Current-Cast® Report

·      State personal income increased 4.3% at an annual rate in the first quarter of 2018, after increasing 4.7% in the fourth quarter of 2017, according to the Bureau of Economic Analysis. Personal income increased in all states and the District of Columbia. The percent change in personal income across all states ranged from 2.0% in Idaho to 7.4% in Washington.

·      The U.S. current-account deficit increased to $124.1 billion (preliminary) in the first quarter of 2018 from $116.1 billion (revised) in the fourth quarter of 2017, according to the Bureau of Economic Analysis (BEA).  The deficit increased to 2.5% of current-dollar gross domestic product (GDP) from 2.4% in the previous quarter. The $8.0 billion increase in the current-account deficit reflected an $8.1 billion increase in the in the deficit on goods, and relatively small and nearly offsetting changes in the balances on services, primary income, and secondary income.

·      May existing home sales decreased 0.4% to an annualized rate of 5,430 thousand units. The May figure was 3.0% below the May 2017 figure. There were 1,850 thousand homes for sale at the end of the month. This represents a supply of 4.1 months at the current sales rate, compared to 4.2 in May of 2017. The median sales price of existing houses sold was $264.8 thousand, 4.9% above May 2017.

·      Housing starts in May were up 5.0% from the previous month, and were up 20.3% from a year ago. Year-to-date, housing starts were up 11.0% from the same period a year ago. Building permits were down 4.6% from the previous month, but were up 8.0% from May 2017. Year-to-date, building permits were up 8.9% from the same period a year ago.

·      The housing market index of National Association of Home Builders (NAHB) and Wells Fargo decreased 2 points to 68 in June. The Index was 72 in January of this year and 66 in June of last year.

·      U.S. House prices rose 0.1% on a seasonally adjusted basis from March to April, according to the Federal Housing Finance Agency’s (FHFA). For the 12 months ending in April, U.S. prices were up 6.4%. For the nine census divisions, seasonally adjusted monthly price changes from March 2018 to April 2018 ranged from negative 0.5% in the West South Central division to positive 0.6% in the East North Central division.  The 12-month changes were all positive, ranging from 4.6% in the West South Central division to 8.9% in the Mountain division.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates inched back over the past week and have now declined in three of the past four weeks. 30-year fixed-rate mortgage averaged 4.57% for the week ending June 21, down from last week when it averaged 4.62%. A year ago this time, the 30-year fixed-rate averaged 3.90%. 15-year fixed-rate mortgage averaged 4.04% for the week ending June 21, downs from last week when it averaged 4.07%. A year ago this time, the 15-year fixed-rate averaged 3.17%.

·      Mortgage applications increased 5.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 15th.

·      The advance figure for initial claims for unemployment insurance decreased 3 thousand to 218 thousand in the week ending June 16. The 4-week moving average was 221 thousand, a decrease of 4 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending June 9 was 1,723 thousand, an increase of 22 thousand from the previous week’s revised level. The 4-week moving average was 1,722.5 thousand, a decrease of 4.75 thousand from the previous week’s revised average. This was the lowest level for this average since December 8, 1973 when it was 1,715.5 thousand.

·      The Philadelphia FED business outlook survey reported that manufacturing activity in the region continued to expand in June. All the broad indicators remained positive, although the indicators for general activity and new orders decreased significantly. The firms continued to report higher prices for both purchased inputs and their own manufactured goods, although the survey’s price indicators decreased modestly from their May readings.

·      The Conference Board index of leading economic indicators increased 0.2% in May, following an increase of 0.4% in the previous month. Over the six-month span through May, the leading index increased 3.0% (about a 6.1% annual rate), with nine out of ten components advancing. The Conference Board coincident economic index increased 0.2% in May, the same increase as in the previous month. Over the six-month span through May, the coincident index increased 1.0%% (about a 2.0% annual rate), with all four components advancing.

·      Advance estimates of retail and food services sales for May were up 0.8% from the previous month, and were up 5.9% from May 2017. Excluding motor vehicle & parts, retail sales were up 0.9% from the previous month, and were up 6.4% from a year ago. Year-to-date, retail sales and food services were up 5.2% from the same period a year ago, while retail sales and food services excluding motor vehicle & parts were up 5.5%.

