Tuesday September 19 2017
US Housing Starts Fall for 2nd Month
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the United States fell 0.8 percent from the previous month to a seasonally adjusted annualized rate of 1180 thousand in August of 2017, following an upwardly revised 1190 thousand in the previous month and compared to market expectations of a 1.7 percent rise. Starts declined in the Northeast and the South.

The volatile multi-family segment slumped 5.8 percent to 323 thousand. In contrast, single-family starts, the largest segment of the market increased 1.6 percent to 851 thousand. Starts went down in the Northeast (-8.7 percent to 105 thousand) and the South (-7.9 percent to 563 thousand) but rose in the Midwest (22 percent to 200 thousand) and the West (4 percent to 312 thousand).

Building permits increased sharply by 5.7 percent to a seasonally adjusted annualized rate of 1300 thousand, way above market expectations of 1220 thousand. Authorizations of units in buildings with five units or more jumped 22.8 percent to 464 thousand while single-family permits dropped 1.5 percent to 800 thousand. Permits rose in the Midwest (8.8 percent to 185 thousand), the West (15.3 percent to 362 thousand) and the South (3.7 percent to 646 thousand) but fell in the Northeast (-13 percent to 107 thousand). 

Year-on-year, starts rose 1.4 percent and permits went up 8.3 percent.

Data released for August suggested a limit impact from storms as Hurricane Harvey impacted construction activity in Texas only for the last week of the month and Hurricane Irma did not have an impact until September. Moreover, the response rate from areas affected by both hurricanes was not significantly lower than normal. Together, Texas and Florida accounted for about 13 percent of 2016 US authorizations and 26 percent of authorizations in the South region.




Friday September 15 2017
US Consumer Sentiment Falls Less Than Expected
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The University of Michigan's consumer sentiment for the United States fell to 95.3 in September of 2017 from 96.8 in August but slightly above market expectations of 95.1. It is the lowest reading in three months, as hurricanes Irma and Harvey heavy impacted gauge if consumer expectations.

The gauge of consumer expectations declined to 83.4 from 87.7 in August while the current conditions index rose to 113.9 from 110.9, the highest since November of 2000.

Americans expect the inflation rate to be 2.7 percent next year, higher than 2.6 percent in August. The 5-year expectation also increased to 2.6 percent from 2.5 percent in the previous month. 

The two hurricanes had a greater impact on expected economic conditions. Across all interviews in early September, 9% spontaneously mentioned concerns that Harvey, Irma, or both, would have a negative impact on the overall economy. Among those who mentioned the hurricanes, the Sentiment Index was 80.2, while among those who did not spontaneously mention either hurricane, the Sentiment Index remained unchanged from last month at 96.8. Given the widespread devastation in Texas and Florida, it is not surprising to find these very negative initial reactions, nor would it be surprising if these negative assessments last longer than following most past hurricanes. While consumers anticipated slight increases in gas prices and a slightly higher overall inflation rate, those concerns were neutralized by the best assessments of their financial situation in more than a decade. Renewed gains in incomes as well as rising home and equity values have acted to counterbalance the negative impacts from the hurricanes. Given the current resilience of consumers, recent events are unlikely to derail confidence.




Friday September 15 2017
US Industrial Production Drops the Most in 8 Years
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

Industrial output in the US shrank 0.9 percent month-over-month in August of 2017, following an upwardly revised 0.4 percent gain in July and missing market expectations of a 0.1 percent increase. It is the first drop in industrial output since January and the biggest since May 2009 as Hurricane Harvey, which hit the Gulf Coast of Texas in late August, is estimated to have reduced the rate of change in total output by roughly 3/4 percentage point.

The index for manufacturing decreased 0.3 percent; storm-related effects appear to have reduced the rate of change in factory output in August about 3/4 percentage point. The manufacturing industries with the largest estimated storm-related effects were petroleum refining, organic chemicals, and plastics materials and resins.

The output of mining fell 0.8 percent in August, as Hurricane Harvey temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas. The output of utilities dropped 5.5 percent, as unseasonably mild temperatures, particularly on the East Coast, reduced the demand for air conditioning.

At 104.7 percent of its 2012 average, total industrial production in August was 1.5 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.8 percentage point in August to 76.1 percent, a rate that is 3.8 percentage points below its long-run (1972–2016) average.




Friday September 15 2017
US Retail Sales Unexpectedly Shrink in August
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Retail sales in the United States fell 0.2 percent month-over-month in August of 2017, missing market expectations of a 0.1 percent rise and following a downwardly revised 0.3 percent gain in July instead of the initially reported 0.6 percent jump. It is the biggest drop in retail sales since February as auto sales declined 1.6 percent, most likely due to Hurricane Harvey. Excluding autos, retail sales increased 0.2 percent.

5 out of 13 major retail categories declined in August while 9 increased.

