ADP National Employment Report Revised Higher for July
Man reading newspaper with the headline Job Market. (Photo: AdobeStock)
Roseland, N.J. (PPD) — Total private sector employment rose 428,000 in August, missing the forecast for the ADP National Employment Report. Forecasts ranged from a low of 150,000 to a high of 1,460,000. The consensus forecast was 900,000.
The goods-producing sector added 40,000 private sector jobs. Construction added 28,000, manufacturing added 9,000 and natural resources/mining added 2,000.
“The August job postings demonstrate a slow recovery,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.”
The service-providing sector added 389,000 private sector jobs. Leisure/hospitality added 129,000, education/health services added 100,000 and professional/business services added 66,000.
The change in total private sector employment was revised from +167,000 to +212,000.
General Business Activity Index Posted First Positive Reading in Five Months
Manufacturing Export Wooden Crate, reading Made in Texas. 3D Illustration. (Photo: AdobeStock)
Dallas, Tx. (PPD) — The Texas Manufacturing Outlook Survey easily beat expectations in August, as the general business activity came in at 8.0, the first positive reading in 5 months. The key production index came in at 13.1, which is down slightly from 16.1 in July but still signaling growth.
The monthly regional index is conducted by the Federal Reserve Bank of Dallas and covers the Eleventh District. Forecasts ranged from a low of -3.0 to a high of 5.0. The consensus forecast was -1.0.
The subcomponents of the Texas Manufacturing Outlook Survey also indicated expansion in regional factory activity this month. The new orders index rose three points to 9.8, and the growth rate of orders index surged to 11.8. The shipments index came in higher at 23.3, up from 17.3. The capacity utilization index ticked down slightly, but remained solidly positive at 10.9.
The company outlook index posted the third consecutive positive reading in August, and shot up 11 points to 16.6. That’s the highest reading in nearly two years. The uncertainty index outlooks fell to 8.2.
Labor market indicators showed solid growth in employment and the length of the workweek. The employment index rose solidly from 3.1 to 10.6, clearly signaling solid hiring. Twenty-three percent (23%) of firms reported net hiring, while only 13% noted net layoffs. The hours worked index rose five points to 10.5.
Company expectations for future factory activity were very positive in August. The future production index increased to an above-average reading of 43.0, and the future general business activity index shot 10 points higher to 20.4.
The Texas Manufacturing Business Outlook Survey for September is scheduled to be released by the Federal Reserve Bank of Dallas on Monday, September 28, 2020.
Ann Arbor, Mich. (PPD) — The Survey of Consumers final reading on consumer sentiment ticked higher from 72.5 in July to 74.1 in August, beating forecasts and the preliminary reading. Consumers are more pessimistic about the 5-year outlook and more optimistic about buying conditions.
Forecasts for the headline index ranged from a low of 71.0 to a high of 73.0, and the consensus forecast was 72.8.
The Current Economic Conditions Index ticked up slightly 0.1 from 82.9 in August, up from 82.5 in the preliminary reading. The Expectations Index was 65.9 in July — tied with the six-year low recorded in May — but rose to 68.5 in the final reading. That’s up from the 66.5 preliminary reading.
Consumer Spending Stronger than Initially Reported in June, Beats Expectations in July
American flag and U.S. dollar financial and economy concept. (Photo: AdobeStock)
Washington, D.C. (PPD) — Personal income unexpectedly rose $874.2 billion (4.2%) in July, beating the forecast, and personal outlays rose $270.6 billion. Personal saving remained very high, but prior gains in personal consumption expenditures (PCE), also known as consumer spending, were stronger than initially reported.
Forecasts for personal income ranged from a low of -2.0% to a high of 1.2%, with the consensus -0.2%. Forecasts for personal outlays ranged from a low of 0.7% to a high of 4.5%, with the consensus 1.5%.
“The increase in personal income in July was more than accounted for by compensation of employees as portions of the economy continued to reopen,” the U.S. Bureau of Economic Analysis (BEA) said in a statement.
