Online job vacancies rose by nearly 196,000 in May

Online advertised vacancies increased 195,600 to 4,809,200 in May, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series.

The April supply/demand rate stands at 1.53 unemployed for each advertised vacancy, with a total of 2.4 million more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7.1 million in April.

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Chicago Business Barometer Up 1.1 Points to highest level since November 2014

The MNI Chicago Business Barometer increased to 59.4 in May from 58.3 in April, the highest level since November 2014.

Optimism among firms about business conditions rose for the fourth consecutive month. Four of the five Barometer components led May’s increase, with only New Orders receding.

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Federal Reserve Beige Book: Modest economic growth, but some regional weaknesses

The Beige Book provided a generally upbeat view of growth in the U.S. in the period from early April through late May. The report appears to strengthen the case the Fed will raise a key short-term interest rate again at its next big meeting in two weeks.  Although the economy expanded at “modest to moderate” pace through late May, growth frayed in some regions, raising questions about whether the central bank will reassess its strategy after an expected increase in interest rates in mid-June.

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Mortgage applications fall 3.4 percent in latest survey, rates flat

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.4 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling one percent and refinances down by four percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.17 percent.

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April pending home sales index posts first year-over-year decline since December

The Pending Home Sales Index decreased 1.3 percent to 109.8 in April from a downwardly revised 111.3 in March. After last month's decline, the index is now 3.3 percent below a year ago, which is the first year-over-year decline since last December and the largest since June 2014 (7.1 percent).

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Initial estimate: Corporate profits dipped sharply in 1Q 2017

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) decreased $40.3 billion in the first quarter, in contrast to an increase of $11.2 billion in the fourth quarter of 2016.

Texas Manufacturing Outlook Survey rose in May to highest level in three years

Texas factory activity increased at a faster pace in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The index, a key measure of state manufacturing conditions, moved up eight points to 23.3, reaching its highest level since April 2014.

State Street Global Investor Confidence Index rose 5.1 points in May

The State Street Global ICI increased to 102.5, up 5.1 points from April’s revised reading of 97.4. The improvement in sentiment was driven by an increase in the North American ICI from 95.1 to 104.1.

“After 10 consecutive months of readings below 100, Global investor confidence is finally picking up steam,” commented Rajeev Bhargava, managing director and head of Investor Behavior Research, State Street Associates. “Markets continue to anticipate a very gradual course for the Federal Reserve rate hikes, and with hopes for increased infrastructure spending and tax reforms, the North American ICI readings are resonating with the uptick in risk appetite.”

Consumer Confidence Index dipped again in May

The Conference Board Consumer Confidence Index, which had decreased in April, declined slightly in May. The Index now stands at 117.9 (1985=100), down from 119.4 in April. The Present Situation Index increased marginally from 140.3 to 140.7, while the Expectations Index declined from 105.4 last month to 102.6 in May.

“Consumer confidence decreased slightly in May, following a moderate decline in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “However, consumers’ assessment of present-day conditions held steady, suggesting little change in overall economic conditions. Looking ahead, consumers were somewhat less upbeat than in April, but overall remain optimistic that the economy will continue expanding into the summer months.”

Case-Shiller Index sets 33-month high in March, up 5.8 percent year-on-year

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in March, up from 5.7% last month and setting a 33-month high.

After seasonal adjustment, the National Index recorded a 0.3% month-over-month increase.

Personal income and spending both rose 0.4 percent in April

Personal income increased $58.4 billion (0.4 percent) in April while disposable personal income (DPI) increased $56.5 billion (0.4 percent) and personal consumption expenditures (PCE) increased $53.2 billion (0.4 percent).

The PCE price index increased 0.2 percent from March and 1.7 percent year-on-year. Excluding food and energy, the PCE price index increased 0.2 percent and 1.5 percent year-on-year.

May consumer sentiment continued high plateau but partisan divide remains

According to the University of Michigan's monthly survey, consumer sentiment has continued to move along the high plateau established following Trump’s election. The May 2017 figure was virtually unchanged from the April reading, and nearly identical with the December to May average of 97.3.

Moreover, the partisan divide between Democrats and Republicans has also remained largely unchanged, with the first expecting a recession and the other more robust economic growth.
Despite the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% in 2017, although this is based on averages across the political divide, which has never been as extreme as it is currently.

First quarter GDP growth revised up from 0.7 to 1.2 percent in second estimate

Real gross domestic product (GDP) increased at an annual rate of 1.2 percent in the first quarter of 2017 according to the "second" estimate released by the Bureau of Economic Analysis. In the advance estimate, the increase in real GDP was 0.7 percent.  In the fourth quarter, real GDP increased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the

"advance" estimate issued last month.

