Data Updates

Data Updates

October 2010

  • 10.29.2010
  • Real GDP
  • Real GDP rose at an annualized rate of 2.0 percent in the third quarter, according to the advance release by the BEA, which happened to be just one-tenth of a percentage point shy of our estimate. On a year-over-year basis, real GDP is trending at 3.1 percent. The third quarter increase, which is a slight acceleration over the second quarter’s 1.7 percent gain, was primarily due to increases in personal consumption, inventory investment, and business fixed investment. Tempering increases in those areas were a decrease in residential investment and continued double-digit increases in imports (which, in GDP accounting, enter in as a negative). Importantly, real personal consumption rose 2.6 percent in the third quarter (on top of our estimate), compared to a 2.2 percent increase in the second quarter. All three components of consumption posted third quarter gains, with the biggest change between the second and third quarter coming from services consumption—which increased from a 1.6 percent gain to a 2.4 percent increase (its largest quarterly increase since 2007:Q1), contributing 1.8 percentage points (pp) to the overall increase in output. Inventories continued to bolster headline growth, adding 1.4 pp to third quarter growth, though that is down slightly from its average contribution of 2.1 pp over the past three quarters. Business fixed investment rose 9.8 percent during the third quarter compared to a 17.2 percent gain in the second, largely as investment in equipment and software only increased 12.0 percent, compared a 24.8 percent jump in the second quarter. Structures investment actually increased 3.8 percent during the quarter, following eight straight quarterly declines. However, the pattern in residential investment reflected the end of the homebuyers tax credit, as the series fell 29.1 percent, more than reversing an incentive-induced 25.6 percent gain in the second quarter. The four-quarter growth rate in residential investment is still down 6.2 percent. Also, as was the case last quarter, import growth swamped export growth, 17.4 percent versus 5.0 percent, leading to a negative contribution from net exports (−2.0 pp). Final sales of domestic product, a somewhat clearer picture of demand as it subtracts inventory contributions, continued to post subdued growth. Final sales rose just 0.6 percent during the third quarter, compared to a 0.9 percent gain in the second quarter. While some may argue that the effect of the homebuyer tax credit is partly to blame for the slight deterioration in final sales over the last quarter, its four-quarter growth rate only stands at 1.1 percent.
  • 10.29.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was virtually unrevised in late October at 67.7 and is little changed from 68.2 in September. In fact, the series hasn’t moved much over the past 4 months, remaining stubbornly below its current cyclical peak in June of this year (at 76.0). One year-ahead average inflation expectations remained at 3.3 percent during the October revision, ticking up 0.3 percentage point from September. Longer-term (5- to 10-year-ahead) were stable during the month, as average expectations nudged down to 3.0 percent from 3.1 percent in September and were unchanged during the October revision.
  • 10.27.2010
  • Durable Goods
  • New orders for durable goods jumped up 3.3 percent (nonannualized) in September, following a 1.0 percent decrease in August. The overall pattern for headline durables goods over the last five months or so has been largely dictated by volatility in aircraft orders. Excluding transportation, new orders slipped down 0.8 percent in September, helping to pull its 6-month annualized percent change down to −0.7 percent after 12 months with a double-digit 6-month growth rate. New orders for nondefense capital goods excluding aircraft edged lower during the month (−0.6 percent) after a 4.8 percent gain in August, leaving its near-term (3-month annualized) trend at −5.4 percent, though the series is still up 13.9 percent on a year-over-year basis. Shipments of durables, which are up 6.2 percent over the past year, fell 0.4 percent in September. Inventories, however, continued to expand, rising 0.5 percent in September, its ninth consecutive increase.
  • 10.27.2010
  • New Home Sales
  • New single-family home sales grew a sizeable 6.6 percent in September following a 1.1 percent increase in August. The annual sales pace was boosted to 307,000 units, a pace slightly above—but by no means comfortably above—record lows recently reached this year. Several more reported climbs will be needed before new home sales can definitively be declared above the low-water mark. The current sales pace, after all, remains more depressed than at any point prior to the current housing downturn, and sales are 21.5 percent slower than the year-ago pace. The median sales price of new single-family homes rose for a second straight month, climbing 1.5 percent in September and lifting prices 3.3 percent on a year-over-year basis. Inventory of new single-family homes for sale dropped 1.0 percent further over the month and in fact has not seen a single increase since January. Months’ supply of new homes eased from 8.6 months down to 8.0 at the current sales rate, further off May?s recent high of 9.2 months.
  • 10.26.2010
  • House Price Indexes
  • The S&P/Case-Shiller 10- and 20-city indexes each saw small declines in August, dropping 0.2 percent and 0.3 percent, respectively. Year-over-year growth in the indexes also weakened to the slowest pace since February, when the series made their post-recession debuts back into positive territory. Year-over-year growth dropped from 4.0 to 2.5 percent for the 10-city index, and from 3.1 to 1.7 percent for the 20-city index. Home prices in the Cleveland metropolitan area declined a fourth consecutive month in August, falling 1.1 percent and leaving them 0.5 percent below their year-ago level. However, since the Cleveland area has the lowest number of sales pair counts (observations) of all metro areas included in the composite 20 index, it tends to see considerable volatility in its measurement of home prices from period to period.

