Thursday, December 22, 2016

Personal Income Increased in November

Personal income increased $1.6 billion in November, or less than 0.1%, according to the Bureau of Economic Analysis, down from a 0.5% increase in October. Personal consumption expenditures also increased, rising 0.2% or $24.0 billion. Disposable personal income – personal income less personal taxes – decreased $1.3 billion, or less than 0.1%.
The personal savings rate – personal savings as a percentage of personal income – was 5.5%, down from October’s rate of 6.0%.

The price index for PCE was unchanged. Excluding food and energy, the index increased less than 0.1%.

Read the BEA release.
Visit Banks and the Economy.

GDP Revised Up to 3.5% for Third Quarter

Real GDP for the third quarter of 2016 grew at a seasonally adjusted annual rate of 3.5%, according to the Bureau of Economic Analysis’s third estimate, up from the second estimate of 3.2%. The general picture of economic growth remains the same.

The change in GDP estimates reflected upward revisions to nonresidential fixed investment, personal consumption expenditures, and state and local government spending.

The upward revision to nonresidential fixed investment reflected an upward revision to intellectual property products.

The revision to consumer spending reflected upward revisions to spending by nonprofit institutions and to financial services.

The revision to state and local government spending was primarily due to an upward revision to investment in structures.

Read the GDP release.
Visit Banks and the Economy.

Durable Goods Orders Fall in November

New orders for manufactured durable goods decreased 4.6% in November to $228.2 billion, following four consecutive monthly increases, according to the U.S. Census Bureau.
New orders excluding defense fell 6.6% on the month, as orders of nondefense capital goods decreased 19.5% to $64.4 billion.

Shipments of manufactured durable goods, up two of the last three months, rose 0.1% to $234.2 billion.

Inventories of manufactured durable goods rose 0.1% to $384 billion, following a virtually unchanged October decrease.

Read the Census release.
Visit Banks and the Economy.

Wednesday, December 21, 2016

Existing-Home Sales Increased in November

Existing-home sales rose 0.7% to a seasonally adjusted annual rate of 5.61 million in November, according to the National Association of Realtors (NAR). November’s sales pace was the highest since February 2007 (5.79 million). A large increase in home sales in the Northeast and a smaller gain in the South helped push total sales up for the third consecutive month.
"The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months," said Lawrence Yun, NAR chief economist. "Furthermore, it's no coincidence that home shoppers in the Northeast — where price growth has been tame all year — had the most success last month."

The total housing inventory fell 8.0% to 1.85 million homes available for sale, while the median existing home price stood at $234,900, a 6.8% increase from November 2015.

Distressed sales moved up to 6% of the total in November, but down from 9% a year ago. Four percent of sales were foreclosures and 2% were short sales. On average, foreclosures and short sales sold for discounts of 17% and 16%, respectively.

Read the NAR release.
Visit Banks and the Economy.

Thursday, December 15, 2016

Builder Confidence at 11-Year High

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 70 in December, a 7 point increase from November and the highest reading in over a decade.

“Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” said NAHB Chief Economist Robert Dietz. “The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.”

All three HMI components rose in December. The component measuring current sales conditions rose 7 points to 76, the component measuring sales expectations rose 9 points to 78, and the component measuring buyer traffic rose 6 points to 53.

The regional three-month moving averages for HMI scores increased as well. The Northeast rose 6 points to 51, the Midwest rose 3 points to 61, the West rose 2 points to 79, and the South rose 1 point to 67.

Read the NAHB release.
Visit Banks and the Economy.

CPI Increased 0.2% in November

The Consumer Price Index increased 0.2% in November on a seasonally adjusted basis. Over the last 12 months, the all-items index rose 1.7%.

Prices for all items less food and energy, increased 0.2% in November, up from a 0.1% increase in October. The index rose 1.7% for the 12 months ending in November.

The food index was unchanged for the fifth consecutive month, as prices for food at home fell 0.1%, while prices for food away from home increased 0.1%. Over the past 12 months, food prices have fallen 0.4%.

The energy index increased 1.2% in November, after a 3.5% October gain. The gasoline index posted the strongest gain, rising 2.7% following a 7.0% October increase.

Prices for all items less food and energy, the “core CPI,” increased 0.2% in November. The increase was driven by a 0.3% rise in the index for shelter. Over the past 12 months, the index for all items less food and energy increased 2.1%.

Read the BLS release.
Visit Banks and the Economy.

