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| Total U.S. nonfarm employment grew in April for the 31st consecutive month as 165,000 jobs were created, accelerating from the 138,000 jobs that were created the previous month. Encouragingly, job totals were revised upward for the previous two months by a combined 114,000. In April, the private sector expanded for the 38th consecutive month, adding 176,000 jobs, while government contracted for the 26th time in the last 35 months, losing 11,000 jobs. The unemployment rate dropped from 7.6 percent to a 52-month low of 7.5 percent, driven primarily by moderate job creation, enough to offset the 210,000 workers who entered the labor force. Despite the slightly larger labor force, the labor force participation rate held steady at 63.3 percent, the lowest level in nearly 34 years when Jimmy Carter was president. Additionally, planned job cuts fell for the second straight month, and thus far, have been marginally affected by sequestration, mass layoff actions declined in three of the last four months, and average weekly labor hours were nearly at a 69-month high. |
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Total nonfarm payroll employment expanded for the 31st consecutive month, increasing by 165,000 in April, accelerating from the 138,000 jobs that were created the previous month. Additionally, the job figures for February were revised upward from 268,000 to 332,000 and upward for March from 88,000 to 138,000. Job growth during the 31-month expansionary streak has averaged approximately 179,000 jobs per month. Economists believe that approximately 125,000 jobs must be created per month just to keep up with new workers entering the workforce. Led by job gains in professional and business services (+73,000), food services and drinking places (+38,000), temporary health services (+31,000), and retail trade (+29,000), private-sector payroll employment increased for the 38th straight month, rising by 176,000 in April after gaining 154,000 the previous month. Approximately 6.8 million jobs have been created in the private sector over the last 38 months. Meanwhile, government employment has declined in 26 of the last 35 months, losing 11,000 jobs in April after losing 16,000 jobs the previous month. Over this 35-month period, government employment has fallen by about 1.1 million. The economy (both the private sector and government) has recovered about 6.2 million of the 8.7 million total jobs lost between the start of the recession in December 2007 and February 2010.
The unemployment rate dropped in April for the third straight month, falling from 7.6 to 7.5, representing a 52-month low. The unemployment rate remained below 8.0 percent for the eighth consecutive month after hovering above 8.0 percent the previous 43 months, the longest streak since the Great Depression. The labor force participation rate, the share of working-age people in the labor force, held steady at a mere 63.3 percent, matching the lowest level since Jimmy Carter was president nearly 34 years ago (May 1979) when the country was in the midst of stagflation. The number of long-term unemployed (jobless for 27 weeks and over) fell from 4.6 to 4.4 million, representing 37.4 percent of the unemployed population. Since April 2010, the number of long-term unemployed has fallen by about 2.3 million.
The Labor Department reported that the average work week for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 33.7 hours in April, just below March’s 69-month high (highest since June 2007), and was unchanged from its level of a year ago.
Challenger, Grey & Christmas reported a decrease for the second consecutive month in the number of planned job cuts announced by U.S. companies. In April, planned jobs cuts dipped 22.6 percent to 38,121, down from 49,255 the previous month, and was down 6.0 percent from its level of a year ago and just 19.1 percent above December 2010’s cyclical low. Retail saw the highest number of job cuts announced in April with 5,897 but that was down significantly from the 16,445 last month. Aerospace and defense firms announced 2,927 job cuts last month, more than 65 percent of which were attributed to federal spending cuts or concerns over sequestration. CEO of Challenger, Gray & Christmas, Inc. said, “The economic slowdown that began late in the third quarter and is expected to turn into another summer slump has yet to result in increased or widespread downsizing. The biggest concern is that consumers, who had been holding up the economy for so many months, are starting to scale back their spending as wages continue to stagnate. This spending shift is evident in largest retail job cut announced in April, which resulted from the sudden closure of all Sears and Walmart portrait studios. Most private-sector firms have not been directly impacted by sequestration yet, due to the fact that government contracts are typically assigned well in advance and may be months or years away from completion. However, as we can see by early job cutting activity, companies are already taking steps to address the impact of future spending cuts.”
Mass layoff actions, involving at least 50 employees from a single employer, declined in March for the third time in the last four months. Mass layoffs actions decreased 6.0 percent to 1,377, down from 1,422 the previous month, and were up just 3.6 percent from a year ago and 4.9 percent above February 2012’s cyclical low.
