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Jan 03, 2020
New York City closed 2019 on a less-than-stellar note, according to the December ISM-New York Report on Business. The top-line current business conditions index dropped more than 10 points to 39.1, its worst result in more than 3½ years. This means that the index has now spent six of the past eight months at or below its neutral threshold of 50. Other indicators were more promising, with the six-month outlook index nudging slightly higher to 64.2, marking its third straight monthly increase, and the employment index increasing by double digits. The prices paid index continues to creep lower, while current and expected revenues both sit at or near their neutral thresholds.
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Dec 27, 2019
Agricultural prices increased 4.6% from October to November thanks to a rise in livestock prices, especially poultry and eggs. Prices for crops also increased. At 88.6, the Agricultural Prices Received Index was 0.2% higher than in November 2018. The crop production index rose 1.7% in November but was down 1.8% from a year earlier. The livestock production index increased 7%, putting it 4.2% higher than in November 2018.
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Dec 20, 2019
Real consumer spending growth continued near its recent trend in November. Real spending grew 0.3% following growth of 0.1% in October and 0.2% in September and August. Durable goods spending was strongest, rising 1.2%, while nondurable goods spending lagged, growing 0.1%. Prices rose 0.2%, the same as in October, but nominal spending rose 0.4% after rounding. The saving rate inched up to 7.9% from 7.8% in October as income growth also gained ground.
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Dec 20, 2019
The headline PCE deflator rose 0.2% in November, in line with our forecast. Food prices were flat after rising 0.2% in October and remaining flat in September. Energy goods and services prices rose for the second consecutive month, increasing 0.8% and offsetting previous declines. The core PCE deflator, which excludes food and energy, increased 0.1% for the fourth consecutive month. On a year-ago basis, the core PCE deflator ticked down a notch to 1.6%, compared with 1.7% in October. All told, inflation pressures remain muted, keeping the possibility of another rate cut alive. We expect the next rate cut to occur in June.
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Dec 20, 2019
Growth in nominal personal income accelerated to 0.5% in November after rising by a revised 0.1% in October. This figure outstripped both the consensus and Moody's Analytics forecasts for a 0.3% increase. Disposable income growth jumped to 0.5% on a nominal basis but fell to 0.4% when adjusted for inflation. Wage and salary growth fell to 0.4% in November, a hair below the 0.5% increase achieved in October. Proprietors' income rose 1.9% following a -1.1% decrease the prior month. Rental income rose 0.5%, and receipts on assets increased 0.8%. The personal saving rate rose to 7.9% from 7.8%.
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Dec 19, 2019
Household financial burdens are low and very modestly declining. The financial obligations ratio fell 4 basis points to 15.03% in the third quarter and was down 6 basis points over the preceding year. The second-quarter reading was revised up from 15.03% to 15.07%. The debt service ratio fell 2 basis points to 9.69% from its prior level and was down 1 basis point over the last year. The prior level was revised up 2 basis points. Debt service hit a record low, with the decline coming from the mortgage debt service ratio. The mortgage ratio dipped 2 basis points in the quarter while the consumer ratio was unchanged. Growth in debt payments and obligations slowed marginally in the quarter while income growth improved.
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Nov 29, 2019
The pace of GDP growth slowed markedly in the third quarter as exports fell. Canada's GDP advanced 1.3% at an annualized rate, only slightly exceeding our November baseline forecast. Consumer spending made a modest contribution, while fixed investment lent surprising strength to the headline on a pickup in residential construction. However, a sharp decline in inventories thwarted a more significant increase in total investment.
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Nov 28, 2019
The trade deficit widened to C$9.9 billion in the third quarter from C$6.7 billion in the second. After narrowing in the second quarter, the goods deficit expanded again due to exports of intermediate food, basic industrial and chemical products, and aircraft and other transport equipment. The surplus with the U.S. narrowed over the quarter, while the deficits with Hong Kong, Saudi Arabia, and South Korea worsened. The services surplus helped moderate the worsening trade in goods, however. Commercial services exports increased, and the travel deficit improved thanks to an increase in education-related travel. The short-term outlook remains downbeat for Canadian exports.
