Employment Cost Index (2ndQ2015)

- ECI quarter/quarter +0.2%. Previous was +0.7% - ECI year/year  +2.0%. Previous was +2.6%.

The +0.2% Q/Q increase is the smallest in the 33 year history of this index.

 

Chicago PMI  (July 2015)

- Business Barometer Index   54.7. Previous was 49.4

 

Consumer Sentiment (July 2015)

- Sentiment   93.1. Previous was 93.3. 

This is the University of Michigan Index.  This is a survey index which questions 500 households each month on their financial conditions and attitudes about the economy.  It is supposed to be a leading indicator of Consumer Spending in the next 90 days. This Index had been deteriorating slightly since the start of this calendar year.

 

2ndQ2015 GDP Initial

- Real GDP quarter/quarter seasonally adjusted, annualized  +2.3%. Previous  was revised up to +0.6%

- GDP price index quarter/quarter seasonally adjusted, annualized +2.0%. Previous was +0.1%.

- Real Final Sales of Domestic Goods was +2.4%.  This filters out imports, exports and business spending.

Coming after a miserable 1stQ a reading of +2.3% is weak.

Average GDP growth has been about +2.3% for the past 3 years.  That is weak.

The present state of affairs indicates that the dual mandate of the Federal Reserve: keep unemployment low and keep inflation in check misses the point that keeping GDP growing is at least as important.  The Fed is in a spot where extremely low interest rates and massive expansion of Monetary base have failed to spur GDP.  The Fed may want to reduce money supply simply so that they can increase it again if necessary.  Increasing rates before problems in the EU and China are fixed would be a big mistake.  Higher rates in the U.S. would hurt Europe at a time when it doesn't need hurting.

 

Initial Jobless Claims (week ended 7/25/2014)

- New Claims  267,000. Previous was 255,000

- 4-week Moving Average 274,750. Previous was 278,250.

Pending Sales of Existing Homes (June 2015)

- Pending Home Sales Index   110.3. Previous was 112.3  

- Pending Home Sales Index month/month -1.8%.

Increased prices may have strained affordability and there has been a drop in Consumer Confidence.

 

Mortgage Applications (week ended 7/24/2015)

- Purchase Index week/week -0.1%. Previous was +1.0%

- Refinance Index week/week  +2.0%. Previous was -1.0%

- Composite Index week/week +0.8%. Previous was + 0.1%.

 

Redbook Chain Store Sales (week ended 7/25/15)   

 

- Store Sales year/year  +1.0%. Previous was +1.2%   Consumer Spending is the heart of the U.S. economy and muted consumer spending will mute GDP growth.

 

  S&P Case-Shiller Home Price Index (May 2015)

- 20-city, seasonally adjusted, month/month  -0.2%. Previous was revised from +0.3% to +0.0%

- 20-city, not seasonally adjusted, month/month  +1.1%. Previous was +1.1%

- 20-city, not seasonally adjusted, year/year +4.9%. Previous was +5.0%.

Prices were up but the seasonal adjustment eliminated the gains.

 

 

PMI Services Flash (July 2015)

- Level 55.2. Previous was 54.8.

 

  Consumer Confidence (July 2015)

- Consumer Confidence  90.9. Previous was 99.8. 

This is a large step back and in line with weakness at the retail level. This is the Confidence metric from The Conference Board.

 

 Richmond Federal Reserve Manufacturing Index  (July 2015)

- Level   13. Previous was 6. 

 

 State Street Investor Confidence Index  (July 2015)

- State Street Investor Confidence Index  114.6. Previous was 127.1. 

This is an interesting metric because it examines risk in investment portfolios.  When economic fundamentals weaken risk aversion is heightened and the index falls.  This index is global examining risk in 45 countries.  The decrease in risk is a consequence of, for starters, Greece and China.

Durable Goods Orders  (June 2015)

- New Orders month/month 3.4%. Previous was -2.1%.

- New Orders year/year    -2.8%. Previous was -3.1% 

- Ex-transportation month/month  0.8%. Previous was -0.1%

- Ex-transportation year/year    -4.5%. Previous was -2.5%.

