Economic News

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U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES
April 2007

Goods and Services

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total April exports of $129.5 billion and imports of $188.0 billion resulted in a goods and services deficit of $58.5 billion, $3.9 billion less than the $62.4 billion in March, revised. April exports were $0.2 billion more than March exports of $129.2 billion. April imports were $3.6 billion less than March imports of $191.6 billion.

http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm

 

[Oldcoin]

Today 09:00am

June RBC Cash Index: 81.4 v 87.1 last

Subcomponents -

Current Conditions: 96.8 v 113.2 prior
Investment Index: 86.1 v 107.5 prior
Expectations Index: 32.2 v 24.3 prior
Jobs Index: 126.9 v 123.8 prior

** Cash Index is used as a predictor for U. of Michigan Confidence

http://www.tradethenews.com/story_details.asp?id=223771

 

[Oldcoin]

Next weeks economic calendar is very busy. Things really get hopping on Wednesday; Retail Sales is released prior to the market open. The report takes on extra importance because the consumer has become such a significant part of the current economy. Last weeks individual retail sales was a mixed bag; most retailers met forecast estimates, however there were earnings advice from Walmart and others which may foretell of future problems. Retail Sales rates an A- for importance, it has been forecast and the market expects improved numbers from April. Also released on Wednesday are Export/Import Prices and Business Inventories. As if that’s not enough the Feds’ Beige Book will be released; this will no doubt set the tone for the next FOMC meeting.

On Thursday PPI is issued which will foretell of inflationary pressures which could impact on the CPI released on Friday.

Friday is turning out to be a down right scary day. On top of the CPI report, Capacity Utilization and the New York Empire Index; Bernanke will speak at the Atlantic Fed Conference prior to market open. I also noticed that it was Quadruple witching…..it could only be scarier if it was Friday the Thirteenth and we knew that Greenspan was talking.

http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html

http://biz.yahoo.com/c/ec/200724.html

Not a lot on the earnings calendar. I did see Lehman Bros, Bear Stearns, Goldman Sacs and one of my favorites Smith & Wesson.

http://www.briefing.com/Investor/Private/Calendars/EarningsCalendarThisWeek.htm

Finally Bull and Bear Wise moved up two points last week to 53.73 primarily on a positive Trade Balance report.

http://www.bullandbearwise.com/

 

[Oldcoin]

U.S. Retail Sales Rose More Than Forecast in May (Update2)

By Joe Richter

June 13 (Bloomberg) -- Retail sales in the U.S. rose by the most in more than a year in May, easing concern that record gasoline prices and falling home values would damage consumers.

The 1.4 percent increase was more than twice the median forecast in a Bloomberg survey of economists and followed a revised 0.1 percent drop the prior month, the Commerce Department said today in Washington. Purchases excluding automobiles rose 1.3 percent.

More jobs and rising wages are cushioning the blow from the jump in fuel costs and the slump in real estate, economists said. Resilient consumer spending, along with a pickup in business investment and manufacturing, suggests the economy is poised for stronger growth this quarter.
``The consumer is holding up very well in the face of the energy-price shock,'' said Dean Maki, head of U.S. economic research at Barclays Capital Inc. in New York. The report ``will ease concerns about the downside risks to growth.'' Maki forecast sales would rise 1 percent, matching the highest estimate of economists surveyed.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY33aJZF5mHk&refer=home

 

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U.S. Import Prices Rise More Than Forecast in May (Update2)

By Shobhana Chandra

June 13 (Bloomberg) -- Prices of goods imported into the U.S. rose more than forecast in May on higher prices for oil and industrial supplies driven by strong overseas demand.

The 0.9 percent increase in the import price index followed a 1.4 percent gain in April, the Labor Department reported today in Washington. Prices excluding petroleum rose 0.5 percent and prices of consumer goods were unchanged.

Prices of industrial materials such as metals rose for the sixth month in seven. Federal Reserve policy makers, who call inflation the biggest risk to the economy, said at their last meeting that faster growth abroad and the decline in the U.S. dollar are adding to price pressures.