Economic Indicators
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| GDP growth accelerated to 2.5 percent in Q1 2013 following a very modest expansion in the previous quarter of 0.4 percent, the slowest rate of growth in seven quarters. The first quarter pickup in GDP growth was fueled by stronger consumer spending, which rose at the fastest pace in two years, and the buildup of business inventories, which contributed a full percentage point to GDP. A sharp decline in federal defense spending, now down in 10 of the last 11 quarters, created a drag of 0.6 percentage points to GDP. Improvements in business activity have been widespread as industrial production jumped to a five-year high and has increased in 36 of the last 45 months, and the service sector has expanded 40 straight months. Conversely, durable goods orders decreased 5.8% in March but have risen in eight of the last 11 months. The Small Business Optimism Index edged down in March and is hovering just two points above its three-year low, encumbered by the high percentage of business owners (more than 75 percent) who expect business conditions to flatten or worsen in the next six months. |
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According to the advance estimate, real gross domestic product or GDP, (the output of goods and services produced within the U.S.) grew at an annual rate of 2.5 percent in the first quarter, accelerating from 0.4 percent, which had been the slowest rate of growth in 7 quarters, or nearly two years. The pickup was fueled by stronger consumer spending and increased business stockpiling that was partly offset by a drop in government spending. Consumer spending increased at a 3.2 percent annual rate in the first quarter, the fastest pace in two years, as Americans saved less. Business investment also picked up, but at a slower pace than in the fourth quarter, and business stockpiling of products contributed 1.0 percentage point to GDP after falling the previous quarter. Government spending, meanwhile, fell 4.1 percent, largely because of an 11.5 percent decline in federal defense. Defense outlays have fallen in 10 of the last 11 quarters, although the Q1 drop was smaller than the 22.1 percent drop (largest in 40 years) in the previous quarter.
Advancing for the fourth time in five months, the Industrial Production Index jumped to a five-year high in March, increasing by 0.4 points to 99.5. The Index has risen in 17 of the last 23 months and in 36 of the last 45 months since bottoming at 83.5 in June 2009.
New orders for manufactured durable goods decreased in March for the second time in three months, falling $13.4 billion, or 5.8 percent, to $216.0 billion, but rose in eight of the last 11 months and 0.5 percent from a year ago, marking the 37th year-over-year increase in the last 39 months. Excluding the volatile transportation component (aircraft orders), durable goods orders fell 1.4 percent in March, declining for the second time in six months on this basis.
The service sector grew (exceeding 50 on the ISM Non-Manufacturing Index) for the 40th month in a row following an 11-month decline. In April, the Index decelerated for the second straight month, registering 53.1, which is 1.3 points lower than the previous month’s reading and 0.6 point lower than last year’s reading.
Following a three-month stretch of modest gains, the Small Business Optimism Index inched down in March, falling 1.3 points to 89.5, just 2.0 points above its three-year low and down 3.0 points from a year ago. Among the greatest declines in the Index were plans to increase employment, plans to increase inventory, and sales expectations. In the 44 months of economic expansion since the beginning of the recovery in June 2009, the Index has averaged 90.6, putting the March reading below the mean for this period. Since the commencement of National Federation of Independent Business’s (NFIB’s) monthly surveys in 1986, the Index has been below 93.0 a total of 56 times; 37 of which have occurred since the recovery began. NFIB Chief Economist said, “After another false start, small-business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce—the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer.”
