Data Updates

Data Updates

July 2011

  • 07.29.2011
  • GDP
  • Real GDP rose at an annualized rate of 1.3 percent in the second quarter, according to the advance estimate by the BEA. While, that would have been a deceleration compared to what we previously knew about the first quarter, it is now an acceleration compared to first quarter growth of just 0.4 percent (more on the revisions in a minute). The (now) acceleration relative to the first quarter primarily reflects a slowdown in import growth, an upturn in federal spending, and an acceleration in real BFI. Importantly, real personal consumption expenditures, which rose 2.1 percent in the first quarter, slowed to a near flat 0.1 percent gain in the second quarter, its smallest quarterly increase since the recession ended. Both durable and nondurable goods consumption decelerated relative to their respective first quarter gains. Durables consumption fell 4.4 percent in the second quarter, relative to a 11.8 percent jump up in the first, while nondurables consumption ticked up just 0.1 percent during the quarter. Services consumption rose 0.8 percent in the second quarter, below its 4-quarter growth rate of 1.1 percent. Real business fixed investment rose 6.3 percent in the second quarter, compared with a gain of 2.1 percent in the first quarter. The acceleration was driven by a rebound in structures investment, which jumped up 8.2 percent after a 14.4 percent decrease in the first quarter. Residential investment also accelerated during the quarter, rising 3.8 percent compared to a 2.5 percent decline in the first quarter. Real import growth slowed from 8.3 percent in the first quarter to 1.3 percent in the second, subtracting just 0.2 percentage points from real GDP growth after subtracting 1.4 percentage points in the first. Real exports rose 6.0 percent in the second quarter and are up 7.9 percent over the past year. Federal government spending rose 2.2 percent in the second quarter, following a 9.4 percent decline in the first. However, state & local government expenditures slipped down 3.4 percent in the second quarter, following a 3.3 percent decrease in the first, and are now down 2.5 percent over the past year (its slowest growth rate since 1981). The “flexible” annual revision took a large chunk out of real GDP growth relative to what we thought we knew. Importantly, the level of real GDP in the second quarter of 2011 is still below its level at the start of the recession. 2008(Q4/Q4) real GDP growth was revised down from −2.8 percent to −3.3 percent, 2009(Q4/Q4) growth was revised down from a 0.2 percent gain to a decrease of 0.5 percent, and 2010(Q4/Q4) growth was actually revised up—from 2.8 percent to 3.1 percent. After the revision, the recession got deeper (from −2.8 percent to −3.5 percent), and the recovery period (since 2009:Q2) was revised down from 2.8 percent to 2.6 percent. Moreover, the recent trajectory in output growth has slowed. Real GDP growth over the last two quarters has grown just 0.8 percent, compared to a 2.4 percent growth rate over the last two quarters of 2010. As for the “source” of the downward revision, real personal consumption appears to have been knocked down the most. Its level as of the first quarter was revised down by roughly a full percentage point. The release also noted that the average annual growth rate from 2007-2010 for real disposable income (which influences consumers ability to consume) was cut in half—from 1.2 percent to 0.6 percent. The savings rate was roughly unchanged.
  • 07.29.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was only slightly revised for the end of July, dropping the preliminary estimate from 63.8 to 63.7. The final July number still represents a sharp decline from June, which came in at an index value of 71.5. Both of the major components of the index fell during the month but were revised up a bit in the final report. Present conditions were estimated at 75.8 in July after a reading of 82.0 in June, getting revised up from 75.3 earlier in the month. Consumer expectations were revised up 0.2 of a point to 56.0 in July, down from 64.8 in June. Shorter-term inflation expectations (1 year ahead) were unchanged in the revisions, remaining at 3.4 percent in July, while longer-term inflation expectations (5 years ahead) added 0.1 percentage point to hit 2.9 percent. Both July estimates of inflation expectations were lower than June, with 1-year and 5-year inflation expectations coming in down 0.4 and 0.1 percentage point, respectively, from the previous month.
