Key Economic Indicators – June 5, 2017

·      Total non-farm payroll employment rose 138 thousand in May, following an increase of 174 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. The average monthly gain in employment was 181 thousand over the prior 12 months. Private-sector payrolls increased by 147 thousand in May, while government employment decreased by 9 thousand. Job gains occurred in health care and mining.

·      The unemployment rate edged down to 4.3% in May, from 4.4% in April. The unemployment rate was 4.7% in May 2016.

·      The number of unemployed decreased by 195 thousand to 6.9 million. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 37 thousand to 1.7 million and accounted for 24.0% of the unemployed.

·      The labor force participation rate declined by 0.2 percentage point to 62.7% in May, but has shown no clear trend over the past 12 months.

·      The average workweek of all employees on private nonfarm payrolls was unchanged at 34.4 hours.

·      In May, average hourly earnings of all employees on private nonfarm payrolls increased by 4 cents to $26.22. Over the past 12 months, average hourly earnings were up 2.5%.

·      Unemployment rates were lower in April than a year earlier in 322 of the 388 metropolitan areas, higher in 46 areas, and unchanged in 20 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 297 metropolitan areas, decreased in 81 areas, and was unchanged in 10 areas.

·      The advance figure for initial claims for unemployment insurance increased 13 thousand to 248 thousand in the week ending May 27. The 4-week moving average was 238 thousand, an increase of 2.5 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 20 was 1,915 thousand, a decrease of 9 thousand from the previous week’s revised level. The 4-week moving average was 1,914.5 thousand, a decrease of 16 thousand from the previous week’s revised average. This was the lowest level for this average since January 12, 1974 when it was 1,881 thousand.

·      Personal income increased 0.4% in April, following a 0.2% increase in the previous month. Personal consumption expenditures increased 0.4%, after increasing 0.3% in the previous month. The price index for personal consumption expenditures increased 0.2%, following a decrease of 0.2% in March. The core index increased 0.2%, following a decrease of 0.1% in the previous month. The price index for personal consumption expenditures was up 1.7% from April 2016, while the core index was up 1.5%.

·      Sales of domestic cars decreased 4.2% in May, while total light vehicle (cars and light trucks) sales decreased 1.4%. Total vehicle sales were 16.6 million units in May, at a seasonally adjusted annual rate, compared to 17.5 million in January 2017, and 17.1 million in May of 2016.

·      In April, international trade deficit in goods and services was $47.6 billion, up $2.3 billion from March. Exports decreased $0.5 billion to $191.0 billion, and imports increased $1.9 billion to $238.6 billion. The cumulative deficit was $186.6 billion for the first four months of 2017, compared with a deficit of $164.5 billion for the same period of the previous year.

·      April construction spending was down 1.4% from the previous month, but was up 6.7% from a year ago. Residential construction decreased 0.9% in April, while nonresidential construction decreased 1.7%. Total private construction decreased 0.7% in April, while total public construction decreased 3.7%.

·      The S & P CoreLogic Case-Shiller home price indices for March show that home prices continued their rise across the country over the last 12 months. The S & P CoreLogic Case-Shiller National Home Price Index recorded a 5.1% annual gain in March, up from 5.7% last month, and setting a 33-month high. As of March 2017, home prices were back to their winter 2007 levels. The U.S. National index was slightly above its July 2006 peak level, and 10-city and 20-city composite indices were approximately 5-6% below their June/July 2006 peaks.

·      The Pending Home Sales Index, a leading indicator for the housing sector, decreased 1.3% to a reading of 109.8 in April, according to the National Association of Realtors. The index is now 3.3% below April 2016.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates were virtually unchanged in a short week following Memorial Day. The 30-year fixed mortgage rate averaged 3.94% for the week ending June 1, down slightly from last week when it averaged 3.95%. A year ago at this time, the 30-year fixed mortgage rate was 3.66%. The 15-year fixed mortgage rate averaged 3.19% for the week ending June 1, unchanged from the previous week. A year ago at this time, the 15-year fixed mortgage rate was 2.92%.

·      Mortgage applications decreased 3.4% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 26th.

·      The Conference Board’s consumer confidence index, which had declined in April, decreased further in May. The Index now stands at 117.9(1985=100), down from 119.4 in April. The present situation index edged up from 140.3 to 140.7, while the expectations index declined from 105.4 to 102.6.

·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in May, and the overall economy grew for the 96th consecutive month. The headline index was 54.9, an increase of 0.1 percentage point from the April reading of 54.8. The New Orders Index was up 2 percentage points from April, while the Production Index was down 1.5 percentage points. The Employment Index was 53.5, an increase of 1.5 percentage points from the April reading of 52.

·      The FED’s “Beige Book” indicated that overall economic activity expanded at a moderate to modest pace from early April through late May in most of the twelve Federal Reserve Districts. Boston and Chicago signaled that growth in their Districts had slowed somewhat to a modest pace since the prior report, while New York indicated that activity had flattened out.

·      The Chicago Fed’s National Financial Conditions Index (NFCI) edged down to negative 0.86 in the week ending May 26. The Index was negative 084 a week ago, and negative 0.67 a year ago. The risk sub-index decreased slightly from the previous week, while the credit sub-index was unchanged and the leverage and nonfinancial leverage sub-indexes ticked up.

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