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Nov 28, 2019
Moody's Analytics nominal house price index was up 5.9% on a year-ago basis in the third quarter, compared with the revised 5.8% gain in the prior three months. Over the past couple of years, nominal house prices have been rising at rates between 5% and 7%, though the nominal rate has slowed this year. Nominal prices are rising most in the Americas, while they are falling in Oceania. Real housing prices gained only 1.2% y/y, slightly up from 1.1% in the second quarter. Growth in real house prices has decelerated over the past couple of years.
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Nov 26, 2019
Factory activity in the Richmond Federal Reserve District slowed in November, according to the Fifth District Manufacturing Index. The composite index fell to -1 after signaling a modest expansion in October. Demand components contracted with shipments falling to -2 and volume of new orders falling to -3. Despite the slowdown, manufacturers increased headcounts and six-month expectations improved from last month.
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Nov 26, 2019
New-home sales slipped slightly in October, falling 0.7% from the revised September total, but are still up by 31.6% from October 2018. Decreased sales in the South and Northeast offset moderate increases in the Midwest and West. However, thanks to a large upward revision in September, there is still a substantial net gain in sales over the past two months. The number of homes on sale barely moved. The new-home market is relatively tight compared with last year but is looser than the existing-home market. The median sales price of new single-family homes increased slightly but is still down year over year.
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Nov 26, 2019
The Federal Housing Finance Agency Purchase-Only House Price Index increased 5.1% in September on a year-ago basis, 1.1% on a quarterly basis, and 0.6% on a monthly basis. House price growth remains healthy and close to the 5% mark. Steady demand and tight inventories are propelling house price gains. Out of the nine census divisions on an annual basis, the East South Central division had the strongest growth while the West South Central division had the weakest.
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Nov 21, 2019
Existing-home sales increased in October and are now closer to their peak from earlier this year. Total sales increased 1.9% in October and are up 4.6% from October 2018. The increase was regionally lopsided, however, with a strong increase in sales for the South offsetting slight decreases in the Northeast and West. Also, the gain was entirely for single-family sales, with condo/co-op sales being flat. Inventory fell again in October, and the market continued to tighten and exert upward pressure on prices.
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Nov 19, 2019
There were no big surprises in the state and regional labor market results for October, which, like the U.S. results, showed that job growth early in the fourth quarter was solid and that factory weakness had not yet spilled over into service sector hiring. Compared with September, about the same number of states reported employment rose, but only about half as many states (four) reported unemployment rates fell. The largest over-the-year percentage gains in nonfarm employment occurred in Utah, Florida and Arizona. Alabama and Colorado reported the largest over-the-year unemployment rate declines, while the largest increase occurred in Mississippi. Jobless rates in Alabama, California, Maine and South Carolina set new series lows.
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Nov 04, 2019
The Moody's Delinquency Tracker total delinquency rate fell 18 basis points to 3.12% in September. This month's decline stems largely from the retail property type. Only two of the six property types declined this month. Meanwhile, improvement across the country was broad-based with all four regional delinquency rates declining. The resolutions outweighed newly delinquent loans, meaning the balance of delinquent conduit loans decreased.
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Sep 19, 2019
Initial claims for unemployment insurance benefits should continue to ease recession concerns. In new filings there is no sign of a significant issue in either the labor market or the broader economy. Jobless claims inched higher in the week ended September 14, from a revised 206,000 (previously 204,000) to 208,000. Claims remain low and suggest that even though business confidence has weakened noticeably, it hasn't led firms to lay off workers. The four-week moving average slipped. The new data include the September payroll reference week and suggest job growth remained solid. Continuing claims declined by 13,000 to 1.661 million in the week ended September 7 and the insured unemployment rate remained at 1.2%.
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Sep 18, 2019
Housing starts recovered in August, gaining 12.3% above the revised July estimate and being 6.6% above total starts from August 2018. The increase in starts was led by multifamily construction, though single-family starts also showed a strong gain. Starts increased in three of the four census regions, with only the West lagging. Housing permits also increased in August, implying that the next two months should also see rising housing starts.
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Sep 17, 2019
Net long-term capital flows increased for the fourth straight month in July. Net inflows totaled $84.3 billion, down from inflows of $100.6 billion in June. Net purchases of long-term U.S. securities by foreign residents totaled $72.3 billion. Private foreign investors accounted for the bulk of the purchases, with net purchases totaling $83.8 billion. Official foreign investors were net sellers of U.S. securities in July, reducing their holdings by $11.5 billion. Meanwhile, U.S. residents sold $12 billion of long-term foreign securities.
