Archive for May, 2020

Key Economic Indicators – June 1, 2020

Friday, May 29th, 2020
  • RealGDPdecreased at an annual rate of 5.0% in the first quarter of 2020, according to the “second” estimate by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1%. In the advance estimate, released a month ago, the increase in real GDP was 4.8% for the first quarter. Real final sales of domestic product (GDP less change in private inventories) decreased 3.7% in the first quarter, in contrast to an increase of 3.1% in the final quarter of 2019.
  • Real gross domestic income (GDI) decreased 4.2% in the first quarter of 2020, compared with an increase of 3.1% in the final quarter of 2019. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, decreased 4.6% in the first quarter, compared with an increase of 2.6% in the fourth quarter of 2019.
  • The price index for gross domestic purchases increased 1.7% in the first quarter of 2020, compared with an increase of 1.4% in the previous quarter. The personal consumption expenditures (PCE) price index increased 1.3%, compared with an increase of 1.4%. Excluding food and energy prices, the PCE price index increased 1.6%, compared with an increase of 1.3%.
  • Corporate profits from current production decreased $295.4 billion in the first quarter of 2020, after an increase of $53.0 billion in the fourth quarter of 2019. Profits of domestic financial corporations increased $67.4 billion in the first quarter, in contrast to an increase of $0.7 billion in the previous quarter. Profits of domestic nonfinancial corporations decreased $169.5 billion, compared with an increase of $53.7 billion in the previous quarter. The rest-of-the-world component of profits decreased $58.6 billion in the first quarter, following a decrease of $1.4 billion.
  • Personal income increased 10.5% in April, following a 2.2% decrease in the previous month. Personal consumption expenditures decreased 13.6%, after a 6.9% decrease in the previous month, according to the U.S. Bureau of Economic Analysis (BEA) . Real disposable personal income increased 13.4% in April, while real personal consumption expenditures decreased 13.2%. The savings rate, personal saving as a percentage of disposable income, was 33.0% in April, up from 12.7% in March. The price index for personal consumption expenditures decreased 0.5% in April, after a decrease of 0.2% in March. The core index decreased 0.4%, after holding steady in the previous month. The price index for personal consumption expenditures was up 0.5% from April 2019, while the core index was up 1.0%. BEA stated: “The April estimate for personal income and outlays was impacted by the response to the spread of COVID-19, as federal economic recovery payments were distributed, and governments continued with “stay-at-home” orders. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate for April because the impacts are generally embedded in source data and cannot be separately identified.”
  • New orders for manufactured durable goods in April decreased 17.2%, according to the U.S. Census Bureau, following a 16.6% March decrease.  Excluding transportation, new orders decreased 7.4%.  Excluding defense, new orders decreased 16.2%.  New orders for transportation equipment decreased 47.3%. Shipments of manufactured durable goods in April, decreased 17.7%, following a 5.5% decrease in March.  Transportation equipment led the decrease by $31.4 billion or 42.7%. Unfilled orders for manufactured durable goods in April, down two consecutive months, decreased $17.5 billion or 1.6% to $1,107.8 billion.  Inventories of manufactured durable goods in April increased 0.2%, following a 0.6% March increase.
  • Retail inventories for April, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $644.9 billion, down 3.6% from March 2020, and were down 3.1% from April 2019.
  • Wholesale inventories for April, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $651.5 billion, up 0.4% from March 2020, but were down 2.6% from April 2019.
  • The international trade deficit was $69.7 billion in April, up $4.7 billion from $65.0 billion in March.  Exports of goods for April were $95.4 billion, $32.2 billion less than March exports. Imports of goods for April were $165.0 billion, $27.5 billion less than March imports.
  • The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 4.4% annual gain in March, up from 4.2% in the previous month. The 10-City Composite annual increase came in at 3.4%, up from 3.0% in the previous month. The 20-City Composite posted a 3.9% year-over-year gain, up from 3.5% in the previous month. Phoenix, Seattle and Charlotte reported the highest year-over-year gains among the 19 cities (excluding Detroit for the month). In March, Phoenix led the way with an 8.2% year-over-year price increase, followed by Seattle with a 6.9% increase and Charlotte with a 5.8% increase. Seventeen of the 19 cities reported higher price increases in the year ending March 2020 versus the year ending February 2020. It was stated that “Housing prices have not yet registered any adverse effects from the governmental suppression of economic activity in response to the COVID-19 pandemic. As much of the U.S. economy remained shuttered in April, next month’s data may show a more noticeable impact.”
  • U.S. house prices rose in the first quarter of 2020, up 1.7% according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).  House prices rose 5.7% from the first quarter of 2019 to the first quarter of 2020.  FHFA’s seasonally adjusted monthly index for March was up 0.1% from February.  Of the nine census divisions, the Mountain division experienced the strongest four-quarter appreciation, posting an 8.0% gain between the first quarters of 2019 and 2020 and a 2.5% increase in the first quarter of 2020.  Annual house price appreciation was weakest in the West South Central division, where prices rose by 4.3% between the first quarters of 2019 and 2020.  It was stated: “Because of the lag between contract signing and sale closing when our data are recorded, we judge the first quarter’s housing statistics were relatively unaffected by the COVID-19 outbreak.  However, we are unable to account for any modifications or cancellations of sales later in March.”