    The FHFA Purchase-Only House Price Index countered the S&P/Case-Shiller index in August, rising 0.4 percent over the month and strengthening year-over-year growth from −3.4 percent up to −2.4 percent. The only region with higher prices since August 2009 was West South Central, and regions hurting the most were the Mountain region, down 7.5 percent from a year ago, and South Atlantic, down 4.9 percent.

  • 10.25.2010
  • Existing Home Sales
  • The housing market continues to give mixed signals, as existing home sales expanding last month with the help of falling home prices. Existing single-family home sales grew for a second straight month in September, rising 10.0 percent after a 7.1 percent increase in August. The annual sales pace was boosted from 3.6 million units to 4.0 million, still a glaring 19.5 percent below the year-ago pace due to the buying buildup prior to the initial tax credit deadline last November. The inventory of existing single-family homes for sale dropped 3.4 percent to 3.38 million units, allowing months’ supply to relax slightly, from 11.6 months in August to a still sky-high 10.2 months in September. The current months’ supply sits well above the 7.6 months’ supply recorded one year ago and higher than averages for any of the past three years. Meanwhile, the median sales price took a 3.1 percent hit over the month, putting prices 1.9 percent below last year’s levels. September marked a third consecutive decrease in prices.
  • 10.22.2010
  • Federal Reserve Balance Sheet
  • Maiden Lane I made a monthly payment of over $600 million on its loan from the New York Fed this week, bringing the outstanding balance down to just under $27 billion. After six weeks of drawing $60 million of 7-day swaps, the European Central Bank (ECB) upped the ante this week on its liquidity swap line. The ECB drew $560 million of 7-day swaps this week, the largest amount outstanding for the bank since early August. Nearly $14 billion of agency debt and mortgage-backed securities (MBS) left the balance sheet over the past two weeks, all of which was replaced by Treasury securities. Up to this point, the New York Fed has purchased nearly $60 billion of Treasury securities since the August Federal Open Market Committee meeting statement announced the initiation of the Fed’s Treasury reinvestment program. The New York Fed has also conducted a series of five reverse repurchase agreement operations as per its October 12 announcement. The operations totaled $889 million and have used Treasury securities, agency debt, and agency MBS as collateral.