  • 07.27.2011
  • Durable Goods
  • New orders for durables slipped down 2.1 percent in June, surprising expectations of a modest increase. Down two out of the last three months, new orders growth appears to be losing some traction as its 3-month annualized growth rate sits at −10.4 percent, compared to its year-over-year growth rate which is still holding up at 7.6 percent. Some of the softness in June can be tied to transportation equipment (both motor vehicles and aircraft orders fell during the month). However, excluding transportation, durables orders edged up just 0.1 percent in June, compared to a 0.7 percent increase in May. An important signal of future equipment and software investment—new orders of nondefense capital goods excluding aircraft—slipped down 0.4 percent in June, following a 1.7 percent gain in May. The series has increased in just two of the past six months and the near term softness is starting to take a toll on its 12-month growth rate—which was knocked down from 11.0 percent to 5.6 percent during the month. Shipments of durables, up five out of the last six months, rose 0.5 percent in June and are up 7.6 percent over the past year. Shipments of nondefense capital goods excluding aircraft rose 1.0 percent in June and are also up 7.6 percent over the past year. Durables inventories, after posting five consecutive monthly gains above 1.0 percent, increased 0.4 percent in June (its smallest monthly increase since March 2010).
  • 07.26.2011
  • Housing Price Indexes
  • On a monthly basis the S&P Case-Shiller Housing Price Index reported that the 10- and 20-city composites increased 1.1 and 1.0 percent, respectively from April to May. Sixteen of the 20 MSAs and both composites posted positive monthly increases. Detroit, Las Vegas, and Tampa were down from April and Phoenix was unchanged. Although the monthly data is encouraging, on an annual basis 19 of the 20 MSAs were down. Washington D.C. was the only MSA to post a positive gain of 1.3 percent, while Minneapolis fared the worst posting a double-digit decline of 11.7 percent from May 2010. Overall, the 10-city composite was down 3.6 percent and the 20-city composite was down 4.5 percent. This is the second consecutive month of generally increased housing prices, which was expected due to seasonal increases to the demand for housing; however it is still uncertain as to whether these improvements are sustainable.

    According to the FHFA housing price index, U.S. house prices rose 0.4 percent on a seasonally-adjusted basis from April to May. The previously reported 0.8 percent increase in April was downwardly revised to a 0.2 percent increase. On an annual basis U.S. housing prices are down 6.3 percent from May 2010. Throughout the nine census divisions monthly prices changes ranged from a 1.0 percent decline in the West South Central Division to a 2.0 increase in the Mountain Division. The U.S. index is 19.6 percent below its April 2007 peak and roughly the same as the January 2004 index level.

  • 07.26.2011
  • New Home Sales
  • Sales of new single-family homes fell 1.0 percent in June to a seasonally-adjusted annual rate of 312,000. June’s decline follows a downwardly revised 0.6 percent decline in May. On a year-over-year basis, sales of new single-family homes were up 1.6 percent in June. Sales of single-family homes rose in the Midwest and South regions, increasing 9.5 percent and 3.4 percent, respectively while sales declined in the Northeast and West regions, falling 15.8 percent and 12.7 percent. The median sales price of new single-family homes rose 5.8 percent in June to $235,200. The number of new single-family homes for sale continued to decline in June, falling 1.2 percent to 165,000 units, representing 5.6 months of supply at the current sales rate.
  • 07.20.2011
  • Existing Home Sales
  • According to the National Association of Realtors, NAR, sales of existing single-family homes were stagnant from May to June at a seasonally adjusted rate of 4.24 million units sold. While this represents a zero percent change from month to month, sales remain 7.4 percent below the 4.58 million units pace of June 2010. The inventory of single-family homes rose 5.9 percent in June to 3.31 million units available for sale, which represents a 9.5-month supply at the current sales pace. The median price of existing single-family homes rose 0.6 percent to $184,600 from this time last year. Regionally, the South and Midwest posted modest gains of 1.8 and 1.1 percent which were offset by declines of 1.9 and 3.5 percent in the West and Northwest, respectively. The general decline in all existing home sales has mainly been attributed at an unexpected spike in contract cancellations due to tight credit and low appraisals. Despite these constraints homes sales are expected to pick up in the remainder of the year as consumer uncertainty diminishes and more distressed homes become available.
