Data Updates

Data Updates

July 2009

  • 07.30.2009
  • Real GDP
  • Real GDP decreased at an annualized rate of 1.0 percent in the second quarter, according to the advance release by the Burea of Economic Analysis, beating expectations of a 1.5 percent decline. Though due to the comprehensive revision, it’s coming off a downwardly revised first quarter estimate of −6.4 percent (from 5.5 percent previously). In fact, from the start of the recession in 2007:Q4 to 2009:Q1, the annualized percentage change in real GDP was revised down from −1.8 percent to −2.8 percent. The weaker trajectory resulted in a year-over-year growth rate in real GDP of −3.9 percent through the second quarter, a post-World War II low. The rate of contraction slowed markedly from the first quarter to the second due to a much smaller decrease in investment, a smaller decrease in inventories, stronger government spending, and a much less dramatic drop in exports. Real BFI fell just 8.9 percent, compared with a 39.2 percent tumble in the first quarter, while the decline in residential fixed investment slowed from −38.2 percent in the first quarter to −29.3 percent in the second. The continued shedding of private inventories subtracted 0.8 percentage point from real GDP growth in the second quarter, compared to 2.4 percentage points in the first. Net exports added 1.4 percentage points to output growth during the quarter, down from 2.6 percentage points in the first, as the decline in exports lessened from −29.9 percent to −7.0 percent and imports decreased 15.1 percent in the second quarter compared to a decrease of 36.4 percent in the first. These “improvements” were tempered by a 1.2 percent decrease in real consumption expenditures in the second quarter, following a 0.6 percent increase in the first (that was revised down from a 1.4 percent gain). The year-over-year growth rate in consumption fell to −1.8 percent, its deepest contraction since 1951. The comprehensive revision incorporated (among other changes); a new classification system for PCE and PCE prices (which resulted in food services being added to the core PCE price index), a new treatment of disasters, a reference year for chain-type aggregation to 2005 from 2000, and some new source data (notably the Bureau of Economic Analysis’s 2002 benchmark input-output accounts, “which provide the most thorough and detailed information on the structure of the US economy”).
  • 07.29.2009
  • Durable Goods
  • New orders for durable goods fell 2.5 percent (nonannualized) in June, following two consecutive monthly increases. However, the details of the report were decidedly more positive than the top-line number would suggest. Much of the overall decrease was driven by 12.8 percent drop in transportation orders (autos and aircraft). Excluding transportation, new orders rose 1.1 percent in June. Moreover, nondefense capital goods orders excluding aircraft rose 1.4 percent in June, following a 4.3 percent jump in May, pulling its 3-month growth rate up to 2.0 percent—its first positive reading since last July. On the other hand, shipments fell for the eleventh consecutive month (slipping down 0.2 percent in June) pushing its 12-month growth rate down to a new cyclical low of −21.0 percent in June. Manufacturers continued to shrink inventories in June, trimming off an additional 0.9 percent. Still, the inventories-to-shipments ratio remained elevated at 1.89 months, well above the norms seen before the start of the recession.
  • 07.28.2009
  • S&P/Case-Shiller Home Price Index
  • The S&P/Case-Shiller 10- and 20-city indexes stayed relatively flat in May. The seasonally-adjusted series each fell 0.2 percent while the unadjusted data showed a meager gain of 0.4 percent for the 10-city index and 0.5 percent for the 20-city index. Either way you look at it, the home price indexes had their best month in over two years. The 12-month growth rates in both indexes improved as well, but remain extremely depressed at −16.8 percent and −17.1 percent for the 10- and 20-city indexes, respectively. Home prices in the Cleveland metropolitan area increased 2.8 percent in May following a 0.6 percent increase in April. The 12-month growth rate for home prices in Cleveland now sits at −6.2 percent up from −10.5 percent in April. Keep in mind that sales pair counts, though up in May, are still extremely low and have led to some greater than usual volatility in the index’s measurement of Cleveland area home prices.

    The FHFA purchase-only index increased 0.9 percent in May, bringing the 12-month growth rate to −5.6 percent, its highest level since June 2007.