``Inflation is going to remain a concern for a considerable period of time because of global growth and demand for commodities,'' said Russell Price, senior economist at H&R Block Financial Advisors in Detroit, whose firm forecast a 0.8 percent import price gain. ``But I don't think it's going to develop into an actual problem.''

http://www.bloomberg.com/apps/news?pid=20601068&sid=aOtEYmpOcQlY&refer=economy

 

[Oldcoin]

Here is the raw data report on retail sales.

http://www.census.gov/svsd/www/marts_current.html

Going over the numbers I didn’t see any downers in the bunch as in last months report. I was a bit surprised to see Building Materials move up some, but it may stand to reason that if you can’t move you might want to fix up what you got. The Building materials are still well off there highs though. It was also good to see motor vehicles continue their move up.

All in all good numbers for the economy. Based on the reports we’ve been getting it looks like we’re keeping people employed and they’re spending the money.

PPI and CPI coming up on Thursday and Friday.

 

[Oldcoin]

Fed Says Some Regions See Pickup as Hiring Increases (Update2)

By Scott Lanman

June 13 (Bloomberg) -- The Federal Reserve gave a more upbeat assessment of U.S. regional economies, as manufacturing and job growth picked up.

Yet the strength of the economy, along with higher costs of fuel and food, hasn't increased ``overall'' pressures on wages and prices, the Fed said in its survey, known as the Beige Book for the color of its cover.

The report came hours after the government said retail sales jumped by the most in more than a year. The Beige Book lends credence to the forecast by Chairman Ben S. Bernanke and his colleagues that U.S. economic growth will rebound last quarter's pace of 0.6 percent, the slowest in more than four years, while inflation gradually drifts down.

``Most districts reported that overall wage pressures do not seem to have increased,'' the Fed said in the report, which reflects information collected before June 4. Even with higher energy costs in most districts and at least two mentioning rising food prices, ``reports generally did not indicate an increase in overall price pressures.''

After the report, U.S. stocks extended gains. The Standard & Poor's 500 Index rose 13.69, or 0.9 percent, to 1506.69 at 2:32 p.m. in New York.

The Fed has left its main interest rate unchanged for almost a year as it waits for the housing recession and inflation pressures to abate.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWp.YOE3awPA&refer=home

 

[Oldcoin]

U.S. Producer Prices Rose More Than Forecast in May (Update1)

By Shobhana Chandra

June 14 (Bloomberg) -- Prices paid to U.S. producers rose more than forecast in May, reflecting a fourth consecutive jump in fuel costs that threatens a broader pickup in inflation.

The 0.9 percent increase followed a 0.7 percent rise in April, the Labor Department said today in Washington. So-called core prices, which exclude fuel and food costs, rose 0.2 percent.

The report underscores Federal Reserve concerns that inflation won't moderate as forecast, economists said. Growing demand from overseas has pushed up prices for raw materials such as fuel and metals, giving businesses reason to try to pass on higher costs to customers.

``Inflationary pressures are certainly there,'' Julia Coronado, a senior economist at Barclays Capital Inc. in New York, said before the report. ``The pass-through is coming down the road. The Fed is going to be increasingly concerned about inflation.''

Yields on Treasury securities rose after the report showed inflation accelerated. The yield on the benchmark 10-year note rose to 5.24 percent at 8:37 a.m. in New York from 5.20 percent late yesterday.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqRIhtLxYb1g&refer=home

 

[Oldcoin]

Today 08:30am
*MAY PRODUCER PRICE INDEX: MOM 0.9% V 0.6%E; PPI EX FOOD & ENERGY: 0.2% V 0.2%E
- No Revisions
Table Of PPI Data From Labor Department, In Percent Changes

MAY APR. MAR.

