Key Economic Indicators – June 4, 2018

·      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.

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