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» Employment
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Although total U.S. nonfarm employment grew in April for the 19th consecutive month with 115,000 new jobs, it was fewer than the 154,000 jobs added in March and marked the slowest rate of growth in six months. The private sector expanded for the 26th consecutive month, adding 130,000 jobs, while government contracted, cutting 15,000 jobs. Driven in large part by 342,000 people exiting the labor force in April, the unemployment rate ticked down to a 39-month low, falling 0.1 percentage points to 8.1 percent. The departure of workers pushed the labor force participation rate down 0.2 percentage points to 63.6 percent, the lowest rate since December 1981. Weekly labor hours held steady at a 58-month high, online recruitment activity increased year-over-year for the 27th consecutive month, planned jobs cuts have fallen in five of the last seven months, and mass layoffs fell to a four and a half year low. |
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» Business Activity
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Boosted by strong auto sales, GDP increased at an annual rate of 2.2 percent in Q1, but down from last quarter’s 3.0 percent and marked the first quarter in the last four in which growth decelerated. The biggest portion of the slowdown came from slower building of inventories by private companies. Still, Q1 marked the 11th consecutive quarter of growth. Improvements in business activity have been widespread with industrial production increasing in 28 of the last 33 months and hovering at a 43-month high, the service sector expanding 28 months in a row, and the Small Business Optimism Index rising in April to the highest level since December 2007. However, durable goods orders dropped sharply in March and have fallen in two of the last three months. |
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» Consumer
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Consumer spending, representing roughly 70 percent of U.S. economic growth, has increased in 30 of the last 35 months. In March, however, its growth decelerated for the first time in four months after rising in February at its fastest pace in seven months. Retail sales increased in March by a solid 0.8 percent and have risen in 17 of the last 20 months, while sales at discounters and department stores grew year-over-year for the 32nd consecutive month but slowed in April due to an earlier Easter and colder than normal weather. The Consumer Confidence Index edged down in April for the second straight month after climbing to a 12-month high in February, and registering at 69.2, it remained well below the 90.0 level that is considered to be a healthy reading. |
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» Financial
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In April, major U.S. stock market indices were either flat or lost ground after rallying to their strongest quarter in more than two years. The Dow Jones Industrial Index was flat in April following a six-month rally, while the S&P 500 fell 0.7 percent in March following its best opening quarter since 1998 and a four-month rally. Ten-year treasury yields dipped and returned near historical lows in April and have fallen in nine of the last 13 months. Historically low yields likely reflect demand for bonds from the Federal Reserve, investors’ ongoing concerns about the strength of the economic recovery, and the continued overhang and uncertainty from the European sovereign-debt issue. Credit conditions have steadily improved in recent quarters as demand for credit strengthened by small businesses in Q1 at the fastest rate in six and half years and in four of the last five quarters; however, credit standards for small businesses actually tightened for the first time in seven quarters. |
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» Housing
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Although housing sales have recently trended downward with new and existing home sales falling in March and in two of the last three months, sales for both are up from a year ago. Still, sales of new homes are hovering near record low levels. Existing home sales, which are up from a year ago, have benefited from historically low mortgage rates, which have descended in 10 of the last 12 months to record lows, and bargain prices for long-term buyers. The inventory of existing homes for sale has fallen in six of the last eight months and remained near January’s five-plus-year low of a 6.0-months supply. Home prices ticked down for the sixth consecutive month, descending to a nine-plus-year low and setting a new low for the current housing cycle. Conversely, the number of building permits issued jumped in March to a three and a half year high after increasing in five of the last six months. |
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» Inflation
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On an annualized basis, the Consumer Price Index (CPI) rose 2.7 percent in April, lower than last month’s 2.9 percent and the lowest annualized rate over the last 12 months. The Core CPI (removing volatile prices of food and energy), however, saw it annualized rate edge up to a three and a half year high, rising to 2.3 percent from 2.2 percent, although still near the Fed’s 2.0 percent target and at a rate that is considered to be moderate. Gasoline prices cooled in April following a three-month rally, while crude oil prices cooled for the second consecutive month following a five-month rally. The recent easing in energy prices as well as 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 through 2014 for stimulating economic growth. The Baltic Dry Index (a barometer of shipping costs) rose in April for the third straight month after plummeting in January to a 3-plus-year low but remained below its level of a year ago. |
