Friday September 14 2018
US Consumer Sentiment Surges in September
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The University of Michigan's consumer sentiment for the US jumped to 100.8 in September of 2018 from 96.2 in August, beating market expectations of 96.7. It is the second highest level since 2004, only behind the March 2018 reading of 101.4, preliminary estimates showed. Expectations were the strongest since July of 2004, largely due to more favorable prospects for jobs and incomes and current conditions were also assessed more favorable.

The current economic conditions sub-index rose to 116.1 from 110.3 in August and the gauge measuring consumer expectations increased to 91.1 from 87.1.

Inflation expectations for the year ahead edged down to 2.8 percent from 3 percent and the 5-year outlook for inflation also fell to 2.4 percent from 2.6 percent. 

Despite a lessening of expected gains in nominal incomes in September, inflation expectations also declined, acting to offset concerns about declining living standards. Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead. While consumers were somewhat more likely to anticipate that the economic expansion would continue uninterrupted over the next five years, nearly as many expected another downturn sometime in the next five years. The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months.




Friday September 14 2018
US Industrial Output Rises More than Expected
Fed | Joana Taborda | joana.taborda@tradingeconomics.com

Industrial production in the US increased 0.4 percent month-over-month in August of 2018, following an upwardly revised 0.4 percent rise in July and beating market expectations of a 0.3 percent increase. Manufacturing moved up 0.2 percent, boosted by a 4 percent rise in motor vehicles and parts with motor vehicle assemblies jumping to an annual rate of 11.5 million units, the strongest since April. Excluding the gain in motor vehicles and parts, factory output was unchanged.

Within manufacturing, the index for durables rose 1.0 percent, while the indexes for nondurables and for other manufacturing (publishing and logging) declined 0.5 percent and 0.9 percent, respectively. Within durables, the largest increases were recorded by motor vehicles and parts, primary metals, and machinery, while the only sizable decrease was registered by furniture and related products. By contrast, within nondurables, only textile and product mills posted a gain.

Mining output rose 0.7 percent in August; it has advanced more than 14 percent in the past 12 months, supported by substantial increases in the oil and gas sector. The index for utilities moved up 1.2 percent in August, as a rebound for electric utilities outweighed a small decline for gas utilities.

Capacity utilization for manufacturing edged up in August to 75.8 percent, 2 1/2 percentage points below its long-run average. The operating rate for durables increased, but the rates for nondurables and for other manufacturing both decreased. The utilization rate for mining rose to 92.0 percent and remained well above its long-run average. The rate for utilities went up to 78.0 percent but was more than 7 percentage points below its long-run average.

Year-on-year, industrial output increased 4.9 percent, the biggest annual gain since December of 2010.




Friday September 14 2018
US Retail Sales Rise the Least in 6 Months
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Retail sales in the US edged up 0.1 percent month-over-month in August of 2018, following an upwardly revised 0.7 percent rise in July and well below market expectations of a 0.4 percent increase. It is the smallest gain in retail sales in six months, mainly due to falls in purchases of motor vehicles, clothing and furniture.

8 of 13 major retail categories showed month-over-month increases; 3 fell and 2 were flat.

Sales fell at furniture and home furniture stores (-0.3 percent compared to 0 percent in July); motor vehicles and part dealers (-0.8 percent compared to -0.1 percent); and clothing and accessories stores (-1.7 percent compared to 2.2 percent). Also, sales were flat for building material and garden equipment (0.1 percent in July) and food and beverage stores (0.8 percent). On the other hand, biggest increases were seen in sales at miscellaneous stores (2.3 percent compared to -2.3 percent); gasoline stations (1.7 percent comapred to 0.8 percent); nonstore retailers (0.7 percent compared to 1.5 percent); health and personal care stores (0.5 percent compared to 0.3 percent); electronics and appliance stores (0.4 percent compared to -0.4 percent); sporting goods, hobby, musical instrument and book stores (0.2 percent compared to -1.6 percent); food services and drinking places (0.2 percent compared to 1.6 percent); and general merchandise stores (0.1 percent compared to 1 percent). 


Excluding autos, sales rose 0.3 percent (0.9 percent in July) and excluding automobiles, gasoline, building materials and food services, core retail sales went up 0.1 percent in August after an upwardly revised 0.8 percent rise in July.

Year-on-year, retail trade rose 6.6 percent in August, compared with an upwardly revised 6.7 percent increase in July.





Thursday September 13 2018
US August Budget Deficit Larger than Expected
US Treasury | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The US government budget deficit nearly doubled to USD 214 billion in August 2018 from USD 108 billion in the same month of the previous year, above market expectations of USD 156.5 billion.

Outlays jumped 29.7 percent from a year earlier and totaled USD 433 billion, as social security accounted for USD 108 billion, Medicare for USD 83 billion, defense for USD 65 billion and interest on debt for USD 32 billion. Other outlays accounted for the remaining USD 146 billion.

