The Chicago Fed National Activity Index (CFNAI)
Chicago Fed Index Points to Slow Down in Growth. The Chicago Fed National Activity Index fell to 0.24 in April of 2021 from an 8-month high of 1.71 in March, suggesting a slowdown in economic growth. Production-related indicators contributed +0.18, down from +0.92 in March. The contribution of the employment, unemployment, and hours category decreased to +0.05 from +0.38. Also, the personal consumption and housing category contributed –0.06, down from +0.50 in March. In contrast, the contribution of the sales, orders, and inventories moved up to +0.07 from -0.09. The index’s three-month moving average decreased to +0.07 in April from +0.35 in March.
S&P Case Shiller Index
Home prices in March 2021 were 13.2% higher in March 2021, compared with March 2020, according to the S&P CoreLogic Case-Shiller National Home Price Index. That’s up from the 12% annual gain in February, and it marks the 10th straight month of accelerating home prices. The March gain is the largest since December 2005 and is one of the largest in the index’s 30-year history. Prices are being pushed higher by incredibly strong competition in the market. High demand is butting up against near record-low supply, resulting in bidding wars for the vast majority of listings. The 10-city composite rose 12.8% year over year, up from 11.7% in the previous month. The 20-city composite increased 13.3%, up from 12% in February.
FHFA - Federal Housing Finance Agency House Price Index
Housing Prices Skyrocketed In March 2021, Increasing Pressure For Fed Tapering. The FHFA (Federal Housing Finance Agency) purchase-only price index rose 13.9% YoY in March 2021 (the largest increase on record and up from 12.4% YoY percent in February). In March 2021, housing prices growth accelerated, rising at the fastest pace since at least 2013. The trend is likely to remain strong in the coming months raising pressure on Fed to taper MBS purchases in the second half of the year.
New Home Sales
New home sales slid 5.9% on a monthly basis in April 2021 to 863,000 units, the U.S. Census Bureau and the Department of Housing and Urban Development reported. Year over year, however, sales were up 48.3%. Sales were down in all regions except for the West, where they rose 7.9% to 164,000 homes. The South saw sales fall 8.2% to 545,000, while they were down 8.3% to 110,000 in the Midwest and down 13.7% in the Northeast. At the end of April, there were 316,000 new homes for sale, representing a 4.4-month supply of homes. The median sales price of new homes sold in April was $372,400, up from $334,200 in March and $310,100 a year ago. National Association of Home Builders Chief Economist Robert Dietz said the rising cost of homes is driving down the pace of sales as many would-be homebuyers find themselves priced out.
Pending Home Sales Apr 2021
Contracts to purchase previously owned U.S. homes declined in April 2021 following a record-low inventory of homes for sale in the first quarter of 2021. The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on contracts signed last month, fell 4.4% to 106.2. Economists polled by Reuters had forecast pending home sales rising 0.8% percent.
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.
Corporate Profits
US Corporate Profits Fall in Q1. Corporate profits in the United States decreased 0.8 percent to USD 1.94 trillion in the first quarter of 2021, following a 3.3 percent drop in the previous period, a preliminary estimate showed. Net dividends declined 2.8 percent to USD 1.34 trillion. Meantime, net cash flow with inventory valuation adjustment, the internal funds available to corporations for investment, rose 1.8 percent to USD 2.59 trillion and undistributed profits climbed 4 percent to USD 0.60 trillion.
Real Gross Domestic Product - GDP
In a GDP report on Thursday, the Commerce Department confirmed that gross domestic product increased at a 6.4% annualized rate last quarter. The unrevised estimate followed a 4.3% growth rate in the fourth quarter. Before tax corporate profits slipped $0.2 billion after decreasing $31.4 billion in the October-December period. A rise in domestic nonfinancial corporation profits was offset by lower domestic financial corporation and international profits. The strong growth momentum held early in the second quarter, with another report from the Commerce Department showing orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 2.3% in April.