Economic Indicators
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| Consumer spending, representing roughly 70 percent of U.S. economic activity, increased for the fifth consecutive month and in eight of the last nine months. Conversely, U.S. retail sales actually dropped for the first time in five months and fell at its fastest rate in nine months. The boost to overall consumer spending was attributed to the elevated costs in utilities that Americans paid to heat their homes during an unseasonably cold March. However, in many other categories Americans cut back on spending in March including auto sales and gas stations from lower gas prices as well as on less volatile categories including department stores, electronics retailers, and sporting goods outlets. The Thomson Reuters Same Store Sales Index advanced year-over-year for the 44th consecutive month in April with growth accelerating for the first time in three months thanks to improved weather and the shift in the Easter holiday. After dipping close to a 16-month low in March, the Consumer Confidence Index advanced to a five-month high in April; although registering at 68.1, it remained well below the 90.0 level that is considered to be a healthy reading and was down 0.6 points from a year ago. |
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Consumer spending, up in eight of the last nine months and 41 of the last 47, rose in March for the fifth straight month following Superstorm Sandy and a slowdown in income growth that was experienced in October. In March, consumer spending advanced by 0.2 percent, or $21.0 billion, after increasing the previous month by 0.7 percent. Consumer spending, which accounts for about 70 percent of economic activity received a boost from higher incomes to help offset an increase in payroll taxes from the expiration of the Payroll Tax Holiday at the start of the year. Consumer spending rose in the January-March quarter at the fastest pace in more than two years. Spending on services drove the increase as Americans paid more to heat their homes during an unseasonably cold March. Unfortunately, higher spending on utilities does not signal consumer confidence the way purchases on household goods, such as new appliances or furniture, usually do.
Personal income, a key pillar of consumer spending, rose a moderate 0.2 percent in March after jumping 1.1 percent the previous month, marking the 37th gain in the last 41 months. Recent volatility in personal income (up 2.6 percent in December, down 3.6 percent in January, up 1.1 percent in February) can be attributed to the payout of dividend and bonus payments in December, which companies accelerated to beat the January rise in income tax rates on high-earners, as well as the expiration of the Payroll Tax Holiday at the start of January.
U.S. retail and food services sales, up in 6 of the last eight months and 23 of the last 31, dropped in March at the fastest pace in nine months after jumping 1.1 percent the previous month. Still, retail sales were up 2.8 percent from a year ago and have risen year-over-year in 41 consecutive months Consumers cut back across a wide range of categories. Auto sales declined 0.6 percent, and gas station sales declined 2.2 percent due in part to lower prices. Additionally, core sales (excluding volatile categories of autos, gas, and building materials) dropped 0.2 percent. Department stores, electronics retailers, and sporting goods outlets all reported lower sales.
For the 44th consecutive month, the Thomson Reuters Same Store Sales (SSS) Index increased year-over-year, advancing 3.8 percent in April, accelerating from last month’s sluggish year-over-year rate of 1.5 percent. Three percent year-over-year growth generally indicates health among U.S. consumers, and the Index has grown at least as much in 21 of the last 30 months. Improved weather played an important part in boosting April retail numbers, and retailers benefitted from the shift in the Easter holiday.
After dipping in March close to a 16-month low, the Conference Board Consumer Confidence Index rose to a five-month high in April, advancing by 6.2 points to 68.1, but was down 0.6 points from a year ago. A reading of 90 generally indicates a healthy economy, but the Index hasn't reached that level since the recession began in December 2007. The Present Situation Index increased to 60.4 from 59.2, while the Expectations Index improved to 73.3 from 63.7 last month. Director of Economic Indicators at The Conference Board said, “Consumer Confidence improved in April, as consumers’ expectations about the short-term economic outlook and their income prospects improved. However, consumers’ confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike, and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.”
Economic Indicators
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| Major U.S. stock market indices climbed to new record highs in April for the second consecutive month and have risen for five consecutive months. The Dow Jones Industrial Index, up in 15 of the last 19 months, rose 1.8 percent in April and 12.3 percent from a year ago, while the S&P 500, up in 14 of the last 17 months, rose 1.8 percent in April and 14.3 percent from a year ago. 10-year treasury yields, though, fell for the third straight month and closed the month only 27 basis points above its record low rate. Historically low yields likely reflect demand for bonds from the Federal Reserve as well as its near zero-interest rate policy, investors’ ongoing concerns about the strength of the economic recovery, and the continued overhang and uncertainty from the European sovereign-debt issue. Demand for credit strengthened in Q1 among small businesses as well as medium to large businesses for the seventh time in the last nine quarters. Credit standards for small businesses eased in Q1 at the fastest pace in six quarters and for the 10th time in the last 11 quarters, while they eased for medium to large businesses in 12 of the last 13 quarters. |
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In April, major U.S. stock market indices rallied for the fifth consecutive month and climbed to new record highs for the second consecutive month. The Dow Jones Industrial Index (DJI), up in 15 of the last 19 months, rallied for the fifth straight month to reach an all-time high, rising 1.8 percent in April, and was up 12.3 percent from a year ago. The S&P 500 Index, up in 14 of the last 17 months, rallied for the sixth consecutive month to reach an all-time high, also rising 1.8 percent in April, and was up 14.3 percent from a year ago.
