The MNI Chicago Business Barometer rose to a six-month high of 65.5 in July, up 1.4 points from 64.1 in June, with the prices paid index rising to a 10-year high.
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Tuesday, July 31, 2018
July Chicago PMI rose to six-month high, prices paid index rises to 10-year high
July consumer confidence index rebounds slightly from June
Consumer confidence gained marginal ground by rising 0.3 points in July, after a modest decline in June. Consumers' assessment of present-day conditions improved, suggesting that economic growth is still strong. However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.
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June personal income and personal spending both rose 0.4 percent, savings rate unchanged
In June, personal income, disposable personal income and personal consumption expenditures all increased 0.4 percent. The personal savings rate was unchanged from May at 6.8 percent.
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Wage inflation: 2Q 2018 compensation costs rose at highest annual rate since 2008
Compensation costs for civilian workers increased 0.6 percent, seasonally adjusted, for the 3-month period ending in June 2018. Wages and salaries increased 0.5 percent and benefit costs increased 0.9 percent. Year-on-year, compensation costs rose 2.8 percent, with wages and salaries up 2.8 percent and benefits rising 2.9 percent.
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May Case-Shiller Index up 1.1 percent from April and 6.4 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 6.4% annual gain in May, remaining the same as in the previous month. Before seasonal adjustment, the National Index posted a month-over-month gain of 1.1% in May.
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Fed-preferred June PCE Price Index up 0.1 percent from May and 2.2 percent year-on-year
In June, the PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent. Year-on-year, the PCE price Index rose 2.2 percent. Excluding food and energy, the index rose 1.9 percent.
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Monday, July 30, 2018
July Global Investor Confidence rebounds 1.0 point to 101.8, but investor sentiment remains depressed
The Global Investor Confidence Index increased to 101.8 in July, up 1.0 point from June's revised reading of 100.8. It is possible that the prospects of escalating trade protectionism, political uncertainty, and lagging earnings growth continue to depress institutional investor sentiment.
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Gallup: Nearly 4 in 10 of Americans cite the economy as the nation's most positive factor
According to a Gallup poll, 37 percent of respondents cited the economy or jobs as nation's biggest positive factor. This marks a 14-year high in Gallup's monthly poll series.
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June pending home sales index rebounds 0.9 percent from May, but still down 2.5 percent year-on-year
The Pending Home Sales Index rose 0.9 percent to 106.9 in June from 105.9 in May. Despite last month's increase, contract signings are still down 2.5 percent on an annual basis.
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Friday, July 27, 2018
July consumer sentiment dipped 0.3 points to 97.9, still at high levels
Consumer sentiment posted a trivial 0.3 point one-month decline in July, remaining a half of an Index-point or less from the average in the prior twelve months (97.7) or since the start of 2017 (97.4). Despite the expectation of higher inflation and higher interest rates during the year ahead, consumers have kept their confidence at high levels due to favorable job and income prospects.
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Second quarter GDP growth jumps to 4.1 percent in first of three estimates
U.S. GDP grew by 4.1 percent in the second quarter of 2018 in the first of three estimates. Most of this jump from the 2.2 percent rate noted in the first quarter was from personal spending, exports, nonresidential fixed investment, federal government spending, and state and local government spending.
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Thursday, July 26, 2018
Initial unemployment claims rise by 9,000 in weekly report
In the week ending July 21, initial unemployment claims were 217,000, an increase of 9,000 from the previous week's revised level. The 4-week moving average was 218,000, a decrease of 2,750 from the previous week's revised average.
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Mortgage applications dip 0.2 percent, rates remain flat
The Market Composite Index decreased 0.2 percent on a seasonally adjusted basis from one week earlier, with purchase loans down 1.0 percent but refinances up 1.0 percent. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 4.77 percent.
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Bloomberg: Consumer confidence rises to highest level since February 2001 in weekly update
Americans' confidence rose to the highest level since February 2001 on brighter assessments of the economy, with the Bloomberg Consumer Comfort Index rising for the seventh straight week to 59.0 from 58.8.
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June trade in goods deficit rose 5.5 percent as imports outpaced exports
The international trade deficit was $68.3 billion in June, up 5.5 percent from $64.8 billion in May. Exports of goods for June were $141.9 billion, $2.2 billion less than May exports. Imports of goods for June were $210.3 billion, $1.3 billion more than May imports.
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Durable goods orders rebounded strongly in June
Overall orders for durable goods, items meant to last three years or more, increased 1.0 percent in June as demand for transportation equipment rebounded. Excluding transportation, orders rose 1.5 percent.