  • Sales of new single-family houses in April were at a seasonally adjusted annual rate of 623 thousand, according to the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 0.6% above the figure for March but is 6.2% above the April 2019 level. The seasonally adjusted estimate of new houses for sale at the end of April was 325,000.  This represents a supply of 6.3 months at the current sales rate, compared with 6.1 months in April 2019. The median sales price of new houses sold in April 2020 was $309.9 thousand, down 8.6% from April 2019.  The average sales price was $364.5 thousand, down 5.4% from a year ago.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed that mortgage rates hit the lowest levels in survey’s nearly 50-year history, breaking the record for the third time in just the last few months. 30-year fixed-rate mortgage averaged 3.15% for the week ending May 28, down from last week when it averaged 3.24%. A year-ago, the 30-year rate was 3.99%. 15-year fixed-rate mortgage averaged 2.62%, down from last week when it averaged 2.70%. A year-ago at this time, the 15-year rate averaged 3.46%.
  • Mortgage applications increased 2.7% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 22,2020.
  • The advance figure for initial claims for unemployment insurance decreased 323 thousand to 2,123 thousand in the week ending May 23. The 4-week moving average was 2,608 thousand, a decrease of 436 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 16 was 21,052 thousand, a decrease of 3,860 thousand from the previous week’s revised level. The 4-week moving average was 22,722.25 thousand, an increase of 760.25 thousand from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 14.5% for the week ending May 16, a decrease of 2.6 percentage points from the previous week’s revised rate. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • Labor productivity rose in 14 of 29 selected service-providing industries in 2019, according to the U.S. Bureau of Labor Statistics. This was one-third fewer industries compared to 2018 when labor productivity increased in 21 of 29 industries. Output increased in 17 industries in 2019 while hours worked increased in 18 industries.  Hours worked grew in 18 of the 29 industries.
  • Interaction with the general public was required for 75.3% of civilian workers in 2019, according to the Bureau of Labor Statistics. For workers in office and administrative support occupations, 86.5% were required to interact with the general public. Within this occupational group, 61.3% of payroll and timekeeping clerks and 100% of bill and account collectors had this requirement.
  • The FED’s “Beige Book” indicated that overall economic activity declined in all Districts as a result of the COVID-19 pandemic.  Declines were especially severe in the leisure and hospitality sector, with very little activity at travel and tourism businesses. Most Districts reported sharp drops in manufacturing activity, and production was notably weak in auto, aerospace, and energy-related plants. Residential home sales plunged due in part to fewer new listings and to restrictions on home showings in many areas. Construction activity also fell as new projects failed to materialize in many Districts. Employment continued to decrease in all Districts, including steep losses in most Districts, as social distancing and business closures affected employment at many firms. Securing PPP loans helped many businesses to limit or avoid layoffs, although employment continued to fall sharply in retail and in leisure and hospitality sectors. Pricing pressures varied but were steady to down modestly on balance. Weak demand weighed on selling prices, with some contacts noting discounting for apparel, hotel rooms, and airfare. Several Districts also reported low commodity prices, including oil, steel, and several agricultural commodities. Supply chain disruptions and strong demand led to higher prices for some grocery items including meat and fresh fruit.
  • The Chicago Fed National Activity Index (CFNAI) fell to negative 16.74 in April from negative 4.97 in March. All four broad categories of indicators used to construct the index made negative contributions in April, and all four categories decreased from March. The index’s three-month moving average, CFNAI-MA3, decreased to negative 7.22 in April from negative 1.69 in March. Following a period of economic expansion, an increasing likelihood of a recession has historically been associated with a CFNAI-MA3 value below negative 0.70.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) was negative 0.51 in the week ending May 22, down from negative 0.45. Risk indicators contributed negative 0.22, credit indicators contributed negative 0.20, and leverage indicators contributed negative 0.09 to the index in the latest week. The adjusted index (ANFCI), which isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions, edged down in the latest week to 0.10 from a revised 0.13. Risk indicators contributed negative 0.33, credit indicators contributed negative 0.33, leverage indicators contributed negative 0.04, and the adjustments for prevailing macroeconomic conditions contributed 0.80 to the index in the latest week.
  • The Federal Reserve Bank of Philadelphia Nonmanufacturing Business Outlook Survey for May indicate continued weakness in nonmanufacturing activity in the region. Despite remaining well below zero, the survey’s current indicators for general activity at the firm level, new orders, sales/revenues, and full-time employment all increased this month after reaching all-time low readings in April. The firms continued to report overall decreases in prices of both their inputs and their own goods and services for the second consecutive month. The survey’s index for firm-level future activity returned to positive territory and suggests optimism about growth over the next six months.
  • The Philadelphia FEDlaunched a weekly business outlook survey on COVID-19. The survey (151 firms) for the week ending on May 24th indicated that nearly 60% of all responding firms reported decreases of more than 5% in new orders or sales (down from 64% last week), while 8% reported increases of more than 5% (up slightly from the previous week).  Nearly 58% of the firms reported shifting to telecommuting/work from home in response to COVID-19 impacts (down slightly from last week), and 39% reported ceasing all hiring (down slightly). Nearly 46% of the firms noted fear of infection (up from 34% when asked two weeks ago), 39% of the firms noted lack of childcare, and 23% noted expanded unemployment benefits as impediments to bringing back workers.
