Data Updates

Data Updates

November 2010

  • 11.30.2010
  • Home Price Indexes
  • The latest S&P/Case-Shiller and FHFA reports agree: Home prices have been declining solidly, both on a monthly and a quarterly basis.

    The national S&P/Case-Shiller home price index fell a steep 3.4 percent in the third quarter, wiping out the 2.6 percent gain in the second quarter and marking the largest drop since the first quarter of 2009. The four-quarter growth rate relapsed into negative territory, dropping from 3.8 percent to −1.6 percent. Meanwhile, the monthly data revealed that September witnessed the largest of three consecutive price declines, for both the 20-city and the 10-city composite indexes. The 20-city index retreated 0.8 percent and the 10-city index retreated 0.7 percent over the month, dragging their respective 12-month growth rates down to 0.5 percent and 1.5 percent.

    The purchase-only home price index published by the Federal Housing Finance Agency (FHFA) also dipped in the third quarter, by 1.6 percent. This decline follows a short-lived 0.7 percent gain in the second quarter, which had interrupted a string of eleven quarterly declines. The four-quarter growth rate slumped from −1.8 percent to −3.2 percent. The monthly FHFA index exhibited its fourth consecutive decline in September, and the drop was shared by all Census divisions except the East South Central, which encompasses Kentucky, Tennessee, Mississippi, and Alabama. September's 0.7 percent decline in the total index helped lower the 12-month growth rate from −2.8 percent to −3.4 percent, back to its position in July.

  • 11.24.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up in November from 69.3 to 71.6, its highest level since June. The current conditions component was revised up from 79.7 to 82.1 in November, while the expectations component was also revised up from 62.7 to 64.8, but is little changed over the past five months. One-year-ahead average inflation expectations were revised up by 0.1 percentage point to 3.7 percent in November, an increase of 0.4 percentage points from October. Longer-term (5-10 year-ahead) expectations were unchanged during the revision at 3.2 percent in November.
  • 11.24.2010
  • Durable Goods
  • New orders for durable goods retrenched in October, falling 3.3 percent (nonannualized) after an upwardly revised 5.0 percent jump up in September. The 12-month growth rate in durable goods orders slipped slightly during the month, but is still up 10.5 percent through October. New orders for nondefense capital goods excluding aircraft fell 4.5 percent in October, following a 1.9 percent increase in September and a 5.1 percent gain in August. The series’ near-term (3-month annualized) trend stands at 9.4 percent and is up 15.2 percent on a year-over-year basis. Shipments of durables, which are up 5.8 percent over the past year, fell 0.9 percent in October. Inventories, however, continued to expand, rising 0.4 percent in September, its tenth consecutive increase.
  • 11.24.2010
  • PCE Prices
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 2.0 percent in October, compared to an increase of 1.2 percent in September. Excluding food and energy prices (core PCE), the index was roughly flat (up 0.1 percent on an annualized basis). On a year-over-year basis, the core PCE price index is up just 0.9 percent. Interestingly, after excluding non-market-based items—such as financial services furnished without payment—the core PCE fell 1.3 percent during the month and is up just 0.7 percent over the past year.
  • 11.24.2010
  • Personal Income
  • Nominal personal income jumped up 0.5 percent (non-annualized) in October and, after revisions, was unchanged in September (both real disposable income and real consumption expenditures were revised up). Nominal disposable income—income less current taxes—rose 0.4 percent in October. After adjusting for price changes, “real” disposable income increased 0.3 percent, and is up 2.5 percent over the past year. Real personal consumption expenditures posted its sixth consecutive monthly gain, rising 0.3 percent in October. The series’ 12-month growth rate stands at 2.3 percent. As consumption and disposable income rose similarly in October, the personal savings rate was little changed from an upwardly revised 5.6 percent in September, edging up to 5.7 percent in October.
  • 11.24.2010
  • New Home Sales
  • New single-family homes sales dropped 8.1 percent in October, countering expectations for a slight gain and eating away a good portion of September’s 12.0 percent increase. Double-digit declines in the Northeast, Midwest, and West far outweighed the 3.1 percent increase in the South. The annual sales pace of 283,000 units remains camped near record lows and 28.5 percent below the year-ago sales pace. The particularly surprising part of the report was the record 13.9 percent plummet in the median sales price, which clearly lent no support to sales over the month. The median price of a new home sank to $194,900, the lowest in seven years. The number of new single-family homes on the market was virtually flat at 202,000 units, the lowest since 1968. Therefore, the increase in months’ supply of new homes in October—from 7.9 months to 8.6—is not due to a ballooning inventory of homes, but instead to a lack of buyers.
  • 11.23.2010
  • Real GDP
  • Real GDP in the third quarter was revised up from an annualized quarterly growth rate of 2.0 percent to 2.5 percent (slightly above expectations), according to the second estimate from the Bureau of Economic Analysis. The revision was largely due to upward adjustments to personal consumption expenditures, exports, and state and local government spending. A slight downward revision to private inventories shaved 0.1 percentage point (pp) off this component’s contribution to output growth, partially offsetting the upward revisions. Real personal consumption was revised up from a gain of 2.6 percent to an increase of 2.8 percent, adding an additional 0.2 pp to growth. Export growth was revised up from an increase of 5.0 percent to a 6.3 percent gain, and imports were relatively unrevised at a nearly 17 percent growth rate, a combined contribution of 0.3 pp to output growth. The investment picture remained roughly the same. On the business side, structures investment fell 5.8 percent in the third quarter, compared to its 4-quarter growth rate of −14.0 percent; while equipment and software continued to grow strongly during the quarter—up 16.8 percent (revised up from a 12.0 percent gain). Residential investment was revised up, but that was from a decrease of 29.1 percent to a decrease of 27.5 percent, still more than reversing a tax-credit-induced 25.6 percent gain in the second quarter. Primarily because of the upward adjustments to consumption and exports, real final sales (GDP less change in private inventories) were revised up by 0.6 pp to an increase of 1.2 percent, a slight acceleration over a 0.9 percent increase in the second quarter. While the growth rate in final sales is still relatively soft, at least the recent trend appears to be that demand gained some traction when compared with the second quarter, instead of losing a bit.
  • 11.23.2010
  • Existing Home Sales
  • Existing single-family home sales dropped 2.0 percent in October following consecutive gains of 7.1 percent in August and 10.0 percent in September. The current sales rate of 3.9 million annual units puts year-over-year growth at −25.6 percent, back down to its level in July and the lowest since June 1982. However, this year-over-year comparison pits current sales figures next to the surge prior to last year’s initial homebuyer tax credit deadline. National Association of Realtors chief economist, Lawrence Yun, says “sales activity is clearly off the bottom” and should “steadily improve to healthier levels by spring of next year,” despite an uneven recovery. NAR President Ron Phipps adds that several factors are restraining recovery, including overly tight credit and a large share of inaccurate (low) appraisal valuations which have caused many sales to be cancelled or postponed. Inventory of existing single-family homes for sale declined 2.4 percent in October, and months’ supply remained elevated but unchanged at 10.1 months.

