Current-Cast® Report

• Real GDP increased at an annual rate of 1.2% in the first quarter of 2017, according to the “second” estimate by the Bureau of Economic Analysis. In the fourth quarter of 2016, real GDP increased 2.1%. In the advance estimate, released a month ago, the increase in real GDP was 0.7% for the first quarter of 2017.
• Real final sales of domestic product (GDP less change in private inventories) increased 2.2% in the first quarter, in contrast to an increase of 1.1% in the final quarter of 2016.
• Real gross domestic income (GDI) increased 0.9% in the first quarter of 2017, compared with a decrease of 1.4% in the final quarter of 2016.
• The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.0% in the first quarter, compared with an increase of 0.3% in the fourth quarter of 2016.
• The price index for gross domestic purchases increased 2.6% in the first quarter of 2017, compared with an increase of 2.0% in the previous quarter.
• The personal consumption expenditures (PCE) price index increased 2.4%, compared with an increase of 2.0%. Excluding food and energy prices, the PCE price index increased 2.1%, compared with an increase of 1.3%.
• Corporate profits from current production decreased $40.3 billion in the first quarter of 2017, after an increase of $11.2 billion in the fourth quarter of 2016. Profits of domestic financial corporations decreased $28.4 billion in the first quarter, in contrast to an increase of $26.5 billion in the fourth quarter. Profits of domestic nonfinancial corporations decreased $18.4 billion, compared with a decrease of $60.4 billion. The rest-of-the-world component of profits increased $6.5 billion, compared with an increase of $45.1 billion.
• New orders for manufactured durable goods decreased 0.7% in April, while shipments decreased 0.3%. Excluding transportation, new orders decreased 0.4%, while shipments decreased 0.2%. Year-to-date new orders were up 2.2% from the same period a year ago, while shipments were up 1.6%.
• Retail inventories for April were down 0.3% from the previous month, but were up 3.0% from April 2016, according to the U.S. Census Bureau.
• Wholesale inventories for April were down 0.3% from the previous month, but were up 1.8% from April 2016.
• The international trade deficit in goods was $67.6 billion in April, up $2.5 billion from $65.1 billion in March, according to the U.S. Census Bureau.  Exports of goods for April were $125.9 billion, $1.1 billion less than March exports. Imports of goods for April were $193.4 billion, $1.4 billion more than March imports.
• April existing home sales decreased 2.3% to an annualized rate of 5,570 thousand units, according to the National Association of Realtors. The April figure was 1.6% above the April 2016 figure. There were 1,930 thousand homes for sale at the end of the month. This represents a supply of 4.2 months at the current sales rate, compared to 4.6 in April of 2016. The median sales price of existing homes sold was $244.8 thousand, 6.0% above April 2016.
• April new home sales decreased 11.4% to an annualized rate of 569 thousand units. The April figure was 0.5% above the April 2016 figure. The median sales price of new houses sold was $309.2 thousand, 3.8% below April 2016.
• U.S. house prices increased 0.6% in March, following a 0.8% increase in the previous month, according to the Federal Housing Finance Agency’s (FHFA). For the 12 months ending in March, U.S. house prices rose 6.2%.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving lower. 30-year fixed-rate mortgage averaged 3.95% for the week ending May 25, down from last week when it averaged 4.02%. A year ago at this time, the 30-year rate was 3.64%. 15-year fixed-rate mortgage averaged 3.19%, down from last week when it averaged 3.27%. A year ago at this time, the 15-year rate was 2.89%.
• Mortgage applications increased 4.4% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 19th.
• The advance figure for initial claims for unemployment insurance increased a thousand to 234 thousand in the week ending May 20. The 4-week moving average was 235.25 thousand, a decrease of 5.75 thousand from the previous week’s revised average. This is the lowest level for this average since April 14, 1973 when it was 232.75 thousand. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 13 was 1,923 thousand, an increase of 24 thousand from the previous week’s revised level. The 4-week moving average was 1,930.25 thousand, a decrease of 16 thousand from the previous week’s revised average. This is the lowest level for this average since January 19, 1974 when it was 1,920.75 thousand.
• The Thomson Reuters/University of Michigan Index of Consumer Sentiment for May was little changed from April. The Index was 97.1 in May, compared with 97.0 in April and 94.7 in May of last year.
• The Chicago FED National Activity Index (NAI) increased to 0.49 in April, from 0.07 in March. The Index was negative 0.09 in April of 2016. The index’s 3-month moving average increased to 0.23 in April from 0.0 in March.
• The Chicago Fed’s National Financial Conditions Index (NFCI) remained at negative 0.82 in the week ending May 19. The Index was negative 0.68 a year ago. the adjusted index (ANFCI), which removes the variation in the individual indicators attributable to economic activity and inflation, edged up to negative 0.44, from negative 0.49.
• Manufacturers in the Fifth District were somewhat less upbeat in May than in the prior three months, according to the latest survey by the Federal Reserve Bank of Richmond. The manufacturing index decreased to 1 in May, from 20 in April and 22 in March. On the other hand, activity in the service sector improved further in May, with the revenues index reaching 34 – its highest mark since 1997.
• Tenth District manufacturing activity continued to expand at a moderate pace in May, and expectations for future activity increased strongly, according to the Federal Reserve Bank of Kansas City.  The composite index was 8 in May, up from 7 in April. Price indexes were mixed, but recorded little change overall.