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Employment
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Total nonfarm payroll employment expanded for the 19th consecutive month, increasing by 115,000 in April, although it was fewer than the 154,000 jobs that were created the previous month and marked the slowest rate of growth in six months. Job growth during the 19-month expansionary streak has averaged approximately 163,000 jobs per month. Economists believe that between 100,000 and 125,000 jobs must be created per month just to keep up with new workers entering the workforce. Driven by job gains in professional and business services, retail trade, and health care, private-sector payroll employment increased for the 26th straight month, rising by 130,000 in April after an increase of 166,000 the previous month. Approximately 4.2 million jobs have been created in the private sector over the last 26 months. Meanwhile, government employment declined in 17 of the last 18 months, falling by 15,000 jobs in April after shedding 12,000 jobs the previous month. The economy (both the private sector and government) has recovered about 3.7 million of the 8.7 million total jobs lost between the start of the recession in December 2007 and early 2010. In April, the unemployment rate ticked down to a 39-month low after declining in seven of the last eight months, dropping from 8.2 to 8.1 percent. Still, the unemployment rate remained above 8.0 percent for the 39th consecutive month, the longest streak of 8 percent-plus unemployment since the Great Depression. With 342,000 people exiting the labor force in April, the labor force participation rate, the share of working-age people in the labor force, edged down 0.2 percentage points to 63.6 percent, the lowest rate since December 1981. The number of long-term unemployed (jobless for 27 weeks and over) declined from 5.3 million to 5.1 million, representing 41.3 percent of the unemployed population. Since April 2010, the number of long-term unemployed has fallen by 1.6 million.
The Labor Department reported that the average work week for production and nonsupervisory employees on private nonfarm payrolls was unchanged in April for the third consecutive month, holding steady at 33.8 hours, even with its highest level over the last 58 months (since July 2007). Year-over-year, weekly hours increased by 0.1 hour from 33.6 hours.
After falling to a 10-month low, Challenger, Grey & Christmas reported that U.S. companies announced an increase in the number of planned job cuts in April for only the second time in the last seven months. In April, planned jobs cuts rose 7.1 percent to 40,559, up from 37,880 the previous month and were 11.2 percent above its level of a year ago and 26.7 percent above its December 2010 cyclical low of 32,004. Last month’s job cuts were led by the education sector, where school districts continue to be under pressure to cut costs amid massive state and local budget deficits. The pace of downsizing in the education sector, however, is down 32 percent through the year’s first four month from a year ago. The broader government sector is also experiencing a decline in job cuts from a year ago, down 83 percent through the first four months. For this year, consumer products firms are the leading job cutters. CEO of Challenger, Gray & Christmas said, “There have been some concerns that the economy may be headed for a repeat of last year’s spring and summer slowdown. While job gains may indeed hit a lull in the coming months, we do not foresee a sudden upsurge in downsizing activity. Even with the increased job cuts in consumer products, retail, and transportation, the monthly totals remain well below levels that would signal a reversal in the recovery.”
Mass layoff actions, at least 50 employees from a single employer, fell to a four and a half year low (since September 2007) after declining in March for the second consecutive month. In March, mass layoffs declined 1.5 percent to 1,273 from 1,293 the previous month and were 1.0 percent lower than the 1,286 figure of a year ago.
The Monster Employment Index, which represents employer online recruitment activity in the 28 largest U.S. metro markets, rose in April (up 3 points to 146) for only the second time in the last six months. Its 2.1 percent monthly increase is a more modest pace than is usually recorded at this time of the year. Still, the Index has experienced positive year-over-year growth (up 1 point or 0.7 percent in April) for 27 consecutive months. Transportation and warehousing continued to outpace all industries (up 27 percent year-over-year), while retail trade weakened, now recording single-digit annual growth at six percent. Public Administration (down 17 percent year-over-year) continued to record the steepest decline.
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Business Activity
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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.) increased at an annual rate of 2.2 percent in the first quarter of 2012, the first time in four quarters in which growth decelerated. Last quarter, GDP increased 3.0 percent, the fastest rate of growth since Q2 2010. Still, the most recent quarter marked the 11th consecutive quarter of growth during following four consecutive quarterly contractions. Half the increase in GDP came from auto sales and manufacturing, as sales reached a 15-million-unit per year pace in February. The biggest portion of the slowdown came from slower building of inventories by private companies. Government spending also fell 3 percent, including an 8.1 percent drop in defense spending. Growth in business investment also fell, with the biggest cuts coming in spending for new buildings. Investment in equipment and software, which is critical to productivity-enhancing innovation, rose 1.7 percent, the weakest pace since mid-2009.