With this second estimate for the first quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in personal consumption expenditures (PCE) were larger and the decrease in state and local government spending was smaller than previously estimated. These revisions were partly offset by a larger decrease in private inventory investment.

Mortgage applications rise 4.4 percent in latest survey as rates drop to lowest level since November 2016

The Market Composite Index increased 4.4 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 1 percent and refinances rising 11 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to its lowest level since November 2016, 4.17 percent.

Federal Reserve meeting minutes suggest another rate hike possible in June

Federal Reserve officials expected at their policy meeting this month that it would "soon be appropriate" to raise short-term interest rates, a signal the U.S. central bank could move in June at its next gathering.

The Fed also moved toward a consensus on a proposal to start gradually shrinking its $4.5 trillion in holdings of Treasury and mortgage securities later in the year.

Initial unemployment claims rise 1,000 in latest report but 4-week average down to lowest level since April 1973

In the week ending May 20, initial unemployment claims were 234,000, an increase of 1,000 from the previous week's revised level.

The 4-week moving average was 235,250, a decrease of 5,750 from the previous week's revised average. This is the lowest level for this average since April 14, 1973 when it was 232,750. 

FHFA: House prices up 1.4 percent in 1Q2017 and 6.0 percent year-on-year

U.S. house prices rose 1.4 percent in the first quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index.

House prices rose 6.0 percent from the first quarter of 2016 to the first quarter of 2017.

FHFA's seasonally adjusted monthly index for March was up 0.6 percent from February.

Richmond Fed's Survey of Manufacturing Activity slips in May

Manufacturers in the Fifth District were somewhat less upbeat in May than in the prior three months, according to the latest survey by the Federal Reserve Bank of Richmond.

The index for shipments and the index for new orders decreased notably, with the shipments index falling to slightly below 0. The index for employment was relatively flat, but the decline in the other two indexes resulted in a decline in the composite index from 20 in April to 1 in May. The majority of firms continued to report higher wages, but more firms reported a decline in the average workweek than reported an increase.

Looking six months ahead, manufacturing executives remained generally optimistic, although the only index to increase was expected capital expenditures.

Flash U.S. Composite Output Index rebounds modestly in May

The seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index revealed a modest rebound in private sector business activity growth in May.

At 53.9, up from 53.2 in April, the headline index pointed to the strongest upturn in U.S. private sector output since February. Faster business activity growth was driven by the service sector (‘flash’ index at 54.0 in May), which more than offset the weakest rise in manufacturing production since September 2016 (‘flash’ output index at 53.3).

April new home sales dipped 11.4 percent from March's 10-year high but still slightly above year-ago levels

New Home Sales

Sales of new single-family houses in April 2017 were at a seasonally adjusted annual rate of 569,000. This is 11.4 percent below the revised March rate of 642,000, but is 0.5 percent above the April 2016 estimate of 566,000.

Sales Price

The median sales price of new houses sold in April 2017 was $309,200. The average sales price was $368,300.

For Sale Inventory and Months’ Supply

The seasonally-adjusted estimate of new houses for sale at the end of April was 268,000. This represents a supply of 5.7 months at the current sales rate.

Philadelphia Fed Manufacturing Business Outlook Survey rebounded sharply in May

Results from the May Manufacturing Business Outlook Survey suggest that regional manufacturing activity continued to expand this month, rising from 22.0 to 38.8 Although most of the survey's future indicators fell this month, the readings suggest that most firms still expect growth to continue over the next six months.

Chicago Fed National Activity Index rose to 0.49 in April, highest since 2014

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.49 in April from +0.07 in March. Two of the four broad categories of indicators that make up the index increased from March, and only one category made a negative contribution to the index in April. The index’s three-month moving average, CFNAI-MA3, increased to +0.23 in April from a neutral reading in March.

Initial unemployment claims fall 4,000 in latest report

In the week ending May 13, initial unemployment claims were 232,000, a decrease of 4,000 from the previous week's unrevised level of 236,000.

The 4-week moving average was 240,750, a decrease of 2,750 from the previous week's unrevised average of 243,500.

Mortgage applications fall 4.1 percent in latest survey, rates remain flat

The Market Composite Index decreased 4.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 3 percent and refinances dipping 4 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances remained unchanged at 4.23 percent.