·      Total manufacturing and trade sales for April were up 0.4%, while inventories were up 0.3%. The total business inventories/sales ratio at the end of April was 1.35, compared with 1.38 in April 2017.

·      Total Industrial production decreased 0.1% in May, following a 0.9% increase in the previous month. The index of industrial production in May was 3.5% above its year-ago level. The rate of capacity utilization for total industry was 77.9%, 1.9 percentage points below its 1972-2017 average, but 1.7 percentage points above its level in May 2017.

·      The import price index increased 0.6% in May, The same increase as in the previous month. The overall import price index increased 4.3% from May 2017.  The export price index increased 0.6% in May, The same increase as in the previous month. The price index for overall exports increased 4.9% from May 2017.

·      The producer price index for final demand increased 0.5% in May, following an increase of 0.1% in the previous month. The price index for final demand excluding food and energy increased 0.3%, following a 0.2% increase in the previous month. The producer price index for final demand increased 3.1% from May 2017 to May 2018, while the index for final demand excluding food and energy increased 2.4%.

·      The consumer price index increased 0.2% in May, the same increase as in the previous month. The core index, all items less food and energy, increased 0.2%, following a 0.1% increase as in the previous month. The consumer price index increased 2.8% for the 12-month period ending in May, while the core index rose 2.2%.

·      Real average hourly earnings for all employees increased 0.1% from April to May. This result stems from a 0.3% increase in average hourly earnings being offset by a 0.2% increase in the consumer price index for all urban consumers.

·      The advance figure for initial claims for unemployment insurance decreased 4 thousand to 218 thousand in the week ending June 9. The 4-week moving average was 224.25 thousand, a decrease of 1.25 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending June 2 was 1,697 thousand, a decrease of 49 thousand from the previous week’s revised level. This was the lowest level for insured unemployment since December 1, 1973 when it was 1,692 thousand. The 4-week moving average was 1,726.75 thousand, a decrease of 3.75 thousand from the previous week’s revised average. This is the lowest level for this average since December 8, 1973 when it was 1,715.5 thousand.

·      Unemployment rates were lower in May in 14 states and stable in 36 states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Eleven states had jobless rate decreases from a year earlier and 39 states and the District had little or no change. Nonfarm payroll employment increased in 7 states in May and was essentially unchanged in 43 states and the District of Columbia. Over the year, 35 states added nonfarm payroll jobs and 15 states and the District of Columbia were essentially unchanged.

·      The federal government budget ran a deficit of $146.8 billion in May, after a surplus of $214.3 billion in April. In May, receipts decreased 9.7% from a year ago, while outlays increased 10.7%. The deficit in May of 2017 was $88.4 billion, $58.4 billion less than the deficit in May of 2018. The cumulative deficit for the first eight months of fiscal year 2018 was $532.2 billion, $99.4 billion more than the deficit of $432.9 billion for the same period of the previous fiscal year.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates rose to their second highest level this year. The 30-year fixed mortgage rate averaged 4.62% for the week ending June 14, up from last week when it averaged 4.54%. A year ago at this time, 30-year fixed mortgage rate averaged 3.91%. The 15-year fixed mortgage rate averaged 4.07% for the week ending June 14, up from last week when it averaged 4.01%. A year ago at this time, 15-year fixed mortgage rate averaged 3.18%.

·      Mortgage applications decreased 1.5% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 8th.

·      The June 2017 Empire State Manufacturing Survey indicated that business activity continued to grow strongly for New York manufacturers. The headline general business conditions index increased from 20.1 in May to 25.0 in June. The prices paid index remained close to last month’s multiyear high, indicating continued significant input price increases, and the prices received index remained elevated.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary, increased to 99.3 in early June, from the final reading of 98.0 in May. The Index was 95.0 in June of 2017. The Current Economic Conditions Index increased to 117.9 in June, from 111.8 in May, while the Index of Consumer Expectations decreased to 87.4, from 89.1.

·      The Federal Open Market Committee decided to raise its target for the federal funds rate by 0.25% to 1.75% to 2.00%. “The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.”

·      New orders for manufactured goods decreased 0.8% in April, following a 1.7% increase in the previous month. Shipments increased less than 0.1%, following a 0.7% increase in the previous month. Year-to-date new orders were up 8.3%, and shipments were up 7.1%.