10-year treasury yields retreated in April for the third month in a row, falling 18 basis points to close the month at 1.67 percent. With the retreat, rates closed the month just 27 basis points above the record low rate of 1.40 percent, which was established towards the end of last July. Historically low yields, and thus higher bond prices, likely reflect demand for bonds (U.S. treasuries and mortgage-backed securities) from the Federal Reserve as well as its near zero-interest rate policy, investors’ concerns about the prospects for a strong economic recovery, and overhang and uncertainty from the European sovereign-debt issue. Amidst global uncertainly and turmoil, U.S. Treasuries continued to remain the world’s favored refuge by investors.
In its last meeting, the Fed stated that it will maintain the target range for the federal funds rate at 0 to 1/4 percent as long as the unemployment rate remains above 6.5 percent, inflation between one and two years ahead is projected to be no more than 2.5 percent, and longer-term inflation expectations continue to be well anchored. The Fed has maintained the target range for the federal funds rate at 0 to 1/4 percent for 36 consecutive periods.
The net percentage of banks tightening credit standards for small businesses fell in Q1 2013 by 7.7 percent (highest in 6 quarters), marking the 10th time in the last 11 quarters that credit standards have eased for small businesses. The recent easing for small businesses has stood in strong contrast to the previous 14 quarters in which credit standards tightened in every quarter but one. Medium to large businesses have faced an easing of credit standards in 12 of the last 13 quarters with a net 7.4 percent facing an easing of credit standards in Q1 2013. The recent easing for medium to large businesses has stood in strong contrast to the previous 10 quarters when credit standards tightened in each quarter. Moreover, demand for credit improved for businesses of all sizes in Q1 2013. A net 15.4 percent of small businesses registered improved demand for credit in Q1 2013 with demand strengthening in seven of the last nine quarters according to the Senior Loan Officer Survey. Demand figures for medium to large businesses have improved in seven of the last nine quarters as well, strengthening 19.1 percent in Q1 2013 after decreasing in the previous quarter by 6.2 percent. An easing of credit standards or rise in demand for credit by businesses may signal faster economic growth.
Economic Indicators
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| Housing sales were mixed in March as sales of new homes advanced for the second time in three months and were up over 18 percent from a year ago, while existing home sales edged down for the first time in three months. Still, existing home sales were up more than 10 percent from a year ago and remained near a three-year high. Home sales have benefited from affordable prices, rising rental rates, and historically low mortgage rates. Mortgage rates retreated in April following a three-month rise and have fallen in 17 of the last 24 months and remain just above December’s record low. Furthermore, the recent upswing in demand for homes has kept the inventory of existing homes for sale at the current sales pace near eight-year lows, boosted the number of building permits nearly 18 percent from a year ago, and lifted home prices in February for the 13th consecutive month. Still, home prices remained nearly 28 percent below their peak and were mired at nine-plus-year lows. |
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Existing home sales decreased slightly following a two-month rise, edging down 0.6 percent in March to a seasonally adjusted annual rate of 4.92 million, but near November’s three-year high and 10.3 percent above the 4.46 million annual rate of a year ago. The National Association of Realtors® (NAR) chief economist said, “Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity. In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents."
Following a seven-month dip to a seven-plus year low (lowest since April 2005 near the peak of the housing boom), month’s supply of existing homes based on the current sales rate rose in March for the second straight month. Total housing inventory at the end of March increased 1.6 percent to 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace, up 2.2 percent from 4.6 months in February, but down 24.2 percent from 6.2 months a year ago. Listed inventory remains 16.8 percent below a year ago and 52.2 percent below the record of 4.04 million in July 2007.