  • The Federal Reserve Bank of Philadelphia coincident indexes showed decreases in all 50 states in April 2020. Over the past three months, the indexes decreased in all 50 states, for a three-month diffusion index of negative 100. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index fell 13.7% over the past three months and 12.0% in April.
  • The Conference Board index of leading economic indicators decreased 4.4% in April, following a decrease of 7.4% in the previous month. Over the six-month span through April, the leading index decreased 11.3% (about a 21.3% annual rate). The Conference Board coincident economic index decreased 8.9% in April, following a 1.5% decrease in the previous month. Over the six-month span through March, the coincident index decreased 9.6% (about an 18.2% annual rate).
  • The Conference Board Consumer Confidence Index, which declined sharply in April, held steady in May. The Index now stands at 86.6 (1985=100), up slightly from 85.7 in April. The Present Situation Index decreased from 73.0 to 71.1, and the Expectations Index improved from 94.3 to 96.9.
  • The University of Michigan Index of Consumer Sentiment for May was 72.3, slightly up from 71.8 in April. The index was 100.0 in May of 2019. The current economic conditions component was 82.3 in May, compared with 74.3 in April. The index of consumer expectations decreased to 65.9 in May, from 70.1 in April.
  • The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus.
  • As of May 29th, there are 5,838,541 COVID-19 confirmed cases in the world, 360,919 deaths, and 2,437,965 recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/29/2020, 9:00 EST). In the United States, there are 1,721,926 confirmed cases, 101,621 deaths, and 399.991 recovered cases. The world is struggling to control the spread of the virus.

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Key Economic Indicators – May 25, 2020

Friday, May 22nd, 2020
  • The advance figure for initial claims for unemployment insurance decreased 249 thousand to 2,438 thousand in the week ending May 16. The 4-week moving average was 3,042 thousand, a decrease of 501 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 9 was 25,073 thousand, an increase of 5,525 thousand from the previous week’s revised level. The 4-week moving average was 22,002.25 thousand, an increase of 2,313.5 thousand from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 17.2% for the week ending May 9, an increase of 1.7 percentage points from the previous week’s revised rate. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • Unemployment rates were higher in April in all 50 states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Similarly, all 50 states and the District had jobless rate increases from a year earlier. The national unemployment rate rose by 10.3 percentage points over the month to 14.7% and was 11.1 points higher than in April 2019. Nevada had the highest unemployment rate in April, 28.2%, followed by Michigan, 22.7%, and Hawaii, 22.3%. The rates in 43 states set new series highs, since the beginning in 1976. Connecticut had the lowest unemployment rate, 7.9%. followed by Minnesota (8.1%) and Nebraska (8.3%).
  • Nonfarm payroll employment decreased in all 50 states and the District of Columbia in April 2020. Over the year, nonfarm payroll employment decreased in all 50 states and the District. The largest job declines occurred in California (2.3447 million), New York (1.8273 million), and Texas (1.2989 million). The largest percentage declines occurred in Michigan (22.8%), Vermont (19.6%), and New York (18.8%).  All 50 states and the District of Columbia had over-the-year decreases in nonfarm payroll employment in April. The largest job declines occurred in California (2.324 million), New York (1.9049), and Texas (1.1106). The largest percentage declines occurred in Michigan (23.0%), Vermont (21.5%), and New York (-19.4%).
  • From December 2018 to December 2019, employment increased in 285 of the 355 largest U.S. counties, according to the U.S. Bureau of Labor Statistics. In December 2019, national employment (as measured by the Quarterly County Employment and Wages program) increased to 149.9 million, a 1.2% increase over the year. Cleveland, OK, had the largest over-the-year increase in employment with a gain of 5.8%. The U.S. average weekly wage increased 3.5% over the year, growing to $1,185 in the fourth quarter of 2019. Among the 355 largest counties, 341 had over-the-year increases in average weekly wages. Santa Cruz, CA, had the largest fourth quarter over-the-year wage gain at 20.7%.
  • Real state personal income grew on average 3.4% in 2018, after increasing 2.9% in 2017, according to the Bureau of Economic Analysis.  Real state personal income is a state’s current-dollar personal income adjusted by the state’s regional price parity and the national personal consumption expenditures price index.  The percent change in real state personal income ranged from 6.7% in Wyoming to 0.9% in Mississippi. Across metropolitan areas, the percent change ranged from 15.6% in Midland, Texas to negative 1.1% in Sebring-Avon Park, Florida.
  • Advance U.S. selected services total revenue for the first quarter of 2020, adjusted for seasonal variation but not for price changes, was $4,011.4 billion, a decrease of 2.8% from the fourth quarter of 2019 and up 0.8% from the first quarter of 2019, according to the U.S. Census Bureau.  The third quarter of 2019 to fourth quarter of 2019 growth was 1.0%.