  • 11.19.2010
  • Federal Reserve Balance Sheet
  • A couple of things have occurred over the past two weeks that have impacted the Fed’s balance sheet. First, there are more signs that the situation in Ireland may be straining the European financial system, as the European Central Bank drew an extra $5 million in dollar liquidity on their currency swap line this week, bumping their drawing to $65 million. The terms were similar to recent draws, 6 days at a rate of 1.19 percent. The amount drawn may rise in upcoming weeks as the Irish government works with a number of agencies to discuss the possibility of a bailout.

    Second, Treasury holdings in the System Open-Market Account jumped by over $28 billion in the past two weeks, as the first purchases for the Federal Reserve’s intermediate-term Treasury purchase program have gotten under way. These purchases are being made jointly with the Treasury reinvestment program announced in August. The reinvestment strategy had held the holdings relatively stable through the beginning of November, and the new round of Treasury purchases has started to inch the portfolio upward. On another note, Maiden Lane made its scheduled monthly repayment, lowering its outstanding balance to just under $26 billion.

  • 11.17.2010
  • Housing Starts
  • Single-family housing starts dropped 1.1 percent in October following downwardly revised increases in August and September. August was revised from a 1.4 percent gain down to a 1.2 percent gain, and September’s increase was adjusted from 4.4 percent down to 2.1 percent. These revisions along with October’s decline left the pace of starts at 436,000 annual units, not far above record lows reached last January and roughly 75 percent below pre-bust levels in late-2005. Single-family starts currently sit 8.2 percent below the year-ago pace. Multi-family starts had a much tougher October than the single-family series, plummeting 43.5 percent and causing total starts to reach an 18-month low pace of 519,000 annual units. However, since multi-family construction is volatile and comprises a considerably smaller portion of total starts, single-family starts give a more reliable picture of monthly home construction trends. Permits for single-family homes, which indicate the probable future direction of starts, rose for the first time in six months, increasing 1.0 percent in October. Permits are low but stable, at 406,000 annual units, roughly where they have been since July.

