Data Updates

Data Updates

July 2010

  • 07.30.2010
  • Real GDP
  • Real GDP rose at an annualized rate of 2.4 percent in the second quarter, in line with consensus estimates. The “good” news is that slowdown followed an upward revision (during the annual benchmark) of 1.0 percentage point to first quarter real GDP, which now stands at 3.7 percent. Over the past four quarters, output has grown 3.2 percent. The “bad” news is that output over the past three years was a little weaker than what we previously thought. The year-over-year growth rate in real GDP was revised down from 2.5 percent to 2.3 percent 2007, from −1.9 percent to −2.8 percent for 2008, and actually ticked up from 0.1 percent to 0.2 percent for 2009. Said another way, the current level of real GDP as of the first quarter of 2010 is 0.8 percent lower than the previous estimate. The BEA noted that the largest contributors to the benchmark revision were downward adjustments to consumption and state and local government spending, as well as an upward revision to imports (which enter in as a negative in GDP accounting). Turning back to the second quarter, consumption rose 1.6 percent, nearly matching a 1.9 percent gain in the first and pushing its 4-quarter growth rate up to 1.6 percent. Private investment accelerated markedly from the first to second quarter of 2010, increasing from an annualized growth rate of 3.4 percent to 19.1 percent. Nonresidential fixed investment jumped up 17.0 percent in the second quarter, its largest quarterly increase since 2006:Q1. Equipment and software continued its rapid increase, rising 21.9 percent during the quarter, following a 20.5 percent and 14.6 percent in the previous two quarters. Interestingly, investment in structures turned around a string of seven negative quarters, increasing 5.1 percent. The series is still down 14.4 on a year-over-year basis, however. Residential investment, likely influenced by tax incentives, jumped up 27.8 percent in the second quarter, adding 0.6 percentage points (pp) to real GDP growth, after subtracting 0.3 pp in Q1. Continued inventory accumulation added 1.1 pp to output growth during the quarter, compared to a 2.6 pp contribution in the first quarter. Elsewhere, exports increased by 10.4 percent though that was outpaced by a 28.8 percent spike-up in imports, subtracting 2.8 pp from growth, on net. Real final sales of GDP (GDP less inventories) eked out a slight 1.3 percent gain in the second quarter, a tad firmer than a 1.1 percent increase in the first quarter which helped to pull its 4-quarter growth rate up from 0.9 percent to 1.2 percent. Also, the personal savings rate rose from 5.5 percent in the first quarter to 6.2 percent, edging back up towards its recent peak of 7.2 percent in 2009:Q2.
  • 07.30.2010
  • ECI
  • The Employment Cost Index (ECI) for civilian workers increased 2.1 percent (annualized rate) in the second quarter, down slightly from an increase of 2.5 percent in the first quarter, but still represents a slight firming over its longer-term (4-quarter) growth rate of 1.9 percent. Wages and salaries for both state & local government workers as well as private industry workers, rose 1.8 percent in the second quarter. However, the 4-quarter growth rate in private industry wages and salaries improved by 0.2 percentage point to 1.6 percent, while the trend for state & local government workers slipped from 1.8 percent to 1.3 percent in the second quarter.
  • 07.30.2010
  • Consumer Sentiment
  • Although the University of Michigan’s Index of Consumer Sentiment was revised up from 66.5 to 67.8 during the July revision, it’s still well below June’s index level of 76.0 and the lowest sentiment value since November 2009. Both the current conditions and consumer expectations components fell markedly during the month. In fact, consumer expectations—at an index value of 62.3—are the lowest since March 2009 (near the trough of the recession) prompting this statement in the release: “ ...consumers view their income and job prospects as extraordinarily weak and those bleak prospects have made consumers more cautious spenders.” Inflation expectations were steady in July, as one-year-ahead average inflation expectations remained at 3.3 percent and longer-term (5-10 year-ahead) expectations ticked up 0.3 percentage point to 3.4 percent (though the longer-run median expectation inched-up just 0.1 percentage point to 2.9 percent).
  • 07.29.2010
  • Fourth District Employment Conditions
  • The Fourth District’s unemployment rate decreased 0.5 percentage point to 9.6 percent for the month of June. The dip in the unemployment rate can be attributed to a decrease in the number of people unemployed (− 5.6 percent) and the labor force (−0.4 percent).

    The distribution of unemployment rates among Fourth District counties ranges from 7.1 percent (Geauga County, Ohio) to 17.8 percent (Magoffin County, Kentucky), with the median county unemployment rate at 10.8 percent. County-level patterns are reflected in statewide unemployment rates as Ohio and Kentucky have unemployment rates of 10.5 percent and 10.0 percent, respectively, compared to Pennsylvania’s 9.2 percent and West Virginia’s 8.5 percent.