New home sales advanced in March for the second time in three months, rising 1.5 percent to an annual rate of 417,000 and were up a robust 18.5 percent year-over-year. January’s annual rate was 50 percent above August 2010’s record low annual rate (since 1963) of 278,000. After jumping to a 56-month high, building permits issued for new housing units fell in March, declining by 3.4 percent to an annual rate of 907,000, but were up a notable 17.9 percent from an annual rate of 769,000 a year ago.
Since sagging to its cyclical low in January 2012, the S&P/Case-Shiller Home Price Index increased in February for the 13th consecutive month, rising 1.2 percent to 149.80 from 147.97, and is up 9.4 percent year-over-year. Still, the Index was 27.5 percent below its peak and remained mired at nine-plus year lows (lowest since November 2003).
Following a three-month increase, average monthly rates on a 30-year fixed rate mortgage dropped 12 basis points in April to 3.45 percent. Mortgage rates have fallen in 17 of the last 24 months and were just 10 basis points above December’s record low rate (since 1971) of 3.35 percent and 46 basis points lower than they were a year ago. A record low has been established 14 times over the last 29 months and in 13 of the last 20 months. Since 1971, the 30-year fixed rate has been below 4.0 percent in only 16 months, and those have all been in the past 16 months.
Economic Indicators
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| Driven by a decline in gasoline prices in March, the Consumer Price Index (CPI) dropped on a monthly basis for the first time in four months, falling 0.2 percent, while the annual rate fell from 2.0 percent to an eight-month low of 1.5 percent. The Core CPI (removing volatile prices of food and energy) edged down on an annual basis from 2.0 percent to a 20-month low of 1.9 percent, below the Fed’s 2.0 percent target rate that is considered to be moderate. In April, gasoline prices cooled for the second straight month, while crude oil prices declined for the second time in three months. A recent easing of energy prices, subdued annual CPI, tame core inflation, and below normal utilization rates for physical capital should continue to temper inflationary concerns, enabling the Fed to keep interest rates at historically low levels for some time to stimulate economic growth. The Baltic Dry Index (a barometer of shipping costs) retreated for the third time in the last five months and was down considerably from its level of a year ago. |
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The Consumer Price Index (CPI) fell on a monthly basis for the first time in four months, slipping 0.2 percent in March after spiking 0.7 percent the previous month (largest gain since June 2009). The monthly decrease was primarily due to a 4.4 percent decline in the gasoline index. The indexes for electricity and fuel oil declined as well, as the energy index fell 2.6 percent after a 5.4 percent increase the previous month. On an annual basis, the Index slid to an eight-month low of 1.5 percent, down from 2.0 percent the previous month and below the Fed’s 2.0 percent inflation target. The Core CPI Index, which removes the effects of volatile food and energy prices, increased in March by only 0.1 percent after increasing by 0.2 percent the previous month, while the annual rate ticked down 0.1 percentage point to a 20-month low of 1.9 percent. The indexes for shelter, used cars and trucks, medical care, personal care, and airline fares all rose in March and slightly offset declines in the indexes for apparel, household furnishings and operations, and tobacco. Led by a sharp decline in gasoline prices, the Producer Price Index (PPI) plunged at the fastest rate in 10 months, decreasing 0.6 percent in March. On an annual basis, the Index fell from 1.7 percent to an eight-month low of 1.1 percent and was far below the cyclical peak of 7.1 percent in July 2011.
The capacity utilization rate, effectively the employment rate of physical capital in the manufacturing, mining, and utilities industries, jumped in March to a 56-month high, rising by 0.2 percentage points to 78.5 percent. Although the capacity utilization rate has risen in 32 of the last 45 months and was 1.2 percentage points higher than prior year, it remained below the long-term average (from 1972-2012) of 80.2 percent and is not stoking near-term concerns of inflation.
Energy prices cooled in April as gasoline prices retreated for the second consecutive month, while crude oil prices retreated for the second time in three months. Crude oil prices fell 5.3 percent in April, but were down 12.3 percent from a year ago. Gasoline prices fell 3.4 percent in April, and were down 7.8 percent from a year ago. At April close, WTI crude oil spot prices were near $91.00 per barrel, and average retail gasoline prices in the U.S. were near $3.59 per gallon.
