Thursday July 19 2018
US Jobless Claims Fall Unexpectedly to Lowest Since 1969
DOL | Stefanie Moya | stefanie.moya@tradingeconomics.com

In the week ending July 14, the advance figure for seasonally adjusted initial claims was 207,000, a decrease of 8,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week's level was revised up by 1,000 from 214,000 to 215,000.

The 4-week moving average was 220,500, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised up by 250 from 223,000 to 223,250.

According to unadjusted data, the biggest decreases in claims were recorded in New York (-9,722), Michigan (-9,389), New Jersey (-4,847), Kentucky (-2,288) and Massachussetts (-2,279) while largest gains were seen in California +(7,015), Georgia (+3,750), Alabama (+2,598) and South Carolina (+1,127). Claims dropped in Puerto Rico (-866) and Virgin Islands (-22).

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending July 7, unchanged from the previous week's unrevised rate. 

Continuing claims during the week ending in July 7 were 1,751,000, an increase of 8,000 from the previous week's revised level of 1,743,000, and above market consensus of 1,730,000. The 4-week moving average was 1,735,750, an increase of 6,250 from the previous week's revised average. The previous week's average was revised up by 1,000 from 1,728,500 to 1,729,500.




Wednesday July 18 2018
US Housing Starts at 9-Month Low
Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the US plunged 12.3 percent month-over-month to an annualized rate of 1,173 thousand in June of 2018, following a downwardly revised 4.8 percent rise in May. It is the lowest rate since September of 2017 and the biggest drop since November of 2016. It compares with market expectations of 1,320 thousand rate.

In May, housing stats were at 1,337 thousand, the highest rate since July of 2007.

In June, the volatile multi-family segment fell 20.2 percent to 304 thousand and single-family starts, the largest segment of the market, went down 9.1 percent to 858 thousand. Declines were seen in all main regions: the South (-9.1 percent to 601 thousand), the West (-3 percent to 320 thousand), the Midwest (-35.8 percent to 156 thousand) and the Northeast (-6.8 percent to 96 thousand). 

Building permits dropped 2.2 percent to a seasonally adjusted annual rate of 1,273 thousand, while markets were expecting a 2.2 percent rise to 1,330 thousand. It is also the lowest rate since September of 2017. Multi-family authorizations declined 7.6 percent to 423 thousand while single-family permits went up 0.8 percent to 850 thousand. Overall, building permits fell in the West (-1.8 percent to 327 thousand), the Midwest (-18.7 percent to 170 thousand) and the Northeast (-16.4 percent to 112 thousand) but increased in the South (6.2 percent to 664 thousand).





Tuesday July 17 2018
US Industrial Output Rebounds in June
Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com

US industrial output rose 0.6 percent month-over-month in June 2018, recovering from an upwardly revised 0.5 percent contraction in May and matching market expectations. The production of motor vehicles and parts rebounded last month after truck assemblies fell sharply in May because of a disruption at a parts supplier.

Manufacturing production moved up 0.8 percent in June, following a decrease of 1 percent in the previous month. Durable manufacturing surged 1.6 percent (vs -1.6 percent in May), as the production of motor vehicles and parts rebounded last month (7.8 percent vs -8.6 percent) after truck assemblies fell sharply in May because of a disruption at a parts supplier. Output also grew for machinery (0.7 percent vs -1.4 percent); computer and electronic products (1.5 percent vs -0.4 percent) and fabricated metal products (0.9 percent vs -0.5 percent). On the other hand, production of both primary metals and electrical equipment, appliances, and components was unchanged. In addition, nondurable manufacturing edged up 0.1 percent, after a 0.5 percent decline in May, due to increases in production of petroleum and coal products (0.6 percent vs -0.3 percent) and chemicals (0.3 percent vs 0.2 percent). By contrast, food, beverage, and tobacco products output continued to contract (-0.2 percent vs -0.8 percent).

Mining output rose 1.2 percent in June, following a 2.2 percent gain in May, reflecting continued gains in the oil and gas sector.