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Sep 17, 2019
Total U.S. household borrowing tacked on 0.33% in August, equivalent to $44 billion. All consumer lending categories except home equity and student loans experienced growth. Total dollar delinquency rates increased by 0.08 percentage point to 2.39%.
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Sep 17, 2019
Homebuilder sentiment inched up 1 point to 68 in September. The builder outlook is unarguably positive, with the index reaching its highest mark this year, and is now 18 points above the 50-point threshold, signaling a healthy market. Out of the three subcomponents, current sales and buyer traffic improved this month while sales expectations declined slightly. Three of the regional housing market indexes increased while the fourth index held constant. Builders will remain in good shape in the short term.
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Sep 17, 2019
Industrial production rose 0.6% in August, its third increase in the last four months. The decrease for July was revised upward. August's print was more than our above-consensus forecast. The results were positive across industries. Mining led the top-line print, rising 1.4%, while manufacturing advanced 0.5%. Above-average temperatures in August drove a 0.6% increase in utilities production. Total capacity utilization rose 0.4 percentage point and that for manufacturing gained 0.3 percentage point.
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Sep 17, 2019
Canadian manufacturing sales suffered a worse-than-expected loss in July as shipments of metals and motor vehicles contracted. Sales tumbled 1.3% from the prior month, leaving them 1.9% below their year-ago level. Manufacturers suffered another setback as the U.S.-China trade war weighs on global demand and confidence sags.
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Sep 16, 2019
President Trump's trade war with China and a potential Brexit have undermined global business confidence. Sentiment is down sharply across the globe since this time last year and is consistent with a global economy that is struggling to grow. Businesses' assessments of present conditions and their expectations regarding the outlook into early next year are especially negative.
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Sep 16, 2019
Manufacturers in New York remain cautiously optimistic based on the September Empire State Manufacturing Survey. The top-line general business conditions index fell from 4.8 to 2, keeping it just slightly above its neutral threshold for a third consecutive month. Components were mixed, with demand indicators inching lower but employment measures moving in the right direction following some signs of trouble in August. The forward-looking general business conditions index fell 12 points to 13.7, indicating that some pessimism is beginning to creep into factories' expectations.
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Sep 16, 2019
A significant outflow of portfolio investment from Canadians in July generated the largest net monthly outflow of funds in 2019. Foreign investors' positions were little changed, with a net reduction of C$1.2 billion in Canadian securities. However, Canadian investors added C$12.5 billion in foreign securities to their holdings, the largest monthly increase in nearly a year.
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Sep 16, 2019
The global economy has grown at a steady clip over the past couple of quarters, but trade tensions between the U.S. and some of its trading partners and the fading impact of the fiscal stimulus in the U.S. have weighed on growth. According to our estimates, global real GDP rose 2.5% at an annualized rate in the second quarter, compared with the 3.1% annualized gain in the prior three months. Global growth has clearly slowed over the past year, as it was up 2.6% on a year-ago basis in the second quarter, compared with 3.3% in a comparable period in 2018.
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Sep 11, 2019
Wholesale inventories began the third quarter with a soft gain. Stockpiles rose 0.2% in July following a revised 0.1% decline in June (previously unchanged). The performance was split among the categories. Durable goods slipped 0.2% over the month while nondurable goods surged 0.8%. Wholesale sales increased 0.3% in July, keeping the inventory-to-sales ratio level at 1.36.
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Sep 05, 2019
The four-week moving average in our U.S. policy uncertainty index edged higher, rising from 143 to 143.5 in the week ended August 30. The four-week moving average had been trending higher since the trade tensions between the U.S. and China took a turn for the worse in early May. The trade tensions are clearly on businesses' minds, as references to trade uncertainty in the Fed's Beige Book remain high. Also, the Challenger Report noted that trade difficulties led businesses to lay off more than 10,000 workers in August.
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Sep 03, 2019
For the first time since the end of the energy rout, the U.S. manufacturing sector is contracting. The ISM manufacturing index fell from 51.2 in July to 49.1 in August, the lowest reading since January 2016 and below the 50 threshold that is consistent with expansion. The details were generally downbeat. The new orders, production and employment indexes all slipped below 50. The supplier deliveries index also declined, but this is an improvement that indicates a softer slowdown in deliveries. The inventories index increased slightly but also remained below the 50 threshold. The good news is that the ISM manufacturing index remains well above its recession threshold of 42.9.
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