  • 07.28.2010
  • Durable Goods
  • New orders for durable goods slipped down for the second consecutive month, decreasing 1.0 percent in June, surprising expectations of a modest increase. While some of the weakness in the headline series over the past few months has come from falling aircraft orders, the three-month annualized growth rate in new orders excluding transportation equipment plummeted from 23.0 percent to −0.9 percent in June, its first negative growth rate since May 2009. Shipments of durables, despite decreases of 0.7 percent in May and 0.3 percent in June, are still holding on to a positive three-month annualized growth rate (3.6 percent), though that is well below their growth rate over the past 12 months (10.8 percent). An important input into nonresidential investment—orders for nondefense capital goods excluding aircraft—edged up 0.2 percent in June, following a 1.5 percent increase in May. The near-term (three-month annualized) growth rate of the series has faltered somewhat from a recent high of 21.6 percent in April, though it is still trending at a relatively robust 8.5 percent. Manufacturers added to inventories for the sixth consecutive month, accumulating an additional 0.9 percent in June. However, the 12-month growth rate in inventories is positive (at 0.1 percent) for the first time since December 2008.
  • 07.26.2010
  • New Home Sales
  • Monthly data for new home sales continue to be volatile and heavily skewed by the effects of the homebuyer tax credit. New single-family home sales rose dramatically in June, by 23.6 percent, after plummeting an even larger 36.7 percent in May. Despite June’s increase, the annual pace of sales sits at just 330,000 units, only second to May as the slowest pace on record. The monthly Census data are subject to revision and have behaved erratically in recent months surrounding the tax credit deadline. However, even the smoother quarterly data have shown three consecutive declines, starting with the last quarter of 2009. Year-over-year growth in sales now sits at −16.7 percent, up from −27.2 percent recorded in May. The months’ supply of new single-family homes dropped to 7.6 from 9.6 months, reflecting June’s sales jump and a 1.4 percent decrease in the inventory of homes on the market.
  • 07.23.2010
  • Federal Reserve Balance Sheet
  • This week’s data release had a few interesting changes to note. First, Maiden Lane I started to repay the New York Fed for the loan that it was extended on July 15, 2008. According to the contract, the loan was set to begin being repaid two years after the loan was made. Second, Japan drew an extra $1 million from their central bank liquidity swap line this week. The draw was for an 84-day term at a rate of 1.21 percent. Third, as the New York Fed works to settle all of the mortgage-backed security (MBS) purchases that were supposed to have been completed by the end of March, the trend in the agency debt purchases has been a steady decline since the program’s expiration. The balance of those purchases (which peaked at $175 billion) has now fallen below $160 billion. In terms of settling the MBS purchases, there were no coupon swap or dollar roll operations this week. As for the liabilities, there was a $33 billion jump in the Treasury’s general account this week. Also, the results of the third TDF small-scale operation were accounted for in the balance sheet, bringing the total balance to $4.2 billion.
  • 07.22.2010
  • Existing Home Sales
  • Existing single-family home sales fell 5.6 percent in June to an annual sales pace of 4.7 million units, but sit 8.5 percent higher than the 4.53 million-unit pace in June 2009. The median home price was $184,200 in June, up 1.3 percent over the last year, with ten out of the nineteen reported metropolitan statistical areas observing year-over-year price growth. June’s slowdown in sales was accompanied by a 4.3 percent increase in the inventory of existing single-family homes on the market, causing months’ supply to rise from 7.8 to 8.7 months at the current sales pace, its highest since August 2009. National Association of Realtors chief economist, Lawrence Yun, attributed the recent large swings in home sales to buyers’ responses to the tax credit extensions and cutoff. “Broadly speaking,” he commented, “sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.”
  • 07.20.2010
  • Housing Starts
  • Single-family housing starts fell for a second month in the aftermath of the homebuyer tax credit, slipping 0.7 percent in June after plummeting 18.8 percent at the cut-off in May. The annual pace of starts was set back to 454,000 units, its slowest since May 2009, and the 12-month growth rate dipped back into negative territory, from 12.6 percent to −4.6 percent. June’s mild decline was attributable to activity in the Northeast (−8.9 percent) and Midwest (−11.3 percent), as the South and the West both saw gains over the month. Permits for single-family housing starts dropped 3.4 percent in June and are down 6.7 percent from one year ago.
  • 07.16.2010
  • CPI