In April, the Euro strengthened against the U.S. dollar for the seventh time in nine months, up 2.0 percent, while the Pound strengthened against the U.S. dollar for the third time in five months, up 2.1 percent. Year-over-year, the Euro weakened against the U.S. dollar, down 1.3 percent, and the Pound weakened too against the U.S. dollar, down a sharper 4.6 percent. At April close, 1 Euro yielded 1.31 U.S. dollars, and 1 Pound, 1.55 U.S. dollars.
The Baltic Dry Index (BDI), which measures the daily average of prices in the spot market to ship raw materials in bulk, retreated in April for the third time in the last five months, declining 4.6 percent, and was down a considerable 24.8 percent from a year ago.
Economic Indicators
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| Economic Indicators |  Collapse All |
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» Employment |
| Unemployment Rate | 7.5% |  | 5/3 |
The unemployment rate for all civilian workers represents the number of unemployed as a percent of the civilian labor force. To qualify as unemployed, a worker must be actively searching as well as physically able to work, but unable to find employment in the previous 4 week period.
| Non-Farm Payrolls | 165K |  | 5/3 |
Nonfarm payroll employment is a monthly estimate of the number of paid employees working full-time or part-time in U.S. business and government agencies. Trends in this figure are considered an indicator of strength and direction of the U.S. economy: increases indicate a growing economy and decreases point to a slowing or contracting economy.
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| Mass Layoffs | 1,337 | | 4/23 |
The Mass Layoff Statistics (MLS) program is a federal-state program that tracks major job cutbacks by industry, using data from each state's unemployment insurance database.
| Challenger, Gray, & Christmas - Layoffs Survey | 38K | | 5/2 |
A monthly report published by outplacement firm Challenger, Gray, & Christmas on the number of announced large company layoffs. This report can help gauge the strength of the job market, which can be useful in gauging the strength of the overall economy.
| Weekly Labor Hours | 33.7 |  | 5/3 |
Average weekly hours of production and nonsupervisory workers on private nonfarm payrolls is tracked monthly by the Bureau of Labor Statistics. A rise in weekly labor hours reflects an increase in labor utilization of those employed.
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» Business Activity |
| Gross Domestic Product | 2.5% | | 4/26 |
GDP is the broadest measure of economic activity. Reported quarterly, GDP growth is the percent change in annualized total economic output. The major elements measured by GDP include consumption, investment, net exports, government spending and inventories. One popular definition of a recession is two consecutive quarters of negative percentage change in GDP, although this is not a hard and fast rule.
| Industrial Production | 99.5 | | 4/16 |
The Industrial Production (IP) Index, which is tracked by the Federal Reserve Board, measures the real output of the manufacturing, mining, and electric and gas utilities industries. The reference or base period for the index is 2007 at a level of 100. These aforementioned sectors are highly sensitive to interest rates and consumer demand; and thus, industrial production can be an important indicator for forecasting future Gross Domestic Product (GDP) and economic performance.
| Durable Goods Order | 0.5% | | 5/3 |
Durable Goods Orders primarily measures business spending on products expected to last more than three years such as machinery and computer equipment. The year over year change in order levels is a gauge of future growth for the manufacturing industry and a predictor of GDP growth. A subset of the data, nondefense capital goods orders, is considered a good indicator of business investment spending.
| ISM Non-Manufacturing Index | 53.1 | | 5/3 |
This is a composite indicator of three factors (employment trends, prices and new orders) in industries outside of manufacturing such as agriculture, construction, transportation, and retail trade. An index value above 50 signals a favorable increase in these factors and a value below 50 signals an unfavorable decrease.
| Small Business Optimism Index | 89.5 | | 4/9 |
This is a monthly index based on a survey of small business owners regarding 10 factors including their future plans for hiring, capital investment, and inventory building, as well as their expectations for future sales, profits, economic trends and credit market conditions. It is a broad indicator of current business conditions in the small business sector.
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» Consumer |
| Consumer Spending | 0.2% | | 4/29 |
A measure of monthly goods and services purchased by household consumers. The dollar figure represents an annualized, seasonally adjusted level of consumption. The percent change from month to month indicates growth (if positive) or contraction (if negative) in household consumption – a major component of GDP.
| Retail Sales | 2.8% | | 4/12 |
An estimate of monthly sales for retail and food service firms, based on a random sample of 5,000 companies. The monthly figure is adjusted for seasonality and holiday/trading day differences, and we record the percentage change from the current month compared with the same month a year ago as indicator of trends in discretionary consumer spending.
