Economic News

[Oldcoin]

Durable-goods orders jump 3.4% on planes, capital equipment.


By Rex Nutting
Last Update: 8:30 AM ET Apr 25, 2007


WASHINGTON (MarketWatch) - Demand for U.S.-made durable goods increased 3.4% in March, led by orders for aircraft and capital equipment, the Commerce Department reported Wednesday. The increase was slightly higher than the 2.5% gain expected by economists. It was the biggest increase in durable-goods orders since December. Boeing's order book was one big story in the March report. Orders for civilian aircraft zoomed 37.6% higher. The other big story in March: Demand for core capital equipment increased a robust 4.7% after a cumulative 8.5% decline in January and February. It was the biggest gain in this key gauge of business investment since September 2004.

 

[Oldcoin]

New-Home Sales in U.S. Increase 2.6% to 858,000 Pace (Update2)
By Courtney Schlisserman

April 25 (Bloomberg) -- Purchases of new homes in the U.S. rose for the first time in three months in March as unusually warm weather and sales incentives brought out more buyers.

Purchases rose 2.6 percent to an annual pace of 858,000 last month from an 836,000 rate in February that was lower than previously reported, the Commerce Department said today in Washington. The supply of unsold homes at the current sales pace declined.

The sales gain may be more a reflection of higher-than- normal temperatures in March than a sign of a recovery in demand, economists said. The National Association of Realtors reported yesterday that sales of existing homes dropped by the most since 1989 last month. Those sales are largely based on contracts signed in February, when winter storms dissuaded buyers.

``Considering the weather was unseasonably mild in March, the report certainly wasn't overly positive news and is consistent with the idea that sales are still struggling,'' said Phillip Neuhart, an economist at Wachovia Corp. in Charlotte, North Carolina. ``We don't see sales bottoming until sometime mid-year.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4ZGiXwtkxh8&refer=home

 

[Oldcoin]

Fed's Beige Book: most areas grew only modestly

WASHINGTON (Reuters) - Most U.S. regions experienced only modest or moderate growth between the end of February and mid-April, while prices were generally stable, the Federal Reserve said on Wednesday.

"Most Federal Reserve districts noted only modest or moderate expansion in economic activity since the previous report" on March 7, the Fed said in its Beige Book summary of economic conditions.

The Beige Book is based on reports by the 12 regional Federal Reserve banks. This time it was assembled by the St. Louis Fed with information collected up to April 16.

http://news.yahoo.com/s/nm/20070425/bs_nm/usa_fed_beigebook_dc_2

 

[350zCommTech]

Fed's Beige Book: most areas grew only modestly

WASHINGTON (Reuters) - Most U.S. regions experienced only modest or moderate growth between the end of February and mid-April, while prices were generally stable, the Federal Reserve said on Wednesday.

"Most Federal Reserve districts noted only modest or moderate expansion in economic activity since the previous report" on March 7, the Fed said in its Beige Book summary of economic conditions.

The Beige Book is based on reports by the 12 regional Federal Reserve banks. This time it was assembled by the St. Louis Fed with information collected up to April 16.

http://news.yahoo.com/s/nm/20070425/bs_nm/usa_fed_beigebook_dc_2

I read it as slowing growth with rising inflation, but Mr. Market is squeezing the shorts big time!:laugh:

 

[Oldcoin]

I read it as slowing growth with rising inflation, but Mr. Market is squeezing the shorts big time!:laugh:

Kinda fun to watch I think Tom has said that the market tends to reverse in a few days, but who knows? With the really positive earnings so far and the market shruging off any negative news the Bull Run isn’t looking tired today.

Bet’cha BirchTree is smiling right now.

 

[Oldcoin]

News Release: Local Area Personal Income, 2005

Local Area Personal Income, 2005

Today, the Bureau of Economic Analysis (BEA) released estimates of personal income at the county level for 2005 based on newly available source data. Personal income is a comprehensive measure of the income of all persons from all sources. In addition to wages and salaries it includes employer-provided health insurance, dividends and interest income, social security benefits, and other types of income. /1

The growth in county personal income for 2005 ranged from 34 percent in Cheyenne County, Kansas to -80 percent in St. Bernard Parish, Louisiana. For the Nation, personal income grew 5.2 percent. Farming was the largest contributor to growth in the 10 fastest growing counties-all in Kansas and North Dakota. The five largest declines in county personal income-all in Louisiana-were due to the destruction of housing and businesses from wind, storm surge, and floods caused by Hurricane Katrina.