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Wednesday, July 25, 2018
Direct foreign investment in the U.S. fell sharply in 1Q 2018
Net foreign direct investment in the U.S. was $53.1 billion in 1Q 2018, the first quarter in which the tax cuts took effect. This level of investment is down 43% from the same quarter of 2017 and 37% from the fourth quarter of 2017.
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June new home sales dip to eight-month low, but still up 2.4 percent year-on-year
Sales of new single-family houses in June 2018 were at a seasonally adjusted annual rate of 631,000, the lowest rate in eight months and down 5.3 percent from May. Still, sales were up 2.4 percent year-on-year. The median new house price fell 4.2 percent to $302,100 in June from a year ago.
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Tuesday, July 24, 2018
FHFA: Home prices up 0.2 percent in May and 6.4 percent year-on-year
The FHFA House Price Index (HPI) reported a 0.2 percent
increase in U.S. house prices in May from April. From May 2017 to May 2018, house prices were
up 6.4 percent.
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Private sector growth strong in July, but prices charged rising at record rate
U.S. private sector companies experienced a robust rise in
overall business activity during July, supported by an improving economic
backdrop and another sharp upturn in incoming new work. Relatively strong rates
of business activity growth were recorded in both the manufacturing and service
sectors.
Intense cost pressures continued in July, which resulted in a sharp
and accelerated increase in average prices charged by private sector firms. The
latest rise in output charges was the fastest since composite data were first
collected in October 2009.
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Monday, July 23, 2018
Chicago Fed National Activity Index rebounded strongly in June
Led by improvements in production-related indicators, the
Chicago Fed National Activity Index (CFNAI) rebounded to +0.43 in June from
–0.45 in May. The index’s three-month moving average, CFNAI-MA3, edged up to
+0.16 in June from +0.10 in May.
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June existing home sales dip for third straight month, prices rise to all-time high
Existing-home sales decreased for the third straight month
in June, falling by 0.6 percent from May and down 2.2 percent year-on-year. The ongoing supply and demand imbalance
helped push June’s median sales price to a new all-time high of $276,900, up
5.2 percent year-on-year.
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Thursday, July 19, 2018
Initial unemployment claims fall to lowest level since December 1969
In the week ending July 14, initial unemployment claims were 207,000, a decrease of 8,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 2,750 from the previous week's revised average.
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Mortgage applications fall 2.5 percent as purchase loans slip
The Market Composite Index decreased 2.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 5.0 percent but refinances rising 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.77 percent from 4.76 percent.
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June Leading Economic Index rose 0.5 percent after no change in May
The U.S. LEI increased in June by 0.5 percent to 109.8 after being flat in May, pointing to continuing solid growth in the U.S. economy. The widespread growth in leading indicators, with the exception of housing permits which declined once again, does not suggest any considerable growth slowdown in the short-term.
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Wednesday, July 18, 2018
June industrial production rebounded 0.6 from May, up 3.8 percent year-on-year
Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. At 107.7 percent of its 2012 average, total industrial production was 3.8 percent higher in June than it was a year earlier.
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June building permits dip for third straight month, down 3.0 percent year-on-year
Privately-owned housing units authorized by building permits in June dipped for the third month to a seasonally adjusted annual rate of 1,273,000, which is the lowest rate since September 2017. This is also 2.2 percent below the revised May rate of 1,301,000 and is 3.0 percent below the June 2017 rate of 1,312,000.
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June housing starts dip to lowest level since September 2017, down 4.2 percent year-on-year
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,173,000, dipping to the lowest rate since September 2017. This is 12.3 also below the revised May estimate of 1,337,000 and is 4.2 percent below the June 2017 rate of 1,225,000.
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June new home mortgage applications down 12 percent from May and 8.8 percent year-on-year
June mortgage applications for new home purchases decreased 12 percent since May and were down 8.8 percent year-on-year, but are not seasonally adjusted. For the first six months of 2018, however, new home applications rose 2.5 percent year-on-year.
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Beige book: Expansion continuing, but tariffs impacting prices and supplies
Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District where growth was described as slight. Manufacturers in all Districts expressed concern about tariffs and in many Districts reported higher prices and supply disruptions that they attributed to the new trade policies.
All Districts reported that labor markets were tight and
many said that the inability to find workers constrained growth. Consumer
spending was up in all Districts with particular strength in Dallas and
Richmond. Contacts reported higher input prices and shrinking margins. Six
Districts specifically mentioned trucking capacity as an issue and attributed
it to a shortage of commercial drivers. Contacts in several Districts reported
slow growth in existing home sales but were not overly concerned about rising
interest rates. Commercial real estate was largely unchanged.