·      Total Industrial production increased 1.0% in April, following a 0.4% increase in the previous month. The index was up 2.2% from April 2016. Capacity utilization for the industrial sector increased 0.6 percentage point in April to 76.7, a rate that is 3.2 percentage points below its long-run (1972–2016) average.

·      Housing starts in April decreased 2.6% from the previous month, but increased 0.7% from a year ago. Building permits in April decreased 2.5% from March, but increased 5.7% from April 2016.

·      The housing market index of National Association of Home Builders (NAHB) and Wells Fargo rose to 70 in May, from 68 in April. The Index was 67 in January and 58 in May of 2016.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving slightly lower. The 30-year fixed mortgage rate averaged 4.02% for the week ending May 18, down from last week when it averaged 4.05%. A year ago at this time, the 30-year fixed-rate averaged 3.58%. The 15-year fixed mortgage rate averaged 3.27%, down from last week when it averaged 3.29%. A year ago at this time, the 15-year fixed-rate averaged 2.81%.

·      Mortgage applications decreased 4.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 12th.

·      Advance selected services total revenue for the first quarter of 2017 decreased 1.2% from the fourth quarter of 2016, but increased 6.4% from the first quarter of 2016, according to the U.S. Census Bureau. 

·      The advance figure for initial claims for unemployment insurance decreased 4 thousand to 232 thousand in the week ending May 13. The 4-week moving average was 240.75 thousand, a decrease of 2.75 thousand from the previous week’s average.

·      Labor productivity rose in 17 of 28 selected service-providing industries in 2016, according to the U.S. Bureau of Labor Statistics. This was greater than in 2015, when labor productivity increased in 14 of 28 industries. On the other hand, unit labor costs declined in 5 industries in 2016.

·      The Philadelphia FED business outlook survey for May indicated that region’s manufacturing activity continued to expand this month. The Index was 38.8 in May, up from 22.0 in April. This was the 10^th consecutive month that the index was positive.

·      The May Empire State Manufacturing Survey indicated that manufacturing activity leveled off in New York State. The general business conditions index decreased six points to negative 1.0.

·      The Conference Board’s leading economic indicators increased 0.3% again in April, fueled by positive contributions from all its components except for building permits and stock prices. In the six-month period ending April 2017, the leading economic index increased 2.4% (about a 4.9% annual rate), well above the growth of 0.7% (about a 1.5% annual rate) during the previous six months. The Conference Board’s coincident economic index, increased 0.3% in April. The coincident economic index rose 1.1 percent (about a 2.1% annual rate) between October 2016 and April 2017, about the same rate as it did over the previous six months.

·      Advance estimates of retail and food services sales for April were up 0.4% from March, and were up 4.5% from April 2016. Year-to-date, retail sales were up 3.5% from the same period a year ago.

·      Total manufacturing and trade sales for March were unchanged from the previous month, but were up 6.5% from a year ago. Total business inventories were up 0.2% from February, and were up 2.6% from March 2016. The total business inventories/sales ratio was 1.35, compared with 1.40 year ago.

·      Sales of merchant wholesalers in March were virtually unchanged, while inventories were up 0.2%.  The March inventories/sales ratio was 1.28, compared with 1.35 in March of 2016.

·      Real gross domestic product (GDP) increased in every state and the District of Columbia in the fourth quarter of 2016, according to the U.S. Bureau of Economic Analysis.  Real GDP growth ranged from 3.4% in Texas to 0.1% in Kansas and Mississippi. Finance and insurance, retail trade, and professional, scientific, and technical services were the leading contributors to U.S. economic growth in the fourth quarter. In the year 2016, real GDP grew in 43 states and the District of Columbia.  Real GDP growth ranged from 3.7% in Washington to negative 6.5% in North Dakota.

·      The federal government budget ran a surplus of $182.4 billion in April, following a deficit of $176.2 billion in the previous month. The cumulative budget deficit for the first seven months of fiscal year 2017 was $344.4 billion, compared with a deficit of $352.9 billion for the same period of the previous fiscal year.

·      The producer price index for final demand (headline index) increased 0.5% in April, following a 0.1% decrease in the previous month.  The index for final demand less foods, energy, and trade increased 0.7%, after an increase of 0.1% in March. The producer price index for final demand increased 2.5% for the 12 months ended in April, while the index for final demand less foods, energy, and trade increased 2.1%.

·      The import price index increased 0.5% in April, following a 0.1% increase in the previous month. The export price index increased 0.4%, following a 0.1% increase in the previous month. The import price index increased 4.1% from April 2016, while the price index for exports increased 3.0%.

·      The consumer price index (headline index) increased 0.2% in April, following a 0.3% decrease in the previous month. The core index increased 0.1%, following a 0.1% decrease in the previous month. The consumer price index increased 2.2% for the 12-month period ending in April, while the core index rose 1.9%.