Sales went down at motor vehicle and parts dealers (-1.6 percent); nonstore retailers (-1.1 percent); clothing (-1 percent); electronics and appliances (-0.7 percent); building material and garden equipment stores (-0.5 percent). 

In contrast, sales rose in gasoline stations (2.5 percent); miscellaneous store retailers (1.4 percent); furniture and home furniture (0.4 percent); food and beverages (0.3 percent); food services and drinking places (0.3 percent); general merchandise stores (0.2 percent); health and personal care stores (0.1 percent); sporting goods, hobby, book and music stores (0.1 percent).

Excluding automobiles, gasoline, building materials and food services, core retail sales also declined 0.2 percent last month after a 0.6 percent gain in July.

Year-on-year, retail sales rose 3.2 percent. 





Thursday September 14 2017
US Jobless Claims Unexpectedly Drop in Latest Week
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits unexpectedly fell by 14 thousand to 284 thousand in the week ended September 9th, well below market expectations of 300 thousand.

Hurricanes Harvey and Irma impacted this week's initial claims. Still, claims have been below 300,000 for 132 straight weeks, the longest such stretch since 1970.

The 4-week moving average was 263,250, an increase of 13,000 from the previous week's unrevised average of 250,250. This is the highest level for this average since August 13, 2016 when it was 263,250.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending September 2, unchanged from the previous week's unrevised rate. 

The continuing claimsdrawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending September 2 was 1,944,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised up 11,000 from 1,940,000 to 1,951,000. The 4-week moving average was 1,948,500, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 2,750 from 1,948,250 to 1,951,000. 




Thursday September 14 2017
US Inflation Rate at 3-Month High of 1.9%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the US increased 1.9 percent year-on-year in August of 2017, above 1.7 percent in July and market expectations of 1.8 percent. It is the highest reading in three months, due to rising shelter and gasoline cost as Hurricane Harvey shut down refineries in the Gulf coast. The monthly rate went up to 0.4 percent, the highest since January and above forecasts of 0.3 percent.

Year-on-year, energy prices jumped 6.4 percent, following a 3.4 percent rise in July. Main increases were reported for gasoline (10.4 percent from 3 percent) and fuel oil (9.4 percent from 3.6 percent) while prices rose less for electricity (2.3 percent from 2.6 percent) and utility piped gas service (5.4 percent from 7.5 percent). Additional upward pressure came from shelter (3.3 percent from 3.2 percent) and transportation services (3.5 percent from 3.2 percent). Food inflation was steady at 1.1 percent while inflation slowed for medical care commodities (2.4 percent from 3.7 percent) and medical care services (1.6 percent from 2.3 percent).

In contrast, prices continued to fall for for new vehicles (-0.7 percent from -0.6 percent), used cars and trucks (-3.8 percent from -4.1 percent) and apparel (-0.6 percent from -0.4 percent).

Core inflation rate which excludes prices of food and energy remained at a two-year low of 1.7 percent, the same as in the previous three months but above market expectations of 1.6 percent.  

On a monthly basis, increases in the indexes for gasoline and shelter accounted for nearly all of the CPI increase. The energy index rose 2.8 percent as the gasoline index increased 6.3 percent. The shelter index rose 0.5 percent in August with the rent index up 0.4 percent. The food index rose slightly in August, with the index for food away from home increasing and the food at home index declining.

Excluding food and energy, consumer prices rose 0.2 percent. Along with the shelter index, the indexes for motor vehicle insurance, medical care, and recreation all increased in August. The indexes for airline fares and for used cars and trucks were among those that declined in August.  




Wednesday September 13 2017
US August Budget Deficit Smaller than Expected
US Treasury | Joana Ferreira | joana.ferreira@tradingeconomics.com

The US government posted a USD 108 billion budget deficit in August 2017, compared with a USD 107 billion gap in the same month of the previous year and below market expectations of a USD 119.5 billion deficit.

In August 2017, outlays declined 1 percent year-on-year and totaled USD 334 billion, as social security accounted for USD 79 billion, defense for USD 52 billion, Medicare for USD 56 billion and interest on debt for USD 25 billion. Other outlays accounted for the remaining USD 122 billion. Meanwhile, receipts decreased 2 percent to USD 226 billion as individual income taxes accounted for USD 109 billion, social security and other payroll taxes for USD 89 billion, corporate income taxes for USD 1 billion and other taxes and duties for the remaining USD 26 billion.

When accounting for calendar adjustments, the deficit was USD 97 billion compared with an adjusted deficit of USD 107 billion the prior year.

The fiscal 2017 year-to-date deficit was USD 674 billion compared with USD 619 billion in the same period of fiscal 2016.




Thursday September 07 2017
US Initial Claims at Over 2-Year High
DOL | Joana Taborda | joana.taborda@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 62 thousand to 298 thousand in the week ended September 2nd, well above market expectations of 241 thousand. It is the highest value since the week ended April 18th 2015, due to the impact of Hurricane Harvey.