  • The headline CPI fell at an annualized rate of 1.6 percent in June, largely on decreasing gasoline prices. On a year-over-year basis the CPI is up 1.1 percent. Excluding food and energy prices (core CPI), the index rose 1.9 percent in June and is trending at annualized growth rate of 1.3 percent over the past three months, above its longer-term (12-month) growth rate of 0.9 percent. Measures underlying inflation produced by the Federal Reserve Bank of Cleveland, which have been trending a bit lower than the core CPI lately, continued to do so in June. The median CPI rose 1.2 percent in June, while the 16 percent trimmed-mean CPI rose just 0.3 percent. The median and trim have risen just 0.3 percent and 0.5 percent, respectively, since the beginning of the year and are ranging between 0.5 percent and 0.8 percent over the past 12 months. As has frequently been the case, all of the monthly volatility (noise) wasn't captured exclusively by excluding food and energy prices in June. Notably, mens’ and boys’ apparel prices shot up a record (going back to 1947) 31.2 percent in June, a price increase that smacks of a seasonal adjustment problem, given that those prices fell 14.2 percent before seasonal adjustment. Nevertheless, the underlying price-change distribution exhibited some firming relative to May, as 34 percent of the overall index rose at rates between 1 percent and 3 percent, compared to just 19 percent in May and an average share of 15.4 percent over the past three months.
  • 07.16.2010
  • Federal Reserve Balance Sheet
  • There were very limited changes to the Fed’s balance sheet this week. The total balance has steadied between $2.3 trillion and $2.4 trillion since early in 2010 and seems to be holding near $2.37 trillion in the past few months. One minor trend of note has been the steady decline in the outstanding balance in AIG’s revolving credit facility with the Fed since the beginning of June. A relatively small decline of $2 billion has occurred over the most recent month and a half, but the trend could be signaling a return of creditworthiness to AIG. Since mid-March, the outstanding balance of the Term Asset-Backed Securities Loan Facility has also declined incrementally, falling from $48 billion to $42 billion. All of this is a sign that nontraditional lending is winding down as the recovery continues. Another $650 million in coupon swap operations were conducted this week, fulfilling the target amount of coupon swaps totaling $9.2 billion over the past three weeks. All major liabilities categories remained relatively stable.
  • 07.16.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment fell 9.5 points to an index value of 66.5 in early July, the largest plunge since October 2008 and the eighth largest in the sixty year history of the surveys. Over the past six months, the index has sporadically increased and dropped, but overall has lost more ground than it has gained. Although the index has climbed up from a trough of 55.3 in November 2008, it still sits well below its values throughout most of the 1990's and the 2000's leading up to the recent recession period. According to the release, “nearly every economic assessment and expectation included in the survey recorded a steep decline.” Only 39 percent of respondents, the smallest proportion ever recorded, anticipated an increase in their income during the year ahead, and the proportion that unfavorably rated economic policies rose to 42 percent in early July. One-year-ahead average inflation expectations rose 0.3 percentage point to 3.6 percent, and longer-term (5-10 year-ahead) expectations ticked up 0.4 percentage point to 3.5 percent. Median expectations for both periods inched up to 2.9 percent.
  • 07.15.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods fell a greater-than-expected 5.9 percent (annualized) in June, owing to a sharp 23.2 percent drop in consumer foods and a modest decline in energy prices. June marks the third straight decline in headline producer prices, causing year-over-year growth in the index to weaken from 5.3 percent to 2.8 percent. The core PPI, which excludes the fickle food and energy prices, advanced 0.7 percent in June, its smallest increase in three months. Year-over-year growth in the core index softened from 1.3 percent to 1.1 percent, staying roughly in-line with its path since last November. Further back in the production line, pricing pressures were on the downside, as core intermediate goods prices dropped 4.5 percent and core crude goods prices took a 44 percent fall.
  • 07.15.2010
  • Industrial Production
  • Industrial production limped forward in June, edging up just 0.9 percent (annualized) following a large 17.4 percent jump in May. While June’s growth was soft, it beat analysts’ expectations for a mild decline. The driver behind the gain was a 37.8 percent increase in utilities output, as record-setting summer heat caused people to crank the A-C for a month straight, and to a smaller extent by a 4.9 percent rise in mining activity. Manufacturing output, which accounts for roughly 75 percent of the index’s weight, countered these increases with a 4.5 percent retreat. Overall industrial production has advanced in all but one of the past 12 months, boosting year-over-year growth to 8.2 percent, its strongest since January 1998.

