Current-Cast® Report

·      Real GDP increased at an annual rate of 3.5% in the third quarter of 2018, according to the “second” estimate by the Bureau of Economic Analysis. In the second quarter of 2018, real GDP increased 4.2%.  In the advance estimate, released a month ago, the increase in real GDP was also 3.5%.

·      Real final sales of domestic product (GDP less change in private inventories) increased 3.1% in the third quarter, in contrast to an increase of 4.0% in the previous quarter.

·      Real gross domestic income (GDI) increased 4.0% in the third quarter, compared with an increase of 0.9% in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 3.8% in the third quarter, compared with an increase of 2.5% in the second quarter.

·      The price index for gross domestic purchases increased 1.7% in the third quarter of 2018, compared with an increase of 2.4% in the previous quarter. 

·      The personal consumption expenditures (PCE) price index increased 1.5%, compared with an increase of 2.0% in the previous quarter. Excluding food and energy prices, the PCE price index increased 1.5%, compared with an increase of 2.1%.

·      Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $76.0 billion in the third quarter, compared with an increase of $65.0 billion in the second quarter. Profits of domestic financial corporations decreased $7.8 billion in the third quarter, in contrast to an increase of $16.5 billion in the second quarter. Profits of domestic nonfinancial corporations increased $66.2 billion, compared with an increase of $53.0 billion. Rest-of-the-world profits increased $17.6 billion, in contrast to a decrease of $4.5 billion.

·      Personal income increased 0.5% in October according to the Bureau of Economic Analysis. Disposable personal income (DPI) also increased 0.5% and personal consumption expenditures (PCE) increased 0.6%. Real DPI increased 0.3% in October and real PCE increased 0.4%. The PCE price index increased 0.2%. Excluding food and energy, the PCE price index increased 0.1%. The PCE price index increased 2.0% from a year ago, while the core (PCE excluding food and energy) price index increased 1.8%. 

·      The international trade deficit was $77.2 billion in October, up $1.0 billion from $76.3 billion in September, according to the U.S. Census Bureau.  Exports of goods for October were $140.5 billion, $0.8 billion less than September exports. Imports of goods for October were $217.8 billion, $0.2 billion more than September imports.

·      Retail inventories for October were up 0.9% from September, and were up 4.0% from October 2017.

·      Wholesale inventories for October were up 0.7% from September, and were up 6.6% from October 2017. 

·      October new home sales decreased 8.9% to an annualized rate of 544 thousand units. The October figure was 12.0% below the October 2017 figure. The median sales price of new houses sold was $309.7 thousand, 3.1% below October 2017.

·      The Pending Home Sales Index, a leading indicator for the housing sector, decreased 2.6% to 102.1 in October, according to the National Association of Realtors. The index is now 6.7% below October 2017.

·      U.S. house prices increased 0.2% in September, following a 0.4% increase in the previous month, according to the Federal Housing Finance Agency’s (FHFA). For the 12 months ending in September, U.S. house prices rose 6.0%. 

·      The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.5% annual gain in September, down from 5.7% in the previous month. The 10-City Composite annual increase came in at 4.8%, down from 5.2% the previous month. The 20-City Composite posted a 5.1% year-over-year gain, down from 5.5% the previous month.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average mortgage rates remained stable. 30-year fixed rate mortgage averaged 4.81% for the week ending November 29, unchanged from last week. A year ago at this time, the 30-year rate was 3.90%. 15-year fixed-rate mortgage averaged 4.25%, up from last week when it averaged 4.24%. A year ago at this time, the 15-year rate was 3.30%.

·      Mortgage applications increased 5.5% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending November 23rd. 

·      The advance figure for initial claims for unemployment insurance increased 10 thousand to 234 thousand in the week ending November 24. The 4-week moving average was 223.25 thousand, an increase of 4.75 thousand from the previous week’s unrevised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending November 17 was 1,710 thousand, an increase of 50 thousand from the previous week’s revised level. The 4-week moving average was 1,667.75 thousand, an increase of 19.75 thousand from the previous week’s revised average.

·      Unemployment rates were lower in October than a year earlier in 272 of the 388 metropolitan areas, higher in 95 areas, and unchanged in 21 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 56 metropolitan areas, and was essentially unchanged in 332 areas.