PPI, Finished Goods 0.9 0.7 1.0
PPI, Ex. Food, Energy 0.2 0.0 0.0
Energy 4.1 3.4 3.6
Foods -0.2 0.4 1.4
Consumer Goods 1.2 0.9 1.4
Residential Electricity 0.7 0.3 0.0
Residential Gas 0.9 0.5 3.3
Gasoline 10.2 8.2 8.7
Home Heating Oil 2.3 4.8 1.8
Drugs 0.4 -0.2 0.5
Autos -0.2 -1.0 0.2
Tobacco 0.0 0.1 0.0
Capital Equipment 0.1 0.1 -0.1
Intermediate Goods 1.1 0.9 1.0
Ex, Food, Energy 0.4 0.8 0.2
Crude Goods 2.0 -1.5 3.2
Ex. Food, Energy 0.1 0.4 7.7



http://www.tradethenews.com/story_details.asp?id=225888

 

[Oldcoin]

Economic View

Q2 Growth Estimates Just Keep Rising
Last Update: 13-Jun-07 16:40 ET

The outlook for strong second quarter growth is at the heart of the sharp rise in long term yields over the last two weeks. After Q1 showed the weakest growth in four years the rebound in Q2 and expectations for strong growth over the second half have rekindled thoughts of further Fed policy tightening -- despite the fall in core PCE inflation to 2%

The sources of Q1 weakness are detailed in the GDP review linked to the economic calendar. The general expectation for stronger Q2 growth have been enlarged by the drop in the April trade deficit, lift in business inventories and very strong gain in May retail sales. There's plenty more data to be fed in to the GDP calculator before the late July preliminary release but many estimates have already passed 4% growth. Briefing.com is holding to a less dramatic 3.7% and will update the estimates as the actual pieces are released.

The lessening drag from housing may be moderate just as it was in the first quarter improvement. We remain confident that the 1% average drag on GDP over the last year will be lighted over the year despite the concerns about sub-prime foreclosures.

The improvements come from business investment given the recent gains in capital goods orders, production and expectations given the back to back annual highs in the ISM index. The draw down in inventories added to the weakened demand as the April's strongest rise since September argues that inventories will also provide a boost to Q2 growth after the significant drag over the last few quarters.

Consumer spending, with a majority weight in GDP, is expected to slow but not as much as earlier expected given the strong and broad based rise in May retail sales. From a 4% growth pace over the last two quarters the expectation is for consumer spending to come in near 3%.

http://www.briefing.com/Investor/Public/OurView/EconomicView.htm

 

[Oldcoin]

Key Factors
Only 2 gains over the last nine weeks.
• 4-week average edged higher to 311K from lower levels the prior four weeks.
• Shows increased hesitancy to lay off workers given the lean available supply and expectations for stronger growth ahead.
• 4-week average in continued claims edged higher from a four month low.
• A very tight labor market as the labor force (employed and unemployed) has contracted since year end 2006.
Big Picture
• Initial claims had been following a subtle upward trend which has again been challenged with the recent low levels. Aberrations are watched for clues on the labor market and economy as the recent levels reflect an even tighter labor market. Continued claims also falling off its highs. Claims provide a nearly real time read on layoffs and the labor market as the low 4.5% unemployment reflects the broader read of layoffs and hiring.

http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm

 

[weatherweenie]

http://biz.yahoo.com/ap/070614/mortgage_rates.html?.v=1

Rates on 30-Year Mortgages Jump to the Highest Level in 11 Months

WASHINGTON (AP) -- Rates on 30-year mortgages rose for a fifth straight week, hitting the highest level in 11 months as prospects dimmed further for possible rate cuts from the Federal Reserve. Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.74 percent this week. That was up from 6.53 percent last week and marked the biggest one-week rise in 30-year rates in more than three years.

 

[Oldcoin]

U.S. May Core Consumer Prices Rise Less Than Forecast (Update1)

By Bob Willis

June 15 (Bloomberg) -- A measure of consumer prices in the U.S. rose less than forecast in May, bearing out the Federal Reserve's view that broader inflation pressures would moderate as the economy cooled.

