Key Economic Indicators – June 15, 2020

  • April 2020 sales of merchant wholesalers were $395.4 billion, down 16.9% from the March level and were down 20.7% from a year ago, according to the U.S. Census Bureau. Total inventories of merchant wholesalers were $650.4 billion at the end of April, up 0.3% from the revised March level, but were down 2.8% from the revised April 2019 level.
  • U.S. selected services total revenue for the first quarter of 2020 was $4,008.5 billion, down 2.9% from the fourth quarter of 2019, but up 0.8% from the first quarter of 2019. Transportation and warehousing revenues decreased 5.0% from the previous quarter, and arts, entertainment, and recreation revenues decreased 11.3%. Health care and social assistance revenues were down 3.7% in the first quarter, and revenues of professional, scientific, and technical services were down 0.2%. Real estate and rental and leasing revenues were up 0.3%, and revenues for the information sector were up 0.2%.
  • U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the first quarter of 2020 totaled $111.7 billion, down $38.8 billion from the fourth quarter of 2019, and down $43.2 billion from the first quarter of 2019, according to the U.S. Census Bureau. Seasonally adjusted sales for the quarter totaled $1,637.4 billion, down $58.5 billion from the fourth quarter of 2019, and down $66.8 billion from the first quarter of 2019.
  • Seasonally adjusted after-tax profits of U.S. retail corporations with assets of $50 million and over totaled $24.0 billion, down $5.6 billion from the fourth quarter of 2019, and down $3.9 billion from the first quarter of 2019.  Seasonally adjusted sales for the quarter totaled $822.5 billion, up $11.5 billion from the fourth quarter of 2019, and up $45.9 billion from the first quarter of 2019.
  • The federal budget had a deficit of $398.8 billion in May, compared with a deficit of $738.0 billion in April 2020, and a deficit of $207.8 billion in May 2019, according to U.S. Department of the Treasury. Receipts were $173.9 billion, 25.1% below May 2019 level. Outlays were $572.7 billion, up 30.2% from May 2019. The cumulative deficit for the first eight months of the fiscal year 2020 was $1,880.3 billion, compared with a deficit of $738.6 billion during the first eight months of the previous fiscal year.
  • The net worth of households and nonprofits fell to $110.8 trillion in the first quarter of 2020, compared with $117.3 trillion at the end of the final quarter of 2019, and $111.2 trillion at the end of first quarter of 2019.
  • Domestic nonfinancial debt expanded at a seasonally adjusted annual rate of 11.7% in the first quarter of 2020, compared with an annual rate of 3.2% in the previous quarter. Household debt increased 3.9% at an annual rate in the first quarter of 2020. Consumer credit grew at an annual rate of 1.6%, while mortgage debt (excluding charge-offs) grew at an annual rate of 3.2%. Nonfinancial business debt rose at an annual rate of 18.8% in the first quarter of 2020, up from a 2.0% annual rate in the previous quarter.
  • Federal government debt increased 14.3% at an annual rate in the first quarter of 2020, up from a 3.8% annual rate in the previous quarter. State and local government debt expanded at an annual rate of 0.1% in the first quarter of 2020, after expanding at an annual rate of 4.5% in the previous quarter.
  • Domestic nonfinancial debt outstanding was $55.9 trillion at the end of the first quarter of 2020, of which household debt was $16.3 trillion, nonfinancial business debt was $16.8 trillion, and total government debt was $22.8 trillion.
  • U.S. import prices increased 1.0% in May, after decreasing 2.6% in April, according to the U.S. Bureau of Labor Statistics. Prices for fuel imports increased 20.5%, after a 31.0% decline in April and a 26.6% decline in March. Nonfuel import prices increased 0.1%, following a 0.5% decrease in the previous month. Prices for U.S. exports increased 0.5% in May after a 3.3% decrease in April. Agricultural export prices decreased 0.5% in May, while non-agricultural exports prices increased 0.6%. Both import and export prices decreased 6.0% over the 12-month period ended in May. Prices for fuel imports dropped 49.6% from May 2019 to May 2020, while non-fuel import prices decreased 0.7%.  Prices for agricultural exports decreased 3.5% from May 2019 to May 2020, while non-agricultural exports prices decreased 6.3%.
  • The producer price index for final demand (headline index) increased 0.4% in May, following a 1.3% decrease in the previous month, according to the U.S. Bureau of Labor Statistics. In May, the advance in the final demand index is attributable to prices for final demand goods, which climbed 1.6%, the largest increase since the index began in November 2009. Two-thirds of the May increase in the index for final demand goods is attributable to a 40.4% jump in meat prices. The indexes for gasoline, processed young chickens, light motor trucks, liquefied petroleum gas, and carbon steel scrap also moved higher. The index for final demand services moved down 0.2%, the same decrease as in the previous month. The index for final demand less foods, energy, and trade increased 0.1% in May, after a 0.9% decrease in April. The producer price index for final demand decreased 0.8% for the 12 months ended in May. The index for final demand less foods, energy, and trade decreased 0.4% for the 12-months ended in May, the second 12-month decrease.