Jobless
The number of Americans filing new claims for unemployment benefits dropped more than expected last week as layoffs subsided, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy. The economy, which in the first quarter notched its second-fastest growth pace since the third quarter of 2003, is gaining speed, with other data on Thursday showing business spending on equipment accelerated in April. Activity is being boosted by the COVID-19 pandemic's easing grip and nearly $6 trillion in relief provided by the government over the past year. Weekly jobless claims drop 38,000 to 406,000. Continuing claims decrease 96,000 to 3.642 million. Core capital goods orders jump 2.3% in April
Durable Goods Orders
U.S. Durable Goods Orders Drop 1.3% in April 2021. U.S. orders for big-ticket manufactured goods dropped unexpectedly in April for the first time in 11 months, pulled down by plunging orders for transportation equipment. The Commerce Department reported Thursday that orders for factory goods meant to last at least three years fell 1.3% in April after rising 1.3% in March. Transportation orders skidded 6.7%. Excluding transportation, which can swing sharply from month to month, durable goods orders were up 1% in April. Factories have been hamstrung by a shortage of supplies as the U.S. economy reopens from the COVID-19 pandemic and demand for goods and services rebounds rapidly. Orders for auto parts, disrupted by a shortage of computer chips, dropped 6.2% in April. Orders for military capital goods dropped 25.8% after falling 11.7% in March. Economists had expected durable goods orders to rise about 0.7% last month. Despite the unexpected decline, the April report also contained hopeful signs: A category that tracks business investment — orders for nondefense capital goods excluding aircraft — increased 2.3% last month on top of a 1.6% gain in March.
Wholesale Inventories Advance
Advance Wholesale Inventories. Wholesale inventories for April 2021, adjusted for seasonal variations and trading day differences, but not for price changes, were estimated at an end-of-month level of $698.3 billion, up 0.8 percent (±0.4 percent) from March 2021, and were up 5.2 percent (±1.4 percent) from April 2020. The February 2021 to March 2021 percentage change was revised from up 1.3 percent (±0.4 percent) to up 1.1 percent (±0.4 percent).
U.S. Trade in Goods
The U.S. trade deficit in goods narrowed 7.3% in April 2020, according to the Commerce Department’s advanced estimate released Friday.The deficit narrowed to $85.2 billion from a record $92 billion in March.Economists polled by Econoday were looking to a $91 billion deficit.The report also showed a 0.8% gain in wholesale inventories while retail inventories were down 1.6%. Excluding autos, retail inventories were up 0.5%. Big picture: The international trade gap remains wide due to the strong economy that is getting stoked by U.S. fiscal stimulus. The trade deficit is expected to continue to be a drag on U.S. GDP growth this year. Shipping delays caused by congestions at U.S. ports, especially on the West Coast, weighed on trade in the past year, analysts said.
Consumer Confidence
The Conference Board Consumer Confidence Index held steady in May 2021, following a gain in April. The Index now stands at 117.2 (1985=100), down marginally from 117.5 in April. Consumer confidence came in at 117.2 in May, down from April's 117.5. Consequently, the index remained well above the 100-threshold, indicating healthy optimism among consumers. The slight decrease came on the back of a notable fall in consumers’ short-term outlook for income, business and labor market conditions. That said, consumers’ assessment of current labor market and economic conditions improved, capping the overall dip in confidence levels.
Consumer Sentiment UM
Rising inflation has cast a shadow over the U.S. economic recovery as Americans pay higher prices for a variety of goods and services ranging from steaks to used cars to plane tickets, according to a closely followed consumer survey. The second and final reading of the consumer sentiment index edged up a tick to 82.9 from an initial 82.8, the University of Michigan said Friday. But it was still down sharply from a 13-month high of 88.3 in April. All three major surveys of consumer confidence fell in May owing to worries about higher prices.
Personal Income
Personal income dropped sharply as the effects faded from March’s government stimulus checks. Including volatile food and energy prices, the headline PCE index jumped 3.6% year over year and 0.6% from March.
Consumer Spending or Real PCE
Personal income dropped sharply as the effects faded from March’s government stimulus checks. Including volatile food and energy prices, the headline PCE index jumped 3.6% year over year and 0.6% from March. As part of its price stability mandate, the Fed considers 2% to be healthy, though it is committed to letting the level average higher than usual in the interest of promoting full employment. The index captures price movements across a variety of goods and services and is generally considered a wider-ranging measure for inflation as it captures changes in consumer behavior and has a broader scope than the Labor Department’s consumer price index. The CPI accelerated 4.2% in April.
Headline PCE = PCE Price Index
Including volatile food and energy prices, the headline PCE index jumped 3.6% year over year and 0.6% from March.
Core PCE Price Index April 2021 - Inflation
A key U.S. inflation gauge rose 3.1% year over year, higher than expected. The core personal consumption expenditures price index increased 3.1% in April 2021 from a year earlier. Federal Reserve officials consider the core PCE to be the best gauge of inflation. A key inflation indicator rose a faster-than-expected 3.1% in April as price pressures built in the rapidly expanding U.S. economy, the Commerce Department reported Friday.The core personal consumption expenditures index was forecast to increase 2.9% after rising 1.9% in March. Federal Reserve officials consider the measure to be the best gauge for inflation, though they watch a number of metrics. Over the past month, core PCE rose 0.7 %, also quicker than the expected 0.6%.
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