  • Privately-owned housing starts in April were at a seasonally adjusted annual rate of 891 thousand, 30.2% below the revised March figure and 29.7% below the April 2019 level, according to the U.S. Census Bureau.  Single-family housing starts in April were at a rate of 650 thousand, 25.4% below the revised March figure. Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,074 thousand, 20.8% below the revised March rate and 19.2% below the April 2019 rate.  Single-family authorizations in April were at a rate of 669 thousand, 24.3% below the revised March figure of 884 thousand.
  • April existing home sales decreased 17.8% to an annualized rate of 4,330 thousand units, according to the National Association of Realtors. The April figure was 17.2% below the April 2019 figure. There were 1,470 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 April of 2019. The median sales price of existing homes sold was $286.8 thousand, 7.4% above April 2019.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates decreasing. 30-year fixed-rate mortgage averaged 3.24% for the week ending May 21, down from last week when it averaged 3.28%. A year-ago, the 30-year rate was 4.06%. 15-year fixed-rate mortgage averaged 2.70%, down from last week when it averaged 2.72%. A year-ago at this time, the 15-year rate averaged 3.51%.
  • Mortgage applications decreased 2.6% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 15th.
  • Manufacturing firms reported continued weakness in regional manufacturing activity this month, according to results from the Philadelphia FED Manufacturing Business Outlook Survey for May. Despite remaining well below zero, the survey’s current indicators for general activity, new orders, shipments, and employment rose this month after reaching long-term low readings in April. After reaching a 40-year low in April, the diffusion index for current general activity increased 13 points to negative 43.1, its third consecutive negative reading. The prices paid index increased 13 points to 3.2, and the prices received index increased 8 points to a reading of negative 3.1, its second consecutive negative reading.
  • The Philadelphia FEDlaunched a weekly business outlook survey on COVID-19. The survey (162 firms) for the week ending on May 17th indicated that nearly 64% of all responding firms reported decreases of more than 5% in new orders or sales (unchanged from last week), while 7% reported increases of more than 5% (down slightly from the previous week).  The impacts of various factors were negative for all firms, except for a very small net positive impact of reshoring of production. Among all firms, the three most frequently cited negative impacts came from mandated cutbacks or closure (51%), demand shock (45%), and cash flow or accounts receivables (38%). More than 61% of the firms reported shifting to telecommuting/work from home in response to COVID-19 impacts, 42% reported ceasing all hiring, and 31 percent reported furloughing employees.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) was negative 0.46 in the week ending May 15, down from negative 0.38. Risk indicators contributed negative 0.20, credit indicators contributed negative 0.17, and leverage indicators contributed negative 0.08 to the index in the latest week. The adjusted index (ANFCI), which isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions, ticked up in the latest week to 0.25 from a revised 0.23. Risk indicators contributed negative 0.30, credit indicators contributed negative 0.26, leverage indicators contributed negative 0.02, and the adjustments for prevailing macroeconomic conditions contributed 0.83 to the index in the latest week.
  • The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus. On May 19th, these measures were summarized by the FED Chairman Jerome H. Powell before the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs: “Available economic data for the current quarter show a sharp drop in output and an equally sharp rise in unemployment. By these measures and many others, the scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II. Since the pandemic arrived in force just two months ago, more than 20 million people have lost their jobs, reversing nearly 10 years of job gains. In March, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals. In addition to monetary policy, we took forceful measures in four areas: open market operations to restore market functioning; actions to improve liquidity conditions in short-term funding markets; programs in coordination with the Treasury Department to facilitate more directly the flow of credit to households, businesses, and state and local governments; and measures to allow and encourage banks to use their substantial capital and liquidity levels built up over the past decade to support the economy during this difficult time.” On May 21st, Vice Chair Richard H. Clarida re-iterated the Bank’s stance: “The Federal Reserve will continue to act forcefully, proactively, and aggressively as we deploy our toolkit—including our balance sheet, forward guidance, and lending facilities—to provide critical support to the economy during this challenging time and to do all we can to make sure that the recovery from this downturn, once it commences, is as robust as possible.”
  • As of May 22nd, there are over 5.160 million COVID-19 confirmed cases in the world, 335.418 thousand deaths, and 1,985.656 thousand recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/22/2020, 1pm EST). In the United States, there are 1.588 million confirmed cases, 95.276 thousand deaths, and 298.418 thousand recovered cases. The world is struggling to control the spread of the virus.

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Key Economic Indicators – May 18, 2020

Friday, May 15th, 2020
  • Due to recent events surrounding COVID-19, many businesses are operating on a limited capacity or have ceased operations completely. Advance estimates of retail and food services sales for April were down 16.4% from March but were down 21.6% from April 2019. Excluding motor vehicles & parts, retail sales were down 17.2% from the previous month, and were down 18.8% from a year ago. Year-to-date, retail sales were down 4.3% from the same period a year ago. Sales of clothing & clothing accessories stores were down 89.3% from a year ago, while electronics & appliance stores sales were down 64.8%. Furniture & home furnishing stores sales decreased 66.5% from April 2019, while food services & drinking places sales decreased 48.7%.
  • Total manufacturing and trade sales for March were down 5.2% from the previous month and were down 4.9% from a year ago. Total business inventories were down 0.2% from February and were down 0.3% from March 2019. The total business inventories/sales ratio was 1.45 in March, compared with 1.38 year ago.