The index for utilities fell 1.5 percent in June after a 0.7 percent decline in May, as a drop for electric utilities (-2.4 percent vs 3.3 percent) outweighed a gain for gas utilities (4.8 percent vs -20.5 percent).

For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing increased at an annual rate of 1.9 percent in the second quarter; and mining jumped more than 19 percent.

Capacity utilization for the industrial sector increased 0.3 percentage point in June to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972–2017) average.





Monday July 16 2018
US Retail Sales Rise Solidly in June
US Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

US retail trade rose by 0.5 percent month-over-month in June 2018, following an upwardly revised 1.3 percent advance in May and matching market expectations. June's gains were mainly boosted by increases in purchases of motor vehicles.

8 of 13 major retail categories showed month-over-month increases.

Sales at motor vehicle & parts dealers advanced 0.9 percent in June (vs 0.8 percent in May) and those at gasoline stations increased 1 percent (vs 3 percent in May). Sales at building material stores increased 0.8 percent last month (vs 2.5 percent in May), and online and mail-order retail trade surged 1.3 percent (vs 0.4 percent in May), the biggest gain since November 2017. Sales also rose at: furniture & home furniture stores (0.6 percent vs -1.4 percent); health & personal care stores (2.2 percent vs 1.3 percent); miscellaneous store retailers (0.2 percent vs 1.2 percent); and food services & drinking places (1.5 percent vs 2.6 percent).

Meanwhile, receipts at clothing stores fell 2.5 percent (vs 2.9 percent in May), the biggest drop since February 2017; and those at hobby, musical instrument and book stores declined 3.2 percent (vs -0.9 percent in May), the most since December 2017. Declines were also seen at: electronics & appliance stores (-0.4 percent vs 0.4 percent); food & beverage stores (-0.3 percent vs 0.2 percent); and general merchandise stores (-0.8 percent vs 1.2 percent).

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged in June after an upwardly revised 0.8 percent increase in May.

Year-on-year, retail trade grew 6.6 percent in June, compared with a 6.5 percent rise in May.




Friday July 13 2018
US Consumer Sentiment at 6-Month Low
University of Michigan | Joana Taborda | joana.taborda@tradingeconomics.com

The University of Michigan's consumer sentiment for the US fell to 97.1 in July of 2018 from 98.2 in June, missing market expectations of 98.2. It is the lowest reading in six months, due to a drop in the current conditions gauge amid rising concerns about the potential negative impact of tariffs on the domestic economy, preliminary estimates showed.

The current economic conditions sub-index went down to 113.9 from 116.5 in June while the gauge measuring consumer expectations edged up to 86.4 from 86.3. Inflation expectations for the year ahead edged down to 2.9 percent from 3 percent and the 5-year outlook for inflation slowed to 2.4 percent from 2.6 percent.

Consumer sentiment slipped in early July but remained nearly equal to the average in the prior twelve months (97.7) and since the start of 2017 (97.4). The continuing strength has been due to favorable job and income prospects, with consumers under age 45 anticipating the largest income gains since July 2000. So far, the strength in jobs and incomes has overcome higher inflation and interest rates. The darkening cloud on the horizon, however, is due to rising concerns about the potential negative impact of tariffs on the domestic economy. Negative concerns about the impact of tariffs have recently accelerated, rising from 15% in May, to 21% in June, and 38% in July (see the chart). Among those in the top third of the income distribution (who account for half of consumer spending), 52% negatively mentioned the impact of tariffs on the economy in early July. The primary concerns expressed by consumers were a decline in the future pace of economic growth and an uptick in inflation. Among those who expressed negative views of the tariffs, the Expectations Index was 30.5 points below those who made no mention of tariffs, and in addition, the expected inflation rate was six-tenths of a percentage point higher. While consumers may not understand the intricacies of trade theory, they have substantial experience making decisions about the timing of discretionary purchases based on prospective trends in prices. 