  • 11.17.2010
  • CPI
  • The CPI rose at an annualized rate of 2.8 percent in October, though the release noted that 90 percent of that increase was due to spiking gasoline prices (household energy prices jumped up as well). Measures of underlying inflation trends continued to hover around zero. The core CPI was flat during the month, while the median and 16 percent trimmed-mean measures rose 1.1 percent and 0.6 percent, respectively. Newswires will likely highlight that the 12-month percent change in the core CPI fell to a fresh all-time low of 0.6 percent in October (the data goes back to 1957). We might stress that the core CPI is looking more like the longer-run trends in the median and the trimmed-mean CPI, which are up 0.5 percent and 0.8 percent over the past twelve months. Over the past six months, these measures of underlying inflation are ranging between 0.8 percent and 0.9 percent. The underlying price-change distribution looked fairly similar to its average over the past six months (at least on the low end), with roughly 50 percent of the index (by expenditure weight) rising at rates of less than 1.0 percent. On the upper-end, just 12 percent of the consumers’ market basket exhibited price increases in excess of 3.0 percent, down from an average of 23 percent over the six months prior. Among the major components, OER increased at an annualized rate of 1.0 percent in October, somewhat higher than its near-term (3-month) annualized growth rate of 0.5 percent. Rent of primary residence rose 0.6 percent in October. Also, medical care services rose 2.0 percent during the month, though this is somewhat below its 12-month growth rate of 3.6 percent. It appears that the prices of a few discretionary spending components (recreation, apparel, household furnishing) continued to decrease in October. In fact, recreation prices have fallen in each of the past four months and is now down 1.0 percent on a year-over-year basis. An alternative glance at the consumers’ market basket, by price-stickiness, revealed that core flexible prices (those items more likely to exhibit transitory price changes) fell at an annualized rate of 4.6 percent in October. The more forward-looking sticky-price components of the market basket rose 0.8 percent during the month, and have really moved around a lot over the past six months or so (which isn’t much of a surprise given that they’re “sticky”). Over the past 12 months, the series is up 0.7 percent, which is consistent with the softness seen in our other measures of underlying inflation.

  • 11.16.2010
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods increased at an annualized rate of 5.5 percent in October, matching September’s increase. While September’s overall jump up was largely driven by increasing food prices, the increase in October was due to rising energy prices. Over the past 12 months, the index is up 4.3 percent. Excluding food and energy prices, the (“core”) PPI plummeted 6.7 percent, its third sharpest decline since the series began in 1974. However, on a not-seasonally-adjusted basis, the core PPI actually rose 7.1 percent and combined with some historically larger unadjusted price increases in October, hints at a seasonal adjustment issue. On a year-over-year basis the core PPI is still up 1.5 percent.

  • 11.16.2010
  • Industrial Production
  • Industrial production was virtually flat (up just 0.1 percent at an annualized rate) in October. September’s decrease of 1.9 percent was upwardly revised from a 2.6 percent decline. In October, a 6.6 percent annualized gain in manufacturing was offset by a 34.1 percent decline in utilities output and a slight tick down in mining (down −0.9 percent). The overall gain in manufacturing was driven by a 10.7 percent jump up in durables manufacturing, while nondurables production rose 2.7 percent. On a year-over-year basis, manufacturing production is up 6.1 percent, though over the past three months the series is trending a little lower, at an annualized rate of 2.6 percent. Overall capacity utilization was flat at 74.8 percent in October, though the factory operating rate increased from 72.3 percent to 72.7 percent during the month (its highest level since August 2008).

  • 11.15.2010
  • Retail Sales
  • Retail sales jumped up 1.2 percent in October, though that was largely due to a 5.0 percent spike in auto sales. Excluding autos, retail sales rose 0.4 percent during the month, following a 0.5 percent gain in September. Across major categories sales were mixed, with large increases at building material and garden supply dealers (up 1.9 percent) and at sporting goods, hobby, book, and music stores (up 1.0 percent). Modest decreases were seen at furniture stores, electronic and appliance stores, and department stores. A clearer measure of the trend in retail sales — sales excluding autos, building supplies, and gas stations — rose 0.2 percent in October, the fifth consecutive increase in the series. On a year-over-year basis, “core” retail sales are up 4.6 percent and are trending at an annualized rate of 6.3 percent over the past three months.

