Empire State Manufacturing Index
US: NY Empire State Manufacturing Index falls to 24.3 in May vs. 23.9 expected. The headline General Business Conditions Index of the NY Fed's Empire State Manufacturing Survey declined to 24.3 in May from 26.3 in April. This reading, however, came in better than the market expectation of 23.9.
Housing Market Index - HMI
Strong buyer demand is keeping homebuilders confident, but rising costs of construction materials are weighing on housing affordability. Builder sentiment in the single-family housing market was unchanged at 83 in May, according to the NAHB/Wells Fargo Housing Market Index. Anything above 50 is considered positive sentiment.The index had plummeted to 37 last May, as the pandemic lockdown hit and the housing market shut down. It then rebounded dramatically in June and July, as consumers rushed out to buy suburban homes, seeking more space for working and schooling from home. Builders now say they continue to see a steady stream of buyers, due in large part to the extreme shortage of existing homes for sale. Continued low mortgage rates are helping some with affordability, but with prices rising fast, purchasing power is weakening.
Housing Starts
U.S. housing starts fell significantly more than expected in April. The Commerce Department’s monthly data release Tuesday estimating housing starts fell 9.5% in April to a 1.569 million-unit seasonally adjusted annual rate. Reuters’ monthly economist poll had showed a consensus forecast of starts falling to a rate of 1.710 million units. Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569 million units last month, the Commerce Department said on Tuesday. Economists polled by Dow Jones had forecast starts falling to a rate of 1.7 million units in April.
Housing Permits
The number of single-family homes where permits have been authorized but construction has not yet started rose 4% in April and has been trending higher in recent months. Overall permits rose 0.3%, with all the gain coming from projects with five units or more. Starts of projects with five units or more, which are mostly apartments, rose 4% in April to a 470,000-unit annual rate, with all of the increase coming from the West and Northeast.
Mortgage Applications
Sky-high home prices mean demand for ever bigger mortgages, but those prices may also be causing a pullback in homebuying overall. Mortgage applications to purchase a home fell 4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was just 2% higher than the same week one year ago, when the housing market was just starting to come back after the pandemic shut it down.
Treasury International Capital (TIC)
The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for March 2021. The next release, which will report on data for April 2021, is scheduled for June 15, 2021. The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $146.4 billion. Of this, net foreign private inflows were $140.0 billion, and net foreign official inflows were $6.5 billion. Foreign residents increased their holdings of long-term U.S. securities in March; net purchases were $208.1 billion. Net purchases by private foreign investors were $142.1 billion, while net purchases by foreign official institutions were $65.9 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $54.1 billion. Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $262.2 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $224.7 billion in March. Foreign residents decreased their holdings of U.S. Treasury bills by $69.1 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $53.7 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $24.6 billion.
Philadelphia Fed Manufacturing Index
Philly Fed factory index falls more quickly than expected in May 2021. Manufacturing activity in the US mid-Atlantic region cooled more quickly than anticipated in May as supply bottlenecks continued to worsen, the results of a closely-followed survey revealed. Price pressures also continued to mount. The Federal Reserve Bank of Philadelphia's factory index dropped from a reading of 50.2 for April to 31.5 in April (consensus: 43.2). A key gauge tracking new orders was little changed, slipping from 36.0 to a still elevated 32.5. But that linked to firms' delivery times worsened sharply, rising from 27.8 to 41.5. The sub-index for prices paid meanwhile increased from 69.1 to 76.8. Employment also weakened, with the corresponding subindex slipping from 30.8 to 19.3. Americans' workweek also continued to lengthen as revealed by a rise in the corresponding subindex from 29.8 to 35.5. A subindex for inventory levels rose from 17.3 to 25.6.
Jobless
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FOMC Minutes for 28/Apr/2021
The Federal Reserve left interest rates near zero and the pace of asset purchases unchanged, but acknowledged an uptick in economic activity as the U.S. recovers from Covid-19. A "number" of Fed officials appeared ready to consider changes to monetary policy based on a continued strong economic recovery, according to minutes of the U.S. central bank's April meeting, but data since then may have already changed the landscape. "A number of participants suggested that if the economy continued to make rapid progress toward the (policy-setting) Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," the minutes said in the most overt reference yet to a possible taper of the Fed's crisis-fighting bond purchases.
PMI Composite Flash
The flash reading of the IHS Market U.S. composite purchasing managers index rose to record 68.1 in May 2021 from 63.5 in April. Flash U.S. Composite Output Index at 68.1 (63.5 in April). Series record high. Flash U.S. Services Business Activity Index at 70.1 (64.7 in April). Series record high. Flash U.S. Manufacturing PMI at 61.5 (60.5 in April). Series record high. Flash U.S. Manufacturing Output Index at 58.1 (57.2 in April). 4-month high. Adjusted for seasonal factors, the IHS Markit Flash U.S. Composite PMI Output Index posted 68.1 in May 2021, up from 63.5 in April 2021. The rate of expansion was unprecedented after surpassing April’s previous series record. May U.S. PMI Composite ahead of consensus and higher M/M.Fri, May 21, 2021 for May U.S. PMI Composite Flash: 68.1 vs. 63.5 prior PMI rate of expansion came in unmatched after exceeding April's previous series record; goods producers and service providers alike noted stronger paces of activity growth midway through Q2.
Existing Home Sales
U.S. home sales fell for a third straight month in April as an acute shortage of properties drove prices to a record high. Existing home sales dropped 2.7% to a seasonally adjusted annual rate of 5.85 million units last month, the National Association of Realtors said on Friday. Sales fell in the Northeast, West and the densely populated South, but rose in the Midwest. Economists polled by Reuters had forecast sales rebounding 2.0% to a rate of 6.09 million units in April. Home resales, which account for the bulk of U.S. home sales, surged 33.9% on a year-on-year basis. The annual increase was, however, distorted by the plunge in sales in April 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
Leading Indicators
The Conference Board Leading Economic Index® (LEI) for the U.S. increased by 1.6 percent in April 2021 to 113.3 (2016 = 100), following a 1.3 percent increase in March and a 0.1 percent decline in February. “With April’s large monthly gain to start the second quarter, the U.S. LEI has now recovered fully from its COVID-19 contraction—surpassing the index’s previous peak, reached at the very onset of the global pandemic in January 2020, While employment and production have not recovered to their pre-pandemic levels yet, the U.S. LEI suggests the economy’s upward trend should continue and growth may even accelerate in the near term. The Conference Board now forecasts real GDP could grow around 8 to 9 percent (annualized) in the second quarter, with year-over-year economic growth reaching 6.4 percent for 2021.
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