·    The Conference Board Consumer Confidence Index, which had improved in October, declined in November. The Index now stands at 135.7 (1985=100), down from 137.9 in October. The Present Situation Index increased slightly from 171.9 to 172.7, while the Expectations Index decreased from 115.1 to 111.0.

·      New orders for manufactured durable goods decreased 4.4% in October, while shipments decreased 0.6%. Excluding transportation, new orders increased 0.1%.  Excluding defense, new orders decreased 1.2%. Year-to-date, new orders were up 8.7%, and shipments were up 7.3% from the same period a year ago.

·      Existing home sales increased 1.4% to a seasonally adjusted annual rate of 5.22 million in October, from 5.15 million in September, according to the National Association of Realtors. The median existing home price in October was $255.4 thousand, up 3.8% from October 2017. Total housing inventory at the end of October decreased 1.6% from the previous month, but increased 2.8% from a year ago, to 1.85 million. Unsold inventory was at a 4.3-month supply at the current sales pace, down from 4.4 months in September, but up from 3.9 months in October 2017.

·      Housing starts in October were up 1.5% from the previous month, but were down 2.9% from October 2017. Building permits in October were down 0.6% from September, and were down 6.0% from a year ago.

·      The housing market index of National Association of Home Builders (NAHB) and Wells Fargo decreased 8 points to 60 in November. The Index was 72 in January 2018, and 69 in November of 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed that mortgage rates dropping across the board. 30-year fixed-rate mortgage averaged 4.81% for the week ending November 21st, down from last week when it averaged 4.94%.  A year ago at this time, the 30-year fixed-rate mortgage averaged 3.92%. 15-year fixed-rate mortgage averaged 4.24% for the week ending November 21st, down from last week when it averaged 4.36%.  A year ago at this time, the 15-year fixed-rate mortgage averaged 3.32%.

·      Mortgage applications edged down 0.1% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 16, 2018.

·      The advance figure for initial claims for unemployment insurance was 224 thousand in the week ending November 17, an increase of 3 thousand from the previous week’s revised level. The 4-week moving average was 218.5 thousand, an increase of 2 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending November 10 was 1,668 thousand, a decrease of 2 thousand from the previous week. The 4-week moving average was 1,649.75 thousand, an increase of 7.5 thousand from the previous week’s average.

·      The Conference Board’s leading economic index increased 0.1% in October, following a 0.6% increase in the previous month. The coincident index increased 0.2%, following a 0.1% increase in the previous month. Over the six-month span through October, the leading index increased 2.6% (about a 5.2% annual rate) with eight out of ten components advancing, while the coincident index increased 1.1% (about a 2.1% annual rate) with all four components advancing.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment decreased to 97.5 in November, from 98.6 in October. The Index was 98.5 in November of 2017. The Current Conditions Index decreased from 113.1 in October to 112.3 in November, while The Index of Consumer Expectations decreased from 89.3 to 88.1.

·      Advance estimates of retail and food services sales for October were up 0.8% from September, and were up 4.7% from October 2017, according to the U.S. Census Bureau. Excluding motor vehicle & parts, retail sales were up 0.7% from September, and were up 5.9% from a year ago. Year-to-date, retail sales were up 5.4% from the first 10 months of 2017.

·      Total manufacturing and trade sales for September were up 0.4% from August, while inventories were up 0.3%, according to the U.S. Census Bureau. The total business inventories/sales ratio was 1.34, compared with 1.37 in September 2017.

·      Total Industrial production increased 0.1% in October, following a 0.2% increase in the previous month. Total industrial production in October was 4.1% above its level a year earlier. The rate of capacity utilization decreased 0.1 percentage point to 78.4%, 1.4 percentage points below its 1972-2017 average.

·      The import price index increased 0.5% in October, while the export price index increased 0.4%. The import price index increased 3.5% from October 2017 to October 2018, while the price index for exports increased 3.1%.

·      The consumer price index increased 0.3% in October, following a 0.1% increase in the previous month. The core index increased 0.2%, following a 0.1% increase as in the previous month. The consumer price index increased 2.5% for the 12-month period ending in October, while the core index rose 2.1%.