Per capita personal income (personal income divided by population) ranged from $93,377 in New York County, New York to $5,148 in St. Bernard Parish, Louisiana.

http://www.bea.gov/newsreleases/regional/lapi/lapi_newsrelease.htm

 

[Oldcoin]

ECONOMIC REPORT
U.S. initial jobless claims fall back in latest week
Weekly claims drop to lowest level since late March; continuing claims rise

By Robert Schroeder, MarketWatch
Last Update: 9:43 AM ET Apr 26, 2007


WASHINGTON (MarketWatch) -- The number of Americans applying for state unemployment benefits dropped in the latest week, even as the number of people continuing to collect benefits rose to its highest level since February.

The Labor Department reported that weekly initial jobless claims fell by 20,000 to 321,000 in the week ending April 21. That's the lowest level in a month.

The four-week moving average of new claims, meanwhile, rose to its highest level since March 3, to 332,000. The four-week average smoothes out one-time events like weather, holidays and strikes.

The number of people collecting unemployment checks rose by 65,000 to 2.59 million in the week ending April 14, the most since Feb. 17. The four-week average of continuing claims rose by 19,250 to 2.53 million.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.


http://tinyurl.com/3ahp7e

 

[Oldcoin]

GROSS DOMESTIC PRODUCT: FIRST QUARTER 2007 (ADVANCE)


Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 1.3 percent in the first quarter of 2007,
according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real
GDP increased 2.5 percent.

The Bureau emphasized that the first-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The first-quarter "preliminary" estimates, based on more comprehensive data, will be released on May 31, 2007.

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) and state and local government spending that were partly offset by negative contributions from residential fixed investment, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the first quarter primarily reflected a downturn in exports, an upturn in imports, a deceleration in PCE for nondurable goods, and a downturn in federal government spending that were partly offset by a smaller decrease in private inventory investment, an upturn in equipment and software, a smaller decrease in residential fixed investment, and an acceleration in PCE for durable goods.

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

 

[Oldcoin]

U.S. Economy Expanded at Slowest Pace in Four Years (Update2)
By Joe Richter

April 27 (Bloomberg) -- The U.S. economy grew in the first quarter at the slowest pace in four years, hobbled by the slump in home construction and a bigger trade deficit.

The 1.3 percent annual growth rate was less than forecast and followed a 2.5 percent fourth-quarter pace, the Commerce Department reported today in Washington. A measure of inflation watched by the Federal Reserve rose at a faster pace.
…….
So far, there is scant evidence of a pickup in growth. The Fed's Beige Book, a compendium of regional anecdotes that will frame policy makers' discussions about the economy when they next meet on May 9, said that most district banks reported ``only modest or moderate'' economic growth since late February. Real estate ``continued to weaken,'' and ``many districts saw a decrease in homebuilding,'' the report said.

Subprime Mortgages

A jump in subprime-mortgage defaults and foreclosures heighten the risk that the real estate slump will linger, economists said. Signs have emerged that woes in manufacturing and housing are suppressing demand in other industries.

Norfolk Southern Corp., the fourth-largest U.S. railroad, said this week that first-quarter profit fell on fewer shipments of autos and homebuilding supplies. Norfolk Chief Executive Officer Charles ``Wick'' Moorman said in an interview that ``we still expect the housing sector and the automotive sector to remain challenges.''

Central bankers have said they expect the economy will improve in the second half of the year as the effects of the housing slowdown dissipate and businesses regain the confidence to resume investing.

``I think the economy is decent,'' General Electric Co. Chief Executive Officer Jeffrey Immelt said before the company's annual shareholder meeting in Greenville, South Carolina, this week. ``I think housing is a tough spot, but the rest of the economy is pretty good.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=afoOS8P4WWpE&refer=home

My concern right now is that while the rest of the economy appears to be good the slow down in housing and increased energy prices will creep into other aspects of the economy and slow it down further. Oldcoin

 

[Oldcoin]

Dollar Weakens to All-Time Low Against Euro as Economy Slows

By Bo Nielsen and Min Zeng

April 27 (Bloomberg) -- The dollar dropped to an all-time low against the euro as investors shunned a slowing U.S. economy in favor of quicker growth in Europe.

The U.S. economy grew last quarter at the slowest pace in four years, a government report showed. The dollar has weakened against most major currencies this year. The Federal Reserve's Trade Weighted Major Currency Dollar index is at the lowest in its 36-year history.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.dc8ZgWa.KA&refer=home

 

[Oldcoin]

Housing Slowdown Sector Impact

in Economy | Employment | Markets | Real Estate | Retail

Yesterday, we picked up Dan Gross’ challenge as to what other sectors the Housing slowdown was making its impact felt.