After jumping to a 41-month high (since August 2008) in January, the Industrial Production Index remained unchanged at 96.6 for the second month in a row in March, although it has increased in 28 of the last 33 months since bottoming at 83.5 in June 2009.
New orders for manufactured durable goods have fallen in two of the last three months, decreasing sharply in March by $8.4 billion, or 4.0 percent, to $203.0 billion but were up 2.9 percent from a year ago, marking the 28th consecutive month of year-over-year increase. Excluding the volatile transportation component (aircraft orders), durable goods orders fell 1.1 percent in March, declining for the second time in the last three months.
The service sector grew (exceeding 50 on the ISM Non-Manufacturing Index) for the 28th month in a row and in 30 of the last 32 months following 11 consecutive months of decline. In April, the Index declined for the second straight month after climbing to a 12-month high in February, declining to 53.5, registering 2.5 points below the previous month although 0.7 points higher than a year ago.
The Small Business Optimism Index rose in April to the highest point since December 2007 and has increased in seven of the last eight months. However, April’s gain only returns the Index to its February 2011 level, indicating that in 14 months, the net gain has been zero. In April, the Index rose 2.0 points to 94.5 from 92.5 the previous month, with the total reading still close to recessionary territory. NFIB Chief Economist said, “While the Index remains historically weak, there was good news in the details of April’s report. Job creation plans, job openings, and capital spending plans all increased. Hopefully, this performance will hold in the coming months. However, GDP and employment growth news has not been good; the Euro debt crisis continues to make news and Congress leaves us on an identical path: huge deficits, a terrifying amount of liquidity at the Fed, and no indication that anything positive will be done. Most likely, there will be only small improvements on Main Street in optimism or hiring and spending this year.”
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Consumer
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Consumer spending, up in 30 of the last 35 months decelerated in its rate of growth for the first time in four months. In March, consumer spending increased by $29.6 billion or 0.3 percent, which followed an increase last month of 0.9 percent, which was the fastest rate of growth in seven months. It did however rise 2.9 percent in the January-March period, the fastest pace for a quarter in more than a year. Consumers could be cutting back because of weak income gains and a slowdown in hiring. After-tax income rose just 0.6 percent in the first three months versus a year earlier. That was the smallest increase in two years. Some economists worry consumers can't keep spending as freely as they did the first three months this year without bigger pay raises.
U.S. retail and food services sales, up in 17 of the last 20 months, increased by 0.8 percent in March after a 1.0 percent increase in February and were up 6.5 percent from a year ago, marking the 29th consecutive month of a year-over-year increase. Consumers spent more on building materials, autos, electronics, furniture, and clothing. March sales were bolstered by hiring, but also unseasonably warm weather, which has added to clothing and home supply sales.
For the 32nd consecutive month, the Thomson Reuters Same Store Sales Index increased year-over-year, but increasing just 0.8 percent in April, following last month’s solid 4.3 percent year-over-year growth. An earlier Easter and later Mother’s Day Holidays cooled April Same Store Sales. Additionally, an unexpected jolt of cold air across much of the U.S. in April kept shoppers away from the malls. Three percent year-over-year growth generally indicates health among U.S. consumers, and the Index has grown at least as much in 12 of the last 13 months.
After jumping last month to a 12-month high in February, the Conference Board Consumer Confidence Index retreated marginally for the second consecutive month, edging down in April by 0.3 points to 69.2 but was still up 3.2 points from a year ago. A reading of 90 generally indicates a healthy economy, but the Index hasn't reached that level since the last recession began in December 2007. The Expectations Index declined to 81.1 from 82.5, while the Present Situation Index improved to 51.4 from 49.9 last month. Director of the Conference Board Consumer Research Center said, “Consumer Confidence was virtually unchanged in April, following a modest decline in March. As was the case last month, the slight dip was prompted by a moderation in consumers’ short-term outlook, while their assessment of current conditions continued to improve. Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic.”