  • 07.19.2011
  • Housing Starts
  • Single-family housing starts rose 9.4 percent in June, following a downwardly revised 0.7 increase in May. The pace of single-family housing starts improved to 453,000 annualized units. Moreover, June’s performance marks the first year-over-year increase in single-family housing starts since May 2010, increasing 0.4 percent over June 2010’s pace. Single-family housing starts improved in the Midwest and South regions, increasing 22.5 percent and 0.8 percent respectively, while declines were seen in the Northeast and West regions, falling 20.4 percent and 6.4 percent, respectively. Single-family housing permits also improved in June, increasing 0.2 percent to 407,000 annualized units. However, despite June’s improvement, single-family housing permits remain 3.8 percent below June 2010’s pace.
  • 07.15.2011
  • CPI
  • The headline CPI decreased at an annualized rate of 2.6 percent in June, though is still up 3.6 percent over the past year. June’s decrease was due in large part to a sizeable decline in gasoline prices (down 57 percent at an annualized rate). Household energy prices decreased as well during the month, falling 13.3 percent. Food prices rose 2.4 percent in June, the series’ smallest monthly increase so far this year. Excluding food and energy prices, the (“core”) CPI rose 3.1 percent in June (higher than expected), following a 3.5 percent increase in May. Over the past 3 months, the index has risen 2.9 percent, compared to its longer-term (12-month) growth rate of 1.6 percent. The largest component of the core index—owners’ equivalent rent—rose 1.9 percent in June, a modest acceleration over its increase of 1.2 percent in May (though that doesn't appear to be the “culprit” for the uptick in the core). Price increases in lodging away from home, new and used autos, and apparel accounted for much of the increase. The index for lodging away from home followed up its 40 percent spike up in May (its largest price increase since October 2005) by increasing 42.6 percent in June. Car and truck rental, a particularly noisy series, rose 51 percent in June, more than rebounding from a 42 percent decrease in May. New vehicle prices, which jumped up 14 percent in May, rose 7.5 percent in June and have risen 8.3 percent over the past six months, compared to a growth rate of -0.5 percent over the six months prior to that. Also, used car prices jumped up 22 percent during the month, the series’ largest monthly increase since December 2009. Apparel prices jumped up 18.3 percent in June (its largest monthly increase since mid-1990), in part as the seasonally-adjusted index for men’s apparel posted its largest one month jump up in the history of the series (which dates back to 1947), rising 35.4 percent. Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland were much more subdued than the core CPI in June, as the median CPI rose 1.7 percent and the 16 percent trimmed-mean CPI increased just 1.2 percent. Over the past 3 months, the median and trim are up 2.2 percent and 2.4 percent, respectively, at least 0.5 percentage points below the near-term growth rate in the core CPI.
  • 07.15.2011
  • Industrial Production
  • Industrial production rebounded from a 0.1 percent (nonannualized) decrease in May, rising 0.2 percent in June. Over the past year, industrial production is up 3.4 percent. Manufacturing production was flat in June and virtually unchanged during the second quarter, as supply chain disruptions stemming from the Japanese earthquake curtailed production of autos and related industries. Motor vehicle and parts production slipped down 2.0 percent in June and fell 4.4 percent on the quarter as a whole. Excluding autos, manufacturing ouput rose 0.2 percent in June and is up 3.7 percent over the past year. Outside manufacturing, mining output continued its recent string of relatively robust growth, increasing 6.6 percent in June and 6.1 percent over the past year. Also, electric and gas utilities output rose 11.6 percent in June after falling 21.4 percent in May. Capacity utilization, after edging down a combined .34 percentage points over the past two months, ticked up a tenth of a percent in June to 76.7 percent, still well below pre-recession level of 81.1 percent.