  • Total Industrial production fell 11.2% in April, its largest drop in the 101-year history of the index, as the COVID-19 pandemic led many factories to slow or suspend operations. This drop in April followed a 4.5% decrease in March. The index was down 15.0% from April of 2019. Manufacturing output dropped 13.7%, its largest decline on record. Capacity utilization for the industrial sector dropped 8.3 percentage points in April to 64.9, a rate that is 14.9 percentage points below its long-run (1972–2019) average.
  • The federal budget had a deficit of $737 billion in April, compared with a deficit of $119.0 billion in March 2020, and a surplus of $160.3 billion in April 2019, according to U.S. Department of the Treasury. Receipts were $241.9 billion, 54.8% below April 2019 level. Outlays were $979.7 billion, up 161.1% from April 2019. The cumulative deficit for the first half of the fiscal year 2020 was $1,482.3 billion, compared with a deficit of $530.9 billion during the first half of the previous fiscal year. The Treasury Department stated reasons for the large deficit very clearly: “Outlays for April totaled $980 billion, an increase of $604 billion over April 2019, largely due to the release of assistance related to the COVID-19 outbreak including: Economic Impact Payments to individuals and families ($217 billion); Coronavirus Relief Fund payments to state, territorial, local and tribal governments ($142 billion); increases in Medicare and other Department of Health and Human Services programs ($146 billion); and increases in unemployment benefits and other Department of Labor programs ($46 billion).  Receipts were $294 billion lower than April 2019 as certain taxes from individuals and corporations were deferred until July, and other provisions in recent legislation impacted receipts.”
  • U.S. import prices decreased 2.6% in April, according to the U.S. Bureau of Labor Statistics, after decreasing 2.4% in March. Both monthly declines were led by falling fuel prices. The decrease in import prices in April was largest monthly drop since the index declined 3.2 percent in January 2015. Prices for U.S. exports decreased 3.3% in April after a 1.7% decrease in March. Import prices decreased 6.8% over the 12-month period ended in April, while export prices decreased 7.0%. The decrease in import prices was the largest 12-month drop since the index declined 8.3% from December 2014 to December 2015.
  • The producer price index for final demand (headline index) decreased 1.3% in April, following a 0.2% decrease in the previous month, according to the U.S. Bureau of Labor Statistics. This decrease in April was the largest since the index began in December 2009. In April, over 80% of the decrease in the final demand index can be traced to a 3.3% drop in prices for final demand goods. The index for final demand services moved down 0.2%. The index for final demand less foods, energy, and trade decreased 0.9%, after a 0.2% decrease in March. This was the largest decline since the index was introduced in September 2013. The producer price index for final demand decreased 1.2% for the 12 months ended in April, the largest decline since falling 1.3% for the 12 months ended November 2015. The index for final demand less foods, energy, and trade decreased 0.3% for the 12-months ended in April, the first 12-month decrease.
  • The consumer price index (headline index) decreased 0.8% in April, following a 0.4% decrease in the previous month. The index for all items less food and energy (the core) index decreased 0.4%, following a 0.1% decrease in the previous month. This is the largest monthly decline in the history of the series, which dates to 1957. A 20.6% decline in the gasoline index was the largest contributor to the monthly decrease in the seasonally adjusted all items index, but the indexes for apparel, motor vehicle insurance, airline fares, and lodging away from home all fell sharply as well. In contrast, food indexes rose in April, with the index for food at home posting its largest monthly increase since February 1974. The consumer price index increased 0.3% for the 12-month period ending in April, the smallest 12-month increase since October 2015. The core index rose 1.4% over the last 12 months, its smallest increase since April 2011.
  • Real average hourly earnings for all employees increased 5.6% from March to April. This result stems from a 4.7% increase in average hourly earnings combined with a 0.8% decrease in the consumer price index.
  • The advance figure for initial claims for unemployment insurance decreased 195 thousand to 2,981 thousand in the week ending May 9. The 4-week moving average was 3,616.5 thousand, a decrease of 564 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 2 was 22,833 thousand, an increase of 456 thousand from the previous week’s revised level. The 4-week moving average was 19,760 thousand, an increase of 2,729.75 thousand from the previous week’s revised average. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • The number of total separations increased by 8.9 million to a series high of 14.5 million in March, according to the U.S. Bureau of Labor Statistics. Within separations, the quits rate fell to 1.8% and the layoffs and discharges rate increased to 7.5%. Job openings decreased by 813 thousand to 6.2 million on the last business day of March. Job openings fell in total private (-774 thousand), with the largest declines in accommodation and food services (258 thousand) and durable goods manufacturing (82 thousand). The number of job openings decreased in the South, Midwest, and West regions. Over the month, hires declined to 5.2 million. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. This release includes estimates of the number and rate of job openings, hires, and separations for the total non-farm sector, by industry, and by four geographic regions.