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Tuesday, July 17, 2018
June industrial production rebounded 0.6 from May, up 3.8 percent year-on-year
Industrial production rose 0.6 percent in June after
declining 0.5 percent in May. For the second quarter as a whole, industrial
production advanced at an annual rate of 6.0 percent, its third consecutive
quarterly increase.
At 107.7 percent of its 2012 average, total industrial
production was 3.8 percent higher in June than it was a year earlier. Capacity
utilization for the industrial sector increased 0.3 percentage point in June to
78.0 percent, a rate that is 1.8 percentage points below its long-run
(1972–2017) average.
Builder confidence unchanged at 68 in July survey
Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 68 reading in July on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI index measuring current sales conditions remained unchanged at 74. Meanwhile, the component gauging expectations in the next six months dropped two points to 73 and the metric charting buyer traffic rose two points to 52.
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Builder confidence unchanged at 68 in July survey
Builder confidence in the market for newly-built
single-family homes remained unchanged at a solid 68 reading in July on the
National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
The HMI index measuring current sales conditions remained
unchanged at 74. Meanwhile, the component gauging expectations in the next six
months dropped two points to 73 and the metric charting buyer traffic rose two
points to 52.
Looking at the three-month moving averages for regional HMI
scores, the Northeast rose one point to 57 while the Midwest remained unchanged
at 65. The West and South each fell one point to 75 and 70, respectively.
Monday, July 16, 2018
July Empire State Manufacturing Survey index dips two points to 22.6
The headline general business conditions index edged down by over two points to 22.6—still a high level, suggesting a continuation of robust growth. Looking ahead, firms were slightly less optimistic about the six-month outlook than they were last month.
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June retail sales rose 0.5 percent from May and 6.6 percent year-on-year
Retail sales increased 0.5 percent in June, for the largest gain since September 2017, and were up 6.6 percent year-on-year. Total sales for the April 2018 through June 2018 period were up 5.9 percent from the same period a year ago.
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Friday, July 13, 2018
Consumer sentiment slips in mid-July read but still at high level
Consumer sentiment slipped in early July but remained nearly equal to the average in the prior twelve months (97.7) and since the start of 2017 (97.4). So far, the strength in jobs and incomes has overcome higher inflation and interest rates. The darkening cloud on the horizon, however, is due to rising concerns about the potential negative impact of tariffs on the domestic economy. While consumers may not understand the intricacies of trade theory, they have substantial experience making decisions about the timing of discretionary purchases based on prospective trends in prices.
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Thursday, July 12, 2018
Initial unemployment dip by 18,000 in weekly report
In the week ending July 7, initial unemployment claims were 214,000, a decrease of 18,000 from the previous week's revised level. The 4-week moving average was 223,000, a decrease of 1,750 from the previous week's revised average.
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Mortgage applications up 2.5 percent in weekly survey due to purchase loans, refinances dip
The Market Composite Index increased 2.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 7.0 percent but refinance activity falling 4.0 percent. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.76 percent.
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Bloomberg: Consumer comfort rose for fifth-straight week to highest level since mid-April
The Consumer Comfort Index improved for a fifth straight week, buoyed by brighter views of their personal finances and record-high confidence among Republicans. The index rose from 57.6 to 58.0, the highest reading since mid-April and matching the second-strongest reading since February 2001.
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CPI up 0.1 percent in June and 2.9 percent year-on-year
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in June and was up 2.9 percent year-on-year. The index for all items less food and energy rose 0.2 percent in June, and was up 2.3 percent year-on-year.
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Wednesday, July 11, 2018
Mortgage applications up 2.5 percent in weekly survey due to purchase loans, refinances dip
The Market Composite Index increased 2.5 percent on a
seasonally adjusted basis from one week earlier, with purchase loans rising 7.0
percent but refinance activity falling 4.0 percent. The average contract
interest rate for 30-year fixed-rate mortgages decreased to 4.76 percent.
Businesses' July Inflation Expectations Hold Firm for the Coming Year
Firms' inflation expectations went unchanged at 2.1 percent
over the year ahead. Sales levels remain
"about normal," on average. Profit margins improved somewhat, and
year-over-year unit costs decreased somewhat to 1.9 percent, on average.
Wholesale inventories rose faster than expected in May as domestic demand rose
U.S. wholesale inventories were a bit higher than initially estimated in May, rising by 0.6 percent amid strong increases in the stocks of machinery and a range of other goods. Economists expect the pace of inventory accumulation to pick up slightly in the second quarter after weak domestic demand in the first quarter.