    Capacity utilization was virtually unchanged in June at 74.1 percent, and so far has climbed nearly half-way back to its pre-recession level around 81 percent.

  • 07.14.2010
  • Import Prices
  • Import prices fell 1.3 percent (nonannualized) in June, the largest decline since December 2008. The drop follows a 0.6 percent decline in May and was led by a 4.4 percent decline in petroleum prices, as nonpetroleum import prices fell by only 0.5 percent. The 12-month growth rates of import prices and nonpetroleum import prices fell for the first time since July 2009, to 4.5 percent and 3.1 percent, respectively. Export prices fell by 0.2 percent in June, their first decline since February. Main factors contributing to the decline were consumer goods excluding automotives prices (−0.6 percent) and capital goods prices (0.4 percent). The 12-month growth rate of export prices fell to 4.3 percent after four consecutive months of increases.
  • 07.14.2010
  • Retail Sales
  • Total retail sales fell for the second consecutive month, slipping down 0.5 percent (nonannualized) in June. Yet the series (which is not adjusted for price changes) is still up 4.8 percent over the past year. Across major components, sales were mixed in June. Relatively large decreases were seen in motor vehicle and parts sales (down 2.3 percent); gasoline stations (down 2.0 percent); sporting goods, hobby, book, and music stores (down 1.4 percent); furniture and home furnishing stores (down 1.1 percent); and building material and supply dealers (down 1.0 percent). On the other hand, sizeable gains were seen in electronics and appliance stores (up 1.3 percent); department stores (up 1.1 percent); and nonstore retailers (up 1.0 percent). “Core” retail sales (sales excluding autos, building supplies, and gas stations), a measure designed to give us a clearer look at the underlying sales trend, inched up 0.2 percent in June. However, this follows a downwardly revised 0.2 percent decline in May and a 0.4 percent decrease in April. Smoothing across time, the three-month annualized growth rate in core retail sales fell into negative territory in June (down 1.5 percent), its first foray below zero since July 2009.
  • 07.13.2010
  • International Trade
  • The nominal trade deficit unexpectedly widened in May, as an increase in imports outweighed a slightly more modest rise in exports. The $1.9 billion widening, which follows a $0.3 billion widening in April, brings the deficit to an 18-month high of $43.3 billion. Despite a 9.1 percent drop in imports of petroleum, total imports rose 2.9 percent, led by consumer goods, automotive vehicles, and capital goods. While the decrease in net exports will likely lop off a few tenths off of real GDP growth in the second quarter, the sharp increase in non-petroleum imports suggests that domestic spending is continuing to recover. The report also provides tentative evidence that the strengthening of the dollar has not hindered US exports yet, as exports climbed 2.4 percent in May. The 12-month growth rates of imports and exports increased to 29.1 percent and 21.0 percent, respectively.
  • 07.09.2010
  • Federal Reserve Balance Sheet
  • The loans extended to Maiden Lane II and III were repaid according to their monthly schedules this week. On the outstanding loan to Maiden Lane II, $220 million was returned to the New York Fed, bringing the total left to be repaid down to $14.089 billion. Maiden Lane III saw a fall of nearly $400 million, dropping the balance remaining to $15.469 billion. The mortgage-backed security (MBS) coupon swap operations announced last week by the New York Fed continued this week, racking up an extra $6 billion. Other assets have continued along their trends. Discount Window lending was cut to a third of its previous size, falling to $111 million left outstanding. Security holdings from the large-scale asset purchase programs seem to have topped out in the range of $1.6 trillion. There was no significant action on the other side of the balance sheet. The third and final scheduled small-scale Term Deposit auction is set for next Monday.
  • 07.02.2010
  • Employment
  • Nonfarm payrolls slipped down by 125,000 in June, though that was on a 225,000 decrease in temporary Census takers. Private payrolls rose 83,000 during the month and have increased by 593,000 since the first of the year, but are still 7.9 million below its level in December 2007. While June’s increase in private payrolls is an improvement over May’s downwardly revised 33,000, it is still under-performing the 3-month average gain of roughly 150,000 prior to May. Across sectors, gains were paltry though fairly widespread. Notably, temporary help services continues to bolster the overall increase in private payrolls, adding 20,500 workers in June and is now up nearly 200,000 for the year. Another relatively large increase came from the leisure and hospitality sector, which rose by 37,000. However, delving into the weeds reveals that the gain was driven mostly by a 28,000 increase in amusements, gambling, and recreation employment that followed a 16,000 loss in May (likely a seasonal adjustment or measurement issue). Goods-producing employment was fell by 8,000 in June, as construction employment followed up a 30,000 dip in May with a 22,000 loss and gains in the manufacturing sector slowed down—from an average of 30,000 over the past three months to 9,000 in June. The average workweek for all employees ticked down 0.1 hour to 34.1 hours in June (its first decline since February), largely on a 0.5 hour drop in the manufacturing workweek to 40.0 hours. Average hourly earnings of all employees were nudged down 2 cents to $22.53 in June, while average hourly earnings of production and nonsupervisory workers were flat at $19.00.

