Current-Cast® Report

·      Real GDP increased at an annual rate of 4.2% in the second quarter of 2018, according to the “second” estimate by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2%. In the advance estimate, released a month ago, the increase in real GDP was 4.1% for the second quarter of 2018.

·      Real final sales of domestic product (GDP less change in private inventories) increased 5.3% in the second quarter, in contrast to an increase of 1.9% in the first quarter.

·      Real gross domestic income (GDI) increased 1.8% in the second quarter of 2018, compared with an increase of 3.9% in the first quarter.

·      The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 3.0% in the second quarter, compared with an increase of 3.1% in the previous quarter.

·      The price index for gross domestic purchases increased 2.3% in the second quarter of 2018, compared with an increase of 2.5% in the previous quarter.

·      The personal consumption expenditures (PCE) price index increased 1.9% in the second quarter, compared with an increase of 2.5% in the previous quarter. Excluding food and energy prices, the PCE price index increased 2.0%, compared with an increase of 2.2%.

·      Corporate profits from current production increased $72.4 billion in the second quarter, after an increase of $2672 billion in the previous quarter. Profits of domestic financial corporations increased $16.8 billion in the second quarter, in contrast to a decrease of $9.3 billion in the previous quarter. Profits of domestic nonfinancial corporations increased $63.6 billion, compared with an increase of $32.3 billion in the previous quarter. The rest-of-the-world component of profits decreased $8.0 billion, compared with an increase of $3.7 billion in the previous quarter.

·      Personal income increased 0.3% in July, and personal consumption expenditures increased 0.4%. The price index for personal consumption expenditures increased 0.1% in July, while the core index increased 0.2%.  The headline index was up 2.3%, and the core index was up 2.0% from July 2017.

·      Retail inventories for July were up 0.4% from the previous month, and were up 2.3% from July 2017, according to the U.S. Census Bureau. 

·      Wholesale inventories for July were up 0.7% from the previous month, and were up 5.2% from a year ago. 

·      The international trade deficit in goods was $72.2 billion in July, up $4.3 billion from $67.9 billion in June, according to the U.S. Census Bureau.  Exports of goods for July were $140.0 billion, $2.5 billion less than June exports. Imports of goods for July were $212.2 billion, $1.8 billion more than June imports.

·      The advance figure for initial claims for unemployment insurance increased 3 thousand to 213 thousand in the week ending August 25. The 4-week moving average was 212.25 thousand, a decrease of 1.5 thousand from the previous week’s unrevised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending August 18 was 1,708 thousand, a decrease of 20 thousand from the previous week’s revised level. The 4-week moving average was 1,731.25 thousand, a decrease of 4.5 thousand from the previous week’s average.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed that average fixed mortgage rates were marginally higher. The 30-year fixed mortgage rate averaged 4.52% for the week ending August 30, up from last week when it averaged 4.51%. A year ago at this time, the 30-year fixed mortgage rate was 3.82%. The 15-year fixed mortgage rate averaged 3.97% for the week ending August 30, down from the previous week when it averaged 3.98%. A year ago at this time, the 15-year fixed mortgage rate was 3.12%.

·      Mortgage applications decreased 1.7% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending August 24th.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment decreased to 96.2 in August, from 97.9 in July.  The Index was 96.8 a year ago. The Current Conditions Index decreased from 114.4 in July to 110.3 in August, while the Index of Consumer Expectations edged down to 87.1 in August, from 87.3 in July.

·      The Conference Board’s consumer confidence index, which had increased in July, improved further in August. The Index now stands at 133.4 (1985=100), up from 127.8 in July. The Present Situation Index increased from 166.1 to 172.2, while the Expectations Index rose from 102.4 last month to 107.6.

·      New orders for manufactured durable goods decreased 1.7% in July, while shipments decreased 0.2%. Excluding transportation, new orders increased 0.2%.  Excluding defense, new orders decreased 1.0%. Year-to-date, new orders were up 8.6%, and shipments were up 7.1% from the same period a year ago.

·      July existing home sales were down 0.7% from the previous month, and were down 1.5% from a year ago. The median sales price of existing houses sold was $269.6 thousand, 4.5% above July 2017.

·      July new home sales were down 1.7% from the previous month, but were up 12.8% from July 2017 figure. The median sales price of new houses sold was $328.7 thousand, 1.8% above July 2017.

·      U.S. House prices rose 0.2% on a seasonally adjusted basis from May to June, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. For the 12 months ending in June, U.S. prices rose 6.5%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey of August 23rd showed average fixed mortgage rates decreased for the third straight week. 30-year fixed-rate mortgage averaged 4.51% for the week ending August 23rd, down from last week when it averaged 4.53%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.86%.

·      Mortgage applications increased 4.2% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending August 17th.

·      The advance figure for initial claims for unemployment insurance decreased 2 thousand to 210 thousand in the week ending August 18th. The 4-week moving average was 213.75 thousand, a decrease of 1.75 thousand from the previous week’s average.

·      Advance estimates of retail and food services sales for July were up 0.5% from the previous month, and were up 6.4% from July 2017. Year-to-date, retail sales were up 5.5% from the same period a year ago.

·      Total manufacturing and trade sales for June were up 0.3%, while inventories were up 0.1%. The total business inventories/sales ratio at the end of June was 1.33, compared with 1.39 in June 2017.