In contrast, receipts decreased 3.2 percent to USD 219 billion as individual income taxes accounted for USD 106 billion, social security and other payroll taxes for USD 93 billion and other taxes and duties for USD 24 billion. Meantime, corporate income taxes represented USD -3 billion.

When accounting for calendar adjustments, the government's deficit was USD 152 billion compared to a gap of USD 108 billion in the same month of the previous year.

The gap for the fiscal year, which began last October, was USD 898 billion, compared to a deficit of USD 674 billion in the same period of the previous fiscal year.




Thursday September 13 2018
US Inflation Rate Slows to 2.7%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Annual inflation rate in the US fell to 2.7 percent in August of 2018 from 2.9 percent in July and below market expectations of 2.8 percent. It is the lowest reading in four months amid a slowdown in cost of fuel, gasoline and shelter.

Year-on-year, prices rose less for fuel oil (30.9 percent compared to 34.7 percent in July); gasoline (20.3 percent compared to 25.4 percent); shelter (3.4 percent compared to 3.5 percent); transportation services (3.9 percent compared to 4 percent); and medical care services (1.9 percent compared to 2.3 percent). Also, prices fell for apparel (-1.4 percent compared to 0.3 percent) and electricity (-0.5 percent compared to -0.8 percent). On the other hand, inflation went up for used cars and trucks (1.3 percent compared to 0.8 percent) and new vehicles (0.3 percent compared to 0.2 percent) while food inflation was flat at 1.4 percent. Prices rebounded for utility piped gas service (0.1 percent compared to -1.3 percent).

Excluding food and energy, core inflation slowed to 2.2 percent from 2.4 percent.

On a monthly basis, consumer prices went up 0.2 percent, the same as in July and matching market expectations. Increases in the indexes for shelter and energy were the main contributors to the seasonally adjusted monthly increase. The energy index increased 1.9 percent in August; a 3.0 percent rise in the gasoline index was the largest factor, but the other energy component indexes also rose. The shelter index increased 0.3 percent in August, the same gain as in July. The food index rose only slightly in August, with the index for food at home unchanged. 

Excluding food and energy, consumer prices rose 0.1 percent in August, lower than 0.2 percent in July and market expectations of 0.2 percent. It is the smallest monthly core inflation since April. Along with the shelter index, the indexes for airline fares and used cars and trucks were among those that increased in August. An array of indexes declined, including apparel, medical care, communication,recreation, and personal care. 





Thursday September 13 2018
US Jobless Claims Remain Near 49-Year Low
DOL | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The number of Americans filling for unemployment benefits decreased by 1 thousand to 204 thousand in the week ending September 8 from the previous week's upwardly revised level of 205 thousand and missing market consensus of 210 thousand. This is the lowest level for initial claims since December 6, 1969 when it was 202 thousand.

The 4-week moving average was 208,000, a decrease of 2,000 from the previous week's revised average. This is the lowest level for this average since December 6, 1969 when it was 204,500. The previous week's average was revised up by 500 from 209,500 to 210,000. 

According to unadjusted data, the largest declines were reported in California (-3,708), New York (-3,688) and Pennsylvania (-956) while the biggest increases were seen in Iowa (+803), Wisconsin (+645) and Kansas (+582).

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending September 1, unchanged from the previous week's unrevised rate. 

The advance number for seasonally adjusted insured unemployment during the week ending September 1 was 1,696,000, a decrease of 15,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 1, 1973 when it was 1,692,000. The previous week's level was revised up 4,000 from 1,707,000 to 1,711,000. It compares with market consensus of 1,710,000. The 4-week moving average was 1,711,250, a decrease of 8,250 from the previous week's revised average. This is the lowest level for this average since November 24, 1973 when it was 1,706,000. The previous week's average was revised up by 1,000 from 1,718,500 to 1,719,500. 




Friday September 07 2018
US Jobless Rate Holds Steady at 3.9%
BLS | Joana Ferreira | joana.ferreira@tradingeconomics.com

The US unemployment rate was unchanged at 3.9 percent in August 2018, above market expectations of 3.8 percent. Still, the jobless rate remained close to May's 18-year low as the number of unemployed declined by 46 thousand to 6.23 million and employment fell by 423 thousand to 155.54 million.

Among the major worker groups, the unemployment rates for adult men (3.5 percent), adult women (3.6 percent), teenagers (12.8 percent), Whites (3.4 percent), Blacks (6.3 percent), Asians (3.0 percent), and Hispanics (4.7 percent) showed little or no change in August.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed in August at 1.3 million and accounted for 21.5 percent of the unemployed. Over the year, the number of long-term unemployed has declined by 403,000.

Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.3 percent, declined by 0.2 percentage point in August. 