  • 07.27.2009
  • New Home Sales
  • New home single-family home sales increased 11.0 percent in June, the largest of three consecutive increases and the fourth in the past five months. In terms of actual units, the increase in the sales pace was rather small at 38,000 units, nonetheless that is the largest monthly gain since October 2007. Over the past five months, new single family home sales are up 55,000 units, amounting to a 16.7 percent increase from its all-time low level of just 329,000 units. Despite the recent increases, new home sales are still roughly 40 percent below their average sales pace over the 20 years from 1980 to 2000. The number of new homes for sals continued to decline in June, falling 12,000 units or 4.1 percent. The inventory of new homes for sale now sits near the bottom of its longer-term average range. In terms of months of supply, the decline in inventory coupled with the increase in sales resulted in a substantial, 1.4 month, drop in the inventory to sales ratio, from 10.2 months to 8.8 months. Despite declining 3.6 months since reaching an all-time high in January, the level of inventory relative to the sales pace remains very elevated by historical standards.
  • 07.24.2009
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up in late July to show a 4.8 point decline over the month, compared to a previously reported decline of 6.2 points. At 66.0 the index is up from its recent and record low of 55.3 points, seen in November 2008, but still substantially below the average rate over the past 20 years. The median one year inflation expectation decreased slightly in July, from 3.0 percent to 2.9 percent, while the median five-to-ten-year inflation expectation was unchanged at 3.0 percent. Both rates are consistent with the normal range seen over the past 10 years. For those that prefer the average inflation expectation, the one year rate declined from 3.9 percent to 3.6 percent, while the five-to-ten-year rate increased from 3.2 percent to 3.4 percent. Those rates are also within what can be considered a normal range.
  • 07.23.2009
  • Existing Home Sales
  • Existing single-family home sales increased 2.4 percent in June, bringing the series to its highest level since October 2008. Prior to June’s gain, sales had bounced between an annual sales pace of 4,050 and 4,250 for the past seven months. The 12-month growth rate in sales increased to 0.2 percent in June, reaching positive territory for the first time since September 2008, and only the second time since November 2005. The number of existing single-family homes on the market for sale was unchanged in June but the increase in the sales pace resulted in a decrease in the months of supply from 9.1 months to 8.9 months, its lowest level since December 2008. The median sales price of existing single-family homes, which is not seasonally adjusted, increased 4.0 percent in June and is up 9.4 percent over the past two months. However, the 12-month growth rate in the median sales price is still down 15.0 percent—not far off its all time low of 16.8 percent seen in April 2009.
  • 07.17.2009
  • Housing Starts and Permits
  • Single-family housing starts increased 14.4 percent in June, while total housing starts increased 3.6 percent. The increase in single-family starts is the largest in percentage terms since 2005, while in terms of actual units it is the largest increase since 2007. Single-family starts have not fallen since January 2009 and over that time have increased 113 thousand units, or 31.7 percent, from the trough of the series. While single-family starts appear to have turned a corner, it is a long climb back to pre-housing-bubble levels. At an annual pace of 470 thousand units, the current pace of starts is just over 40 percent of the average annual rate from 1985 through 2000. Permits for single-family housing starts increased 5.9 percent in June, their fourth increase in the past five months. Over that time, permits have increased 25.7 percent from their January trough.
  • 07.15.2009
  • Consumer Price Index
  • The CPI jumped up 9.3 percent (annualized rate) in June, almost entirely on a ridiculously large spike in motor fuel (up 569 percent—annualized rate, of course). According to the release, that spike in motor fuel accounted for over 80 percent of the overall increase. Even with this month’s jump, the CPI is down 1.4 percent over the past year. The core CPI rose 2.4 percent in June, following a 1.7 percent increase in May and outpacing most of its longer-term trends. However, if you dig a little deeper, you'll see a couple of curious price movements. First, apparel prices exhibited a &ldquofunky” seasonal pattern, jumping 8.8 percent on a seasonally basis, while falling 25.5 percent on a not seasonally-adjusted basis. Perhaps the story here is that the severity of the business cycle has already depressed clothing prices (and some other goods as well, recreation for example), trumping the usually seasonal sales. Said another way, apparel prices have already been slashed to “rock-bottom prices” due to the recession, and we aren't seeing the normal seasonal sales resulting in a seasonally adjusted price increase. Also, just as in the PPI yesterday, prices of new vehicles rose 8.2 percent in June and are actually up 0.9 percent over the past year (which doesn't make intuitive sense given the current environment). Turning to the measures produced by the Federal Reserve Bank of Cleveland, the median CPI increased 0.8 percent, while the 16-percent trimmed mean indicator rose 2.0 percent in June. Over the past three months, the median CPI is trending at 1.2 percent and the 16 percent trimmed-mean is at 1.3 percent. The underlying component distribution in June shows a substantial amount of weight in the tails. Nearly 52 percent of the consumer market basket was in the extreme tails (rising in excess of 5 percent or exhibiting price decreases). Moreover, roughly 30 percent of the index rose at rates between 0 percent and 1 percent in June, leaving just 10 percent over the overall index in the broad “sweet spot” between 1 and 3 percent. Overall, the details of the report would suggest that underlying inflation trends are more subdued than what the headline is stating, and maybe slightly below where the core CPI is at, too.
  • 07.15.2009
  • Industrial Production