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

·      The advance figure for initial claims for unemployment insurance was 216 thousand in the week ending November 10, an increase of 2 thousand from the previous week’s unrevised level. The 4-week moving average was 215.25 thousand, an increase of 1.5 thousand from the previous week’s average.

·      Unemployment rates were lower in October in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased in 9 states in October 2018 and was essentially unchanged in 41 states and the District of Columbia. Eighteen states had jobless rate decreases from a year earlier and 32 states and the District had little or no change. Over the year, 36 states added nonfarm payroll jobs and 14 states and the District were essentially unchanged.

·      Real gross domestic product (GDP) increased in all 50 states and the District of Columbia in the second quarter of 2018, according to the U.S. Bureau of Economic Analysis. The percent change in real GDP in the second quarter ranged from 6.0% in Texas to 2.5% in Delaware.

·      Personal income increased in 2,787 counties, decreased in 318, and was unchanged in 8 in 2017, according to the U.S. Bureau of Economic Analysis (BEA). Personal income increased 4.5% in the metropolitan portion of the United States and increased 3.2% in the nonmetropolitan portion in 2017. The change in personal income ranged from negative 41.4% in Slope County, North Dakota to 23.7% in Crosby County, Texas in 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed mortgage rates moderated after increasing last week. 30-year fixed-rate mortgage averaged 4.94% for the week ending November 15th, unchanged from last week.  A year ago at this time, the 30-year fixed-rate mortgage averaged 3.95%. 15-year fixed-rate mortgage averaged 4.36% for the week ending November 15th, up from last week when it averaged 4.33%.  A year ago at this time, the 15-year fixed-rate mortgage averaged 3.31%.

·      Mortgage applications decreased 3.2% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending November 9th.

·      The November 2018 Empire State Manufacturing Survey indicated that business activity continued to grow strongly in New York State. The headline index edged up two points to 23.3.

·      The Philadelphia FED business outlook survey indicated that regional manufacturing activity slowed in November.  The headline index was 12.9 in November, compared with 22.2 in October.

• Sales of merchant wholesalers for September were up 0.2% from the previous month, and were up 7.8% a year ago, according to the U.S. Census Bureau. Inventories increased 0.4% in September, following a 0.9% increase in the previous month. The inventories/sales ratio was 1.26 in September, compared with 1.29 a year ago.
• The producer price index for total final demand increased 0.6% in October, while the index for final demand less foods, energy, and trade increased 0.2%. The producer price index for final demand increased 2.9% from October 2017 to October 2018, while the index for final demand less foods, energy, and trade increased 2.8%.
• The advance figure for initial claims for unemployment insurance was 214 thousand in the week ending November 3, a decrease of a thousand from the previous week. The 4-week moving average was 213.75 thousand, a decrease of 0.25 thousand from the previous week’s average.
• The number of jobs openings decreased to 7.0 million on the last business day of September, according to the U.S. Bureau of Labor Statistics. The number of hires and separations were both little changed at 5.7 million.
• From December 2017 to March 2018, gross job gains from opening and expanding private-sector establishments were 7.4 million, a decrease of 420 thousand jobs from the previous quarter, according to the U.S. Bureau of Labor Statistics. The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 740 thousand jobs in the private sector during the first quarter of 2018.
• Unemployment rates were lower in September than a year earlier in 308 of the 388 metropolitan areas, higher in 58 areas, and unchanged in 22 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 58 metropolitan areas, decreased in one area, and was essentially unchanged in 329 areas.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed mortgage rates rose significantly across the board. The 30-year fixed mortgage rate averaged 4.94% for the week ending November 8, up from last week when it averaged 4.83%. A year ago at this time, the 30-year fixed-rate averaged 3.90%. The 15-year fixed mortgage rate averaged 4.33%, up from last week when it averaged 4.23%. A year ago at this time, the 15-year fixed-rate averaged 3.24%.
• Mortgage applications decreased 4.0% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending November 2nd.