·      Real average hourly earnings for all employees increased 0.1% from March to April. This result stems from a 0.3% increase in average hourly earnings combined with a 0.2% increase in the consumer price index.

·      The advance figure for initial claims for unemployment insurance decreased 2 thousand to 236 thousand in the week ending May 6. The 4-week moving average was 243.5 thousand, an increase of 0.5 thousand from the previous week’s average.

·      There were 5.7 million job openings on the last business day of March, little changed from February. The job openings rate for March was 3.8%, compared with 3.9% a year ago. The number of hires was virtually unchanged at 5.3 million in March. There were 5.1 million total separations, little changed from February.

·      Labor productivity increased in 31 of the 90 manufacturing and mining industries in 2016, according to the U.S. Bureau of Labor Statistics. This was fewer than in 2015 when labor productivity rose in 41 industries.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving slightly higher. The 30-year fixed mortgage rate averaged 4.05% for the week ending May 11, up from last week when it averaged 4.02%. A year ago at this time, the 30-year fixed-rate averaged 3.57%. The 15-year fixed mortgage rate averaged 3.29%, up from last week when it averaged 3.27%. A year ago at this time, the 15-year fixed-rate averaged 2.81%.

·      Mortgage applications increased 2.4% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 5th.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment for May, preliminary, edged up to 97.7. The index was 97.0 in April, and 94.7 in May of 2016.

·      Total non-farm payroll employment rose 211 thousand in April, following an increase of 79 thousand in the previous month.   Private-sector payrolls increased by 194 thousand in the month, while government employment decreased by 17 thousand.

·      The unemployment rate decreased to 4.4% in April, from 4.5% in March. The unemployment rate was 5.0% in April of 2016.

·      The average workweek of all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours. Average hourly earnings increased by 7 cents to $26.19. Over the past 12 months, average hourly earnings were up 2.5%.

·      The advance figure for initial claims for unemployment insurance decreased 19 thousand to 238 thousand in the week ending April 29. The 4-week moving average was 243 thousand, an increase of 0.75 thousand from the previous week’s average.

·      First quarter productivity decreased 0.6% (seasonally adjusted annual rate) in the non-farm business sector, following a 1.8% increase in the final quarter of 2016. From the first quarter of 2016 to the first quarter of 2017, productivity increased 1.1%, as output increased 2.4% and hours worked increased 1.3%. Unit labor costs increased 2.8% in the first quarter of 2017, reflecting a 3.9% increase in hourly compensation and a 1.1% increase in productivity.

·      Personal income increased 0.2% in March, while personal consumption expenditures held steady. Real disposable personal income increased 0.5% in March, while real personal consumption expenditures increased 0.3%. The personal saving rate – personal saving as a percentage of disposable personal income – was 5.9% in March, compared with 5.7% in February.

·      The price index for personal consumption expenditures decreased 0.2% in March, following a 0.1% increase in the previous month. The core index decreased 0.1%, following a 0.2% increase in the previous month. The price index (headline index) was up 1.8% from March 2016, while the core index was up 1.6%.

·      Sales of domestic cars increased 2.8% in April, while total light vehicle (cars and light trucks) sales increased 1.8%. Total vehicle sales were 16.8 million units in April, at a seasonally adjusted annual rate, compared with 17.5 million in January of 2017, and 17.3 million in April of 2016.

·      New orders for manufactured goods increased 0.2% in March, while shipments decreased 0.1%. Excluding transportation, new orders were down 0.3% in March, while shipments were down 0.2%. Year-to-date new orders for manufactured goods were up 5.2% from the same period in 2016, while shipments were up 4.5%.

·      In March international trade deficit was $43.7 billion, $0.1 billion less than the revised February figure. March exports were $191.0 billion, $1.7 billion less than February exports. March imports were $234.7 billion, $1.7 billion less than February imports. Year-to-date the goods and services deficit was $135.6 billion, an increase of $9.4 billion, or 7.5%, from the same period in 2016.

·      March construction spending was down 0.2% from the previous month, but was up 3.6% from March 2016, according to U.S. Census Bureau. Private construction increased less than 0.1% in March, while public construction decreased 0.9%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving slightly lower. 30-year fixed-rate mortgage averaged 4.02% for the week ending May 4^th, down slightly from last week when it averaged 4.03%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.61%. 15-year fixed-rate mortgage averaged 3.27%, unchanged from the previous week. A year ago at this time, the 15-year fixed-rate mortgage averaged 2.86%.

·      Mortgage applications decreased 0.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending April 28, 2017.

·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in April, and the overall economy grew for the 95th consecutive month.

·      In April, the Institute for Supply Management’s (ISM) non-manufacturing survey results indicated growth in the non-manufacturing business activity for the 88th consecutive month. Sixteen out of seventeen non-manufacturing industries reported growth in April.

·      The Federal Open Market Committee decided to maintain the target range for the federal funds rate at 3/4 to 1%. The Committee indicated that the stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2% inflation, and stated that the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.