  • The unemployment rate for foreign-born persons in the United States was 3.1% in 2019, down from 3.5% in 2018, according to the U.S. Bureau of Labor Statistics. The jobless rate of native-born persons was 3.8% in 2019, down from 4.0% in 2018. In 2019, there were 28.4 million foreign-born persons in the U.S. labor force, comprising 17.4% of the total. Hispanics continued to account for nearly half of the foreign-born labor force in 2019, and Asians accounted for one-quarter. Foreign-born workers were more likely than native-born workers to be employed in service occupations; natural resources, construction, and maintenance occupations; and production, transportation, and material moving occupations. Foreign-born workers were less likely than native-born workers to be employed in management, professional, and related occupations and in sales and office occupations. The median usual weekly earnings of foreign-born full-time wage and salary workers were $800 in 2019, compared with $941 for their native-born counterparts.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed that mortgage rates generally hold steady. The 30-year fixed mortgage rate averaged 3.28% for the week ending May 14, up slightly from last week when it averaged 3.26%. A year-ago at this time, the 30-year fixed-rate averaged 4.07%. The 15-year fixed mortgage rate averaged 2.72%, down slightly from last week when it averaged 2.73%. A year-ago at this time, the 15-year fixed-rate averaged 3.53%.
  • Mortgage applications increased 0.3% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 8th.
  • The University of Michigan Index of Consumer Sentiment inched upward in early May to 73.7, after plunging 17.3 points in April. The Index was 100.0 in May of last year. The Current Economic Conditions Index increased to 83.0 in May, from 74.3 in April. The Index of Consumer Expectations decreased to 67.7 in May, from 70.1 in April.
  • The Philadelphia FED launched a weekly business outlook survey on COVID-19. The survey (189 firms) for the week ending on May 10th indicated that more than 64% of all responding firms reported decreases of more than 5% in new orders or sales (up from 60% last week), while 8% reported increases of more than 5% (unchanged from the previous week).  More than 81% of the firms reported seeking a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan to address problems arising from the outbreak, and 23% sought out an SBA Economic Injury Disaster Loan. Of the 116 firms that reported seeking a PPP loan, nearly 90% reported having received a loan. Of the 102 firms that reported receiving a PPP loan, similar shares reported that receiving the PPP loan helped them pay bills and/or rent (68%) and prevented furloughs and/or layoffs (67%), and 31% indicated that it allowed for recalling furloughed and/or laid off workers. A larger share of manufacturers reported the loan prevented furloughs/layoffs relative to non-manufacturers, while a larger share of non-manufacturers reported that it allowed for recalling furloughed/laid off workers. More than 63% of the firms reported shifting to telecommuting/work from home in response to COVID-19 impacts, and 38% reported ceasing all hiring.
  • The May Empire State Manufacturing Survey indicated that business activity continued to deteriorate significantly in New York State. The general business conditions index decreased 29.7 points to negative 48.5 in May, from negative 78.2 in April. The prices paid index decreased 1.7 points to 4.1, while the prices received index increased a point to negative 7.4.
  • The Chicago Fed Survey of Business Conditions (CFSBC) Activity Index, a survey of business contacts located in the Seventh Federal Reserve District, decreased to negative 69 in April from negative 55 in March, suggesting that economic growth remained well below trend and slowed even further in April.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) was negative 0.40 in the week ending May 8, down from negative 0.30. Risk indicators contributed negative 0.17, credit indicators contributed negative 0.15, and leverage indicators contributed negative 0.08 to the index in the latest week. The adjusted index (ANFCI), which isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions, edged down in the latest week to 0.24 from a revised 0.26. Risk indicators contributed negative 0.26, credit indicators contributed negative 0.27, leverage indicators made a neutral contribution, and the adjustments for prevailing macroeconomic conditions contributed 0.78 to the index in the latest week.
  • The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus. On May 13th, the FED Chairman Jerome H. Powell states that among people who were working in February, almost 40 percent of those in households making less than $40,000 a year had lost a job in March. Chairman Powell inidcated that further stimulus is necessary and concluded his speech with the following paragraph: “At the Fed, we will continue to use our tools to their fullest until the crisis has passed, and the economic recovery is well under way. Recall that the Fed has lending powers, not spending powers. A loan from a Fed facility can provide a bridge across temporary interruptions to liquidity, and those loans will help many borrowers get through the current crisis. But the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems. Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery. This trade-off is one for our elected representatives, who wield powers of taxation and spending.”
  • According to Federal Reserve Board’s Economic Well-Being of Households, 19% of all adults reported either losing a job or experiencing a reduction in work hours in March. 23% of adults said their income in March was lower than in February. Five percent said their income increased. More than 9 in 10 who lost a job or were told not to work expect to return to the same job, including 14% who were told the date to expect to return or who have already returned to work. “Education is a major determinant of where workers are physically able to do their jobs. Sixty-three percent of workers with a bachelor’s degree worked entirely from home in the last week of March. Sixty-seven percent of workers who never attended college and 60 percent who completed some college, or an associate degree worked entirely outside of their homes.”
  • As of May 15th, there are over 4.477 million COVID-19 confirmed cases in the world, 303.389 thousand deaths, and 1,606.796 thousand recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/15/2020, 11:00 EST). In the United States, there are 1.420 million confirmed cases, 85.974 thousand deaths, and 246.414 thousand recovered cases. The world is struggling to control the spread of the virus.