Our experiment in “Crowd-Sourcing” worked out well – you contributed scores of suggestions based on observed data, both public and private.

Here’s a list of your observed sector impacts as they relate to the Housing slowdown:

http://bigpicture.typepad.com/comments/2007/04/housing_slowdow.html

Here’s is an example of what I mean by an impact on other sectors caused by the housing slowdown.

 

[Oldcoin]

I saw in the market talk thread that there was talk of stagflation. I had to go back to post #452 in this thread to track down our discussion. So here is the definition;

Stagflation

A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.

So far the jobs picture has not indicated a stagflation scenario; we’re not in a recession yet either. Although, if we continue with the decreasing GDP it could occur later this year, the odds I’ve seen are between 25 to 40% that we’ll hit a recession.

 

[Oldcoin]

Gotta love the U.S. consumer. If anything will pull us through the current economic slowdown they will.

Highlights
Reuters/University of Michigan consumer sentiment index, at 87.1 for April, rose 1.8 percentage points from mid-month but still fell short of March's reading of 88.4. Inflation expectations, closely watched by Federal Reserve officials, were 3.3 percent, unchanged from mid-month but up 3 tenths from March in a reflection of high gas prices.

Current conditions were firm at 104.6, up 1.1 percentage points from March and a contrast with the Conference Board's report earlier this week that showed a sharp drop. Expectations for the Reuters/Michigan report slipped to 75.9 from 78.7 in March.

Today's report offsets to a degree the greater weakness seen in the Conference Board's data. The outlook for consumer spending remains healthy, underscored by today's GDP report that showed a 3.8 percent annualized increase in personal consumption expenditures. Markets showed no significant reaction to the report.

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

 

[Oldcoin]

United States
The Employment Conundrum - Construction Doesn't Nail It Down
April 27, 2007

By Richard Berner (New York)

Explaining the dichotomy between weak growth and firm labor markets has become a cottage industry. Small wonder: In the last three quarters of 2006, economic growth slowed by one-third to 2.3%, and to just 1.3% in the quarter just past. In contrast, hours and employment have hardly decelerated over those periods. And solving the puzzle matters for both investors and policymakers. Just last night, San Francisco Fed President Janet Yellen rounded up her own list of the usual suspects: longer cyclical lags between the slowing in growth and in employment, mismeasurement, or, more worrisome, a downshift in the trend rate of productivity growth. We agree that those are the prime suspected culprits. Moreover, which of them dominates is critically important but highly uncertain, and the risks to the outlook for growth and inflation are thus higher (see “The Employment Conundrum,” Global Economic Forum, April 9, 2007).

In my view, atypically long lags between the change in output and employment largely explain the puzzle, so slower job gains lie ahead. Following a long ‘jobless recovery, job gains caught up to the economy over the past two years. With that catch-up essentially complete, I think employment growth will slow from 1.3% annualized to less than 1% over the balance of the year. Mismeasurement could also be a culprit, but neither labor hoarding nor an undercount of laid-off illegal construction workers seems large enough to explain the gap. But I’ll be the first to concede that this debate is far from over. Here’s why.

http://www.morganstanley.com/views/gef/index.html

Some more thoughts on the employment picture.

 

[Oldcoin]

Weekly Economic Commentary by Dr. Scott Brown

The Softer Dollar

The softer dollar has generated renewed worries about the U.S. economy and global financial markets. However, the degree of concern is not too panicky – and rightly so. Large global imbalances have long been seen as a potential obstacle, but the recent softness in the greenback appears to be due more to the difference in short-term interest and expected monetary policy. The dollar seems likely to trend lower over the intermediate term, but a rebound seems likely in the short term. While there is some risk of more dramatic currency adjustments, the dollar is likely to soften gradually as global imbalances come back in line.

http://www.raymondjames.com/monit1.htm

 

[Show-me]

http://www.briefing.com/GeneralCont...vestor&ArticleId=NS20070427115955EconomicView

The 1.3% growth in the first quarter was the weakest in four years and leaves a modest 2.1% average over the last year. The advanced read is part estimate from the Commerce Department as many of the components haven't been reported for March. That may explain some of the surprises in the detail.
The biggest surprise is the 2% rise in business investment given the sharp contraction in capital goods sales which usually serve as a good estimate. The detail shows gains in business equipment, software and structural investment and presents a less dire outlook. The decline in residential investment was large but weaker than the prior two quarters as the fading weakness is expected to continue over the coming quarters.