  • The consumer price index (headline index) decreased 0.1% in May, following a 0.8% decrease in the previous month. The index for all items less food and energy (the core) index decreased 0.1%, following a 0.4% decrease in the previous month. Declines in the indexes for motor vehicle insurance, energy, and apparel more than offset increases in food and shelter indexes to result in the monthly decrease in the seasonally adjusted all items index. The gasoline index declined 3.5% in May, leading to a 1.8% decline in the energy index. The food index, in contrast, increased 0.7% in May as the index for food at home rose 1.0%.  The consumer price index increased 0.1% for the 12-month period ending in May, while the core index rose 1.2%. The energy index fell 18.9% over the last year. The food index increased 4.0% over the last 12 months, with the index for food at home rising 4.8%.
  • Real average hourly earnings for all employees decreased 0.9% from April to May. This result stems from a 1.0% decrease in average hourly earnings combined with a 0.1% decrease in the consumer price index.
  • The advance figure for initial claims for unemployment insurance decreased 355 thousand to 1,542 thousand in the week ending June 6. The 4-week moving average was 2,002 thousand, a decrease of 286.25 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 30 was 20,929 thousand, a decrease of 339 thousand from the previous week’s revised level. The 4-week moving average was 21,987.5 thousand, a decrease of 404.75 thousand from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 14.4% for the week ending May 30, a decrease of 0.2 percentage point 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.”
  • The number of total separations decreased by 4.8 million to 9.9 million in April, according to the U.S. Bureau of Labor Statistics. Despite the over the month decline, the total separations level is the second highest in series history. Within separations, the quits rate fell to 1.4% and the layoffs and discharges rate decreased to 5.9%. Job openings decreased to 5.0 million on the last business day of April. Over the month, hires declined to 3.5 million, a series low. 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 nonfarm sector, by industry, and by four geographic regions.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed that mortgage rates remain relatively flat. The 30-year fixed mortgage rate averaged 3.21% for the week ending June 11, up slightly from last week when it averaged 3.18%. A year-ago at this time, the 30-year fixed-rate averaged 3.82%. The 15-year fixed mortgage rate averaged 2.62%, unchanged from last week. A year-ago at this time, the 15-year fixed-rate averaged 3.26%.
  • Mortgage applications increased 9.3% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 5th.
  • The University of Michigan Index of Consumer Sentiment increased in early June to 78.9, from 72.3 in May. The Index was 98.2 in June of last year. The Current Economic Conditions Index increased to 87.8 in June, from 82.3 in May. The Index of Consumer Expectations increased to 73.1 in June, from 65.9 in May.
  • The Philadelphia FEDlaunched a weekly business outlook survey on COVID-19. The survey (135 firms) for the week ending on June 7th indicated that more than 61% of all responding firms reported decreases of more than 5% in new orders or sales (up slightly from last week), while 10% reported increases of more than 5% (down from 15%).  More than 82% of the firms reported seeking a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan to address problems arising from the outbreak, and 17% sought out an SBA Economic Injury Disaster Loan. Of the 91 firms that reported seeking a PPP loan, nearly 96% reported having received a loan. Of the 87 firms that reported receiving a PPP loan, equal shares reported that receiving the PPP loan helped them pay bills and/or rent (68%) and prevented furloughs and/or layoffs (70%), and 32% indicated that it allowed for recalling furloughed and/or laid off workers. Larger shares of non-manufacturers reported the loan prevented furloughs/layoffs relative to manufacturers. Just under half of the firms reported shifting to telecommuting/work from home in response to COVID-19 impacts, and 31% reported ceasing all hiring.
  • The Chicago Fed Survey of Business Conditions (CFSBC) Activity Index, a survey of business contacts located in the Seventh Federal Reserve District, increased to negative 32 in May from negative 72 in April, suggesting that economic growth remained well below trend.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) edged down to negative 0.40 in the week ending June 5. Risk indicators contributed negative 0.24, credit indicators contributed negative 0.24, and leverage indicators contributed negative 0.10 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, also edged down in the latest week to negative 0.08. Risk indicators contributed negative 0.35, credit indicators contributed negative 0.40, leverage indicators contributed negative 0.06, and the adjustments for prevailing macroeconomic conditions contributed 0.74 to the index in the latest week.
  • The Federal Reserve Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 0 to 0.25%. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. The Committee also stated: “To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations.” The projections by the Federal Reserve Board members and Federal Reserve Bank presidents for major economic indicators for the 2020-2022 period are also released. Median forecasts for 2020 are real GDP contraction of 6.5%, unemployment rate of 9.3%, inflation, based on the price index for personal consumption expenditures, of 0.8%, and core inflation of 1.0%.
  • There were 7,540,679 COVID-19 confirmed cases in the world, 422,012 deaths, and 3,561,804 recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 6/12/2020, 9:00 EST). In the United States, there are 2,023,347 confirmed cases, 113,820 deaths, and 540,292 recovered cases. The world is struggling to control the spread of the virus.

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