  • 07.15.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment fell precipitously in July, dropping 7.7 points to 63.8, its lowest level since March 2009. The overall decrease came as the consumer expectations component plummeted from 64.8 June to 55.8 in July. The current conditions component also slipped during the month—from 82 to 76.3. Meshing with the current dour news on employment, the release noted: “Consumers reported much less favorable news about jobs. Twice as many consumers reported hearing about new job losses compared with job gains in early July. Just two months ago, more consumers reported hearing news about job gains than job losses.” Median year-ahead inflation expectations continued to abate, decreasing 0.4 percentage points to 3.4 percent and are now down 1.2 percentage points from a recent high in April. Longer-term (5- to 10-year) median inflation expectations ticked down from 3.0 percent in June to 2.8 percent in July.
  • 07.14.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods fell at an annualized rate of 4.3 percent in June, largely as energy prices dipped roughly 30 percent during the month after an 8-month string of double-digit increases. Still, the headline PPI is up 7.3 percent over the past year. Producer prices for finished consumer foods partially reversed a 16 percent drop in May, rising 7.8 percent in June. Excluding volatile food and energy items, (“core”) producer prices jumped up 4.1 percent in June, its largest monthly increase since January, pushing up its 12-month growth rate from 2.1 percent in May to 2.3 percent in June. Further back on the production line, pricing pressure was relatively subdued for these series, as core intermediate goods rose just 3.8 percent, and core crude goods—which are up 25 percent over the past year—rose 13.7 percent in June.
  • 07.14.2011
  • Retail Sales
  • Retail sales ticked up 0.1 percent in June, reversing a 0.1 percent decrease in May. The 3-month annualized growth rate in retail sales, which had been in double digits as recently as March, has now slipped down to 0.9 percent. Interestingly, sales at motor vehicle and parts dealers, which dipped down 1.8 percent in May, only partially rebounded in June (rising 0.8 percent). Retail sales excluding motor vehicles and parts dealers were flat in June, and while its year-over-year growth rate is just a tenth under 8.0 percent, the 3-month annualized trend in the series stands at just 2.4 percent. Apart from autos, sales performance was mixed across broad categories in June. Sales at building material, garden equipment, and supplies dealers led the gainers, rising 1.3 percent in June. Sales at clothing stores rose 0.7 percent during the month, after a flat May. On the other hand, sales at gasoline stations fell 1.3 percent (likely as prices in June dipped). And notably, sales at furniture and home furnishing stores, electronics and appliance stores, and sporting goods, hobby, book and music stores all decreased for the third consecutive month. An alternative gauge of retail spending—“core” retail sales (sales excluding autos, building supplies, and gas stations)—edged up just 0.1 percent in June, its smallest increase over the past six months. Importantly, its near-term (3-month annualized) growth rate, at 2.0 percent, is much weaker than its longer-run (12-month) growth rate of 5.5 percent, and appears to just be roughly keeping pace with underlying inflation.
  • 07.13.2011
  • Trade Prices
  • In June, U.S. import prices fell 0.5 percent, marking the first monthly decrease since June of last year. Still, import prices are up 13.6 percent on a year-over-year basis, the swiftest growth rate since August 2008. The decrease from June to May was largely driven by declining fuel prices: petroleum fell 1.6 percent and natural gas dropped 1.4 percent. Although petroleum prices declined month-to-month, they were up 49.8 percent on a yearly basis.

    Non-oil import prices fell a modest 0.1 percent, relative to a 0.4 percent increase in May. While June marks the first monthly decline since July 2010, non-oil import prices continue to increase year-over-year (up 4.9 percent). The decrease from May to June can be attributed to a 0.4 percent decline in the prices of nonfuel industrial supplies and materials and a 1.9 percent decrease in foods, feeds, and beverages. The falling prices in these categories offset the effects of increasing prices for automotive vehicle (up 0.3 percent) and consumer goods (up 0.1 percent).

    U.S. export prices rose 0.1 percent in June after falling 0.2 percent in May. Year-over year, export prices rose 9.9 percent marking the largest increase since July 2008. June’s advance was mainly driven by rising agricultural export prices (up 0.7 percent) given that nonagricultural prices remained flat from May to June.