 

[Oldcoin]

This week will be a busy one; not only do we have some important economic releases, were still in the middle of the 1st quarter earnings reports. This week starts off with personal income and outlays. Since the U.S. consumer is essential to the economy the report may have an impact greater than the C+ it’s rated at for importance. Also due on Monday is the Chicago PMI. Look for a reading in excess of 50 to indicate that we’re still in an expansion mode. On Tuesday ISM index and Pending Home Sales will be released along with auto sales. Wednesday Factory Orders and Thursday Initial Claims which leads us into Fridays Job report. The market should focus in on Fridays report since a declining employment report could indicate the start of stagflation which we talked about last week. Here are the Calendars;

http://biz.yahoo.com/c/ec/200718.html

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

I have Bernake speaking on Free Trade on Tuesday, don’t expect any surprises. On Wednesday Treasury Secretary Paulson talks and Friday Fed Res Pres Timothy Geithner.

Next week the market will have Proctor & Gamble, GM, Eastman Kodak and Kellogg reporting, have you been eating your Wheaties?

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

Surprisingly Bull and Bear Wise rose last week to 50.75 on the reported improvement on home sales. Since the GDP was bearish the last reporting, it had no impact on the index.

http://www.bullandbearwise.com/

 

[Oldcoin]

Fed's Yellen says economic downturn possible
By Mark FelsenthalSun Apr 29, 1:42 PM ET

There is the potential for a downturn in the U.S. economy that could have ripple effects around the world, San Francisco Federal Reserve President Janet Yellen said on Saturday.

The U.S. economy grew modestly in the first quarter but should accelerate in the second half of the year, she said in a speech to the American Academy of Arts and Sciences and the American Philosophical Society.

Enumerating the top current risks to stable economic conditions around the world, she said that in the U.S. economy "there is potential for a downturn that could have major spillover effects around the globe." The United States contributes roughly 25 percent to world economic output, she noted.

The U.S. economy expanded at a sluggish 1.3 percent in the first quarter of 2007, the Commerce Department said on Friday, reflecting declines in the housing market and a pickup in inflation. It was the fourth consecutive quarter of sub-par growth in the world's largest economy.

"I do think there are downside risks to the American economic growth, but in spite of those risks I really think it is quite likely that the U.S. economy is going to pick up steam and revert back to trend growth before 2007 comes to and end," Yellen said.

Given "slightly elevated" levels of inflation, a period of subpar output will help dispel inflationary pressures, she added.

In the event the U.S. economy experiences a downturn, other countries have economic policy tools to help cushion the impact, Yellen said. Such tools include the adoption of numerical targets for inflation at many central banks around the world, she noted.

The U.S. central bank does not use inflation targets but is discussing whether to adopt them.

Yellen said other risks to the global economy include large investment and savings imbalances and possible disruptions from the re-pricing of risks in international financial markets.

The Federal Reserve is pinned between slow growth, which would could call for lowering benchmark interest rates, and stubbornly elevated inflation, which would dictate raising rates.

Fed officials have said that holding overnight borrowing costs steady at 5.25 percent, where they have been since June, will allow growth to pick up as inflation eases.

Yellen is not a voter on the Fed's policy-setting Federal Open Market Committee, which meets on May 9.

http://tinyurl.com/3dwgln

Silly headline…but it made me read it, so maybe not so silly after all.

 

[Oldcoin]

Spending Rose Less Than Forecast, Price Gains Ease (Update2)
By Joe Richter
April 30 (Bloomberg) -- Personal spending in the U.S. rose less than forecast in March, a sign higher gasoline prices and a sagging housing market may be starting to chip away at a mainstay of the expansion.

The 0.3 percent rise in spending followed a 0.7 percent February increase, the Commerce Department said today in Washington. The Federal Reserve's preferred measure of inflation was unchanged from a month earlier.

Adjusted for inflation, spending fell by the most since September 2005, suggesting the economy may not be able to count as much on consumers to buffer slowdowns in manufacturing and home construction. The price figures bear out the Fed's forecast that inflation will gradually recede as the economy cools.

http://www.bloomberg.com/apps/news?pid=20601087&sid=arH8bM8S0USA&refer=home

 

[Oldcoin]

http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Link to the BEA release on Personal Income and Outlays.