  • 10.19.2010
  • Housing Starts
  • Single-family housing starts posted a second consecutive gain in September, rising 4.4 percent after a downwardly revised increase of 1.4 percent in August. At 452,000 annual units, the current pace of starts falls 10.8 percent short of last September’s pace. Month-over-month gains varied widely by region, with the Midwest down 8.2 percent, the South unchanged, the West up 2.3 percent, and the Northeast up a whopping 66.7 percent. Meanwhile, building permits for single-family homes were little changed over the month, edging up 0.5 percent to an annualized pace of 405,000 units, basically where it has been since July. Permits are below last year’s pace nationally (−14.4 percent), and that is echoed in all four regions of the U.S.
  • 10.18.2010
  • Industrial Production
  • Industrial production more than reversed a 2.1 percent annualized gain in August, slipping down 2.6 percent in September, perhaps another tentative sign that the inventory cycle is abating. Manufacturing output fell 1.8 percent and while it is still up 5.4 percent on a year-over-year basis, its 3-month annualized growth rate down from its a recent high of 13.1 percent in May to 2.6 percent in September. Durables manufacturing fell 2.9 percent in September on broad-based declines across sectors, while nondurables output inched up 1.4 percent. Mining output rose 8.5 percent in September, following robust gains of 20.4 percent and 11.3 percent in August and July, respectively. On the other hand, utilities production fell 20.2 percent in September, helping to pull its 3-month annualized growth rate down to −9.1 percent over the past three months. Overall capacity utilization slipped down for the first time since June of 2009, falling from 74.85 percent of capacity in August to 74.67 percent.
  • 10.15.2010
  • CPI
  • Headline CPI rose at an annualized rate of 1.2 percent in September, as increases in food and energy prices (up 3.8 percent and 8.2 percent) contributed to the overall increase. Excluding those relatively volatile categories, the core CPI was unchanged during the month, pulling its 12-month growth rate down 0.1 percentage point to 0.8 percent in September. Our measures of underlying inflation, the median and 16 percent trimmed-mean measures, rose 0.6 percent and 0.9 percent, respectively in September. Those increases were slightly below each series’ short-term (3-month annualized) trend and more in-line with their 12-month growth rates of 0.5 percent for the median and 0.8 percent for the 16 percent trimmed-mean CPI. These series have been just north of flat through the first quarter of this year and are ranging between 0.4 percent and 0.7 percent. Digging a little further into the details, nearly 50 percent of the overall index (by expenditure weight) exhibited outright price declines in September, consistent with its average over the first five months of the year (47 percent), compared to an average of 34 percent over the prior three months. However, the upper tail of the distribution has remained relatively stable throughout the year (so far), with an average weight of 15 percent of the marketbasket. There are a couple of mentionable price moves in September. First, the price index for hospital services jumped up a whopping 23.8 percent (a series high with data back to 1997), pushing medical service prices up 9.5 percent (its largest monthly increase since the early 1990s). Also, it seems that those curiously strong increases in used car and truck prices are beginning to dissipate, as the series fell 7.6 percent in September, helping to edge its 12-month growth rate down to 12.9 percent, further away from its recent peak of 17.0 percent in July. Finally, rent of primary residence jumped up 1.6 percent during the month, its largest monthly increase since April 2009. However, owners’ equivalent rent (OER), the largest component of shelter, was virtually flat, rising just 0.3 percent at an annualized rate.
  • 10.15.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment ticked down slightly in early October, from 68.2 in September to 67.9. As the series has slipped from its peak in June of this year (at 76.0), most of the declines have come from the consumer expectations component. However, in October, expectations strengthened from 60.9 to 64.6, while current conditions fell from 79.6 to 73.0. According to the release, this reversal comes as respondents feel, “...prospects for the economy improved and prospects for personal finances and buying plans declined.” One year-ahead average inflation expectations rose 0.3 percentage point to 3.3 percent in October, with a sizeable 0.4 percentage point jump to 2.6 percent in the median expectation. Longer-term (5-10 year-ahead) were stable during the month, as average expectations nudged down to 3.0 percent from 3.1 percent in September, while the median expectation was flat at 2.7 percent.
  • 10.15.2010
  • Retail Sales
  • Retail sales continued to improve in September, rising 0.6 percent (nonannualized) in September, following an upwardly revised 0.7 percent gain in August. Increases were fairly broad-based in September, with autos (up 1.6 percent), electronics & appliance stores (up 1.5 percent), and miscellaneous store retailers (up 1.4 percent) leading the way. On a year-over-year basis total retail sales jumped up from 4.1 percent to 7.3 percent during the month. “Core” retail sales—sales excluding autos, building supplies, and gas stations—also showed some relative strength, rising 0.4 percent in September after jumping up 1.0 percent in August (which was revised up from 0.6 percent).
  • 10.14.2010
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods increased at an annualized rate of 5.5 percent in September, following a 4.8 percent rise in August. Over the past 12 months, the index is up 4.0 percent, above its 10-year trend of 2.6 percent. Turning back to the present, much of the overall increase in September was due to a 15.6 percent jump in finished consumer foods. Energy prices also rose 6.0 percent. Excluding food and energy prices the (“core”) PPI increased 1.4 percent in September, slightly below its 3-month annualized growth rate of 2.1 percent, but roughly in-line with its longer-term (12-month) trend of 1.6 percent.
  • 10.14.2010
  • International Trade
  • The nominal trade deficit widened by $3.8 billion in August, cancelling out about half of July’s $7.2 billion narrowing. Exports inched up 0.2 percent to $153.9 billion, while imports grew a larger 2.1 percent to $200.2 billion, resulting in an overall trade balance of −$46.3 billion. Though not as deep as June’s recent low (−$49.8 billion), August’s widening is an apparent resumption of the steady trend begun last June. Most of the widening resulted from a large rise in goods imports ($3.9 billion), as the U.S. ran a minuscule surplus in services over the month. The 0.7 percent increase in services exports marked the fourth in-a-row, bringing service exports to $46.2 billion, the highest level on record. On a year-over-year basis, exports are up 18.0 percent and imports are up 24.0 percent.
  • 10.13.2010
  • Import and Export Prices
  • Import prices dropped 0.3 percent (nonannualized) in September following a 0.6 percent increase in August, and year-over-year growth slowed from 4.0 to 3.5 percent. Fuel prices drove September’s overall decline, falling 3.1 percent over the month with contributions from petroleum products (down 3.1 percent) and natural gas (down 4.4 percent). Import prices excluding fuel advanced 0.3 percent, leaving the series up 2.6 percent on a year-over-year basis.

