Consumer Sentiment at 7-Month Low
University of Michigan | Joana Taborda | firstname.lastname@example.org
The University of Michigan's consumer sentiment for the United States came in at 89.7 in April of 2016 from 91 in the previous month and below market expectations of 92. It is the lowest reading since September of 2015, as both future expectations and current conditions deteriorated, preliminary estimates showed.
The barometer of consumer expectations went down to 79.6 from 81.5 in the previous month and the gauge of current economic conditions decreased to 105.4 from 105.6 in March.
Americans expect the inflation rate in the next year to be 2.7 percent, the same as in March. Over the next 5 years, they expect consumer prices to increase at a slower 2.5 percent (2.7 percent in March).
Monday April 18 2016
US Industrial Production Falls 0.6% in March
Federal Reserve | Joana Taborda | email@example.com
Industrial output in the United States declined 0.6 percent in March of 2016 from the previous month, following an upwardly revised 0.6 percent drop in February. Figures came worse than market expectations of a 0.1 percent decrease, as mining shrank the most since September of 2008 when production was curtailed because of hurricanes and utilities and manufacturing also fell. For the first quarter as a whole, industrial production shrank at an annual rate of 2.2 percent.
A substantial portion of the overall decrease in March resulted from declines in the indexes for mining and utilities, which fell 2.9 percent and 1.2 percent, respectively. Substantial cutbacks in coal mining and in oil and gas well drilling and servicing, as well as decreases in oil and natural gas extraction explain the drag from mining, which has fallen nearly 13 percent over the past 12 months. The index for utilities moved down again, primarily because of a drop of 4.6 percent for natural gas utilities.
In addition, manufacturing output fell 0.3 percent. The production of durables moved down 0.4 percent. The largest declines, about 1 1/2 percent, were registered both by motor vehicles and parts and by electrical equipment, appliances, and components. Several industries posted increases, with the largest, nearly 1 percent, for computer and electronic products. After increasing 0.9 percent in January and decreasing 0.5 percent in February, the output of nondurable manufacturing edged down in March, as gains in the production of petroleum and coal products and of chemicals nearly offset declines for most other industries. The output of other manufacturing (publishing and logging) fell almost 1 percent. For the first quarter, manufacturing output moved up at an annual rate of 0.6 percent, roughly reversing its small decrease in the fourth quarter of last year.
Year-on-year, industrial production declined 2 percent.
Capacity utilization for the industrial sector decreased 0.5 percentage point in March to 74.8 percent, a rate that is 5.2 percentage points below its long-run (1972–2015) average.