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Key Economic Indicators – May 11, 2020

Friday, May 8th, 2020
  • The unemployment rate surged to 14.7% in April, highest rate since the inception of this series in January 1948, and non-farm payroll employment dropped at a record rate of 20.5 million, according to the U.S. Bureau of Labor Statistics.
  • Total non-farm payroll employment fell by 20.5 million in April, following a decrease of 870 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls decreased by 19.52 million in the month, while government employment decreased by 980 thousand. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality. The April over-the-month decline is the largest in the history of the series, from 1939, and brought employment to its lowest level since February 2011. Job losses in April were widespread, with the largest employment decline occurring in leisure and hospitality.
  • In April, employment in leisure and hospitality plummeted by 7.7 million, or 47 percent. Almost three quarters of the decrease occurred in food services and drinking places (5.5 million). Employment also fell in the arts, entertainment, and recreation industry (1.3 million) and in the accommodation industry (839 thousand). Employment declined by 2.5 million in education and health services in April. In health care, employment declined by 1.4 million, led by losses in offices of dentists (503 thousand), offices of physicians (243 thousand), and offices of other health care practitioners (205 thousand). Employment also declined in social assistance (651 thousand), reflecting job losses in child day care services (336 thousand) and individual and family services (241 thousand). Employment in private education declined by 457 thousand over the month.
  • Professional and business services shed 2.1 million jobs in April, while employment in retail trade declined by 2.1 million. In April, manufacturing employment dropped by 1.3 million. Employment in the other services industry declined by 1.3 million in April, with nearly two-thirds of the decline occurring in personal and laundry services (797 thousand). Construction employment fell by 975 thousand. Employment fell by 584 thousand in transportation and warehousing in April, while wholesale trade shed 363 thousand jobs. Employment fell by 262 thousand in financial activities, 254 thousand in information, and 46 thousand in mining.
  • The average workweek of all employees on private nonfarm payrolls increased by 0.1 hour to 34.2 hours. Average hourly earnings increased by $1.34 cents to $30.01. Over the past 12 months, average hourly earnings were up 7.9%. BLS noted: “The increase in average hourly earnings largely reflect the substantial job loss among lower-paid workers; this change, along with earnings increases, put upward pressure on the average hourly earnings estimates.”
  • The unemployment rate rose to 14.7% in April, from 4.4% in March. This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948). The unemployment rate was 3.6% in April of 2019.
  • The number of unemployed persons increased by 15.938 million to 23.078 million. The number of unemployed persons who reported being on temporary layoff increased about ten-fold to 18.1 million in April. The number of permanent job losers increased by 544 thousand to 2.0 million. The number of persons who usually work full time declined by 15.0 million over the month, and the number who usually work part time declined by 7.4 million. Part-time workers accounted for one-third of the over-the-month employment decline.
  • In April, the number of unemployed persons who were jobless less than 5 weeks increased by 10.7 million to 14.3 million, accounting for almost two-thirds of the unemployed. The number of unemployed persons who were jobless 5 to 14 weeks rose by 5.2 million to 7.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 225 thousand to 939 thousand in April and accounted for 4.1% of the unemployed.
  • The labor force participation rate decreased by 2.5 percentage points to 60.2% in April, the lowest rate since January 1973 when it was 60.0%.
  • The advance figure for initial claims for unemployment insurance decreased 677 thousand to 3,169 thousand in the week ending May 2. The 4-week moving average was 4,173.5 thousand, a decrease of 861.5 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending April 25 was 22,647 thousand, an increase of 4,636 thousand from the previous week’s revised level. The 4-week moving average was 17,097.75 thousand, an increase of 3,800.25 thousand from the previous week’s revised average. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • First quarter productivity decreased 2.5% (seasonally adjusted annual rate) in the non-farm business sector, following a 1.2% increase in the final quarter of 2019, according to the U.S. Bureau of Labor Statistics (BLS). Unit labor costs increased 4.8% in the first quarter of 2020, reflecting a 2.2% increase in hourly compensation and a 2.5% decrease in productivity. From the first quarter of 2019 to the first quarter of 2020, productivity increased 0.3%, as output increased 0.1%, and hours worked decreased 0.2%. The 2.5% decline in non-farm business sector labor productivity in the first quarter of 2020 was the largest quarterly decline since the fourth quarter of 2015, when output per hour decreased 2.9%. It reflects the largest decline in output since the first quarter of 2009 (6.5% decline) and the largest decline in hours worked since the third quarter of 2009 (4.4% decline). Productivity had increased in 15 of the 16 quarters between fourth-quarter 2015 and first-quarter 2020. BLS also stated: “BLS quarterly estimates of labor productivity combine output data with hours worked data based primarily on the Current Employment Statistics (CES) survey. The reference period for the CES largely predated many of the COVID-19-related job losses that occurred in the latter part of March. To capture these job losses, adjustments were made to March employment, based on the Department of Labor’s Employment and Training Administration weekly reports of the number of initial claims for unemployment insurance benefits. Hours and related measures—including labor productivity—for the first quarter of 2020 reflect these adjustments.”