While June may be better that the previous month the year/year still shows weakness and the continuing problems with the economies of Europe and China will affect DGO.

 

 

Dallas Federal Reserve Manufacturing Survey  (July 2015)

- Production Index   -4.6. Previous was -6.5.

This is an index based on a survey of Texas manufacturers.

 

PMI Manufacturing Index Flash (July 2015)

- Level  53.8. Previous was 53.4  

 

New Home Sales (June 2015)

- New Home Sales (seasonally adjusted, annualized)  482,000. Previous was 517,000.

This is weak and less than expectation.  While housing is always regional New Home Sales certainly are an important macroeconomic indicator.  To some extent what we have seen this year is an increase in multi-family construction and flat single-family construction.  This is partly due to construction in cities where multi-family is the only option for expanding housing supply.

 

Jobless Claims (week ended July 18, 2015)

  - New Claims seasonally adjusted 255,000. Previous was 281,000

- New Claims unadjusted, totaled 262,981  a decrease of 81,382 from previous

- 4-week Moving Average  278,500. Previous was 282,000

The 255,000 Initial Claims is the lowest reading in 42 years. 

 

 

Chicago Federal Reserve National Activity Index  (June 2015)

- Level +0.08. Previous was -0.8 

- 3 Month Moving Average -0.01. Previous was -0.07 

 

 

 

Leading Indicators  (June 2015)

- Leading Indicators month/month +0.6%. Previous was +0.8%

 

 

Kansas City Federal Reserve Manufacturing Index (July 2015)

- Level  -7. Previous was -9. 

MBA Mortgage Applications (week ended 7/17/2015)

- Purchase Index Week/Week +1.0%. Previous weeks were -8.0%, +7.0%, -4.0%, +1.0%. -4.0%, +10.0%, -3.0%, +1.0%, -4.0%, -0.2%, +1.0%, +0.0%, and +5.0%.

- Refinance Index Week/Week -1.0%. Previous weeks were +4.0%, +3.0%, -5.0%, +2.0%, -7.0%, +7.0%, -12.0%, -4.0%, +0.3%, -6.0%, -8.0%, and -4.0%.

- Composite Index Week/Week +0.1%. Previous weeks were -1.9%, +4.6%, -4.7%, +1.6%, -5.5%, +8.4%, -7.6%, -1.6%, -1.5%, -3.5%, -4.6%, -2.3%, and +2.3%.

 

FHFA House Price Index (May 2015)

- month/month +0.4%. Previous was +0.4% - year/year   +5.7%. Previous was +5.3%

 

Existing Home Sales (June 2015)

- Existing Home Sales (seasonally adjusted annualized rate)  5,490,000. Previous was 5,320,000

- Existing Home Sales month/month  +3.2%. Previous was +4.5%

- Existing Home Sales year/year    +9.6%.

This is the highest level of Existing Sales since February 2007.

 

Redbook Chain Store Sales (week ended 7/18/2015)

- Store Sales year/year  +1.2%. Previous was +1.4%.   

Consumer Price Index  (June 2015)   

- CPI month/month  +0.3% Previous was +0.4%

- CPI year/year    +0.1%. Previous was +0.0%

- CPI core (less food & energy) month/month  +0.2%. Previous was +0.1%

- CPI core (less food & energy) year/year   +1.8%. Previous was +1.7%.    With core CPI near the Fed's stated target of 2.0% and the Unemployment Rate below 6% the Fed may feel that a rate hike is the right move.

The problem I see is that while the Fed may be meeting its dual mandate, economic growth (GDP) is still quite weak averaging 2.2% growth for the past 3 years +.

 

Housing Starts (June 2015)

 

- Starts seasonally adjusted, annualized 1,174,000. Previous was 1,069,000

- Permits seasonally adjusted, annualized  1,343,000. Previous was  1,275,000.

This growth is in units. Single Family start fell as multi-family (apartments) increased. This is an interesting statement about what is happening.  Rents have soared making apartment building lucrative.  The American dream of home ownership has suffered a setback.