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Financial
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In April, major U.S. stock market indices were either flat or lost some ground after rallying the previous four months and experiencing its strongest quarter in more than two years. The Dow Jones Industrial Index (DJI) was essentially flat in April but was up 3.1 percent from a year ago after rising the previous six months. The S&P 500 Index decreased 0.7 percent in April but was up 2.5 percent from a year ago after experiencing its best first-quarter start since 1998 and rising the previous four months.
Ten-year treasury yields, which have fallen in nine of the last 13 months, closed April at 1.91 percent, down from last month’s close of 2.22 percent; and closed only 19 basis points above the record low of 1.72 percent that was reached near middle of last September. Historically low yields (and thus higher bond prices) likely reflect demand for bonds from the Federal Reserve, investors concerns about the prospects for a strong economic recovery, and overhang and uncertainty from the European sovereign-debt issue. Traders fear that a default by Greece will unsettle lenders to other debt-saddled European nations and potentially cause a wave of default. 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 and continues to anticipate that economic conditions, including low rates of resource utilization and a subdued outlook for inflation over the medium run, are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. The Fed has maintained the target range for the federal funds rate at 0 to 1/4 percent for 28 straight periods.
The net percentage of banks tightening credit standards for small businesses rose by 1.9 percent in Q1 2012, marking the first time in seven quarters that credit standard tightened for small businesses. Q1 snapped the longest streak of credit easing for small businesses in five years (since Q4 2006). Medium to large businesses faced a tightening of credit standards for the first time in nine quarters with a net 5.4 percent facing an easing of credit standards in Q1 2012. Q1 snapped the longest streak of credit easing for medium to large businesses in more than five years (since Q3 2006). On the other hand, demand for credit increased for businesses of all sizes in Q1 2012. Banks reported a strengthening in demand for credit by small businesses in four of the last five quarters with the Senior Loan Officer Survey, registering a 15.1 percent rise in Q1 2012, the fastest rate of improvement in six and a half years (since Q3 2005). Demand figures for medium to large businesses have also improved in four of the last five quarters, increasing 19.6 percent in Q1 2012. An easing of credit standards or rise in demand for credit by businesses may signal faster economic growth.
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Housing
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Existing home sales, which have decreased over the last two months, declined 2.6 percent in March to a seasonally adjusted annual rate of 4.48 million but were 5.2 percent above the 4.26 million annual rate of a year ago. The National Association of Realtors® (NAR) chief economist said, “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases. Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”
Months supply of existing homes based on the current sales rate was flat in March but has fallen in six of the last eight months and is just above January’s five-plus-year low (since April 2006). Total housing inventory at the end of March declined 1.3 percent to 2.37 million existing homes available for sale, which represents a 6.3-month supply at the current sales pace, the same as in February, but down 24.1 percent from an 8.3-months supply a year ago. Listed inventory is 21.8 percent below a year ago and well below the record of 4.04 million in July 2007.
New home sales have decreased in two of the last three months, falling 7.1 percent in March and remaining just 18.0 percent above August 2010’s record low annual rate (since 1963) of 278,000. Year-over-year, new home sales rose 7.5 percent above last year’s annual rate of 305,000. Building permits issued for new housing units have risen in five of the last six months and jumped to a three and a half year high (since October 2008), climbing 6.9 percent in March to an annual rate of 764,000 and were 33.1 percent higher than the annual rate of 574,000 a year ago.
The S&P/Case-Shiller Home Price Index ticked down for the sixth straight month in February, setting a new low for the current housing cycle. The Index ticked down in February by 0.8 percent to 134.20 from 135.23 the previous month and is down 3.5 percent year-over-year and mired at nine-plus-year lows (since October 2002).
Average monthly rates on a 30-year fixed rate have fallen in 10 of the last 12 months, declining in April by 4 basis points to a record low rate (since 1971) of 3.91 percent. A new record low has been established eight times over the last 17 months and in seven of the last eight months. In April, average mortgage rates were 93 basis points lower than they were a year ago.
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Inflation
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The Consumer Price Index (CPI) rose 0.3 percent in March after rising 0.4 percent in February. On an annualized basis, it increased 2.7 percent, lower than last month’s 2.9 percent and the lowest annualized rate over the last 12 months. The indexes for food, energy, and all items less food and energy all increased in March. The gasoline index continued to rise, leading to a 0.9 percent increase in the energy index. The food index rose 0.2 percent as the index for meats, poultry, fish, and eggs increased notably. The Core CPI Index, which removes the effects of volatile food and energy prices, rose in March by 0.2 percent, up slightly from last month’s 0.1 increase, while up a moderate 2.3 percent on an annualized basis, which is the highest annualized rate in three and a half years and is up from last month’s 2.2 percent. Most of the major components increased in March, with the indexes for shelter and used cars and trucks accounting for about half the total increase. The Producer Price Index (PPI) was flat in March after an increase of 0.4 percent in February, and was up just 2.8 percent year-over-year, the lowest annualized rate in 21 months (since June 2010).