Wednesday, December 14, 2016

Fed Raises Rates for First Time in 2016

The Federal Reserve Open Market Committee (FOMC) unanimously voted to raise the target range for the federal funds rate by 25 basis points to 0.50 to 0.75 percent. Today’s widely expected move marked the first change in the federal funds rate since it was increased by a quarter percentage point in December 2015.
The projected policy path for the federal funds rate was slightly more aggressive than September’s, with the Fed’s dot plot showing three rate hikes next year instead of two. Participants estimated a target rate of 1.4 percent for 2017 (a 30 basis point increase), a 2.1 percent rate for 2018 (a 20 basis point increase), and a 2.9 percent rate for 2019 (a 30 basis point increase).

In their decision to move the target rate, the Committee noted that the labor market has “continued to strengthen,” and that they are confident that inflation will rise over the medium term to its 2 percent objective.

The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. It also stressed that the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee also announced that it is maintaining its policy of reinvesting principal payments from its holdings of agency debt and mortgage-backed securities, and of rolling over maturing Treasury securities at auction, anticipating it will do so until normalization of the federal funds rate is under way.

Read the FOMC statement.
Visit Banks and the Economy.

Producer Prices Rose 0.4% in November

Producer prices increased 0.4% in November, seasonally adjusted, after remaining unchanged in October, according to the U.S. Bureau of Labor Statistics. Year over year, producer prices have risen 1.3%, which is the largest 12-month rise since November 2014 (1.3%).
The index for final demand goods rose 0.2% in November after also rising in October. The increase was led by a 0.2% rise in the index for final demand goods less food and energy. In contrast, there was a 0.3% decrease in the index for final demand energy.

Prices for final demand services rose 0.5% in November, the largest increase since January 2016. Much of the advance was due to the index for final demand trade services, which increased by 1.3%.

Read the BLS release.
Visit Banks and the Economy.

Retail Sales Post Small Rise in November

There were $465.5 billion in retail and food service sales in November, up 0.1% from the previous month and 3.8% from November 2015, according to the U.S. Census Bureau.
Core retail sales – excluding automobiles and parts – increased 0.2% after rising 0.6% in October. Year-over-year core sales increased 3.9%.

Retail trade sales were unchanged from October and up 3.6% from last year. Sales at nonstore retailers increased 0.1% from October, while increasing 11.9% year-over-year.

Sales at gasoline stations continued to climb, rising 0.3% during the month and 4.0% from a year ago.

Read the Census release.
Visit Banks and the Economy.

Industrial Production Declined in November

Industrial production fell 0.4% in November after rising 0.1% in October. Over the last year, industrial production is down by 0.6%.
Manufacturing output declined 0.1% in November after also climbing 0.3% in October. Production of durable goods decreased by 0.3%, while nondurable goods production rose 0.3%. Capacity utilization for manufacturing decreased by 0.1 percentage point to 74.8%, a rate that is 3.7 percentage points below its long-run average.

The mining index moved up 1.1% in November. Most mining industries posted increases, with coal being the notable exception.

The utilities index fell 4.4% in November, as the demand for heating was again reduced by warmer-than-normal temperatures.

Read the Fed release.
Visit Banks and the Economy.

Tuesday, December 13, 2016

Small Business Optimism Jumps in November

The NFIB Small Business Optimism Index posted a strong increase of 3.5 points in November to 98.4. Eight of the ten index components rose, while one declined and one was unchanged.

Reported job creation remained weak in November, as only 55% of businesses reported hiring or trying to hire. Fifty-two percent reported few or no qualified applicants for the positions they were trying to fill. Sixteen percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 15% of owners plan to create new jobs, up 5 points from the previous month.

The percent of owners reporting higher sales in the past three months fell 1 point to a net negative 8%. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose 10 points to a net 11% of owners. Capital spending decreased as 55% of owners reported capital outlays, down 2 points from October. The percent of owners planning capital outlays in the next 3 to 6 months fell 3 points 24%.

Credit conditions held from October, as 4% of owners reported that all their borrowing needs were not met. Only 2% of business owners surveyed reported that financing was their top business problem, unchanged from October.

Read the NFIB report.
Visit Banks and the Economy.

Thursday, December 8, 2016

Consumer Credit Grew 5.2% in October

Consumer credit increased at a seasonally adjusted annual rate of 5.2% in October, down from a 7.1% rate in September. Total outstanding credit increased $16.0 billion during the month (compared with $21.8 billion in September) to $3.73 trillion.