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.4 million, changed little over the month but was down by 830,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

In August, 1.4 million persons were marginally attached to the labor force, little different from a year earlier. (Data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 434,000 discouraged workers in August, essentially unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.0 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.




Friday September 07 2018
US Economy Adds More Jobs than Expected
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Non farm payrolls in the United States increased by 201 thousand in August of 2018, following a downwardly revised 147 thousand in July and above market expectations of 191 thousand. Employment increased in professional and business services, health care, wholesale trade, transportation and warehousing, and mining.

Professional and business services added 53,000 jobs in August and 519,000 jobs over the year.

In August, health care employment rose by 33,000, with job gains in ambulatory health care services (+21,000) and hospitals (+8,000). Health care has added 301,000 jobs over the year.

Wholesale trade employment increased by 22,000 in August and by 99,000 over the year. Durable goods wholesalers added 14,000 jobs over the month and accounted for about two-thirds of the over-the-year job gain in wholesale trade. 

Employment in transportation and warehousing rose by 20,000 in August and by 173,000 over the past 12 months. Within the industry, couriers and messengers added 4,000 jobs in August.

Mining employment increased by 6,000 in August, after showing little change in July. Since a recent trough in October 2016, the industry has added 104,000 jobs, almost entirely in support activities for mining.

Employment in construction continued to trend up in August (+23,000) and has increased by 297,000 over the year.

Manufacturing employment changed little in August (-3,000). Over the year, employment in the industry was up by 254,000, with more than three-fourths of the gain in the durable goods component.

Employment showed little change over the month in other major industries, including retail trade, information, financial activities, leisure and hospitality, and government.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in August. In manufacturing, the workweek held steady at 41.0 hours, and overtime was unchanged at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.8 hours for the fifth consecutive month. 

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the year, average hourly earnings have increased by 77 cents, or 2.9 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $22.73 in August. 

The change in total nonfarm payroll employment for June was revised down from +248,000 to +208,000, and the change for July was revised down from +157,000 to +147,000. With these revisions, employment gains in June and July combined were 50,000 less than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 185,000 per month over the last 3 months.




Thursday September 06 2018
US Services Grew for 103rd Consecutive Month: ISM
ISM | Joana Taborda | joana.taborda@tradingeconomics.com

The ISM Non-Manufacturing PMI index rose to 58.5 in August from 55.7 in July, beating expectations of 56.8. Production, new orders, employment, business activity, backlogs of orders and new export orders rose faster while supplier deliveries and price pressures eased.

Stronger growth was seen for business activity (60.7 from 56.5), new orders (60.4 from 57), employment (56.7 from 56.1), backlogs of orders (56.5 from 51.5) and new export orders (60.5 from 58). Also, both supplier deliveries (56 from 53) and price pressures (62.8 from 63.4) eased. 

 Logistics, tariffs and employment resources continue to have an impact on many of the respective industries. Overall, the respondents remain positive about business conditions and the economy.

The 16 non-manufacturing industries reporting growth in August — listed in order — are: Construction; Transportation & Warehousing; Retail Trade; Educational Services; Other Services; Real Estate, Rental & Leasing; Public Administration; Management of Companies & Support Services; Wholesale Trade; Mining; Accommodation & Food Services; Health Care & Social Assistance; Finance & Insurance; Utilities; Professional, Scientific & Technical Services; and Information. The only industry reporting a decrease is Agriculture, Forestry, Fishing & Hunting.




Thursday September 06 2018
US Jobless Claims Unexpectedly Fall to Near 49-Year Low
DOL | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The number of Americans filling for unemployment benefits went down by 10 thousand to 203 thousand in the week ending September 1 from the previous week's unrevised level of 213 thousand while markets had expected a slight increase to 214 thousand. This is the lowest level for initial claims since December 6,1969 when it was 202,000. However, the Labor Day holiday was observed on Monday which could have influenced the estimates.

The 4-week moving average was 209,500, a decrease of 2,750 from the previous week's unrevised average of 212,250. This is the lowest level for this average since December 6, 1969 when it was 204,500.

According to unadjusted data, the largest declines were reported in Michigan (-1,606), Florida (-890) and New York (-837) while the biggest rises were seen in Indiana (+1,085), Washington (+665), Illinois (+597) and Ohio (+466).

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending August 25, unchanged from the previous week's unrevised rate.

Continuing jobless claims, the number of people already receiving benefits, during the week ending August 25 were 1,707,000, a decrease of 3,000 from the previous week's upwardly revised level of 1,710,000. It compares with market consensus of 1,710,000. The 4-week moving average was 1,718,500, a decrease of 13,250 from the previous week's revised average. This is the lowest level for this average since December 8, 1973 when it was 1,715,500. The previous week's average was revised up by 500 from 1,731,250 to 1,731,750.