Leading Economic Index rose again in April

The Leading Economic Index for the U.S. increased 0.3 percent in April to 126.9 (2010 = 100), following a 0.3 percent increase in March, and a 0.5 percent increase in February.

While the majority of leading indicators have been contributing positively in recent months, housing permits followed by average workweek in manufacturing have been the sources of weakness among the U.S. LEI components.

April industrial production rose for third straight month across all major industries

Industrial production advanced 1.0 percent in April for its third consecutive monthly increase and its largest gain since February 2014, largely as a result of widespread increases among its major industries.

At 105.1 percent of its 2012 average, total industrial production in April was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.6 percentage point in April to 76.7 percent, a rate that is 3.2 percentage points below its long-run (1972–2016) average.

E-commerce sales growth continued to outpace total retail sales growth in 1Q 2017

U.S. retail e-commerce sales for the first quarter of 2017 rose 4.1 percent from the fourth quarter of 2016.  At the same time, total retail sales for the first quarter of 2017 rose 1.0 percent.

Comparing year-on-year, the first quarter 2017 e-commerce estimate increased 14.7 percent from the first quarter of 2016 while total retail sales increased 5.1 percent in the same period.

E-commerce sales in the first quarter of 2017 accounted for 8.5 percent of total sales, up from 8.2 percent the previous quarter and 7.8 year-on-year.

April building permits fall 2.5 percent from March but up 5.7 percent year-on-year

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,229,000. This is 2.5 percent below the revised March rate of 1,260,000, but is 5.7

percent above the April 2016 rate of 1,163,000.

April housing starts dip 2.6 percent from March but up 0.7 percent year-on-year

Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,172,000. This is 2.6 percent below the revised March estimate of 1,203,000, but is 0.7 percent above the April 2016 rate of 1,164,000.

NAHB Housing Market Index rises to 70 in May, second-highest rating since the recession

In a further sign that the housing market continues to strengthen, builder confidence in the market for newly-built single-family homes rose two points in May to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the second highest HMI reading since the downturn.

Two of the three HMI components registered gains in May. The index charting sales expectations in the next six months jumped four points to 79 while the index gauging current sales conditions increased two points to 76. Meanwhile, the component measuring buyer traffic edged one point down to 51.

Consumer sentiment rises to 97.7 in May while partisan divide narrows

Consumer sentiment remained on the high plateau established following Trump's election, with the early May figure nearly identical with the December to May average of 97.4.

The recent stability in consumer sentiment, however, masks two important underlying shifts in the components as well as in the partisan divide. More favorable income gains and low inflation meant that consumers held the most favorable real income expectations in a dozen years. Buying plans, however, were mixed: household durables rose to a decade peak, while vehicle buying conditions slipped to a three year low.

Home buying conditions were viewed less favorably, but were offset by the most favorable views about home selling in more than a decade.

The partisan difference in the Expectations Index is still huge, but the gap between Democrats and Republicans narrowed slightly to 55 Index points from 65 three months ago, mainly due to Democrats expressing diminished fears of an immediate recession and lessened concerns about personal financial setbacks.

Retail sales rebounded 0.4 percent in April, with online sales up 1.4 percent

Americans stepped up their spending at auto dealers, hardware stores and e-commerce outlets as retail sales rebounded from two sluggish months, with retail sales rising 0.4 percent in April.  Sales had ticked up just 0.1 percent in March and fell in February.

The rise also indicates that the struggles of large retail chains, such as Macy's and JC Penney's, reflect changes in consumer buying patterns rather than broader economic weakness. Sales at department stores fell 0.2 percent. Yet a category that includes online retailers reported sales growth of 1.4 percent, the strongest of any group.

CPI rose 0.2 percent in April, up 2.2 percent over past year

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in April. Over the last 12 months, the all items index rose 2.2 percent before seasonal adjustment.

The index for all items less food and energy rose 0.1 percent in April after declining in March.  The index for all items less food and energy rose 1.9 percent over the last 12 months; this compares to a 1.8 percent average annual increase over the past decade.

Initial unemployment claims dip 2,000 in latest report

In the week ending May 6, initial unemployment claims were 236,000, a decrease of 2,000 from the previous week's unrevised level of 238,000. The 4-week moving average was 243,500, an increase of 500 from the previous week's unrevised average of 243,000.

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Bloomberg Consumer Comfort Index dips slightly in May

While consumer comfort remains near a 15-year high, Americans were a bit rattled about the prospects for the U.S. economy in the latest week, amid a recent report that first-quarter growth was the weakest in three years. Still, the index is on a healthy run, remaining above 49 for 11 straight weeks -- the longest such streak since September 2001.