The capacity utilization rate, effectively the employment rate of physical capital in the manufacturing, mining, and utilities industries, slipped in March but has risen in 26 of the last 33 months. In March, the capacity utilization rate edged down 0.1 percentage point to 78.6 percent but is 2.1 percentage points higher than prior year. Still, the utilization rate remained below the long-term average (from 1972-2011) of 80.3 percent and is not stoking near-term concerns of inflation.
Energy prices cooled in April following a steady rise in recent months. Crude oil prices fell for the second consecutive month after increasing the previous five months, down 1.3 percent in April and 7.6 percent from a year ago. Following a three-month increase, gasoline prices decreased 2.7 percent in April and were down 3.1 percent from a year ago. At April close, crude oil spot prices were near $103.78 per barrel, and average retail gasoline prices were near $3.89 per gallon.
The U.S. dollar strengthened against the Euro for the second month in a row, up 0.7 in April, while it weakened against the Pound for the fourth consecutive month, down 1.7 percent in April. Year-over-year, it strengthened against both, up 10.7 percent against the Euro and 2.4 percent against the Pound. At April close, 1 Euro yielded 1.32 US dollars, and 1 Pound, 1.63 US dollars.
The Baltic Dry Index (BDI), which measures the daily average of prices in the spot market to ship raw materials in bulk, rallied for the third consecutive month, increasing 23.7 percent in April after retreating the previous three months and plummeting in January to the lowest level in over 3 years. Year-over-year, the Index is still down 9.0 percent.
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| Economic Indicators |  Collapse All |
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| Indicator |
Latest |
Trend |
Date |
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» Employment |
| Unemployment Rate | 8.1% |  | 5/4 |
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 | 115K |  | 5/4 |
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.
| Mass Layoffs | 1,273 | | 4/24 |
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 | 41K |  | 5/3 |
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 | 33.8 |  | 5/4 |
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.
| Monster Employment Index | 146 | | 5/4 |
Monster collects job postings from 1,500 web sites (including Monster.com) and creates an index of job availability. In addition to providing insight on the general strength of the economy, this report gives a sense of how many jobs employers are trying to fill.
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» Business Activity |
| Gross Domestic Product | 2.2% | | 4/27 |
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 | 96.6 | | 4/17 |
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 | 2.9% |  | 5/2 |
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 | 53.5 | | 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.
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| Small Business Optimism Index | 94.5 | | 5/8 |
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 | 0.3% | | 4/24 |
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 | 6.5% | | 4/16 |
An estimate of monthly sales for retail and food service firms, based on a random sample of 5000 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.
| Thomson Same Store Sales Index | 0.8% | | 5/3 |
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.
| Consumer Confidence Index | 69.2 | | 4/24 |
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 | 0.0% | | 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 | -0.7% | | 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 | 0.09% | | 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 risk-free investment given their negligible credit risk.
| 10-Year Treasury Notes | 1.91% | | 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% | | 4/25 |
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 | 1.9% | | 4/30 |
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 55 domestic banks and 23 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 | 15.1% | | 4/30 |
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 55 domestic banks and 23 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 | 4.48 mil | | 4/19 |
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 | 6.3 mo. | | 4/19 |
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 | 134.20 | | 4/24 |
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 not-seasonally adjusted.
| New Home Sales | 328K | | 4/24 |
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.
| 30-Year Fixed Rate Mortgage | 3.91% | | 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.
| Building Permits | 764K | | 4/25 |
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 an annualized rate, is considered a good leading indicator of future trends in housing.
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» Inflation |
| Consumer Price Index | 2.7% | | 4/13 |
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.
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| Producer Price Index | 2.8% | | 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 | 78.6% | | 4/17 |
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 2011 is 80.3 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 | -2.7% | | 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.
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| Currency - Euro & Pound (GBP) | -0.7% | | 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) | 23.7% | | 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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