GLOBAL ECONOMIC REPORTER

U.S. Housing Market Continues to Improve

Eugene Liu — Wed, 26 Aug 2009 14:46:46 +0000

The U.S. housing market cotinues to show signs of recovery from the worst downturn in decades. The drastically reduced prices have lead to increased activities for the past few weeks.

Some encouraging signs:

The Mortgage Bankers Association (MBA) reported in its weekly mortgage applications survey that the Market Composite Index (MCI), a measure of the overall mortgage loan application volume, increased 7.5% for the week ending August 21 from the previous week after seasoanl adjustment. Except in the week ending on August 12, the MCI has been increasing steadily since the beginning of July. More than half of the mortgage applications (56.5%) are refinances.

Sales of new single-family houses in July increased at a seasonally adjusted annual rate of 9.6% from June, according to estimate released by the Census Bureau and the Department of Housing and Urban Development.

Sales of existing homes, including single-family, townhomes, condominiums and co-ops, rose 7.2% in July from the previous month and 5.0% from the previous year, according to the National Association of Realtors. July marks the 4th consecutive month of increase.

The Case-Shiller Home Price Index for the 20 largest metro areas in the U.S. increased in June after steady declines since May of 2006. It is still too early to tell whether this is indeed a break in the downward trend. But the heightened housing activities should exert upward pressure on home prices in the coming months.

Manufacturing Business Conditions In New York Continue to Improve

Eugene Liu — Tue, 18 Aug 2009 15:42:43 +0000

The Federal Reserve Bank of New York reported in its latest Empire State Manufacturing Survey that business conditions have improved significantly. The general business conditions index in August increased 13 points to 12.1, the highest level since November 2007. The index was -0.6 in July and -9.4 in June.

Employment indexes were still in the negative territory but recoreded substantial improvements from previous months. The index for number of employees rose 13 points to -7.5 in August, its highest level since October 2008. Average workweek index also climbed, by 13 points to -6.4.

Indexes measuring future business expectations increased significantly in August. The future general business conditions index rose 14 points to 48.2, with 62% of the respondents expecting better conditions in the next 6 months. The future new orders index and the future shipments index both rose by 15 points and 4 points, respectively. Future employment indexes were positive and higher in August than in July, suggesting the pace of hiring may start to increase soon in the New York region.

Housing Starts Slowed in July

Eugene Liu — Tue, 18 Aug 2009 15:19:11 +0000

The U.S. Census Bureau and the Department of Housing and Urban Development announced that privately-owned housing starts contracted 1.0% from June. The seasonally adjusted estimate for July was 581,000 while the estimate for June was 587,000.

The number of building permits for privately-owned hosuing issued in July was also smaller than the number in June. After seasonal adjustment 560,000 permits were issued in July, a 1.8% decline from June.

Single-family housing starts and permits rose in July, however, by 1.7% and 5.8%, respectively, from the month of June.

Producer Price Index Declined 0.9% in July

Eugene Liu — Tue, 18 Aug 2009 13:42:23 +0000

The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for finished goods declined 0.9% in July after seasonal adjustment, following a 1.8% increase in June. All major categories experienced declines in prices. Index for energy goods fell by 2.4%, and prices of foods declined by 1.5%. Crude goods prices fell by 4.5% while prices of the intermediate goods decreased 0.2%.

The lower prices suggest that beginning phase of economic recovery in the U.S. is quite slow-paced. The upside, however, is that inflationary pressure is minimal in the short to medium term.

Changes in U.S. Producer Price Indices (%)

Data source: Bereau of Labor Statistics

U.S. Labor Market Showed Signs of Stablizing in July

Eugene Liu — Fri, 07 Aug 2009 14:44:53 +0000

The U.S. Bureau of Labor Statistics reported today that nonfarm payroll employment declined in July by 247,000 from the previous month, but the rate of decline was the smallest since August of 2008. The unemployment rate was unexpectedly lower in July by 0.1 percentage point. The July unemployment rate was 9.4% while most analysts had expected a 9.6% rate. The number of unemployment persons stood at 14.5 million in July.

Changes in U.S. Nonfarm Payroll Employment (10,000’s)

Data source: Bereau of Economic Analysis

U.S. Economy Midweek Roundup

Eugene Liu — Wed, 05 Aug 2009 15:49:09 +0000

Here is a summary of important data releases this week regarding the performance of the U.S. economy:

Manufacturing Activities Declined at a Slower Pace in July. The Institute of Supply Management (ISM)’s Primary Manufacturing Index (PMI) increased 4.1 points to 48.9. While the reading being below 50 suggests contraction, the increase from last month shows improvement in manufacturing activities. Indices for new orders, production, and supply deliveries showed growth for the month of July. Indices for employment and inventories showed contraction, but the pace of decline has been slower.