·      Sales of domestic cars decreased 1.6% in May, while total light vehicle (cars and light trucks) sales decreased 1.8%. Total vehicle sales were 16.8 million units in May, at a seasonally adjusted annual rate, compared to 17.1 million in January 2018, and 16.7 million in May of 2017.

·      Sales of merchant wholesalers in April were up 0.8% from the previous month, and were up 7.8% from April of 2017. Sales of durable goods were up 0.8% in April, and sales of nondurable goods were up 0.7%. Inventories of merchant wholesalers were up 0.1% from the previous month, and were up 5.8% from April 2016.  The April inventories/sales ratio was 1.28, compared with 1.3 a year ago.

·      U.S. selected services total revenue for the first quarter of 2018, not adjusted for seasonal variation or price changes, was $3,746.4 billion, a decrease of 1.2% from the fourth quarter of 2017, and up 5.2% from the first quarter of 2017. 

·      U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the first quarter of 2018 totaled $154.0 billion, up $36.4 billion from the after-tax profits of $117.6 billion recorded in the fourth quarter of 2017, and up $3.7 billion from the after-tax profits of $150.2 billion recorded in the first quarter of 2017.  

·      Seasonally adjusted after-tax profits of U.S. retail corporations with assets of $50 million and over totaled $28.2 billion, down $1.1 billion from the $29.3 billion in the fourth quarter of 2017, but up $9.2 billion from the $19.0 billion recorded in the first quarter of 2017.

·      In April, international trade deficit in goods and services was $46.2 billion, down $1.0 billion from March. Exports increased $0.6 billion to $211.2 billion, and imports decreased $0.4 billion to $257.4 billion. The cumulative deficit was $201.8 billion for the first four months of 2018, compared with a deficit of $181.0 billion for the same period of the previous year.

·      Non-farm business sector labor productivity increased 0.4% during the first quarter of 2018, following a 0.3% increase in the previous quarter, according to the U.S. Bureau of Labor. Unit labor costs increased 2.9%, following a 2.5% increase in the previous quarter. Productivity in the non-farm business sector increased 1.3% from the first quarter of 2017, and unit labor costs also increased 1.3%.

·      The advance figure for initial claims for unemployment insurance decreased a thousand to 222 thousand in the week ending June 2. The 4-week moving average was 225.5 thousand, an increase of 2.75 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 26 was 1,741 thousand, an increase of 21 thousand from the previous week’s revised level. The 4-week moving average was 1,728.75 thousand, a decrease of 13.25 thousand from the previous week’s revised average. This was the lowest level for this average since December 8, 1973 when it was 1,715.5 thousand.

·      The number of job openings increased slightly to a new series high of 6.698 million on the last business day of April, according to the U.S. Bureau of Labor Statistics. Hires increased to 5.578 million, while separations increased to 5.408 million. Over the 12 months ending in April, hires totaled 66.1 million and separations totaled 63.7 million, yielding a net employment gain of 2.4 million. These totals include workers who may have been hired and separated more than once during the year.

·      Employer costs for employee compensation averaged $36.32 per hour worked in March 2018, according to the U.S. Bureau of Labor Statistics. Wages and salaries averaged $24.77 per hour worked and accounted for 68.2% of these costs, while benefits averaged $11.55 and accounted for the remaining 31.8%. Private industry employer costs for paid leave averaged $2.40 per hour worked or 7.0% of total compensation, supplemental pay averaged $1.32 (3.9%), insurance benefits averaged $2.74 (8.0%), retirement and savings averaged $1.30 (3.8%), and legally required benefits averaged $2.65 per hour worked or 7.8%. The average cost for health insurance benefits was $2.58 per hour worked in private industry (7.5% of total compensation) in March 2018.

·      From December 2016 to December 2017, employment increased in 316 of the 346 largest U.S. counties, according to the U.S. Bureau of Labor Statistics. The U.S. average weekly wage increased 3.9% over the year, growing to $1,109 in the fourth quarter of 2017. In December 2017, the 346 U.S. counties with 75,000 or more jobs accounted for 73.0% of total U.S. employment and 78.3% of total wages.