• Total non-farm payroll employment increased 250 thousand in October, following an increase of 118 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 246 thousand in October, while government employment increased by 4 thousand. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.
• The unemployment rate was unchanged at 3.7% in October. The unemployment rate was 4.1% in October 2017.
• The number of unemployed increased by 111 thousand to 6.075 million. The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 11 thousand to 1.373 million and accounted for 22.5% of the unemployed.
• The labor force participation rate increased by 0.2 percentage point to 62.9% in October, but has shown little change over the past 12 months.
• The average workweek of all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours.
•  In October, average hourly earnings of all employees on private nonfarm payrolls increased by 5 cents to $27.30. Over the past 12 months, average hourly earnings were up 3.1%.
• Compensation costs for civilian workers increased 0.8%, seasonally adjusted, for the 3-month period ending in September 2018, according to the U.S. Bureau of Labor Statistics. Compensation costs for civilian workers increased 2.8% for the 12-month period ending in September 2018, compared with a compensation costs increase of 2.5% in September 2017. Wages and salaries increased 2.9% for the 12-month period ending in September 2018, while benefit costs increased 2.6%.
• Nonfarm business sector labor productivity increased 2.2% during the third quarter of 2018, according to the U.S. Bureau of Labor Statistics, as output increased 4.1% and hours worked increased 1.8%. From the third quarter of 2017 to the third quarter of 2018, productivity increased 1.3%, reflecting a 3.7% increase in output and a 2.4% increase in hours worked. Unit labor costs in the nonfarm business sector increased 1.2% in the third quarter of 2018, reflecting a 3.5% increase in hourly compensation and a 2.2% increase in productivity. Unit labor costs increased 1.5% over the last four quarters.
• The advance figure for initial claims for unemployment insurance decreased 2 thousand to 214 thousand in the week ending October 27. The 4-week moving average was 213.75 thousand, an increase of 1.75 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending October 20 was 1,631 thousand, a decrease of 7 thousand from the previous week’s revised level. This is the lowest level for insured unemployment since July 28, 1973 when it was 1,603 thousand. The 4-week moving average was 1,640.75 thousand, a decrease of 6.25 thousand from the previous week’s revised average. This is the lowest level for this average since August 11, 1973 when it was 1,627.25 thousand.
• According to gross domestic product (GDP) by industry statistics released by the Bureau of Economic Analysis, 16 of 22 industry groups contributed to the overall 4.2% increase in real GDP in the second quarter. 

• Personal income increased 0.2% in September according to the Bureau of Economic Analysis. Disposable personal income increased 0.2% and personal consumption expenditures increased 0.4%. Real disposable personal income increased 0.1% in September, while real personal consumption expenditures increased 0.3%. The personal consumption expenditures price index increased 0.1%, while the core index (excluding food and energy) increased 0.2%. The personal consumption expenditures price index increased 2.0% from September 2017. The core index also increased 2.0% from a year ago.
• New orders for manufactured goods increased 0.7% in September, while shipments increased 0.9%. Year-to-date, new orders were up 8.4%, while shipments were up 7.5%.
• The international trade deficit in goods and services increased to $54.0 billion in September from $53.3 billion in August (revised), as exports increased to $212.6 billion and imports increased to $266.6 billion, according to the U.S. Census Bureau.
• September construction spending was up less than 0.1% from the previous month, and was up 7.2% from a year ago. Residential construction increased 0.5%, while nonresidential construction decreased 0.3%. Total private construction increased 0.3% in September, while total public construction decreased 0.9%.
• The S&P CoreLogic Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, reported a 5.8% annual gain in August, down from 6.0% in the previous month. The 10-City Composite annual increase came in at 5.1%, down from 5.5% the previous month. The 20-City Composite posted a 5.5% year-over-year gain, up from 5.9% the previous month.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates dropping slightly after last week’s increases. The 30-year fixed mortgage rate averaged 4.83% for the week ending November 1, down from last week when it averaged 4.86%. A year ago at this time, the 30-year fixed rate mortgage averaged 3.94%. The 15-year fixed mortgage rate averaged 4.23%, down from the previous week when it averaged 4.29%. A year ago at this time, the 15-year fixed rate mortgage averaged 3.27%.
• Mortgage applications decreased 2.5% from one week earlier,  according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 26, 2018.
• The Conference Board Consumer Confidence Index, which had improved modestly in September, increased again in October. The Index now stands at 137.9 (1985=100), up from 135.3 in September. The Present Situation Index increased from 169.4 to 172.8, while the Expectations Index rose from 112.5 to 114.6.
• The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in October, and the overall economy grew for the 114th consecutive month.