Author Archives: Diane Swonk

Investor Interest in Housing Wanes

Existing homes sales slid to a 5.05 million unit pace in August and were revised down slightly to a 5.14 million unit rate in the month of July. Losses were concentrated in the West and South, where investors had been playing an outsized role in supporting sales. All cash buyers slipped to 23% of the [...]

Housing Starts Dip

Housing starts fell below the one million unit threshold again in August, but were revised up slightly for the month of July. Losses were heavily concentrated in the multifamily market, which has been on a tear. The largest losses in multifamily home construction were experienced in the West, where housing shortages are the most acute. [...]

Fed on Path to Slow Exit from QE

The Federal Open Market Committee (FOMC) voted to further reduce its asset purchases by $5 billion each, which brings its current purchases of mortgage-backed securities down to $5 billion per month and its purchases of Treasury bonds down to $10 billion per month. Chair Yellen also went out of her way to reemphasize that the [...]

Inflation Dips on Lower Gas Prices

The Consumer Price Index (CPI) edged 0.2% lower in August, largely on a drop in energy prices. Prices at the pump fell more than 4% alone. All of the savings at the pump is likely to be spent on food, where prices continued to rise during the month.

Industrial Production Slips in August

Industrial production fell 0.1% in the month of August, as vehicle production plummeted after an unseasonably strong July. Production figures for July were also revised down, which underscores how uneven gains remain in the manufacturing sector. Production for housing-related durables such as furniture, appliances and carpeting also fell after slightly,

Strong Retail Sales Help Dispel Employment Worries

Retail sales jumped 0.6% in August, with strong gains in vehicles, housing-related furniture, appliances and electronics. More importantly, those gains were on top of upward revisions to the month of July which, when combined with improving consumer attitudes about prospects for employment, affirm our view that the initial disappointing employment report for the month of [...]

Employment Shortfall is a Fluke

Payroll employment rose a marginal 142,000, well below the consensus for the month of August, with downward revisions on net to the two previous months. The weakest part of the data was a shortfall in retail employment, partly due to a strike on the East Coast. Manufacturing flatlined

Construction and Manufacturing Surprise to Upside

Construction spending jumped 1.8% in July from June, much more than most expected. Gains were greater in the public sector than in the private sector, as highway and street construction picked up to some extent in response to an unusual volume of repairs that needed to be completed in response to last year’s harsh winter. [...]

Spending and Incomes Flatline in July

Real disposable incomes increased by 0.1% in July after being revised up for the month of June.  The most weakness occurred in wages and salaries. Rental incomes increased, which is keeping investors in the housing market, particularly in the Midwest where foreclosures are still around for investors to flip to rent. Real expenditures were slightly [...]

GDP Q2 Revised to Upside

Real GDP was revised up 0.2% to 4.2% in the second quarter, a pleasant surprise as many had expected a downward revision. Increases were across the board but overall gains were still heavily dependent on a rise in inventories following a sharp drain