  • Industrial production fell for the eighth consecutive month, decreasing 4.6 percent (annualized rate) in June, pulling its 12-month growth rate down an additional 0.1 percentage point to −13.6 percent. On the other hand, this was its smallest monthly decrease in nearly a full year, causing the 3-month growth rate to tick up to −8.9 percent in June from −13.7 percent in May. Manufacturing production dropped by 6.5 percent in June, following a 12.5 percent decrease in May. Still, the series fell to a fresh cyclical low on a year-over-year basis. Mining output fell 5.5 percent in June, following three consecutive monthly decreases greater than 20.0 percent. Even though production losses seem to be showing nascent signs of leveling off, the capacity utilization rate continued its free-fall to a fresh record low of 68.0 percent of capacity.
  • 07.14.2009
  • Retail Sales
  • Total retail sales increased 0.6 percent (nonannualized) in June (roughly in line with expectations), following a 0.5 percent gain in May. However, the details of the June report are a little less encouraging. Gains were lead by a 5.0 percent jump in sales at gasoline stations (most likely due to price effects) and a 2.6 percent spike in auto sales. Outside those two categories, retail sales fell 0.2 percent during the month, its fourth consecutive monthly decline. That said, there were a couple of bright spots. Sales at electronics and appliance stores increased by 0.9 percent in June, its first monthly increase since February, pulling its 12-month growth rate up from a cyclical low of −13.7 percent in May to −11.5 percent in June. Also, sales at sporting goods, hobby, book, and music stores posted a 0.9 percent gain in June, while sales at nonstore retailers rose (up 0.6 percent) for the first time since January.
  • 07.14.2009
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods spiked up 23.3 percent (annualized rate) in June, more than doubling expectations, and following a 2.9 percent increase in May. There have only been a handful of months where the PPI has jumped up above 20 percent over the past 20 years. Still, producer prices are down 4.3 percent over the past 12 months. While part of the overall price gain was due to a large increase (116.1 percent) in energy prices, price increases were relatively broad-based in June. Excluding food and energy prices (core PPI), the index jumped up 6.5 percent during the month, pushing its 3-month growth rate up from 0.5 percent to 2.1 percent and its 12-month growth rate up 0.4 percentage point to 3.4 percent. Further back on the production line, both core intermediate and core crude goods prices posted modest increases, rising 4.3 percent and 35.9 percent, respectively.
  • 07.10.2009
  • Import Prices
  • Import prices jumped up 3.2 percent (nonannualized) in June, more than doubling a 1.4 percent increase in May, driven by spiking petroleum prices (up 20.3 percent nonannualized). While somewhat hard to believe given the large oil price shock last summer, June’s increase in petroleum prices was the largest monthly advance since April 1999. Still, over the past 12 months petroleum prices are down 45.9 percent. Nonpetroleum import prices ticked up 0.2 percent in June, following a 0.1 percent increase in May, but are still down 6.5 percent from a year ago. Export prices increased for the third consecutive month, rising 1.1 percent in June. Both higher agricultural and nonagricultural prices contributed to the overall monthly increase. However, export prices are still down 6.4 percent on a year-over-year basis.
  • 07.10.2009
  • Consumer Sentiment
  • The University of Michigan’s Survey of Consumer Sentiment declined by 6.2 points (roughly 9 percent) to an index level of 64.6 in July, erasing almost all of the gains seen over the previous three months. According to the release,“Consumers concluded that the economic downturn would last longer and their personal finances would not recover as quickly as they had previously expected.” Losses were seen in both components of sentiment in July, though the decline in the consumer expectations component was much more pronounced (roughly 8 points). One-year average inflation expectations ticked down to 3.8 percent in July, from 3.9 percent in June. Longer-term (5-to-10 year ahead) average expectations jumped up to 3.7 percent from 3.2 percent in June (most likely biased by a few outliers), though the median only rose by 0.1 percentage point to 3.1 percent.
  • 07.10.2009
  • International Trade
  • The nominal trade deficit decreased $2.8 billion in May, after increasing a combined $2.7 billion in March and April. The decrease brings the monthly trade deficit to its lowest level since 1999. Since July 2008, when the deficit hit its most recent high, the trade balance has improved by $38.9 billion. The vast improvement over that time has come as both imports and exports have fallen off prodigiously. Over the last 10 months imports have fallen 34.9 percent, roughly $80 billion, while exports have declined 25.0 percent, approximately $41 billion. In recent months the decline in both imports and exports has tapered off somewhat. May’s improvement in the trade balance was the result of a small increase (1.6 percent) in exports, the second in the past four months, and a 0.6 percent decline in imports. Over the past three months, imports have only fallen an annualized 8.2 percent, compared to an annualized decline of 50.3 percent in the seven months from August 2009 to February 2009. Meanwhi;e, exports have only fallen an annualized 3.9 percent since January after falling at an annualized pace of 42.3 percent from June through January.
  • 07.02.2009
  • Employment Report
  • Nonfarm payrolls fell to 467,000 in June—worse than what was expected for the month. This follows a downwardly revised loss in April (from −504,000 to −519,000) and an upward revision to May’s estimate (from −345,000 to −322,000) that, on net, added 8,000. While June’s change comes as somewhat of a disappointment for those looking for an improvement over May’s estimate, it is still much less than the average loss of −622,000 during 2008’s fourth quarter and 2009’s first. Since the start of the recession in December 2007, payroll employment has now fallen by 6.5 million. Employment losses were widespread in June, and fairly evenly distributed between goods producing (−223,000) and service-providing (−244,000) payrolls. Manufacturing employment fell by 136,000, with 27,000 coming from motor vehicle and parts, while employment in construction decreased by 79,000. On the service side, the retail trade sector shed 21,000 workers, with half of those losses coming from motor vehicle and parts dealers (−10,500). It should come as no surprise, but education and health sectors continued to grow in June, adding 34,000, nearly matching their average gain of 39,000 since the start of the recession. Government payrolls posted a rare decrease in June, slipping down by 52,000, though this was in large part due to a layoff of workers temporarily hired to prepare for the 2010 Census.