Service Industries Remain Weak. The ISM’s Non-Manufacutring Index (NMI) declined 0.6 point to 46.4 in July. July marks the 10th consecutive month of decline in the service sector. Most indices(business activity, new orders, employment, and etc.) showed slight contraction in July.

Mortgage Activities Picked up Pace in Latest Survey. The Mortgage Bankers Association (MBA)’s weekly survey showed increased mortgage application activities. The Market Composite Index, which measures mortgage loan application volume, increased 4.4% from one week earlier after seasonal adjustment. The Refinance Index increased 7.2% from the previous week and has risen 35% above the recent low at the end of June.

U.S. Personal Income Down in June but Consumption Expenditure Up. The Burea of Economic Analysis reported that Disposable Personal Income (DPI) decreased $143.8 billion or 1.3% in June from previous month. In May, DPI increased $168.7 billion or 1.6%. Personal Consumption Expenditure (PCE) rose, however, by $41.4 billion or 0.4% in June. PCE also increased in May by $9.0 billion or 0.1%. The decrease in personal income in June was in part due to provisions in the American Recovery and Reinvestment Act of 2009 that boosted transfer payments more in May than in June.

U.S. 2nd Quarter GDP Fell at a Slower Rate than Expected

Eugene Liu — Fri, 31 Jul 2009 14:50:09 +0000

The U.S. Bereau of Economic Analysis released the advance estimate of the U.S. real Gross Domestic Product in the 2nd quarter. Total output of goods and services fell at an annual rate of 1.0% in the 2nd qurater after inflation adjustment. In the 1st quarter, real GDP fell 6.4%. The percent decrease in real GDP in the 2nd quarter was less than expected. Most analysts expected it to decrease by 1.5%. The seasonally-adjusted level of real GDP in the 2nd quarter stood at an annual rate of $12.9 trillion.

The better-than-expected performance of the U.S. economy signals the end of the recession is in sight and that the 2nd quarter of 2009 could be the end of the downward trend. Survey data on the manufacturing sector and the housing sector have shown encouraging signs of recovery. The stock market has rallied since March 2009 with activity level not seen since November of 2008.

Changes in U.S. Real GDP (Annual Rate %)

Data source: Bereau of Economic Analysis

Fewer Workers Claimed Unemployment Insurance Benefits

Eugene Liu — Thu, 30 Jul 2009 14:24:29 +0000

The Bureau of Labor Statistics released the weekly report on unemployment insurance claims. The unadjusted number of U.I. claims for the week ending July 25 decreased 13.3% to 507,464. The seasonally adjusted number increased 4.5%, however. The total number of workers claiming U.I. beneifts as of July 25 was roughly 6.1 million (not seasaonlly adjusted), a decrease of 196,289 from the previous week. The data suggest the U.S. labor market is slowly improving but the hiring rate remains low.

A Closer Look:

States with largest increases in U.I. claims: California (+4,290), Michigan (+3,654), and Florida (+3,291).
States with largest decreases in U.I. claims: New York (-22,052), Wisconsin (-6,791), Missouri (-6,529), and Pennsylvania (-6,420).

GER Special Report: Impact of the Subprime Mortage Crisis on Central New York’s Economy

Eugene Liu — Wed, 29 Jul 2009 15:05:07 +0000

Summary: This report analyzes how the Central New York economy weathers the current recession. Overall the Syracuse metro area appreaed to be quite resilient to the economic storm that has swept other parts of the nation. Unemployment rate is up but less than the national average. The construction, leisure & hospitality, and education & health services sectors continued to create jobs in Syracuse metro area during the recession, although the manufacturing sector declined substantially. Single-family home prices in Central New York rose during the recession while most other Upstate New York metro areas experienced declines.

Click here for the report.

Metropolitan Area Unemployment Rose in June

Eugene Liu — Wed, 29 Jul 2009 14:26:02 +0000

The Bureau of Labor Statistics reported today that unemployment rates were higher in June than the same time last year in all 372 metropolitan areas. 18 metro areas experienced unemployment rates greater than 15%, 8 of which were in California and 5 in Michigan. 352 metro areas recorded over-the-year declines in nonfarm employment, but 6 areas reported increases. The slumping consumer demand and the restructuring of U.S. auto industry contributed to the increases.

A Closer Look:

Large metro areas with highest unemployment rates: Detroit, MI (17.1%), Riverside, CA (13.7%), Charlotte, NC (12.4%), Las Vegas, NV (12.3%), and Providence, RI (12.1%).
Large metro areas with lowest unemployment rates: Oklahoma City, OK (6.0%), Washington DC (6.6%), and San Antonio, TX (6.9%).

The national unemployment rate in June was 9.5% after seasonal adjustment.