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Producer Price Index up 0.3 percent in June and 3.4 percent year-on-year
The Producer Price Index for final demand rose 0.3 percent in June, down from 0.5 percent in May but up from 0.1 percent in April. On an unadjusted basis, the final demand index moved up 3.4 percent for the 12 months ended in June, the largest 12-month increase since climbing 3.7 percent in November 2011.
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Tuesday, July 10, 2018
The Rise of the New Single-Family Rental Home: A Hedge Against Real Estate Cycles
My column for the July edition of Builder & Developer magazine is now posted online.
An excerpt:
In September of 2015, I wrote a column about the
introduction of a new product type to the home building marketplace: the
single-family home for rent, otherwise known as build-to-rent (B2R). At that
time, just a few builders, including Lennar and Toll Brothers, had dipped their
toes into these waters, but today it’s being seen as a clever hedge against the
boom-and-bust real estate cycles which can test even the best-run companies.
To be sure, it’s not just homebuilders getting into this
game. Wall Street-backed companies like Invitation Homes and AmericanHomes4Rent started the trend by buying up cheap, existing single-family homes in
foreclosure back in 2012 when home prices were near their lowest, eventually
assembling a portfolio of 200,000 units across the country. Even with that
rapid growth, their holdings still represent just 1.4 percent of the estimated
14 million single-family rental homes, with most owned by small “mom and pop”
operators.
June Small Business Optimism Index dips 0.6 points but still at high level
The Small Business Optimism Index posted its sixth highest reading in survey history for the month of June, at 107.2, down 0.6 from May. Since December 2016, the Index has averaged an unprecedented 105.4, well above the 45-year average of 98 and rivaling the all-time high of 108.0 in July 1983.
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Consumer borrowing picked up in May at fastest rate in six months
Consumer borrowing picked up in May, with total consumer
credit increasing at an annual growth rate of 7.6%, which is the fastest pace
of credit growth since November. Most
of this was due to revolving credit, like credit cards, which rose by 11.4% in
May, and indicating consumers are willing to increase their spending after a
slow first quarter of the year.
JOLTS: Job openings dipped 3.0 percent in May as hiring picked up
The number of job openings edged down 3.0 percent to 6.6
million on the last business day of May. Over the month, hires rose 3.1 percent
to 5.8 million, while separations rose 0.8 percent to 5.5 million.
Monday, July 9, 2018
The 2018 Gold Nugget Winners: High Art in Architecture, Design and Land Use
One of the things I like best about the building industry is the enormous creativity involved in every stage of the process, especially for decisions made about architecture, design and land use. This was certainly true again for this year’s Gold Nugget winners at PCBC, ranging from rehabs which are both practical and inspiring, to master plans which seemed to effortlessly take the pulse of today’s culture while still making them relevant to future residents. Following are some profiles of winners in key categories.
In between the downtown area and the 30-acre Kewalo Harbor, 4,500 residential units, over one million square feet of retail space, a central plaza and rail station will emerge. Best of all, by including scores of existing businesses in this redevelopment, Ward Village demonstrated clear respect for the local culture and history.
But the true selling point for Escenia was its integration
into the 17,000 acres of an open space preserve, which will eventually become
part of the 33,000-acre Southern Subregion Habitat Reserve, one of California’s
largest. The land plan itself was noted
for retaining ranch elements including a yurt campground, oak groves, hillside
trails and farming, all of which are intended to inspire future generations to
respect the land.
For an individual, single-family home, it was Plan 9502 at
Camelot Homes’ White
Horse in Scottsdale, AZ which was named Home of the Year. In this case, judges cited the way in which
this plan updates the classic hacienda footprint into a modern feel, with
numerous indoor-outdoor spaces to take advantage of the local climate.
Yet by orienting each of the 50 homes towards
its center, the compounds created on these half-acre lots helped to mitigate
noise from an adjacent six-lane highway.
The end result was a traditional-looking home outside that was more
white-washed farmhouse inside, ultimately creating an unusually unique plan
which judges noted “would set a future precedent for the evolution of
production housing.”
Clever designs also abounded in the multi-family space, with
Trumark Urban’s The Pacific winning
Best Multi-Family Community due to what judges said was “transforming what was
a detractor and neighborhood eyesore to an exemplary display of positive change.” What Trumark was able to do was transform a
mid-rise, 1960s-style school of dentistry in the middle of the upscale,
built-out community of Pacific Heights in San Francisco into 76, LEED
Gold-certified luxury condos and townhomes.