Disposable personal income (DPI) rose $39.9 billion (0.2%) and personal consumption expenditures (PCE) gained $267.6 billion (1.9%). Real DPI fell 0.1% in July and Real PCE gained 1.6%. The PCE price index rose 0.3%. Excluding food and energy, the PCE price index rose 0.3%.
The personal saving rate — personal saving as a percentage of disposable personal income — fell to 17.8%. That’s down from a record high 33% in April.
Manufacture of rails for trains and freight wagon, boxcars. Rail manufacturing plant. Stack of steel round bar – iron metal rail lines material for industry construction in warehouse. (Photo: AdobeStock)
The U.S. Census Bureau reported new orders for manufactured durable goods soared 11.2%, or $23.2 billion to $230.7 billion in July. That’s the third straight month of strong data beating the consensus forecast and the prior month being revised higher.
Forecasts for new orders ranged from a low of 3.0% to a high of 9.1%. The consensus forecast was 4.3%, a still solid but less gain than the actual figure. New orders for durable goods were revised higher for June, from 7.3% to 7.7% at $207.5 billion.
Excluding transportation, new orders for durable goods rose 2.4%. Forecasts ranged from a low of 1.0% to a high of 4.0%. The consensus forecast was 2.0%.
Highest Insured Unemployment Rates in Strict Lockdown States
U.S. initial jobless claims graph on a tablet screen. (Photo: AdobeStock)
Washington, D.C. (PPD) — The U.S. Labor Department (DOL) reported initial jobless claims fell 98,000 to a seasonally-adjusted 1,006,000 for the week ending August 15. The previous week was downwardly revised by 2,000 from 1,106,000 to 1,104,000.
Forecasts ranged from a low of 925,000 to a high of 1,100,000. The consensus forecast was 987,000.
The 4-week moving average came in at 1,068,000, down 107,250. The previous week’s average was revised down by 500 from 1,175,750 to 1,175,250.
Lagging Jobless Claims Data
The advance seasonally adjusted insured unemployment rate fell back to single digits for the week ending August 15, 0.2% to 9.9%. The previous week was revised down by 0.1 from 10.2 to 10.1%.
The insured unemployment rate hit the first high of the current crisis at 8.2% for the week ending April 4. The all-time high prior to that was 7.0%, recorded in May of 1975. On April 11, it rose to 11.0% and 12.4% on April 25.
Under the Trump Administration, this rate had fallen to an all-time low 1.1% and remained at 1.2% just weeks ago, as recently as March 14. But that was before coronavirus (COVID-19) mitigation efforts.
The advance number for seasonally adjusted insured unemployment during the week ending August 15 was 14,535,000, a decrease of 223,000. The previous week’s level was revised down by 86,000 from 14,844,000 to 14,758,000.
The 4-week moving average was 15,215,750, a decrease of 604,000. The previous week’s average was revised down by 21,500 from 15,841,250 to 15,819,750.
Extended Benefits were available in all 50 states, Puerto Rico and D.C. during the week ending August 8. The total number of people claiming benefits in all programs for that same period fell 1,042,323 to 27,017,232.
The highest insured unemployment rates in the week ending August 8 were in Hawaii (19.8), Puerto Rico (19.2), Nevada (17.3), California (16.1), New York (15.4), Connecticut (13.6), Louisiana (13.5), the Virgin Islands (12.8), Georgia (12.6), and Massachusetts (12.2).
The largest increases in initial claims for the week ending August 15 were in New Jersey (+11,580), Florida (+11,190), New York (+9,879), Texas (+9,096), and Tennessee (+3,793), while the largest decreases were in California (-12,155), Nevada (-6,817), Georgia (-4,236), Puerto Rico (-2,864), and Pennsylvania (-1,510).
Private Inventory Investment, Consumer Spending Chip Away at ‘Stay-at-Home’ Orders
The Bureau of Economic Analysis (BEA) reported the “second” estimate for second quarter (Q2) gross domestic product (GDP) was -31.7% on an annualized basis, revised up from the advance estimate of -32.9%. Real GDP was -5.0% in Q1 2020, though BEA specifically cited the mitigation efforts to slow the spread of coronavirus (COVID-19) for both quarters.