·      The net worth of households and nonprofits rose to $100.8 trillion during the first quarter of 2018, according to the Board of Governors of the Federal Reserve System.

·      Domestic nonfinancial debt outstanding was $49.8 trillion at the end of the first quarter of 2018, of which household debt was $15.3 trillion, nonfinancial business debt was $14.4 trillion, and total government debt was $20.1 trillion.

·      Domestic nonfinancial debt growth was 7.2% at a seasonally adjusted annual rate in the first quarter of 2018, up from an annual rate of 2.9% in the previous quarter. Household debt increased at an annual rate of 3.3%, while nonfinancial business debt rose at an annual rate of 4.4%. Federal government debt decreased at an annual rate of 15.3% in the first quarter, while state and local government debt contracted at an annual rate of 4.2%.

·      April consumer credit outstanding increased at an annual rate of 2.9%. Revolving credit increased 2.6%, while non-revolving credit increased 3.0%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates dipped for the second consecutive week. The 30-year fixed mortgage rate averaged 4.54% for the week ending June 7, down from last week when it averaged 4.56%. A year ago at this time, 30-year fixed mortgage rate averaged 3.89%. The 15-year fixed mortgage rate averaged 4.01%, down from last week when it averaged 4.06%. A year ago at this time, 15-year fixed mortgage rate averaged 3.16%.

·      Mortgage applications increased 4.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 1st.

·      In May, the Institute for Supply Management’s (ISM) non-manufacturing survey results indicated growth in the non-manufacturing business activity for the 100th consecutive month. Fourteen non-manufacturing industries reported growth, and one sector reported contraction in activity.

·      The Chicago Fed’s National Financial Conditions Index (NFCI) was unchanged at negative 0.80 in the week ending June 1. The risk sub-index contributed negative 0.34, the credit index contributed negative 0.31, and leverage sub-index contributed negative 0.15 The adjusted Index (ANFCI) ticked up to negative 0.53 in the latest week.

·      Real GDP increased at an annual rate of 2.2% in the first quarter of 2018, according to the “second” estimate by the Bureau of Economic Analysis. In the fourth quarter of 2017, real GDP increased 2.9%. In the advance estimate, released a month ago, the increase in real GDP was 2.3% for the first quarter.

·      Real final sales of domestic product (GDP less change in private inventories) increased 2.0% in the first quarter, in contrast to an increase of 3.4% in the final quarter of 2017.

·      Real gross domestic income (GDI) increased 2.8% in the first quarter of 2018, compared with a decrease of 1.0% in the final quarter of 2017.

·      The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.5% in the first quarter, compared with an increase of 2.0% in the fourth quarter of 2017.

·      The price index for gross domestic purchases increased 2.7% in the first quarter of 2018, compared with an increase of 2.5% in the previous quarter.

·      The personal consumption expenditures (PCE) price index increased 2.6%, compared with an increase of 2.7%. Excluding food and energy prices, the PCE price index increased 2.3%, compared with an increase of 1.9%.

·      Corporate profits from current production decreased $12.4 billion in the first quarter of 2018, after a decrease of $1.1 billion in the fourth quarter of 2017. Profits of domestic financial corporations increased $2.2 billion in the first quarter of 2018, in contrast to a decrease of $14.6 billion in the previous quarter. Profits of domestic nonfinancial corporations decreased $19.0 billion, compared with an increase of $19.4 billion in the previous quarter. The rest-of-the-world component of profits increased $4.4 billion in the first quarter, following a decrease of $5.9 billion.

·      Personal income increased 0.3% in April, following a 0.2% increase in the previous month. Personal consumption expenditures increased 0.6%, after increasing 0.5% in the previous month. Real disposable income increased 0.2% in April, while real personal consumption expenditures increased 0.4%. The savings rate, personal saving as a percentage of disposable income, was 2.8% in April, down from 3.0% in March.

·      The price index for personal consumption expenditures increased 0.2% in April, after holding steady in March. The core index increased 0.2%, the same increase as in the previous month. The price index for personal consumption expenditures was up 2.0% from April 2017, while the core index was up 1.8%.

·      Retail inventories for April were up 0.6% from the previous month, and were up 2.5% from April 2017, according to the U.S. Census Bureau. 