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May Business Inflation Expectations: Up 2.0 percent over the next 12 months and 1.8 percent over past year

Respondents to the Atlanta Fed Survey indicated that, on average, they expect unit costs to rise 2.0 percent over the next 12 months. Inflation uncertainty increased slightly to 2.2 percent. Firms also report that, compared to this time last year, their unit costs are up 1.8 percent.

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Producer Price Index rose 0.5 percent in April, up 2.5 percent year-on-year

The Producer Price Index for final demand advanced 0.5 percent in April. On an unadjusted basis, the final demand index rose 2.5 percent for the 12 months ended April 2017, the largest increase since moving up 2.8 percent for the 12 months ended February 2012.

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First Quarter 2017 Economic Update: Some Mixed Signals but Real Estate Remains Strong

This seems to be an odd time for the U.S. economy, which has remained somewhat sluggish since the beginning of the year. This compares to a rise of nearly eight percent in the S&P 500 since January 1st and a seller’s market for housing in which there simply isn’t enough inventory to satiate several years of pent-up demand.

Meanwhile, both business and consumer confidence – which have been at record levels lately due to promised changes in our byzantine tax code and reductions in business regulations – are starting to slightly wane due to a political system still mostly stuck in neutral.

GDP growth, which averaged just 1.6 percent in 2016 --- the lowest since 2011 – fell further to an initial estimate of 0.7 percent during the first quarter of 2017, due largely to consumers, businesses and state and local governments tightening their spending. However, not only is it likely that this estimate will rise with the second and third iterations, but, as of mid-May, analysts are forecasting growth in the second quarter at 3.6 percent as investments in fixed assets rebound. Moreover, the Federal Reserve’s Beige Book showed residential construction growth accelerating through the end of March as non-residential construction remained strong.

Job growth, which rebounded by 211,000 in April, started out very strong in January and February – ranging from 216,000 to 232,000 -- before dipping sharply to just 79,000 in March. However, given April’s official unemployment rate dipping to 4.4 percent – a 10-year low – March’s performance is widely being viewed as a temporary dip due to poor mid-month weather, fewer construction jobs being added, and a dip in retail employment as that sector continues to battle against online competitors.

In terms of inflation, while the Consumer Price Index (less food and energy) dipped 0.1 percent in March, it has still risen by 2.0 percent over the past year, or even with the target set by the Federal Reserve. The Producer Price Index reported similar trends, dipping 0.1 percent in March but up 2.3 percent over the past 12 months.

Not surprisingly, due to this somewhat murky collection of jobs and inflation data, in its most recent May meeting the Fed delayed raising interest rates until the labor market has stabilized further and inflation needs some more taming.

If there is one area which is not murky, it is confidence. The University of Michigan’s Consumer Sentiment Survey has been on a high plateau since President Trump’s election, settling at around 97 in March and April. Nonetheless, a new trend in the survey has revealed stark differences based on political beliefs, with optimists in one corner and pessimists in the other, especially in terms of expectations for household incomes, inflation and unemployment. These partisan extremes can in turn cause instability and impact consumer spending.

Looking specifically at the building industry, builder confidence has remained at well over 60 since last September, and has averaged 68 since the beginning of 2017. In tandem with this confidence, construction spending rose for five straight months before slipping 0.2 percent in March. Although housing starts dipped 6.8 percent in March, they were still up over nine percent year-on-year. And, while March building permits rose a moderate 3.6 percent from February, they’re up by a robust 17 percent over the past year.

Similarly, sales of new single-family homes rose by 5.8 percent in March to an annual rate of 621,000 units, or a year-on-year increase of nearly 16 percent. Median new home sales prices rose 1.2 percent year-on-year to $315,000, but are still down from last year’s peak of $332,700 in December. At current sales rates, existing inventory would take 5.2 months to sell versus 5.5 months a year ago.

For existing homes, sales rose 4.4 percent in March to an annual rate of 5.7 million, which is also up nearly six percent from a year ago and marked the strongest month of sales since February of 2007. Median existing home prices rose close to seven percent year-on-year to $236,400, for the 61^st consecutive month of year-over-year increases. Although September inventory rose moderately to over 1.8 million homes to a still-brief timeline of just 3.8 months, it has fallen year-over-year for 22 consecutive months.

Looking ahead to 2017 versus 2016, the NAHB is projecting annual single-family starts to rise by 9.0 percent and multi-family starts to decline by 1.6 percent.In addition, look for a rise of 12.1 percent for new single-family homes to 626,000, and existing homes sales to increase 3.2 percent to 4.98 million.