    Export prices, on the other hand, rose for a second consecutive month in September, growing 0.6 percent after a 0.8 percent advance in August. Year-over-year growth picked up steam from 4.2 percent to 5.0 percent. Both agricultural and nonagricultural exports contributed to September’s increase, growing 2.4 and 0.3 percent, respectively. Prices for food, feeds, and beverages were up 2.2 percent, consumer goods were up 1.0 percent, and industrial supplies and materials advanced 0.8 percent.

  • 10.08.2010
  • The Employment Situation
  • Total nonfarm payrolls slipped down 95,000 in September, largely reflecting a decrease of 159,000 in government payrolls, which was roughly split between a 77,000 decrease in temporary Census workers and a decline of 76,000 in local government workers (its largest decline since July 1982). While effects from the Census are nearing their final throes, local government decreases seem to have increased in recent months, averaging a roughly 50,000 decrease over the past three months compared to a roughly flat average since the beginning of the recession (perhaps some speculative evidence of budgetary strains?). Revisions to the past two months revealed a combined 15,000 decrease, but that came as losses in government payrolls (−51,000) swamped upward revisions to private sector (+36,000). Private payrolls appear to be gaining some traction, rising by 64,000 in September, following upwardly revised gains of 93,000 in August and 117,000 in July. Over the last six months, the average gain in private payrolls has been 107,000, compared to an average of −6,000 over the six months prior to that. Goods-producing payrolls fell 22,000 in September, though that was largely on as construction employment decreased 21,000, nearly reversing a 31,000 increase in August. Manufacturing payrolls were just shy of flat, while mining payrolls increased slightly (up 5,800). Private service-sector employment increased by 86,000 during the month, nearly matching its gains over the previous two months. The largest gains in the sector came from leisure and hospitality (up 38,000), health care (up 24,000), and temporary help services (up 17,000). Other measures that have been showing some recent improvement, average hours and earnings, were flat in September, though factory overtime ticked up from 3.8 hours to 3.9 hours. On the household side, the unemployment rate remained at 9.6 percent and the employment-to-population ratio was unchanged at 58.5 percent.
  • 10.08.2010
  • Federal Reserve Balance Sheet
  • The European Central Bank rolled over its swap operations in both of the past two weeks—the sixth and seventh consecutive weeks that it has drawn dollar liquidity. Both operations were for $60 million at a rate of 1.18 percent. In the Treasury General Account, the balance remained close to $58 billion, nearly three times as high as right before the end of the third quarter. The Federal Reserve Board announced and conducted a fourth Term Deposit auction, which took place on Monday October 4. The $5 billion auction was for 28-day deposits. Results from the operation showed that the stop-out rate was just under 27 basis points and that the bid-to-cover ratio was 2.72. This operation was still part of the announced small-scale operations that were to be conducted in preparation of larger-scale operations.

    The outstanding loan balances for Maiden Lane II and III were reduced this week, with Maiden Lane II falling $200 million and Maiden Lane III dropping $350 million. Their balances now stand at $13.5 billion for Maiden Lane II and $14.3 billion for Maiden Lane III, even though the estimated value of the portfolio holdings is $15.7 for Maiden Lane II and $22.8 for Maiden Lane III. These transactions follow last week?s announcement from AIG that it had constructed a plan to exit from government assistance. Discount Window lending to primary dealers spiked this past week to $89 million. While the amount is tiny compared to the total balance sheet, it is the highest level seen since June of this year.