Revolving credit rose at an annual rate of 2.9% to $981.3 billion, compared to a 5.0% increase in September. Non-revolving credit rose at a 6.0% annual rate, or $13.7 billion, compared to September’s rate of $17.7 billion. Total non-revolving credit is now $2.75 trillion.
Federal government holdings of student loans continue to be the largest portion of non-revolving credit, comprising approximately 38% of outstanding credit. Depository institutions and finance companies are secondary and tertiary holders, with 25% and 22%, respectively, of outstanding non-revolving credit.

Read the Fed release.
Visit Banks and the Economy.

Tuesday, December 6, 2016

Manufactured Goods Orders Rise for Fourth Consecutive Month

New orders for manufactured goods increased 2.7% to $469.4 billion in October, according to the U.S. Census Bureau. The October reading followed a 0.6% increase in September.
New orders for manufactured durable goods rose 4.6% to $238.8 billion, after increasing 0.3% in September. Orders for transportation equipment drove the increase, rising 12% to $88.1 billion.

Shipments of manufactured durable goods decreased 0.1% to $234.1 billion. Transportation equipment led the decrease, falling 1.5% to $80.7 billion.

Inventories of manufactured durable goods was virtually unchanged at $383.7 billion.

Read the Census release.
Visit Banks and the Economy.

International Trade Balance Widened in October

The U.S. international trade deficit expanded in October to $42.6 billion, up from $36.2 billion in September, according to the U.S. Census Bureau of Economic Analysis. The expansion reflected a $3.4 billion decrease in exports along with a $3.0 billion increase in imports.

The goods deficit increased $6.3 billion to $63.4 billion, while the services surplus fell $0.1 billion to $20.8 billion.

Exports of goods fell $3.5 billion to $123.1 billion in October, driven by decreases in foods, industrial supplies and consumer goods. Exports of foods fell by $1.4 billion, largely due to a $1.0 billion decrease in soybean exports. Industrial supplies fell $1.0 billion due to declines in gold and fuel-oil exports. Consumer goods exports fell by $0.9 billion. Exports of services increased $0.1 billion to $63.3 billion.

Imports of goods increased $2.8 billion to $186.5 billion, mostly due to an increase in consumer goods which rose by $2.7 billion. Capital goods imports also increased, rising by $1.1 billion. Imports of services increased $0.2 billion to $42.4 billion in October.

Read the Census/BEA release.
Visit Banks and the Economy.

Monday, December 5, 2016

ISM: Non-Manufacturing Sector Continued to Grow in November

The ISM Non-Manufacturing Index registered 57.2 points in November, up 2.4 points from the previous month. This is the highest reading since October 2015 as the non-manufacturing sector continues to grow at a faster rate. Fourteen non-manufacturing industries reported growth in November, while two reported contraction.
Growth in the Business Activity Index jumped 4.0 points to 61.7. Sixteen industries reported increased business activity and one reported decreased activity. Respondents noted an increase in capital projects and the volume of business has been trending up consistently.

Non-manufacturing employment grew for the sixth consecutive month. The index increased 5.1 points to 58.2, which is the highest reading since October 2015. Some respondents noted an adjustment to new business conditions and more work to complete before year-end.

The New Orders Index fell 0.7 point to 57.0, indicating growth, but at a slower pace. Some respondents commented that they had seen growth in business sales and the seasonal end of year push.

Supplier deliveries slowed for the 11th consecutive month, as the index registered 52.0 points (readings above 50 for this index indicate slower deliveries). Six industries reported slower deliveries, while two reported faster deliveries.

Read the ISM release.
Visit Banks and the Economy.

Friday, December 2, 2016

Unemployment Down to 4.6% as 178,000 Jobs Added in November

Total nonfarm payroll employment rose by 178,000 in November, up from October’s downwardly revised figure of 142,000, according to the Bureau of Labor Statistics. The national unemployment rate fell 0.3 points to 4.6%. The majority of gains occurred in professional and business services and in health care.
Private-service providing industries added a net 139,000 jobs, led by gains in professional and business services, which added 63,000 jobs during the month and 571,000 over the year, and by health care, which added 28,000 jobs this month and 407,000 over the year.

Goods-producing employment rose by 17,000 jobs during the month, as gains in construction employment led the way.

The civilian labor force participation rate was 62.7%, down slightly for the second month in a row. The number of long-term unemployed, those jobless for 27 weeks or more, decreased to 1.9 million and accounted for 24.8% of the unemployed. The number of discouraged workers was 591,000, little different from a year earlier.

Average hourly earnings declined 3 cents to $25.89. Hourly earnings have increased 2.5% over the past year.

Read the BLS release.
Visit Banks and the Economy.