Mortgage loan applications rise 2.4 percent in most recent survey as rates remain flat

The Market Composite Index increased 2.4 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 2 percent and refinances up 3 percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances remained unchanged at 4.23 percent.

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Job openings rose 1.1 percent in March

The number of job openings was rose 1.1 percent to 5.7 million on the last business day of March. Over the month, hires rose 0.2 percent to 5.3 million, and separations rose 1.6 percent to 5.1 million, respectively.

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Small Business Optimism Index slips in April but still at historically high levels

The Index dipped 0.2 points April, settling at 104.5. April was the sixth straight month for historically high optimism, a hot streak not seen since 1983. Five of the Index components posted a gain, reaching levels not seen since before the previous administration. Three of the components declined, and two were unchanged. Nearly all of the slight decline was attributable to an 8-point plunge in expected business conditions.

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Consumer credit jumped 5.2 percent in March

Consumer borrowing rose at a solid 5.2% annual rate in March, suggesting the consumer has not completely retrenched.  Although the U.S. economy got off to a slow start this year as consumers dialed back spending, the Federal Reserve said earlier this week that the slump in first quarter growth was temporary.

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April job growth rebounded to 211,000, unemployment rate at 4.4 percent

Total nonfarm payroll employment increased by 211,000 in April, and the unemployment rate was little changed at 4.4 percent. Job gains occurred in leisure and hospitality, health care and social assistance, financial activities, and mining. Over the year, the unemployment rate has declined by 0.6 percentage point, and the number of unemployed has fallen by 854,000.

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Initial unemployment claims drop 19,000 in most recent report

In the week ending April 29, initial unemployment claims were 238,000, a decrease of 19,000 from the previous week's unrevised level of 257,000. The 4-week moving average was 243,000, an increase of 750 from the previous week's unrevised average of 242,250.

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Mortgage loan applications slip 0.1 percent in latest survey as rates rise slightly

The Market Composite Index decreased 0.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising four percent but refinances falling five percent. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.23 percent.

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Gallup Good Jobs Rate slipped to 44.7 percent in April

The U.S. Gallup Good Jobs Rate fell to 44.7% in April, down from 45.1% in March, but higher than the 44.4% measured in February. The current GGJ rate is slightly lower than the 44.9% recorded in April 2016.

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Labor productivity rose at 0.6 percent annual rate in 1Q 2017

Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the first quarter of 2017, as output increased 1.0 percent and hours worked increased 1.6 percent.

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April planned job cuts down 15 percent from March and 43 percent year-on-year

US-based employers announced workforce reductions totaling 36,602 during the month, down 15 percent from March and 43 percent lower than the 64,141 recorded in April 2016.  Of these cuts, 11,669 were in the retail sector, the highest total among all industries.

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Federal Reserve opts to keep interest rates unchanged in latest meeting

Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed. In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 3/4 to 1 percent.

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Auto sales fell for fourth straight month in April

Car sales in the US slowed significantly in April, compounding several months of declines that suggest the industry's record sales streak may be behind it. It was the fourth straight month of decline for the industry.

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Gallup's Economic Confidence Index dipped to +5 in April, but positive streak continued

Gallup's U.S. Economic Confidence Index averaged +5 in April, down four points from March's average. Despite the dip, confidence has been in positive territory for six consecutive months -- the longest such streak in the past nine years.

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April service sector index rose 2.3 percentage points to 55.2

The NMI registered 57.5 percent, which is 2.3 percentage points higher than the March reading of 55.2 percent. In April the non-manufacturing sector reflected strong growth after a slowing in the rate from the previous month.

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April manufacturing sector index fell 2.4 percentage points in April to 54.8

The April PMI registered 54.8 percent, a decrease of 2.4 percentage points from the March reading of 57.2 percent. Comments from the panel generally reflect stable to growing business conditions; with new orders, production, employment and inventories of raw materials all growing in April over March.

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Gallup Job Creation Index dips to 36 in April, one point from record high in March

The Gallup Job Creation Index was at +36 in April, one point off the record high of +37 in March. The Midwest led the regions at +42, the first time any region has topped +40 in the nine-year history of the index.

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ADP: Private sector job growth dipped to 177,000 in April

Private-sector employment increased by 177,000 from March to April, on a seasonally adjusted basis. This compares to 255,000 last month and 109,000 year-over-year, and is the lowest level since October 2016.

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