  • 07.12.2011
  • International Trade
  • The U.S. trade deficit expanded 15.1 percent to $50.2 billion in May, dropping by $6.6 billion from $43.6 billion in April. Imports increased $5.6 billion to $225.1 billion, while exports declined $0.9 billion to $174.9 billion. May’s 2.6 percent climb in imports stems from a 10.3 percent increase in petroleum imports. Both volume and prices ($108.70 per barrel, highest since August 2008) contributed to the increase in petroleum imports which in turn caused a widening of the overall petroleum deficit. The increase in the petroleum deficit accounts for nearly two-thirds of the expansion of the overall trade balance. Increases in auto imports, posting gains of $0.6 billion in May after declining 2.8 billion the previous month, reflect fading disruptions from the Japanese disaster. Year-over year imports rose 15.9 percent. Exports declined 0.6 percent in May, the first drop since February 2011. Although exports fell from April to May, they are up by 15 percent on a year-over-year basis. May’s decline in exports stems from decreases in industrial supplies (down 5 percent) and consumer goods (down 2.8 percent).
  • 07.08.2011
  • The Employment Situation
  • Nonfarm payrolls were essentially flat in June, growing just 18,000 and falling well short of consensus expectations. Revisions to the past two months lowered nonfarm payroll estimates for April and May by a total of 44,000. Factoring in the two-month gain through revisions to government payrolls of 24,000, the private sector lost a total of 68,000 from their April and May totals. Since averaging a gain of 220,000 nonfarm payrolls from February to April, the past two months have added an average of 22,000 jobs. Goods-producing payrolls were virtually unchanged in June (up 4,000) following a similarly flat May (up 3,000). Construction payrolls fell 9,000 in June, while mining and logging payrolls rose by 7,000. Manufacturing payrolls gained 6,000 during the month, continuing its slowdown from the first quarter. Private service-producing employment rose by 53,000 in June, matching the 70,000 gain in May after strong gains in April and March. Retail trade employment remained a fairly noisy series in June, adding 5,200 payrolls after a 4,300 decline in May (the noise is characteristic of either seasonal adjustment issues or mismeasurement). Professional and business services added 12,000 jobs in June, fewer than the 90,000 added in April and May, but did so after the decline in temporary help services continued for the third consecutive month. Temporary help services payrolls have fallen by 19,100 over the past three months. Education and health services hit a bump in June, coming in flat after averaging a gain of 35,000 over the past 12 months. Revisions also knocked a total of 30,000 payrolls off of education and health services employment gains over April and May. Leisure and hospitality rebounded from a 24,000 decline in May by adding 34,000 payrolls in June.

    Average weekly hours of private employees dropped slightly from 34.4 in May to 34.3 in June, and the index of aggregate hours decline from 93.9 to 93.6. The breadth of the expansion, as indicated in the 1-month diffusion index, did not recover from May’s 54.1 reading. June’s index was reported as 53.4, indicating that just over half of private industries added to their payrolls during the month. Turning to the household side of the report, the unemployment rate edged up for the second consecutive month, going from 9.1 percent to 9.2 percent in June. The unemployment rate increase came in as the increase in the number of unemployed outpaced the decline in the labor force. There was also a move up in the other measures of labor underutilization (U4, U5 and U6) that include discouraged and marginally attached workers in the underlying definitions. The employment-to-population ratio fell from 58.4 to 58.2, matching its low during the cycle. The labor force participation rate fell to its lowest value since 1984, falling to 64.1 percent.

  • 07.08.2011
  • Consumer Credit
  • Total consumer credit outstanding rose for the eighth consecutive month in May, increasing 0.21 percent. The improvement follows a downwardly revised increase of 0.24 percent in April. On a year-over-year basis, total consumer credit outstanding rose for the second consecutive month, increasing 1.0 percent. May’s improvement was likely driven by the increase in revolving accounts, which rose 0.42 percent (the first monthly increase in revolving credit outstanding since December of 2010). Non-revolving accounts rose 0.11 percent in May, following a 0.40 percent increase in April. The slowdown in non-revolving consumer credit in May was likely driven by lower auto sales, which fell from a seasonally-adjusted annual rate of 13.1 million units in April to a seasonally-adjusted annual rate of 11.8 million units in May.