Thursday July 12 2018
US June Budget Deficit Smaller than Expected
US Treasury | Joana Ferreira | joana.ferreira@tradingeconomics.com

The US budget deficit narrowed to USD 75.0 billion in June 2018 from USD 90.2 billion in the same month of the previous year, and below market expectations of USD 98.2 billion.

Outlays fell 9 percent from the same month a year earlier and totaled USD 391 billion, as social security accounted for USD 88 billion, defense for USD 65 billion, Medicare for USD 79 billion and interest on debt for USD 32 billion. Other outlays accounted for the remaining USD 126 billion. 

Meanwhile, receipts declined 7 percent to USD 316 billion as individual income taxes accounted for USD 162 billion, social security and other payroll taxes for USD 94 billion, corporate income taxes for USD 38 billion and other taxes and duties for the remaining USD 22 billion.

When accounting for calendar adjustments, the government's deficit was USD 26 billion compared to an adjusted deficit of USD 48 billion in the same month the previous year.

The gap for the fiscal year, which began last October, was USD 607 billion, compared to a deficit of USD 523 billion in the same period of the previous fiscal year.




Thursday July 12 2018
US Inflation Rate Highest since 2012
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

The inflation rate in the US edged up to 2.9 percent in June of 2018 from 2.8 percent in May, matching market expectations. It is the highest rate since February of 2012 when inflation was also at 2.9 percent, due to rising prices for oil and gasoline. The last time inflation was above 2.9 percent was in December of 2011 when it reached 3 percent.

Year-on-year, prices rose faster for fuel oil (30.8 percent from 25.3 percent in May); gasoline (24.3 percent from 21.8 percent); medical care services (2.5 percent from 2.3 percent); food (1.4 percent from 1.2 percent).

On the other hand, inflation eased for shelter (3.4 percent compared to 3.5 percent); apparel (0.6 percent from 1.4 percent); medical care commodities (2.4 percent from 2.7 percent); transportation services (3.7 percent from 3.8 percent). Also, prices fell for electricity (-0.1 compared to 1 percent); utility piped gas service (-2.1 percent from -0.8 percent); used cars and trucks (-0.7 percent from -1.7 percent) and new vehicles (-0.5 percent from -1.1 percent). Core inflation which excludes food and energy eded up to 2.3 percent from 2.2 percent.

On a monthly basis, consumer prices rose 0.1 percent, below 0.2 percent in May and market expectations of 0.2 percent. The indexes for shelter, gasoline, and food all rose to lead to the increase in the all items index. The food index went up 0.2 percent in June, with the indexes for food at home and food away from home both rising 0.2 percent. Despite a 0.5-percent increase in the gasoline index, the energy index declined 0.3 percent, with the indexes for electricity and natural gas both falling. 

The index for all items less food and energy rose 0.2 percent in June, the same as in May and matching forecasts. The shelter index rose 0.1 percent, and the indexes for medical care, used cars and trucks, new vehicles, and recreation all increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in June.




Thursday July 12 2018
US Jobless Claims Fall to 2-Month Low
DOL | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The number of Americans filling for unemployment benefits decreased by 18 thousand to 214 thousand in the week ending July 7 from the previous week's upwardly revised level of 232 thousand. It was the lowest reading since the week ending May 5 and surprised markets which had expected a smaller decline to 225 thousand. Yet, last week's data included the Independence Day holiday, which this year fell on a Wednesday. It probably reflects volatility around such holidays.

The 4-week moving average was 223,000, a decrease of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 224,500 to 224,750.

According to unadjusted data, the largest declines in claims were reported in California (-4,797), New Jersey (-3,615), Massachusetts (-2,588), Connecticut (-2,015) and Kentucky (-1,608) while the biggest increases were seen in New York (+15,306) and Michigan (+9,132). Claims rose in Puerto Rico (+1,142) and Virgin Islands (+4).

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending June 30, unchanged from the previous week's unrevised rate. 