  • 11.12.2010
  • Consumer Sentiment
  • The University of Michigan Index of Consumer Sentiment ticked up in early November from 67.7 to 69.3, its highest level since June. Much of the overall gain came from a 3.1 point increase in the current conditions component (which rose from 76.6 to 79.7), as consumer expectations edged up only 0.8 point to 62.7. One-year-ahead average inflation expectations rose from 3.3 percent to 3.6 percent in November, while the median year-ahead expectation increased from 2.7 percent to 3.0 percent. Longer-term (5-10 year-ahead) expectations edged northward on average—from 3.0 percent to 3.2 percent in November—but the median expectation was unchanged at 2.8 percent.
  • 11.10.2010
  • International Trade
  • The nominal trade deficit narrowed by $2.5 billion in September to $44.0 billion, as exports edged up 0.3 percent over the month and imports declined 1.0 percent. At $154.1 billion, exports are in fact at their highest level in two years, with help from a weakening dollar. The August to September rise in exports mainly reflected services, which saw the largest growth in travel, other private services (including business services, insurance, financial services), and passenger fares. The decrease in imports was attributed to goods imports, particularly consumer goods and automotive vehicles, parts, and engines. The U.S. trade deficit shrank with some major trade partners over the month, including Canada, Mexico, China (down 0.7 percent), and the European Union. On a year-over-year basis, exports are up 14.8 percent, and imports are up 17.0 percent.
  • 11.10.2010
  • Import and Export Prices
  • Import prices rose 0.9 percent (nonannualized) in October following a small 0.1 percent drop in September, and year-over-year growth was little changed, at 3.6 percent. Fuel prices led the overall increase in October, growing 3.0 percent over the month bolstered by petroleum products and crude.

    Export prices grew for a third straight month in October, picking up pace from 0.6 percent in September to 0.8 percent growth in October. Export prices have generally ridden upward since March 2009’s cyclical bottom and have risen 5.8 percent since last October. All major components contributed to the overall increase over the month. Prices for foods, feeds, and beverages were up 2.2 percent, industrial supplies and materials increased 1.8 percent, and consumer goods grew 0.9 percent.

  • 11.05.2010
  • The Employment Situation
  • Nonfarm payrolls expanded by 151,000 in October, following large upward revisions to private payrolls in September and August (totaling 93,000), and leaving its three month average increase at 136,000. As expected, government payrolls ticked down slightly (−8,000) as the number of temporary Census workers left on the payroll dwindled to a negligible 1,000. Nearly all of October’s gain came from the service side, as goods-producing payrolls only edged up 5,000. In fact, construction and manufacturing employment levels are little changed since May. On the service side, the largest gains came from education and health services (up 53,000), temporary help services (up 34,900), and retail trade (up 27,900). Temporary help services have increased by roughly 409,000 over the past year, accounting for almost 40 percent of the growth in private-service sector employment over that time period. Also, average hours and earnings continued to increase. On the household side of the report, the number of unemployed persons was little changed in October, and the unemployment rate remained at 9.6 percent. However, both the labor force participation rate and the employment-to-population ratio worsened during the month. The participation rate fell 0.2 percentage points to 64.5. And perhaps more importantly, the employment-to-population ratio—which tends to be a cleaner measure of labor market duress than the unemployment rate—slipped down from 58.5 percent to 58.3 percent in October and is now hovering just 0.1 percentage point above its current cyclical low of 58.2 reached last December.
  • 11.05.2010
  • Federal Reserve Balance Sheet
  • All three of the Maiden Lane portfolios were revalued last week according to third-quarter fair market values for the securities in the portfolios. Maiden Lane I jumped from $27.95 billion to $28.47. Maiden Lane II jumped from $15.68 billion to $16.47 billion, and Maiden Lane III grew from $22.84 to $23.53. All three of the portfolios still have a net value above the amount of the outstanding loan from the Federal Reserve Bank of New York. Central bank liquidity swap operations by the European Central Bank fell back to their previous trend of $60 million during the past two weeks, after a jump up to $560 million three weeks ago. Also, the amount of reverse repos doubled last week as more preparatory operations were conducted, with the balance jumping to $1.6 billion before falling back to zero this week.