  • 07.01.2011
  • Construction Spending
  • Private construction spending slid down 0.4 percent in May and is now down 5.8 percent over the past year, a marked improvement from May 200, when spending was down 24.3 percent on a year-over-year basis. Contributing to the top-side monthly decline was a 2.1 percent drop in residential spending that was only partially offset by a 1.2 percent increase in non-residential spending. The drop in residential was caused by a 3.8 percent decline in spending on home improvements and a 2.1 percent decline in spending on multi-family properties while single-family spending was essentially flat. Over the year, however, multi-family spending (down 6.8 percent) is slightly outperforming single family spending (down 11.9 percent). On the non-residential side, there are no real standout sectors. While lodging, office, amusement and recreation, transportation, power, and manufacturing all posted small to moderate increases over the month, none of them are showing monthly gains on a consistent basis.
  • 07.01.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised down slightly in late June—from an index value of 71.8 to 71.5. While the headline estimate was little changed during the revision, the underlying components shifted markedly. The current conditions component was revised up from 79.6 to 82.0 in June, reportedly on easing gasoline prices, and is now 0.1 index point above May’s level. On the other hand, the expectations component was revised down sharply, from 66.8 to 64.8. Median year-ahead inflation expectations edged were revised down from 4.0 percent to 3.8 percent in late June, continuing to recede from a recent high of 4.6 percent in April. Longer-term (5- to 10-year) median inflation expectations were unrevised at 3.0 percent, up 0.1 percentage point from May.
  • 07.01.2011
  • Federal Reserve Balance Sheet
  • The second round of asset purchases came to a close at the end of June. Since the start of that program, combined with the reinvestment of principal payments on current security holdings, the Fed has purchased over $700 billion of Treasury securities. A statement was released by the Fed following the most recent Federal Open Market Committee meeting that gave the New York Fed the authority to continue reinvesting principal payments on the Fed’s asset holdings in order to maintain the size of the balance sheet. Also of note, the Maiden Lane II portfolio has remained fairly constant throughout June, with no securities being offered since the first week of the month. Prices on the asset classes held in the portfolio have been trending down since the beginning of March, when the Treasury began selling a similar mix of assets. On June 29, the Fed acknowledged that it had extended the U.S. dollar liquidity swap arrangements through the beginning of August 2012. The swap arrangements are held with Canada, Switzerland, England, and the European Central Bank, and they allow foreign central banks to get dollar-denominated credit that they can lend to commercial banks in their country. Those swaps arrangements have not been utilized since March, but may be necessary as the Greek debt crisis unfolds. More preparatory reverse repurchase operations were conducted in the middle of June, primarily to incorporate the newest set of government-sponsored enterprise counterparties.
  • 07.01.2011
  • ISM Manufacturing
  • The ISM’s Manufacturing Purchasing Managers Index (PMI) rebounded modestly in June—rising 1.8 index points to 55.3—after plummeting 6.9 points to 53.5 in May, perhaps reinforcing that some of the recent softness in manufacturing was tied to transitory factors. At a level of 55.3 the PMI is still indicating a manufacturing sector expansion, though at a somewhat slower pace than through the first quarter of this year (which averaged 61.1). All of the broad categories that comprise the PMI improved in June, with the largest improvement coming from inventories—which increased 5.4 points to 54.1 during the month. The employment index increased by 1.7 points to 59.9, though remains below April’s level of 62.7. The new orders and production indexes rose 0.6 points and 0.5 points, respectively in June. Also, the supplier deliveries index (which increases when delivery times slow), rose from 55.7 to 56.3 in June. The prices index (which is not seasonally adjusted and does not enter into the overall PMI) continued its recent decline, slipping from 76.5 in May to 68.0 in June, and is down 17.5 points from its level in April.