Monthly Archives: September 2012

Chicago Manufacturing Drops; Sentiment Improves

The ISM-Chicago manufacturing index dropped to 49.7 in September, not only below the 50 threshold, which determines whether the sector is expanding or contracting, but also the lowest level in three years. Five of seven components including employment and orders slipped. This confirms the weakness we saw in durable goods earlier in the weak. Weakness [...]

Incomes Drop, Consumer Spending Nearly Flat

Disposable personal incomes fell 0.3% in August after adjusting for inflation. Wages and salaries abated significantly from July to August in response to the slowdown in manufacturing, while farm income held up despite the drought. Farmers hedge droughts with insurance and pick up some of the loss in volume with increased prices. Personal consumption expenditures [...]

Weekly Unemployment Insurance Claims Down 26,000

Durable Goods Orders Plummet, GDP Revised Down on Drought

Durable goods orders plummeted 13.2%, the largest decrease since January 2009. The data was not as bad excluding transportation, which showed huge declines in both aircraft and motor vehicles. We also saw very large declines in defense orders, which reflect the pullback in Iraq. There also could be some hesitation on the defense front as [...]

New Home Sales Dip Slightly in August

New home sales fell to a 373,000 unit, annualized rate in August, off only marginally from the 374,000 unit rate of July, and up almost 30% from a year ago. The Northeast and the Midwest saw solid gains, the West held steady and the South slipped a bit. Some of the weakness in the South [...]

House Price Increases Disappoint, but Confidence Rebounds

The S&P/Case-Shiller and Federal Housing Finance Agency (FHFA) indices of house prices showed continued gains in July. Increases, however, were at the low end of market expectations, as both rose less than 1%. Nonetheless, rising prices are better than falling prices as they reinforce the view that the housing market has finally hit a bottom. [...]

Initial Jobless Claims Remain Relatively Flat

For the week ending September 15, initial jobless claims decreased by 3,000 from the week prior.  New claims totaled 382,000 last week and have been steady for two weeks in a row. Compared to a recent bottom of 357,000 for the week ending July 21, current claims are up 25,000. The 4-week moving average for [...]

Philly Fed Manufacturing Index Treading Water

The Federal Reserve Bank of Philadelphia’s Business Outlook Survey registered -1.9 in September, which is essentially flat. This follows larger negatives for the previous two months and suggests business activity is essentially paralyzed at a low level. It is the fifth consecutive negative reading for the index. Manufacturing, however, posted a modest increase, which is [...]

Home Sales

Existing home sales rose 7.8% to a 4.82 million-unit annualized rate in August. Gains were fairly broad-based across regions, but still well below demand, with many buyers complaining that tight mortgage market conditions are locking them out of the market. First-time buyers amounted to 31% of sales, still below where they were they should be, [...]

Housing Starts Increase Less than Expected

Housing starts rose to 750,000 in August, up 2.3% from July, but less than many market participants had expected. Gains occurred in both single and multi-family starts and remain higher than a year ago. The level of housing construction activity remains suppressed, given the pent-up demand builders are seeing. Tight mortgage conditions and the difficulty [...]