So-called core prices, which exclude food and fuel, rose 0.1 percent last month after a 0.2 percent gain in April, the Labor Department said today in Washington. The median estimate of economists surveyed forecast a 0.2 percent gain. All prices rose 0.7 percent, the biggest increase since September 2005, led by a jump in gasoline costs.

The report may alleviate Fed concerns that rising energy and food costs would translate into broader price gains. Smaller gains in core prices may eventually give Fed Chairman Ben S. Bernanke the option to lower interest rates should the economy falter.

``We've seen a gradual diminution in core inflation,'' William Cheney, chief economist at John Hancock Financial Services in Boston, said before the report. ``If everything plays out right according to the Fed playbook, they'll be on hold well into next year and then they'll start to ease a little.''

Factories in New York expanded at the fastest pace in a year, reflecting an increase in sales and orders, a Fed report today showed. The Fed Bank of New York's general economic index rose to 25.8 from 8.03 the prior month, signaling a pickup in manufacturing is being sustained. Readings greater than zero signal expansion.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0mcl96maDW0&refer=home

 

[Oldcoin]

New York Fed's Manufacturing Index Jumps to 25.8 This Month

By Shobhana Chandra

June 15 (Bloomberg) -- Factories in New York state expanded at a faster rate this month as new orders and shipments rose, evidence a pickup in manufacturing is being sustained.

The Federal Reserve Bank of New York's general economic index rose to 25.8 from 8.03 the prior month, the bank said today. Readings greater than zero signal expansion.

Companies are revving up production plans as demand in the U.S. and overseas improves. A recovery in manufacturing, together with stabilization in home construction, will help the economy accelerate after the slowest pace of growth in more than four years last quarter.

``Manufacturing has turned up pretty sharply,'' Robert Mellman, an economist at JPMorgan Chase & Co. in New York, said before the report. ``Final demand is reasonably strong and inventories are less of a drag.''

Economists forecast the New York manufacturing index would rise to 11.3 from an originally reported 8, according to the median of 46 estimates in a Bloomberg News survey. Projections ranged from 8 to 15.

The index averaged 9.4 in the first five months this year, compared with 20.3 for all of 2006.

http://www.bloomberg.com/apps/news?pid=20601087&sid=atn4pBJXR7NM&refer=home

 

[Oldcoin]

U.S. International Transactions: First Quarter 2007

Current Account

The U.S. current-account deficit--the combined balances on trade in
goods and services, income, and net unilateral current transfers--increased to
$192.6 billion (preliminary) in the first quarter of 2007 from $187.9 billion
(revised) in the fourth quarter of 2006. The increase was more than accounted
for by an increase in net unilateral current transfers to foreigners. In
addition, the deficit on goods increased a small amount. These increases were
partly offset by small increases in the surpluses on services and on income.

Goods and services

The deficit on goods and services decreased slightly to $176.8 billion
in the first quarter from $176.9 billion in the fourth.

Goods

The deficit on goods increased to $200.9 billion in the first quarter
from $200.3 billion in the fourth.

Goods exports increased to $270.1 billion from $266.5 billion. The
largest increases were in consumer goods, in agricultural products, and in
automotive vehicles, parts, and engines.

Goods imports increased to $471.0 billion from $466.8 billion. The
increase largely resulted from an increase in petroleum and products. Among
nonpetroleum products, increases in capital goods, in consumer goods, and in
foods, feeds, and beverages were mostly offset by decreases in other major
commodity categories.

http://www.bea.gov/newsreleases/international/transactions/transnewsrelease.htm

 

[Oldcoin]

Consumer sentiment fades to 83.7 in early June

By Rex Nutting
Last Update: 10:03 AM ET Jun 15, 2007


WASHINGTON (MarketWatch) -- U.S. consumer sentiment eased in early June, according to a monthly survey released Friday by Reuters and the University of Michigan. The consumer sentiment index fell to 83.7 from 88.3 in May. Economists were expecting the index to fall to 87.0. The current conditions index dropped to 100.2 from 105.1. The expectations index fell to 73.0 from 77.6. Inflation expectations over the next five years fell to 3% from 3.1%, while inflation expectations for the next year rose to 3.5% from 3.3%

http://tinyurl.com/yvd2t6

 

[Oldcoin]

After a relatively busy week for economic reports this current week is downright slow. The only significant reports are due out Tuesday and Thursday. On Tuesday Housing Starts will be released prior to the market open. I don’t expect much of an impact on market activity unless we get very positive news; which is totally unexpected.