Forecasts ranged from a low of -33.6% to a high of -31.6%. The consensus forecast was -32.6%.
The second estimate is based on more complete source data than the “advance” estimate reported last month. Private inventory investment and personal consumption expenditures (PCE) fell less than initially estimated.
New Residential Sales, Housing Market Defy COVID and Forecasts
An exchange showing one hand giving cash to the another for new house and keys, a vector illustration for new home sales. (Photo: AdobeStock)
Washington, D.C. (PPD) — The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) jointly reported the new residential sales statistics for July 2020. New home sales of single-family houses soared 13.9% (±20.0%) to a seasonally adjusted annual rate of 901,000 in July, far surpassing the consensus forecast.
Forecasts ranged from a low of 735,000 to a high of 800,000. The consensus forecast was 774,000.
That’s an increase of 13.9% (±20.0%) from the upwardly revised rate of 791,000 in June. Last month was initially reported at 776,000, the highest level for new home sales since before the Great Recession, or July 2007. Now, new home sales are 36.3% (±27.4%) above the estimate of 661,000 for July 2019.
The median sales price of new houses sold in July 2020 was $330,600. The average sales price was $391,300.
The seasonally-adjusted estimate of new houses for sale at the end of July was 299,000. This represents a supply of 4.0 months at the current sales rate.
As People’s Pundit Daily (PPD) previously reported, economic indicators widely show the U.S. housing market is “booming”, surpassing pre-pandemic levels and expectations. Experts now foresee housing leading the economic recovery and have raised growth forecasts for the sector.
Real estate market with price tags above home properties to illustrate house prices in 3D abstract. (Photo: AdobeStock)
Washington, D.C. – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) shot 0.9% higher in June, triple the consensus forecast (0.3%) and erasing losses during the shutdown. The HPI finds house prices are up 5.7% year-over-year and previously reported -0.3% for May 2020 was revised upward by 0.1% to -0.2%.
“Home prices grew by 5.4% in the second quarter of 2020 compared to a year ago, despite the impacts of COVID-19.” said Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “Although house prices fell slightly in May relative to April, in June prices rebounded by 0.9% over the month as local economies re-opened and transactions picked up again.”
“Four Census Divisions showed strong early summer gains with month over month growth of 1% or more in June.”
House prices have risen for 36 consecutive quarters since September 2011. Of the nine census divisions, the Mountain division posted the largest four quarter appreciation at 7.0% between the second quarters of 2019 and 2020 and a 0.9% gain in Q2 2020. The Mountain division has been the leading region for 11 straight quarters.
Meanwhile, annual house price appreciation was weakest in the Middle Atlantic division, where prices gained by 4.5% between the second quarters of 2019 and 2020.
On Tuesday, the U.S. Census Bureau and Department of Housing and Urban Development reported new home sales soared 13.9% to a seasonally adjusted annual rate of 901,000 in July. That far surpassed forecasts and is the highest level since December 2006.
CFNAI-MA3 — the Three-Month Moving Average — Back in Positive Territory
U.S. economy on an American flag background waving in the wind, in 3D rendering. (Photo: AdobeStock)
The Chicago Fed National Activity Index (CFNAI) indicated slower, “but still well-above-average growth” in July, while economic growth in June was revised higher. The CFNAI came in +1.18 in July after an initially reported +4.11 in June, which was revised higher to +5.33.
Production and employment-related indicators drove the gain last month for the second straight month in a row, albeit at a more moderate pace. The CFNAI-MA3 — the three-month moving average — rose to +3.59 in July, up from –2.78 in June.
The CFNAI Diffusion Index — also a three-month moving average — increased to +0.62 in July, up from +0.14 in June. Fifty-six (56) of the 85 component indicators posted positive contributions to the CFNAI, while 29 posted negative contributions.
Twenty-five (25) indicators improved from June to July, while 60 deteriorated. Of the indicators that improved, 9 made negative contributions.
The CFNAI was based on data available as of August 20, 2020. At that time, July data for 51 of the 85 indicators had been published. Estimates were used for unavailable data to construct the index.
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