  • New orders for manufactured goods in March, down four of the last five months, decreased 10.3% to $445.8 billion, according to the U.S. Census Bureau, following a 0.1% decrease in the previous month.  Shipments, down three consecutive months, decreased 5.2% to $473.6 billion.  This followed a 0.3% February decrease.  Unfilled orders, down following three consecutive monthly increases, decreased 2.0%.  This followed a 0.1% February increase.  The unfilled orders-to-shipments ratio was 6.57, down from 6.62 in February.  Inventories decreased 0.8% to $693.5 billion, following a 0.4% decrease in the previous month.  The inventories-to-shipments ratio was 1.46, up from 1.40 in February. It was stated: “Due to recent events surrounding COVID-19, many businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards.”
  • In March international trade in goods and services deficit was $44.4 billion, $4.6 billion more than the revised February figure, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis (BEA). March exports were $187.7 billion, $20.0 billion less than February exports. March imports were $232.2 billion, $15.4 billion less than February imports. Year-to-date international trade in goods and services deficit was $129.7 billion, compared with a deficit of $157.8 billion during the first three months of 2019. Year-to-date exports were $603.8 billion, compared with $625.5 billion during the same period in 2019. Year-to-date imports were $733.5 compared with $783.2 billion during the first three months of the previous year. The BEA stated: “The declines in March exports and imports were, in part, due to the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. The full economic effects of the COVID-19 pandemic cannot be quantified in the trade statistics for March because the impacts are generally embedded in source data and cannot be separately identified. The Census Bureau and the Bureau of Economic Analysis have monitored data quality and determined estimates in this release meet publication standards.”
  • Consumer credit increased at a seasonally adjusted annual rate of 1.7% during the first quarter, according to the Board of Governors of the Federal Reserve System. Revolving credit decreased at an annual rate of 10.3%, while non-revolving credit increased at an annual rate of 6.0%. In March, consumer credit decreased at annual rate of 3.4% to $4,209.3 billion. Revolving credit decreased at an annual rate of 30.9% in March, while non-revolving credit increased at an annual rate of 6.2%.
  • Construction spending during March 2020 was estimated at a seasonally adjusted annual rate of $1,360.5 billion, up 0.9% from February, according to the U.S. Census Bureau. The March figure was 4.7% above a year ago. During the first three months of this year, construction spending amounted to $297.0 billion, 6.7% above the $278.5 billion for the same period in 2019. In March, private construction increased 0.7%, while public construction increased 1.6%. Private residential construction increased 2.3% in March, while private nonresidential construction decreased 1.3%. Public residential construction increased 0.7% in March, while public nonresidential construction decreased 1.6%. The Census Bureau stated: “Due to recent events surrounding COVID-19, many governments and businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards.”
  • The home-ownership rate of 65.3% in the first quarter of 2020 was 1.1 percentage points higher than the rate in the first quarter 2019 (64.2%) but was not statistically different from the rate in the fourth quarter 2019 (65.1%), according to the U.S. Census Bureau. National vacancy rates in the first quarter 2020 were 6.6% for rental housing and 1.1% for homeowner housing. The rental vacancy rate of 6.6% was 0.4 percentage point lower than the rate in the first quarter 2019 (7.0%), but not statistically different from the fourth quarter 2019 (6.4%).  The homeowner vacancy rate of 1.1% was 0.3 percentage point lower than the rate in the first quarter 2019 (1.4%) and the rate in the fourth quarter 2019 (also 1.4%).The results of Freddie Mac’s Primary Mortgage Market Survey showed mortgage rates ticked up slightly. 30-year fixed rate mortgage averaged 3.26% for the week ending May 7, up from a week earlier when it averaged 3.23%. A year-ago at this time, the 30-year fixed rate mortgage averaged 4.10%. 15-year fixed rate mortgage averaged 2.73%, down from last week when it averaged 2.77%. A year-ago at this time, the 15-year fixed rate mortgage averaged 3.57%.
  • Mortgage applications increased 0.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 1, 2020.
  • The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector contracted in April, and the overall economy contracted after 131st consecutive months of expansion. It was stated that “Comments from the panel were strongly negative (three negative comments for every one positive comment) regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and continuing energy market recession. The PMI® indicates a level of manufacturing-sector contraction not seen since April 2009, with a strongly negative trajectory.”
  • The Institute for Supply Management’s (ISM) non-manufacturing survey results indicated that economic activity in the non-manufacturing sector contracted in April for the first time since December 2009, ending a 122-month period of growth. Two non-manufacturing industries reported growth, while sixteen industries reported contraction in April.
  • The Federal Reserve Bank of Philadelphia suspended the release of the state leading indexes indefinitely. It was stated that: “Given the sudden, extreme impact of the COVID-19 outbreak on initial unemployment claims in recent weeks, our researchers’ standard approach for estimating the six-month change in coincident indexes is not appropriate.”
  • The Federal Reserve Bank continues to take measures to alleviate the negative effects of the virus.
  • As of May 8th, there are over 3.872 million COVID-19 confirmed cases in the world, 270.118 thousand deaths, and 1,293.333 thousand recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 5/8/2020, 9:40 am EST). In the United States, there are 1.257 million confirmed cases, 75.670 thousand deaths, and 195.036 thousand recovered cases. The world is struggling to control the spread of the virus.

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