    There were two important changes to the balance sheet recently that did not involve a major shift in the data. First, the Federal Open Market Committee announced the start of a Treasury securities purchase program of $600 billion that will inflate the size of the balance sheet. The purchases, coined quantitative easing II, will be conducted in conjunction with the agency debt and mortgage-backed securities reinvestment strategy, with estimates of total purchases near $850-$900 billion by the end of the first quarter of 2011. An initial operation took place November 4, but it is not included in this week’s data. The purchase came in the amount of $4.765 billion and was weighted entirely in 4-6 year securities.

    Also, a new line has been added to the balance sheet this week. American International Group (AIG) has recently completed the sale of its American Life Insurance Company unit to MetLife and the initial public offering of its Asian life insurance unit, AIA Group Limited. The sale and IPO drew over $27 billion in cash and another $9 billion in MetLife shares. The cash will eventually go toward repaying AIG’s credit facility and the New York Fed for its preferred shares in the two units, but until the plan is closed (expected by the first quarter of 2011), the cash proceeds will be held by the New York Fed as agent. The holdings currently total $18.85 billion.

  • 11.04.2010
  • Productivity and Costs
  • Nonfarm business sector productivity—real output per hour of all persons—rebounded from a 1.8 percent decline in the second quarter, increasing 1.9 percent in the third quarter. On a year-over-year basis, productivity is up 2.5 percent. The gain in the third quarter came as output rose 3.0 percent, faster than the 1.1 percent increase in hours. Compensation jumped up 1.8 percent in the third quarter after two consecutive quarterly decreases, leaving its four quarter growth rate up just 0.5 percent. After adjusting for price effects, the 4-quarter percent change in compensation is still negative, down 0.8 percent. Unit labor costs, down three of the past four months, were virtually flat in the third quarter and down 1.9 percent on a year-over-year basis, implying a dearth of wage pressure on pricing decisions.
  • 11.01.2010
  • Personal Income
  • Nominal personal income decreased 0.1 percent (non-annualized) in September, its first decrease in a year. Nominal disposable income—income less current taxes—also fell in September, ticking down 0.2 percent, following a 0.4 percent jump up in August. Over the past 12 months, disposable income is up 3.0 percent. After adjusting for price changes, “real” disposable income more than reversed a 0.2 percent gain in August, falling 0.3 percent in September. Real personal consumption rose for the fifth consecutive month after ticking up 0.1 percent in September. The series’ 12-month growth rate jumped up to 2.3 percent in September from 1.4 percent in August. As disposable income slipped in September and consumption continued on its uptrend, the personal saving rate ebbed from 5.6 percent to 5.3 percent.

  • 11.01.2010
  • PCE
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 1.0 percent in September, compared to an increase of 2.3 percent in August. Excluding food and energy prices (core PCE), the index was roughly flat (up 0.3 percent on an annualized basis). However, this followed a downward revision in August—from a 1.4 percent gain to 0.8 percent. increased 1.4 percent. That revision to July and August’s data knocked the 12-month growth rate in the core PCE down from 1.4 percent to 1.3 percent through August. After adding in September’s flat reading, the 12-month growth rate ticked down another 0.1 percentage point to 1.2 percent.
  • 11.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) rebounded from a dip down to an index level of 54.4 in September, jumping back up to 56.9 in October, its highest level since May. The rebound was largely driven up increases in the new orders (up 7.8 points) and production (up 6.2 points) sub-indexes. The increase in new orders was the largest monthly gain since January 2009. Elsewhere, the employment index edged up from 56.5 in September to 57.7 in October, but is still below its recent cyclical high of 60.4 in August. Also, the indexes for supplier deliveries and inventories slipped lower in October, falling 1.1 points and 1.7 points, respectively.
  • 11.01.2010
  • Construction Spending
  • Total construction spending grew a mild 0.5 percent in September due to a 1.8 percent increase in residential construction, as nonresidential spending was unchanged over the month. Downward revisions left July with a deeper decline of 2.6 percent and flipped August’s 0.4 percent gain to a 0.2 percent drop. Private construction outlays were flat in September following four consecutive declines, as a 1.8 percent gain on the residential side was roughly offset out by a 1.6 percent drop on the nonresidential side. Public construction spending rose for a second straight month (by 1.3 percent), bumping year-over-year growth to 1.3 percent, positive for the first time since last September. Public outlays were led by transportation (up 5.1 percent), healthcare, and office construction. Overall, September−s report was a positive one, beating expectations for a 0.5 percent decline in total spending. However, the larger picture remains very weak, as clearly shown by the still-deeply-negative year-ago spending comparisons. Total spending is down 10.4 percent since September 2009, residential spending is down 5.3 percent, and nonresidential spending still sits way south, at −12.4 percent.