On Thursday we have Jobless Claims and Leading Indicators. Leading Indicators is a compellation of prior reports and thus predictable; so this report should not be a market mover. Jobless Claims is expected to come in about the same as the prior period and should also not have an impact on the market. Fact is if Jobless Claims came in worse (higher) than expected it could be a positive for market action. Higher than expected jobless claims could increase pressure on the Fed to lower rates. This seems pretty slim to me since the employment numbers have to date been so positive.

The sleeper of the week could be the MBA Purchasers Report due out on Wednesday. This is a leading indicator for single family home sales and residential housing construction. A good number here would reassure the market that the housing market may have bottomed out. I still have my doubts; with increasing interest rates and tighter lending standards it will be awhile before we see indications of a housing recovery.

Here are your calendars;

http://biz.yahoo.com/c/ec/200725.html

http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html

Speaking this week are Janet Yeller and NY Fed Reserve Bank Pres & FOMC voting member Timothy Gerthner on Wednesday at the same function.

We are well past the earnings season; however we do have a couple of names worthy of note on the earnings calendar. An interesting comparison in marketing and management styles set up this week with the reporting from Best Buy (BBY) and Circuit City (CC). Both company’s retail electronics, but Best Buy is expected to report 0.50/Share while Circuit City is expected to reflect a loss of 0.31 per Share.

Also reporting is Fed Ex which many watch as an indicator of the health of the economy….you got to ship all the stuff that’s bought and sold. Also reporting are Morgan Stanley and H&R Block.

http://www.briefing.com/Investor/Private/Calendars/EarningsCalendarWeek2.htm

Bull and Bear Wise dropped to a dismal 47.76 last week. A number of releases were bearish. If it wasn’t for options expiration last week and some injections of cash from the Fed the market could have easily moved much lower.

http://www.bullandbearwise.com/

 

[Oldcoin]

http://tinyurl.com/2cjz6p

ECONOMIC REPORT
Home builders' confidence falls to 16-year low
Contractors say market probably won't improve until next year
By Rex Nutting, MarketWatch
Last Update: 2:33 PM ET Jun 18, 2007


WASHINGTON (MarketWatch) -- The outlook for U.S. home building is the worst in 16 years, the National Association of Home Builders reported Monday. The builders' housing market index fell by two points to 28 in June, the lowest since February 1991.

The market probably won't turn around until next year, said David Seiders, chief economist for the builders. "We expect housing to exert a drag on economic growth during the balance of 2007."

The decline was in line with expectations of economists surveyed by MarketWatch.

 

[Oldcoin]

U.S. Housing Starts Fell in May to 1.474 Million Pace (Update1)

By Bob Willis

June 19 (Bloomberg) -- Housing starts in the U.S. fell in May, signaling the slump in home construction will continue to depress growth.

Builders broke ground on new houses at an annual rate of 1.474 million, down 2.1 percent from 1.502 million the prior month, the Commerce Department said today in Washington. Building permits rose 3 percent to 1.501 million from 1.457 million.

Lower prices and more incentives have failed to spur interest as buyers wait for even bigger bargains, leaving builders with a glut of unsold properties. A jump in mortgage rates and stricter rules to qualify borrowers with poor credit ratings, known as subprime customers, may reduce demand even more in coming months, economists said.

``There is still some more downside to the housing market,'' said Nariman Behravesh, chief economist at Global Insight Inc. in New York. ``Mortgage rates started up again and there is still a shakeout going on in subprime.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQfe3diju2fQ&refer=home

 

[Show-me]

You can buy all the building permits you want in anticipation of a improving real estate market. It does not mean you have to "start" digging the hole if the market is still weak.