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| Thomson Same Store Sales Index | 3.8% | | 5/9 |
The monthly SSS index provides a snapshot of U.S. consumer spending relative to expectations ahead of the monthly comps reporting cycle. The index tracks 29 retailers across a variety of specialties, including discounters, department, apparel, teen/kids, and drug stores. Costco® currently has the strongest weighting in the index after Wal-Mart® ceased reporting monthly same store sales results in April 2009.
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| Personal Income | 0.2% | | 4/29 |
A measure of income received from wages and salaries, dividends and interest, rental income, and other business sources. The percent change from month to month indicates growth (if positive) or contraction (if negative). Personal income, a key pillar of consumer spending, tends to display a rising trend during periods of economic expansion, and show a stagnant or slightly declining trend during recessionary times.
| Consumer Confidence Index | 68.1 | | 4/30 |
This index is based on a survey of households regarding current and future business and employment conditions, as well as expectations for future income. It indicates consumers’ level of optimism and can affect their likelihood to make purchases – a major component of GDP. A declining trend in this index may indicate a slowdown in consumer spending and a slowdown in economic growth.
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» Financial |
| Dow Jones Industrial Average | 1.8% | | 4/30 |
An index of 30 of some of the largest and most widely held stocks in America. The Dow Jones Industrial Average is the most popular index used to track the health of the U.S. equities market.
| S&P 500 | 1.8% | | 4/30 |
An index containing 500 large cap and predominantly American stocks. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched index of large-cap US stocks. It is considered to be a bellwether for the US economy.
| 13-Week Treasury Bills | 0.05% |  | 4/30 |
T-Bills are short term U.S. government issued securities that mature in one year or less from their issue date. They are considered to be a nearly credit risk-free investment given their negligible default risk.
| 10-Year Treasury Notes | 1.67% | | 4/30 |
Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Usually, bond market investors are forward-looking and this means interest rates on Treasury securities will move in the direction of Fed policy with a lead. As a result, one is more likely to see rising interest rates on Treasury yields during an expansion (and falling yields during economic slowdowns) in advance of policy changes by the Federal Reserve. Generally, stock prices and bond yields (interest rates) move inverse of each other.
| Federal Reserve Rates | 0.25% | | 5/1 |
The Federal Open Market Committee consists of the seven Governors of the Federal Reserve Board and five Federal Reserve Bank presidents. The FOMC meets eight times a year in order to determine the near-term direction of monetary policy. These meetings occur roughly every six weeks and and can be one of the most influential events for the markets. The interest rate set by the Fed, the federal funds rate, serves as a benchmark for all other rates.
| Tightening/(Easing) of Credit | -7.7% | | 5/6 |
The Senior Loan Officer Opinion Survey on Bank Lending Practices addresses changes in the supply of C&I (Commercial and Industrial) loans to businesses. The results reported are based on responses from 60 domestic banks and 24 U.S. branches and agencies of foreign banks. Positive percentages represent a net tightening of credit, while negative percentages represent a net easing. An increase in the net percentage of banks tightening credit standard reflects a decrease in the supply of credit available to businesses to finance business operations (payrolls and inventories) and expansion (plant/equipment and mergers/acquisitions); and thus, may signal slower economic growth.
| Demand for Credit | 15.4% | | 5/6 |
The Senior Loan Officer Opinion Survey on Bank Lending Practices addresses changes in the demand for C&I (Commercial and Industrial) loans to businesses. The results reported are based on responses from 60 domestic banks and 24 U.S. branches and agencies of foreign banks. Positive percentages represent a net strengthening of demand, while negative percentages represent a net weakening. A rise in demand for credit reflects an increase in financing needs for business operations (payrolls and inventories) and expansion (plant/equipment and mergers/acquisitions); and thus, may signal faster economic growth.
