Thursday, August 17, 2017

Industrial Production Rose 0.2% in July

Industrial production grew 0.2% in July after 0.4% June increase, according to the Federal Reserve. July represented the sixth consecutive month without a decline.
Manufacturing output fell 0.1% in July after a 0.2% increase in June. Production of durable goods decreased 0.5%, while nondurables edged up 0.4% during the month. Capacity utilization for manufacturing decreased by 0.1 percentage point to 75.4%, a rate that is 3.0 percentage points below its long-run average.

The output of mining continued to rise, increasing 0.5% in July, following an upwardly revised 2.0% June jump. The index in July was 10.2% higher than its year-earlier level.

Utilities increased 1.6% in July, following a 1.2% decline in June. The index in July was 0.6% lower than its year-earlier level.

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Fed Divided Over Timing of Next Rate Hike

The Federal Open Market Committee was divided over when it will next raise the target federal funds rate, which they decided to hold at 1 to 1.25 percent, according to minutes from the FOMC’s July 25-26 meeting. “Some” FOMC members expressed uncertainty about inflation, saying that the committee “could afford to be patient” in deciding when to raise rates, while others said the labor market has neared full employment and a delay in raising rates “would likely be costly to reverse” or “could lead to an intensification or financial stability risks or to other imbalances that might prove difficult to unwind.”

The committee also said its plans to begin reducing the Fed’s balance sheet will be “formally announced next month.” The balance sheet is swollen with $4.5 trillion in securities purchased as part of quantitative easing programs between 2008 and 2014.

FOMC members said they expect continued economic growth and job gains in the near term, and agreed that the timing and size of future rate hikes “would depend on their assessment of realized and expectation economic conditions.” 

Read the FOMC minutes

Wednesday, August 16, 2017

Housing Starts Declined in July

Housing starts decreased to a seasonally adjusted annual rate of 1.155 million in July, according to the U.S. Department of Commerce. The decline was 4.8% below the revised June rate of 1.213 million and is 5.6% below the July 2016 rate.
Housing activity decreased in three of the four regions with only the South showing growth, increasing 0.6%. The Northeast and Midwest both saw large declines after a strong June report, falling 15.7% and 15.2%, respectively. The West fell at a slower rate as housing activity decreased 1.6%.
New building permits decreased during the month, falling 4.1% to 1.223 million. However, permits were up 4.1% from the July 2016 rate.

Housing completions were at a seasonally adjusted annual rate of 1.175 million, down 6.2% from the revised June estimate but 8.2% above the July 2016 rate.

Read the Census release.

Tuesday, August 15, 2017

Homebuilder Confidence Soared in August

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 68 in August, a four point increase from June’s reading.

“Our members are encouraged by rising demand in the new-home market,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.”

All three HMI components posted gains in August. The component measuring current sales conditions rose four points to 74; the component measuring sales expectations in the next six months grew five points to 78, and the component measuring buyer traffic moved up one point to 49.

The regional three-month moving averages for HMI scores showed gains in one of the four regions. The Northeast edged one point up to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.

Read the NAHB release.
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Retail Sales Jumped to 7-Month High in July

There were $478.9 billion in retail and food service sales in July, up 0.6% from the previous month and 4.2% from July 2016, according to the U.S. Census Bureau. July’s retail sales were the largest gain in seven months. June’s number was upwardly revised to reflect 0.3% growth.
Core retail sales – excluding automobiles and parts – grew 0.5%. Year-over-year core sales increased 3.8%.

Retail trade sales increased 0.6% from June, up 4.3% from last year. Sales at nonstore retailers increased 1.3% from June, the largest monthly gain since December 2016. Nonstore retailer sales are up 11.5% year-over-year as online retailers continue to grow their market share.

Sales at gasoline stations decreased 0.4% during July, the second consecutive monthly decline, but are up 2.1% from a year ago.

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Friday, August 11, 2017

Consumer Prices Increased 0.1% in July

The Consumer Price Index grew 0.1% in July on a seasonally adjusted basis, according to U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index rose 1.7%.
Prices for all items less food and energy, the “core CPI,” increased 0.1% in July, the fourth month in a row it increased that amount. The index rose 1.7% for the 12 months ending in July.

The food index increased 0.2% after remaining flat in June. Prices for food at home and food away from home both grew 0.2%. Over the past 12 months, food prices are up 1.1%.

The energy index fell 0.1% in July, the third consecutive monthly decline. The fuel oil index led the decrease, falling 2.0%. However, the energy index still rose 3.4% in the last twelve months.

Read the BLS release.
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Thursday, August 10, 2017

Producer Prices Declined 0.1% in July

Producer prices fell 0.1% in July, seasonally adjusted, after increasing 0.1% in June, according to the U.S. Bureau of Labor Statistics. Producer prices rose 1.9% for the twelve months ended July 2017.
The index for final demand goods decreased 0.1% in July after growing 0.1% in the previous month. The index for final demand energy fell 0.3%, the third consecutive monthly decline. Prices for final demand were unchanged after growing 0.6% in June.

Prices for final demand services decreased 0.2% in July, the first decline since February. Prices for final demand transportation and warehousing services led the way, falling 0.8%.

Read the BLS release.
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