·      Wholesale inventories for April were virtually unchanged from the previous month, and were up 5.6% from April 2017. 

·      The international trade deficit in goods was $68.2 billion in April, down $0.4 billion from $68.6 billion in March, according to the U.S. Census Bureau.  Exports of goods for April were $139.6 billion, $0.7 billion less than March exports. Imports of goods for April were $207.8 billion, $1.1 billion less than March imports.

·      April construction spending was up 1.8% from the previous month, and was up 7.6% from a year ago. Residential construction increased 4.4% in April, while nonresidential construction decreased less than 0.1%. Total private construction increased 2.8% in April, while total public construction decreased 1.3%.

·      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 6.5% annual gain in March, the same as the previous month. As of March 2018, the U.S. National index was 7.8% above its July 2006 peak level. As of March 2018, average home prices for the metropolitan areas within the 10-City and 20-City Composites are back to their winter 2007 levels.  The 20-city composite index was 1.0% above its July 2006 peak level, and 10-city composite index was 1.7% below its June 2006 peak.

·      The Pending Home Sales Index, a leading indicator for the housing sector, decreased 1.3% to a reading of 106.4 in April, according to the National Association of Realtors. The index is now 2.1% below April 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates fell over the past week, after climbing to their highest level in over seven years. The 30-year fixed mortgage rate averaged 4.56% for the week ending May 31, down from last week when it averaged 4.66%. A year ago at this time, the 30-year fixed mortgage rate was 3.94%. The 15-year fixed mortgage rate averaged 4.06%, down from last week when it averaged 4.15%. A year ago at this time, the 15-year fixed mortgage rate was 3.19%.

·      Mortgage applications decreased 2.9% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 25th.

·      Total non-farm payroll employment rose 223 thousand in May, following an increase of 159 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 218 thousand in May, while government employment increased by 5 thousand. Job gains occurred in retail trade, health care and construction. The average monthly gain in employment was 191 thousand over the prior 12 months.

·      The unemployment rate edged down to 3.8% in May, from 3.9% in April. The unemployment rate was 4.3% in May 2017.

·      The number of unemployed decreased by 281 thousand to 6.065 million. The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 104 thousand to 1.189 million and accounted for 19.4% of the unemployed.

·      The labor force participation rate declined by 0.1 percentage point to 62.7% in May, and employment-population ratio increased by 0.1 percentage point to 60.4%.

·      The average workweek of all employees on private nonfarm payrolls was unchanged at 34.5 hours.

·      In May, average hourly earnings of all employees on private nonfarm payrolls increased by 8 cents to $26.92. Over the past 12 months, average hourly earnings were up 2.7%.

·      Unemployment rates were lower in April than a year earlier in 305 of the 388 metropolitan areas, higher in 63 areas, and unchanged in 20 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 312 metropolitan areas, decreased in 70 areas, and was unchanged in 6 areas.

·      The advance figure for initial claims for unemployment insurance decreased 13 thousand to 221 thousand in the week ending May 26. The 4-week moving average was 222.25 thousand, an increase of 2.5 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 19 was 1,726 thousand, a decrease of 16 thousand from the previous week’s revised level. The 4-week moving average was 1,743.5 thousand, a decrease of 8.5 thousand from the previous week’s revised average. This was the lowest level for this average since December 15, 1973 when it was 1,735.75 thousand.

·      The Conference Board’s consumer confidence index, which had declined slightly in April, increased in May. The Index now stands at 128.0 (1985=100), up from 125.6 in April. The present situation index increased from 157.5 to 161.7, while the expectations index increased from 104.3 to 105.6.

·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in May, and the overall economy grew for the 109th consecutive month. The headline index was 58.7, an increase of 1.4 percentage points from the April reading of 57.3. The New Orders Index was up 2.5 percentage points from April, while the Production Index was up 4.3 percentage points. The Employment Index was 56.3, an increase of 2.1 percentage points from the April reading of 54.2.

·      The FED’s “Beige Book” indicated that overall economic activity expanded moderately in late April and early May with few shifts in the pattern of growth. In Dallas District economic activity sped up at a solid pace. Prices rose moderately in most Districts, while the remainder reported slight or modest increases.