Finally, it was The
Camden’s combination of 287 upscale apartments, a 40,000-square-foot
Equinox health club and multiple gathering spaces to maximize socializing which
earned this project by Camden Development top honors for Best Mixed-Use
Project.
Built on the site of Paramount
Pictures’ first production building in the heart of Hollywood, CA, The Camden
not only captures this entertainment-oriented history on a public art wall at
the base of each tower, but intentionally markets its units to the young and
local ‘industry’ types as not just a home, but also a very convenient place to
network.
June Employment Trends Index rebounded from May, up 5.2 percent year-on-year
As expected, after decreasing in May, the Employment Trends Index continued its solid path upwards in June, with positive contributions from all of its components and rising by 5.2 percent year-over-year to 108.94. The labor market will continue to tighten in the coming months, with strong employment growth outpacing the number of people entering the labor force.
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Jobs grew by 213,000 in June, unemployment rate ticked back up to 4.0 percent
Total nonfarm payroll employment increased by 213,000 in June, and the unemployment rate rose to 4.0 percent as more job seekers came off of the sidelines. Job growth occurred in professional and business services, manufacturing, and health care, while retail trade lost jobs.
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Friday, July 6, 2018
Gallup: Percent of Americans recognizing robust job market still near record high
Americans continue to recognize a robust U.S. job market, with 65% saying that it is a good time to find a "quality job," similar to 67% in May. These are the highest readings in Gallup's 17-year history of tracking this measure of Americans' views of the employment situation.
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Thursday, July 5, 2018
OECD report discusses left-behind workers in economic growth
The Organization for Economic Cooperation and Development (OECD) has a new report out which discusses why so many workers in the U.S. feel left behind even with low unemployment and healthy GDP growth.
This is important for the future as the economy continues to transition to one using more technology and robotics. How can we include today's workers in the job markets of tomorrow?
Click here for the entire report: https://lnkd.in/gtPg8GQ
Initial unemployment claims rise by 3,000 in latest report
In the week ending June 30, initial unemployment claims were 231,000, an increase of 3,000 from the previous week's revised level. The 4-week moving average was 224,500, an increase of 2,250 from the previous week's revised average.
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Mortgage applications fall 0.5 percent in weekly report
The Market Composite Index decreased 0.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 1.0 percent and refinances falling 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79 percent.
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Bloomberg: Consumer comfort index reaches 17-year high
Americans' sentiment approached a 17-year high last week on increasingly upbeat views of the economy and personal finances, rising to 57.6. This was the fourth consecutive weekly advance.
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June service sector economy index rises another 0.5 points to 59.1 percent
The June NMI® registered 59.1 percent, which is 0.5 percentage point higher than the May reading of 58.6 percent. There is a continuing concern relating to tariffs, capacity constraints and delivery.
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June planned job cuts up 18 percent from May and 19.6 percent year-on-year
Job cuts announced by U.S.-based employers rose 18 percent to 37,202 in June, and were up 19.6 percent year-on-year. Although the second quarter saw 25.3 percent fewer cuts than the previous quarter, they were still up 4 percent year-on-year.
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ADP: Private Sector Employment Increased by 177,000 Jobs in June
Private-sector employment increased by 177,000 from May to June, on a seasonally adjusted basis. This compares with growth of 189,000 in May and 154,000 last June.
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June FOMC meeting minutes: Concern about trade tensions, flattening yield curve
U.S. central bankers discussed whether recession lurked around the corner, and expressed concerns global trade tensions could hit an economy that by most measures looked strong. In addition, gradual rate hikes could take fed funds rate above neutral level some time next year.
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Tuesday, July 3, 2018
CoreLogic: Home prices increased nationally by 1.1 percent between April and May 2018, and were
up 7.1 percent year over year. Looking
ahead, the CoreLogic HPI Forecast indicates that the national home-price index
is projected to continue to increase by 0.3 percent in June and 5.1 percent
over the next year.
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Durable goods orders rebounded 0.4 percent in May, up 8.7 percent YTD year-over-year
Orders for durable goods bounced back strongly in May, rising by 0.4 percent. So far in 2018, durable goods orders have risen 8.7 percent versus the same period of 2017.
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Monday, July 2, 2018
June manufacturing sector index up 1.5 points to 60.2, tariffs concerns cited for future
The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. Demand remains robust, but the nation's employment resources and supply chains continue to struggle. Respondents are overwhelmingly concerned about how tariff related activity is and will continue to affect their business.
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May construction spending rose 0.4 percent from April, up 4.5 percent year-on-year
May construction spending rose 0.4 percent from April, and was up 4.5 percent year-on-year. For the first five months of the year, it was up 4.3 percent year-on-year.
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