The 4-week moving average was 250,250, an increase of 13,500 from the previous week's unrevised average of 236,750.

The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending August 26, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 26 was 1,940,000, a decrease of 5,000 from the previous week's revised level. The previous week's level was revised up 3,000 from 1,942,000 to 1,945,000. 

The 4-week moving average was 1,948,250, a decrease of 4,000 from the previous week's revised average. The previous week's average was revised up by 750 from 1,951,500 to 1,952,250.


Wednesday September 06 2017
US ISM Non Manufacturing PMI Rises in August
ISM | Joana Taborda | joana.taborda@tradingeconomics.com

The ISM Non-Manufacturing PMI index for the United States went up to 55.3 in August of 2017 from 53.9 in July, compared to market expectations of 55.4. Improvements were seen in production, new orders and employment while inventories slowed and price pressures increased. The majority of services providers are optimistic about business conditions going forward.

Increases were reported for production (57.5 from 55.9 in July); new orders (57.1 from 55.1); employment (56.2 from 53.6); backlogs of orders (53.5 from 52) and new export orders (55 from 53). On the other hand, inventories (53.5 from 56.5) and supplier deliveries (50.5 from 51) slowed and price pressures increased (57.9 from 55.7).                                                                                                              

The 15 non-manufacturing industries reporting growth in August — listed in order — are: Retail Trade; Information; Management of Companies & Support Services; Real Estate, Rental & Leasing; Other Services; Wholesale Trade; Utilities; Mining; Educational Services; Accommodation & Food Services; Finance & Insurance; Public Administration; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance. The two industries reporting contraction in August are: Agriculture, Forestry, Fishing & Hunting; and Transportation & Warehousing.




Wednesday September 06 2017
US Trade Gap Lower than Expected
BEA | Joana Taborda | joana.taborda@tradingeconomics.com

The trade deficit in the United States widened slightly to USD 43.7 billion in July of 2017, following a downwardly revised USD 43.5 billion gap in June. It compares with market expectations of a bigger USD 44.6 billion shortfall. Exports declined 0.3 percent and imports fell at a slower 0.2 percent. The trade gap with China reached an 11-month high and the one with the EU was the highest in 8 months.

The July increase in the goods and services deficit reflected a fall in the goods deficit of less than USD 0.1 billion to USD 65.3 billion and a decrease in the services surplus of USD 0.2 billion to USD 21.6 billion.

Total exports fell 0.3 percent from the previous month to USD 194.38 billion. Exports of goods decreased USD 0.4 billion to USD 128.6 billion, mainly due to lower sales of consumer goods (USD -0.7 billion); cell phones and other household goods (USD -$0.5 billion); automotive vehicles, parts, and engines (USD -0.6 billion) and passenger cars (USD -1.0 billion). On the other hand, sales rose for capital goods (USD 0.9 billion) and civilian aircraft (USD 1.1 billion). 

Exports of services decreased USD 0.1 billion to USD 65.8 billion as travel (for all purposes including education) went down USD 0.3 billion. Other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services, increased USD 0.2 billion.

Total imports fell 0.2 percent to USD 23.81 billion. Purchases of goods decreased USD 0.5 billion to USD 193.9 billion, mainly due to lower imports of automotive vehicles, parts, and engines (USD -0.8 billion); passenger cars (USD -0.8 billion); industrial supplies and materials (USD -0.7 billion) and crude oil (USD - 1 billion). On the other hand, imports rose for capital goods (USD 1.3 billion); computer accessories (USD 0.6 billion) and computers (USD 0.6 billion). 

Imports of services increased less than USD 0.1 billion to USD 44.1 billion. The changes in all categories were $0.1 billion or less and nearly offsetting.

On a non-seasonally adjusted basis, exports fell to Canada (-13.9 percent), Mexico (-7.6 percent), the EU (-9.8 percent) and OPEC (-7.1 percent) but rose to China (3.5 percent), Japan (2.3 percent) and Brazil (7.5 percent). Imports went down from Canada (-11.5 percent), Mexico (-9.7 percent), the EU (-3.7 percent), the OPEC (-12.6 percent) and Brazil (-3.5 percent) but rose from China (3.1 percent) and Japan (3 percent). 

The US trade deficit widened with China (USD -33.56 billion from USD -32.58 billion in June), the EU (USD -13.45 billion from USD -12.47 billion), Japan (USD -5.77 billion from USD -5.57 billion) and Canada (USD -1 billion from USD -0.46 billion) but narrowed with Mexico (USD -4.92 billion from USD -5.96 billion).

Year-to-date, the goods and services deficit increased USD 27.9 billion, or 9.6 percent, from the same period in 2016. Exports increased USD 76.8 billion or 6 percent and imports went up at a faster USD 104.8 billion or 6.7 percent.