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» Housing |
| Existing Home Sales | 4.92 mil | | 4/22 |
This is an annualized, seasonally adjusted figure based on the number of existing home and condominium sale transactions that closed during the month. Month to month changes are considered a good measure of demand in the residential real-estate sector.
| Existing Home Inventory | 4.7 mo. |  | 4/22 |
This is an annualized, seasonally adjusted figure based on the number of existing home and condominium sale transactions that closed during the month. Month to month percentage changes are considered a good indicator of activity trends in the housing market. The months supply figure represents the number of months required to sell all current existing home inventory at the current pace of sales activity. The lower this figure, the greater the need for new housing starts and construction activity.
| S&P / Case-Shiller Home Price Index | 149.80 | | 4/30 |
The S&P / Case-Shiller Index is a monthly index that tracks home price trends in 20 major markets across the country. Prices shown are seasonally adjusted.
| New Home Sales | 417K | | 4/23 |
This is an annualized, seasonally adjusted figure based on the number of new single family home transaction commitments (e.g. sales for which an agreement was signed) during the month. The level of monthly sales is considered a good indicator of activity trends in housing. Together with existing home sales, trends in housing activity can act as a leading indicator for consumer purchases of household items such as appliances and furniture.
| Building Permits | 907K | | 4/24 |
The Building Permits Survey (BPS) produces estimates of the number of permits issued for new housing units each month. The level of permits issued, which is shown at a seasonally adjusted annualized rate, is considered a good leading indicator of future trends in housing.
| 30-Year Fixed Rate Mortgage | 3.45% | | 4/30 |
The 30-year fixed rate loan is the most common loan in the lending markets, and the 30-year interest rate is a good measure for the availability of credit to eligible borrowers in the home lending market. Changes in the mortgage rate impact both the level of new and existing home sales with a few months of lag time.
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» Inflation |
| Consumer Price Index | 1.5% | | 4/16 |
The Consumer Price Index is a measure of the average price level of a fixed basket of goods and services purchased by consumers. The CPI is divided into two measures, with the ‘core’ rate excluding volatile food and energy costs. The year/year change in core CPI is seen by most economists as the best measure of the underlying inflation rate.
| Producer Price Index | 1.1% | | 4/12 |
The Producer Price Index measures a basket of finished goods purchased by businesses to sell to consumers. The PPI is used as an early indicator of inflation, since it gives some insight into the costs incurred by businesses to produce their goods and services. The most important indicator is the underlying core PPI number, which excludes volatile food and energy prices.
| Capacity Utilization | 78.5% | | 4/16 |
The Federal Reserve Board constructs estimates of capacity and capacity utilization for industries in manufacturing, mining, and electric and gas utilities. For a given industry, the capacity utilization rate is equal to an output index (seasonally adjusted) divided by a capacity index. Effectively, it is the employment rate for physical capital. When the economy is healthy, total capacity utilization should be near 80.0 percent. The long-term average rate from 1972 through 2012 is 80.2 percent. If it gets up close to 85 percent it is a serious sign that the economy is overheating and that inflation will soon be a very serious issue. Therefore, capacity utilization beyond a certain threshold may signal inflation is on the rise.
| Fuel Prices | -3.4% | | 4/30 |
The Energy Information Administration publishes a weekly survey of fuel prices gathered from a sampling of service stations across the country. The association also publishes weekly WTI crude oil spot prices per barrel.
| Currency - Euro & Pound (GBP) | 2.0% | | 4/30 |
The chart below shows the exchange rate of the U.S. Dollar with the Euro and British Pound. The vertical axis shows the number of U.S. dollars equal to one Euro and Pound. When the graph is falling, the dollar is strengthening, since it takes fewer dollars to purchase one euro. When the graph is rising, the dollar is weakening. The strength of the dollar is an important economic indicator as a strong dollar generally means bad news for American companies as their products will be more expensive in relation to foreign competitors, but good news for consumers as a stronger dollar results in lower prices for imported goods and services.
| Baltic Dry Index (BDI) | -4.6% | | 4/30 |
The Baltic Dry Index is a daily average of prices in the spot market to ship raw materials in bulk. It represents the cost paid by an end user to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The Baltic Exchange is similar to the New York Mercantile Exchange in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. This index can be used as an indicator of the direction of overall global economic activity because it measures the changing demand for shipping capacity (which is generally limited and increases very slowly over time); consequently, small changes in demand can lead to much larger changes in shipping rates. The BDI can also be a good indicator of the future direction of inflation.
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