·      Total Industrial production increased 0.1% in July, following a 1.0% increase in the previous month. The index of industrial production in July was 4.2% above its year-ago level. The rate of capacity utilization for total industry was 78.1%, 1.7 percentage points below its 1972-2017 average, but 2.0 percentage points above its level in July 2017.

·      Housing starts in July were up 0.9% from the previous month, but were down 1.4% from a year ago. Building permits were up 1.5% from the previous month, and were up 4.2% from July 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates continued to decline. The 30-year fixed mortgage rate averaged 4.53% for the week ending August 16, down from last week when it averaged 4.59%.

·      Mortgage applications decreased 2.0% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending August 15th.

·      The advance figure for initial claims for unemployment insurance was 212 thousand in the week ending August 11, a decrease of 2 thousand from the previous week’s level. The 4-week moving average was 215.5 thousand, an increase of a thousand from the previous week’s average.

·      The import price index held steady in July, while the export price index decreased 0.5%. The import price index increased 4.8% from July 2017, while export prices increased 4.3%.

·      The August 2017 Empire State Manufacturing Survey indicated that business activity remained robust for New York manufacturers. The headline general business conditions index climbed three points to 25.6.

·      The Philadelphia FED business outlook survey for August reported slower growth in manufacturing activity. The diffusion index for current general activity decreased 14 points to 11.9, its lowest reading in 21 months.

·      The Conference Board index of leading economic indicators increased 0.6% in July, following a 0.5% increase in the previous month. The coincident index increased 0.2%, following a 0.3% in the previous month.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment slipped to its lowest level since last September. The Index was 95.3 in August, down from 97.9 in July, and 96.8 in August 2017.

• • Sales of merchant wholesalers in June were down 0.1% from the previous month, but were up 10.2% from June of 2017. Sales of durable goods were up 0.2%, while sales of nondurable goods were down 0.3%. Inventories of merchant wholesalers were up 0.1% from the previous month, and were up 5.2% from a year ago.  The June inventories/sales ratio was 1.25, compared with 1.31 a year ago.
  • June consumer credit outstanding increased at an annual rate of 3.1%. Revolving credit decreased 0.2%, while non-revolving credit increased 4.4%.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates little changed. The 30-year fixed mortgage rate averaged 4.59% for the week ending August 9, down slightly from last week when it averaged 4.60%.
  • Mortgage applications decreased 3.0% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending August 3rd.
  • The producer price index for final demand (headline index) held steady in July, following a 0.3% increase in the previous month.  The index for final demand less foods, energy, and trade increased 0.3%, the same increase as in the previous month. The producer price index for final demand increased 3.3% for the 12 months ended in July. The index for final demand less foods, energy, and trade increased 2.8% during the same period.
  • The consumer price index increased 0.2% in July, after an increase of 0.1% in the previous month. The core index increased 0.2%, the same increase as in the previous month. The consumer price index (headline index) increased 2.9% for the 12-month period ending in July, and the core index rose 2.4%.
  • Real average hourly earnings for all employees were unchanged from June to July. This result stems from a 0.3% increase in average hourly earnings being partially 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 6 thousand to 213 thousand in the week ending August 4. The 4-week moving average was 214.25 thousand, a decrease of 0.5 thousand from the previous week’s average. 
• • The number of job openings little changed at 6.7 million on the last business day of June, according to the U.S. Bureau of Labor Statistics. Over the month, hires and separations were little changed at 5.7 million and 5.5 million, respectively.

·      Total non-farm payroll employment rose by 157 thousand in July, following an increase of 248 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 170 thousand in July, while government employment decreased by 13 thousand. Job gains occurred in professional and business services, in manufacturing, and in health care and social assistance. The average monthly gain in employment was 203 thousand per month over the prior 12 months.

·      The unemployment rate edged down to 3.9% in July, from 4.0% in June. The unemployment rate was 4.3% in July 2017.

·      The number of unemployed decreased by 284 thousand to 6.280 million. The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 43 thousand to 1.435 million and accounted for 22.7% of the unemployed.

·      The labor force participation rate was unchanged at 62.9% in July, and has shown no clear trend over the past 12 months.

·      The average workweek of all employees on private nonfarm payrolls decreased by 0.1 hours to 34.5 hours.

·      In July, average hourly earnings of all employees on private nonfarm payrolls increased by 7 cents to $27.05. Over the past 12 months, average hourly earnings were up 2.7%.

·      Unemployment rates were lower in June than a year earlier in 298 of the 388 metropolitan areas, higher in 61 areas, and unchanged in 29 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 51 metropolitan areas, and was essentially unchanged in 337 areas.

·      The advance figure for initial claims for unemployment insurance increased a thousand to 218 thousand in the week ending July 28. The 4-week moving average was 214.5 thousand, a decrease of 3.5 thousand from the previous week’s average.

·      Sales of domestic cars decreased 1.2% in July, while total light vehicle (cars and light trucks) sales decreased 3.1%. Total vehicle sales were 16.7 million units in July, at a seasonally adjusted annual rate, compared to 17.1 million in January 2018, and 16.7 million in July of 2017.

·      June construction spending was down 1.1% from the previous month, but was up 6.1% from a year ago. Residential construction decreased 0.5% in June, while nonresidential construction decreased 1.6%. Total private construction decreased 0.4% in June, while total public construction decreased 3.5%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving higher. The 30-year fixed mortgage rate averaged 4.60% for the week ending August 2, up from last week when it averaged 4.54%.

·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in July, and the overall economy grew for the 111th consecutive month.