  • 10.04.2010
  • Factory Orders
  • New orders for manufactured goods dropped 0.5 percent in August, reversing the 0.5 percent gain in July and leaving year-over-year growth essentially unchanged at 9.5 percent. Durable goods orders contracted 1.5 percent over the month, largely driven by transportation equipment, aircraft materials in particular. Excluding transportation equipment, durable goods orders actually rose a moderate 1.7 percent. Nondurables, on the other hand, inched up 0.3 percent. Orders for nondefense capital goods excluding aircraft—considered a leading indicator of business investment spending—rebounded 5.1 percent in August after plummeting 5.3 percent in July, pushing the series’ 12-month growth rate back up to 20.2 percent from 13.9. Manufacturers’ inventories expanded 0.1 percent while shipments declined by 0.6 percent, causing the inventory-to-shipments ratio to rise from 1.26 to 1.27, matching its November 2009 level.
  • 10.01.2010
  • Personal Income
  • Nominal personal income rose 0.5 percent (non-annualized) in August, following a 0.2 percent increase in July. Its 12-month growth rate climbed to 3.3 percent during the month (its highest growth rate since September 2008. Nominal disposable income—income less current taxes—increased 0.5 percent in August. After adjusting for price changes, “real” disposable income rose 0.2 percent, reversing a 0.2 percent loss in July. Still, the series is trending at an annualized rate of just 0.9 percent over the past three months, compared to its 12-month growth rate of 1.7 percent. Real personal consumption continued to post modest gains, rising 0.2 percent in August, its fourth straight monthly increase. The personal saving rate ticked up from 5.7 percent to 5.8 percent during the month and has been bouncing around 6.0 percent for the past five months or so.
  • 10.01.2010
  • Personal Consumption Expenditure
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 2.8 percent in August, largely as energy prices jumped up 31.7 percent. Excluding food and energy prices (core PCE), the index increased 1.4 percent. Its 3-month annualized growth rate currently stands at 1.1 percent, 0.3 percentage point below its longer-term (12-month) growth rate.
  • 10.01.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up sharply in September, from a preliminary value of 66.6 to 68.2, though this is still a slight deterioration from 68.9 in August. While the current conditions component improved from 78.3 in August to 79.6 in September, consumer expectations slipped from 62.9 to 60.9 during the month, its lowest level in more than a year. Interestingly, the release noted that sentiment for lower income households (below $75k) improved during the month but that was swamped by a deterioration in sentiment among higher income households, hinting that some uncertainty about extension of the Bush tax cuts may be providing the restraint. One year-ahead average inflation expectations edged down 0.2 percentage point to 3.0 percent in September, though the median expectation fell from 2.7 percent to 2.2 percent (with the variance increasing from 18 to 21). Longer-term (5-10 year-ahead) average expectations were flat at 3.1 percent in September, while the median expectation ticked down from 2.8 percent to 2.7 percent.
  • 10.01.2010
  • ISM Manufacturing
  • As a further sign that the inventory cycle is waning, the ISM’s Manufacturing Purchasing Managers Index (PMI) slipped further away from a cyclical high of 60.4 in April—edging down from an index value of 56.3 in August to 54.4 in September. Four out of the five components of the ISM?s diffusion index declined in September, with the only increase coming from manufacturers’ inventories (up from 51.4 to 55.6). The new orders component fell from 53.1 to 51.1 during the month, while the production index is slipped down 3.4 index points to 56.5. Manufacturing employment, as measured by the ISM, continued to expand in September, though at a lesser rate than in August, as the employment index decreased from 60.4 to 56.5.
  • 10.01.2010
  • Construction Spending
  • Total construction spending beat expectations in August but was carried entirely by sizeable growth in public construction. Construction outlays edged up a modest 0.4 percent from July’s ten-year low, to an annualized pace of $811.8 billion. However, spending is still 8.8 percent below its year-ago level. Private construction outlays saw the smallest of four consecutive declines in August, dipping 0.9 percent to the lowest annual spending pace since January 1998. Private residential spending slipped 0.3 percent, and private nonresidential fell 1.4 percent, down in every spending category except education. While year-over-year growth in private nonresidential spending remains deeply depressed at &minis;24.2 percent, private residential spending had actually enjoyed five steady months of positive year-over-year growth up until August, when it again dipped south of the equator to −1.7 percent. Total public construction, on the other hand, grew a strong 2.5 percent over the month and was up in every area except for power and education.