    The unemployment rate ticked down from 9.7 percent to 9.5 percent in June, as 652,000 people (or 0.4 percent) left the labor force in June. A decrease of this magnitude has only happened two other times since the 1990 recession: recently in December 2009 (down 0.4 percent), and in May 1995 (down 0.6 percent). A less noisy indicator of labor market duress—employment-to-population ratio—ticked down from 58.7 percent to 58.5 percent in June, 4.2 percentage points below its level at the start of the recession.

  • 07.02.2010
  • Factory Orders
  • New orders for manufactured goods slipped down 1.4 percent (nonannualized) in May, following a downwardly revised 1.0 percent increase in April. New orders excluding transportation fell 0.6 percent during the month, after falling 0.7 percent in April, but are still up 15.3 percent on a year-over-year basis. Losses in May were felt across both durable and nondurable sectors, falling 0.6 and 2.1 percent, respectively. However, orders for nondefense capital goods excluding aircraft increased for the fourth consecutive month, rising 1.4 percent in May, and are now trending at a relatively strong 3-month growth rate of 17.7 percent. Manufacturers’ shipments fell 1.3 in May, more than giving up a 0.6 percent gain in April. Interestingly, inventories fell 0.4 percent in May, its first decrease since last December.
  • 07.02.2010
  • Federal Reserve Balance Sheet
  • A second small-scale Term Deposit operation took place this week, and it was met with more strong demand. Over $11 billion of bids were entered for just $2 billion worth of deposits, making the stop out rate equal to that of the first auction (27 basis points). The end of the month marked the end of a reserve maintenance period and the end of a quarter, but there were only minor adjustments made to both currency and reserves. Assets remained steady this week, with more adjustments toward normalcy taking place. Discount Window lending declined, credit extended to AIG was repaid and there were no new draws on the central bank liquidity swap lines. Early in the week, the New York Fed announced that it would begin conducting agency mortgage-backed-security (MBS) coupon swap operations to help settle the Fed’s agency MBS purchases that concluded at the end of March. According to the press release, these operations will be used in conjunction with MBS dollar roll operations and are not expected to exceed the unsettled amount of $9.2 billion in Fannie Mae coupon securities. The most recent balance sheet release reported that $2.5 billion of these types of operations had already occurred.
  • 07.02.2010
  • Fourth District Employment Conditions
  • The Fourth District’s unemployment rate decreased 0.1 percentage point to 10.2 percent for the month of May. The dip in the unemployment rate can be attributed to a decreases in the number of people unemployed (−1.7 percent) and the labor force (−0.6 percent).

    The distribution of unemployment rates among Fourth District counties ranges from 7.4 percent (Delaware County, Ohio) to 19.4 percent (Menifee County, Kentucky), with the median county unemployment rate at 11.3 percent. County-level patterns are reflected in statewide unemployment rates, as Ohio and Kentucky have unemployment rates of 10.7 percent and 10.4 percent, respectively, compared to Pennsylvania’s 9.1 percent and West Virginia’s 8.9 percent.

  • 07.01.2010
  • Construction Spending
  • Total construction spending declined less than expected in May, slipping 0.2 percent after gaining 2.3 percent in April. On a year-ago basis, construction outlays improved to −8.0 percent from −9.5 percent in April, and the series is in its best shape since July 2008. May’s mild decline was driven by a 0.5 percent tumble in private spending, with a 0.4 percent decline on the residential side and a 0.6 percent drop on the nonresidential side. Public construction spending grew 0.4 percent during the month, the smallest of three straight increases, and year-over-year growth bumped up from −4.2 percent to −2.9. Year-over-year growth in total private spending currently sits at −10.7 percent, which believe-it-or-not marks substantial progress, considering its position below 20 percent up until the turn of 2010. However, that progress has come almost exclusively from residential construction, which has seen positive 12-month growth now for three months, while 12-month growth in nonresidential outlays appears to have merely stabilized near record lows.
  • 07.01.2010
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) slipped down to an index level of 56.2 in June, down from 59.7 in May and a cyclical high of 60.4 in June. Still, this is well above the diffusion index growth threshold of 50.0 for the manufacturing sector. Also, according to the release, “?given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time.” That said, every component that comprises the PMI except for inventories (which were roughly flat) decreased significantly in June, led by a whopping 7.2 index point decline in new orders to 58.5.