    Also of note, the average workweek for production and nonsupervisory workers ticked down 0.1 hour to 33.0 hours—a record low (the series began in 1964). That said, the manufacturing workweek increased slightly from 39.4 in May to 39.5 in June (it has been ranging around 39.5 since February).

    On the household side, the unemployment rate rose to 9.5 percent in June, rising just 0.1 percentage point after six consecutive increases of 0.4 percentage point or greater. However, the employment-to-population ratio slipped down 0.2 percentage point to 59.5 percent in June, its lowest level since April 1984.

  • 07.02.2009
  • Factory Orders
  • New orders for manufactured goods increased 1.2 percent (nonannualized) in May, following a 0.5 percent rise in April. Still, the series is down −22.7 percent over the past 12 months. Orders for nondefense capital goods excluding aircraft jumped up 4.7 percent in May, rebounding from a 3.5 percent loss in April, helping to pull its 12-month growth rate up from its current cyclical low of −26.0 percent in April to −22.3 percent in May. As was the case with the advance report, shipments continued to decrease in May (for the ninth consecutive month), falling 0.9 percent. Manufacturers were able to trim inventories by 0.6 percent in May, compared to an average decrease of 1.2 percent since the beginning of the year. With modest declines in both shipments and inventories, the I/S ratio remained at 1.45 months in May and has been fairly steady since last December.
  • 07.01.2009
  • ISM Manufacturing
  • The ISM Purchasing Managers Index (PMI) increased by 2.0 points to an index value of 44.8 percent in June, marking the sixth consecutive monthly improvement from a cyclical low of 32.9 in December. According to the release, “A PMI in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy.” Using the ISM’s calculation, June’s PMI corresponds with a 1.1 percent annualized increase in real GDP. Contributing to June’s increase both the employment and production subindexes posted gains in excess of 6.0 points in June, although the new orders and inventories components each slipped down by roughly 2.0 points during the month, tempering the overall gain.
  • 07.01.2009
  • Construction Spending
  • Total private construction spending decreased 1.0 percent in May, following April’s 0.8 percent increase. The 12-month growth rate in private construction spending now sits at −18.4 percent, surpassing its previous record low of −18.1 percent reached at the tail end of the 1990 recession. Private residential construction declined 3.4 percent in May, in line with its 12-month growth rate of −34.2 percent. Private nonresidential construction increased for the fourth consecutive month in May, rising 0.5 percent. After reaching high in October 2008, private nonresidential construction spending fell a combined 7.3 percent in the subsequent three months. Over the four months since that time, spending has rebounded to make up nearly half of that loss. During that period, private nonresidential construction has increased at an annualized pace of 10.9 percent, approximately twice as fast as the pace of growth from October 2007 to October 2008.