Continuing claims during the week ending June 30 were 1,739,000, a decrease of 3,000 from the previous week's upwardly revised level of 1,742,000. Figures came above market expectations of 1,720,000. The 4-week moving average was 1,728,500, an increase of 9,500 from the previous week's revised average. The previous week's average was revised up by 750 from 1,718,250 to 1,719,000. 


Friday July 06 2018
US May Trade Deficit Smallest in 1-1/2 Years
BEA | Joana Ferreira | joana.ferreira@tradingeconomics.com

The US trade deficit narrowed sharply to USD 43.1 billion in May 2018 from a revised USD 46.1 billion in the previous month and below market expectations of USD 43.7 billion. It was the smallest trade gap since October 2016.

Exports of goods and services from the US rose USD 4.1 billion from the previous month, or 1.9 percent, to a record USD 215.3 billion in May. Goods exports increased USD 3.7 billion to USD 144.9 billion, mainly driven by higher sales of soybeans (up USD 2.0 billion) and civilian aircraft (up USD 1.9 billion). Exports of industrial supplies and materials, however, slumped USD 1.3 billion, due to a decline in sales of other petroleum products (down USD 0.9 billion). Exports of services increased USD 0.4 billion to USD 70.4 billion in May.

Imports of goods and services to the US increased USD 1.1 billion, or 0.4 percent, to USD 258.4 billion in May. Goods imports rose USD 1.1 billion to USD 210.7 billion, due to higher purchases of capital goods (up USD 2.1 billion), such as telecommunications equipment, computers, civilian aircraft parts and civilian aircraft engines. By contrast, imports of pharmaceutical preparations dropped USD 0.6 billion. Imports of services decreased USD 0.1 billion to USD 47.7 billion.

The politically sensitive goods deficit with China surged 18.7 percent to USD 33.2 billion in May (vs USD 28.0 billion in April). Also, the trade gap with Mexico rose 18.8 percent to USD 6.7 billion (vs 5.7 billion in April) and that with Canada jumped 86.2 percent to USD 1.5 billion (vs USD 0.8 billion). Meanwhile, the trade deficit narrowed with the EU (USD 13.4 billion vs USD 14.6 billion) and with Japan (USD 5.5 billion vs USD 6.3 billion).

On a non-seasonally adjusted basis, exports rose to Japan (5.9 percent), Canada (4.4 percent), the EU (4.3 percent), China (3.3 percent) and Mexico (1.2 percent). Imports grew from China (14.6 percent), Canada (6.9 percent) and Mexico (4.8 percent), but fell from Japan (-3.7 percent) and the EU (-0.2 percent).





Friday July 06 2018
US Jobless Rate Rises to 4% in June
Anna | anna@tradingeconomics.com

The US unemployment rate rose to 4 percent in June 2018 from 3.8 percent in the previous month, which was the lowest since April 2000. The number came above market expectations of 3.8 percent as more entered the labor force.

The number of unemployed persons increased by 499,000 to 6.6 million. A year earlier, the jobless rate was 4.3 percent, and the number of unemployed persons was 7.0 million.

Among the major worker groups, the unemployment rates for adult men (3.7 percent), adult women (3.7 percent), and Asians (3.2 percent) increased in June. The jobless rate for teenagers (12.6 percent), Whites (3.5 percent), Blacks (6.5 percent), and Hispanics (4.6 percent) showed little or no change over the month.

Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 211,000 in June to 3.1 million, and the number of reentrants to the labor force rose by 204,000 to 2.1 million. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.) 

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 289,000 in June to 1.5 million. These individuals accounted for 23.0 percent of theunemployed.

In June, the civilian labor force grew by 601,000. The labor force participation rate edged up by 0.2 percentage point over the month to 62.9 percent but has shown no clear trend thus far this year. 

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in June at 4.7 million. 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 June, 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. 

Non farm payrolls in the United States increased by 213 thousand in June of 2018, following an upwardly revised 244 thousand in May and well above market expectations of 195 thousand. Job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined.