Real estate market with price tags above home properties to illustrate house prices in 3D abstract. (Photo: AdobeStock)
The S&P CoreLogic Case-Shiller Home Price Index (HPI) posted a 3.4% annual gain in May, down from 3.5% the previous month.
The 10-City Composite annual increase came in at 2.2%, down from 2.3% in April. The 20-City Composite reported a 2.4% year-over-year gain, down from 2.5%.
Prior
Consensus Forecast
Forecast Range
Result
20-city, SA – M/M
0.0%
0.2%
0.2% to 0.3%
0.1%
20-city, NSA – M/M
0.8%
0.6%
0.5% to 0.6%
0.6%
20-city, NSA – Yr/Yr
2.5%
2.4%
2.3% to 3.5%
2.4%
“Nationally, year-over-year home price gains were lower in May than in April, but not dramatically so and a broad-based moderation continued,” says Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices.
“Among 20 major U.S. city home price indices, the average YOY gain has been declining for the past year or so and now stands at the moderate nominal YOY rate of 3.1%.”
Las Vegas, Phoenix and Tampa posted the highest year-over-year increases. In May, Las Vegas led with a 6.4% year-over-year price gain, followed closely by Phoenix at 5.7%, and Tampa at 5.1%.
Seven (7) of the 20 cities posted larger price gains in the year ending May 2019 versus the year ending April 2019.
BEA Reports Downward Revisions to Personal Income Under Obama, Upward Revisions Under Trump
American flag and U.S. dollar financial and economy concept. (Photo: AdobeStock)
The Bureau of Economic Analysis (BEA) reported personal income rose $83.6 billion (0.4%) in June, beating the consensus forecast.
Disposable personal income (DPI) increased $69.7 billion, or 0.4%. Real DPI increased 0.3% in June. Consumer spending as gauged by personal consumption expenditures (PCE) increased $41.0 billion, or 0.3%.
Prior
Consensus Forecast
Forecast Range
Results
Personal Income – M/M ∆
0.5%
0.3%
0.3% to 0.5%
0.4%
Consumer Spending – M/M ∆
0.4%
0.3%
0.2% to 0.4%
0.3%
PCE Price Index M/M ∆
0.2%
0.1%
0.1% to 0.3%
0.1%
Core PCE price index – M/M ∆
0.2%
0.2%
0.2% to 0.3%
0.2%
PCE Price Index Y/Y ∆
1.5%
1.5%
1.4% to 1.7%
1.4%
Core PCE price index – Yr/Yr ∆
1.6%
1.7%
1.6% to 1.8%
1.6%
Consumer spending, which met the forecast for June, rose solidly by 0.4% in May and 0.6% in April. It drove a stronger-than-expected advance estimate for second quarter (Q2) gross domestic product (GDP).
Real PCE rose by 0.2% and the PCE price index rose 0.1%. Excluding food and energy, the PCE price index gained 0.2%.
Important Personal Income Revisions
Most interestingly, the BEA released important revisions dating back to 2014. All downward revisions to personal income gains transpired under the Obama Administration.
All upward revisions to personal income came under the Trump Administration.
Personal income was revised down $0.1 billion, or less than -0.1% in 2014; down $1.8 billion, or less than -0.1% in 2015; and down $4.0 billion, or less than -0.1% in 2016.
It was revised up $47.9 billion, or 0.3% in 2017; and up $249.6 billion, or 1.4% in 2018.
Economic Resurgence of the Mining Industry Fuels GDP Leaderboard
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West Virginia led the nation in gross domestic product (GDP) growth for the first quarter (Q1) 2019 at 5.2%, while Hawaii came in last at 1.2%.
Nationwide, real GDP rose in all 50 states and the District of Columbia (DC) in Q1 2019. But the resurgence of the mining industry under the Trump Administration has provided the strongest growth to mining-friendly states. The industry, which surged 26.5% in Q1 2019 after skyrocketing 38% in Q4 2018, was the leading contributor to GDP growth in West Virginia, Texas, and New Mexico.
However, finance and insurance, retail trade, and health care and social assistance were the leading contributors to real GDP growth nationally. These industries increased 9.5%, 11.9% and 6.2%, respectively, and contributed to growth in all 50 states and DC.
While the private sector has been growing, the government sector shrunk 1.1% nationally. Even though it shaved off from real GDP growth in most states, it especially hurt the District of Columbia (DC). The decrease was only partly due to the partial government shutdown in January 2019.
Comparing GDP Under Administrations
The difference between the Obama/Biden and Trump/Pence economies are clear. While both are predominantly service-driven, the former was a dominant service sector economy and the latter is the result of a resurgence within the goods-producing sector. That has translated into higher wages and stronger economic growth.
For instance, real GDP in the state of Pennsylvania grew by just 1.7% in Q4 2016 and 1.1% annually in 2016. Finance and insurance; retail trade; and professional, scientific, and technical services were the leading contributors to U.S. economic growth in Q4 2016. Information services; professional, scientific, and technical services; and health care and social assistance were the leading contributors to growth for the year.
A decline in mining subtracted from U.S. economic growth, nationally.
By contrast, real GDP in the state of Pennsylvania rose 2.1% in 2018, up from just 1.1% in 2016. It came in at 2.9% in Q1 2019 vs. 1.7% in Q4 2016.
Real GDP in West Virginia grew by just 1.9% in Q4 2016 juxtaposed to 5.2% in Q1 2019.
President Donald Trump announced Rep. John Ratcliffe, R-Tx., will be nominated to replace Dan Coats as the Director of National Intelligence (DNI). The changeover comes as the investigation into wrongdoing at the genesis of the Russia probe heats up.
“I am pleased to announce that highly respected Congressman John Ratcliffe of Texas will be nominated by me to be the Director of National Intelligence,” President Trump tweeted.
“A former U.S. Attorney, John will lead and inspire greatness for the Country he loves. Dan Coats, the current Director, will be leaving office on August 15th. I would like to thank Dan for his great service to our Country. The Acting Director will be named shortly.”
The shakeup comes as Mr. Coats and the Office of the Director of National Intelligence (ODNI) have refused to cooperate with investigations in to the origins of and potential wrongdoings in the Russia probe.
In May, Attorney General William Barr assigned U.S. Attorney John H. Durham in Connecticut to conduct a thorough investigation.
Trump: “We’re Sending a Clear Message to Human Smugglers and Traffickers”
President Donald Trump at the White House on Friday announced a “safe third country” agreement with Guatemala to combat asylum fraud and human smuggling. The agreement with the Central American country is a major victory for the president’s tariff threat strategy.
“We’re sending a clear message to human smugglers and traffickers that your day is over,” President Trump said before the signing. “And we’re investing in the future of Guatemala and the safety and rights of migrants.”
How Trump Got Safe Third Country Agreement
President Donald Trump announces “safe third country” agreement with Guatemala at the White House on Friday, July 26, 2019. (Photo: White House)
On May 31, President Trump announced the U.S. would impose a 5% tariff on imports from Mexico as a result of record numbers of illegal immigrants crossing the southern border. The President said the tariffs will “gradually increase” on Mexico and others, and would remain until the flow stops.
Mexico and other Central American countries — to include Guatemala — repeatedly stated they would never accept a safe third country agreement.
But that was before the tariff threat.
“This landmark agreement will put the coyotes and the smugglers out of business,” the President added. “These are very bad, sick, deranged people who have made a lot of money off of other people’s miseries.”
“It is going to provide safety for legitimate asylum-seekers and stop asylum fraud and abuses in the system.”
Key with business words and rig equipment graphic icons relative to the oil and gas industry. (Photo: PPD/AdobeStock/JEGAS RA)
The Baker Hughes (BHI) North America Rig Count gained from 1072 by 1 to 1073 for the week ending July 26. The U.S. rig count was down 8 from last week to 946 and down 102 from last year. Canada rose by 9 from 118 to 127 and remained down 96 from last year.
Indicator
July 19
July 26
North America Rig Count
1072
1073
U.S.
954
946
Gulf of Mexico
25
23
Canada
118
127
Rigs classified as drilling for oil and in operation fell by 3 in the U.S. to 776, which is 85 rigs less than the 861 one year ago. Rigs classified as drilling for gas declined by 5 to 169, and are still 17 fewer than the 186 one year ago.
Rigs in Canada classified as drilling for oil gained 2 to 85, which is 69 less than the 154 rigs in operation one year ago. Rigs classified as drilling for gas rose by 4 to 42, which is now 27 less than the 69 in operation one year ago.
The Gulf of Mexico, which is a subset of the U.S. total, fell by 2 to 23 rigs. That’s 8 more rigs than the 15 in operation one year ago.
The Baker Hughes North America Rig Count tracks changes in the number of active operating oil and gas rigs on a weekly basis. Active rigs are essential for exploration and development.
The United States and Canada are separate components, and a separate count for the Gulf of Mexico is given as a subset of the U.S. total. The count includes only rigs that are significant users of oilfield services and supplies.
The Bureau of Economic Analysis (BEA) “advance” estimate for second quarter (Q2) 2019 gross domestic product (GDP) came in at a 2.1% seasonally-adjusted annual rate (SAAR). The stronger-than-anticipated reading for what was expected to be the weak quarter was fueled by stronger-than-anticipated consumer spending.
The second estimate for real GDP in Q1 2019 came in at 3.1% juxtaposed to 2.2% in Q4 2018. The percent change in real GDP in Q1 ranged from 5.2% in West Virginia to 1.2% in Hawaii.
Prior
Consensus Forecast
Forecast Range
Result
Real GDP – Q/Q ∆ – SAAR
3.1%
1.9%
1.6% to 2.2%
2.1%
Real Consumer Spending – Q/Q ∆ – SAAR
0.9%
3.9%
2.0% to 4.1%
4.3%
GDP Price Index – Q/Q ∆ – SAAR
0.9%
2.0%
1.5% to 2.2%
2.4%
GDP Core Price Index – Q/Q ∆ – SAAR
1.3%
1.9%
1.6% to 2.0%
2.4%
Disposable personal income in Q2 2019 rose $193.4 billion, or 4.9%. That’s compared to an increase of $190.6 billion in Q1, or 4.8%. Real disposable personal income rose 2.5% juxtaposed to an increase of 4.4%.
Personal saving was $1.32 trillion in Q2 compared with $1.37 trillion in Q1. The personal saving rate — defined as personal saving as a percentage of disposable personal income — remained very high at 8.1% in Q2. That compares with 8.5% in Q1.
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)
New orders for manufactured durable goods increased $4.9 billion in June, or 2.0% to $246.0 billion. The increase comes after two consecutive months of declines.
Indicator
Prior
Revised
Consensus Forecast
Forecast Range
Result
New Orders – M/M ∆
-1.3 %
-2.3 %
0.5 %
-1.5 % to 1.8 %
2.0 %
Ex-transportation – M/M ∆
0.3 %
0.5 %
0.2 %
-0.3 % to 0.5 %
1.2 %
Core capital goods – M/M ∆
0.4 %
0.3 %
0.2 %
0.0 % to 0.3 %
1.9 %
Excluding transportation, new orders rose 1.2%. Excluding defense, new orders gained a more solid 3.1%. Transportation equipment, which is also up after two consecutive monthly declines, led the gain, rising $3.0 billion or 3.8% to $80.5 billion.
Non-defense new orders for capital goods rose $3.3 billion, or 4.8% to $72.1 billion in June.
U.S. jobless claims graph on a tablet screen. (Photo: AdobeStock)
Initial jobless claims fell another 10,000 to a seasonally adjusted 206,000 for the week ending July 20, indicating a very tight and strong labor market. The 4-week moving average was 213,000, a decrease of 5,750.
Prior
Consensus Forecast
Forecast Range
Result
Initial Jobless Claims
216 K
219 K
210 K to 223 K
206 K
The Labor Department said no state was triggered “on” the Extended Benefits program during the week ending July 6.
The advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending July 13.
The advance number for seasonally adjusted insured unemployment during the week ending July 13 declined by 13,000 to 1,676,000. The 4-week moving average was 1,697,250, a decrease of 4,500.
The highest insured unemployment rates in the week ending July 6 were in New Jersey (2.5), Puerto Rico (2.4), Connecticut (2.2), Pennsylvania (2.0), Rhode Island (2.0), California (1.8), Alaska (1.7), Massachusetts (1.7), Illinois (1.5), New York (1.5), and Oregon (1.5).
The largest increases in initial claims for the week ending July 13 were in Texas (+4,546), California (+3,867), Georgia (+3,831), Alabama (+1,930), and Pennsylvania (+1,744), while the largest decreases were in Michigan (-5,561), New Jersey (-3,702), Illinois (-1,888), Arkansas (-1,181), and Massachusetts (-842).
Mueller Clearly Allowed Anti-Trump Prosecutors to Run the Russia Investigation
President Donald Trump, left, delivers his first State of the Union address, right, former FBI director Robert Mueller.
Former Special Counsel Robert Mueller III testified before the House Judiciary Committee and Intelligence Committee, appearing confused and contradictory. On numerous occasions, the former head of the Investigation into Russian Interference in the 2016 Presidential Election appeared little more than a figurehead who wasn’t familiar with the report submitted to the Justice Department (DOJ)
The first contradiction came in an exchange between Mr. Mueller and Ranking Member Doug Collins, R-Ga., who asked him if “collusion and conspiracy were synonymous.”
In what appeared to be an attempt by Mr. Mueller to aid the collusion narrative pushed by Democrats, he answered the two words were not synonymous.
“No,” he responded.
But the answer contradicted the written report, which he characterized as testimony at an unprecedented press conference in late May. Rep. Collins read back the text of the report that specifically stated they were in fact synonymous.
Mr. Mueller also tried to refute the claim the investigation didn’t find evidence of a conspiracy or collusion between members of the Trump campaign and Russia, stating there was “insufficient evidence.”
The report, which Rep. Collins again read back to him, stated otherwise.
[T]he investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.
But one of the most damning moments came during an exchange with Rep. John Ratcliffe, R-Tx., who claimed Mr. Mueller’s assertion that the investigation didn’t exonerate the President Donald Trump violated policy and a “bedrock principle of our justice system.”
Rep. Ratcliffe asked Mr. Mueller to identify a case in which the law “set forth a legal standard that an investigated person is not exonerated if their innocence from criminal conduct is not conclusively determined.”
“Can you give an example other than Donald Trump where the Justice Department determined an investigated person was not exonerated because their innocence was not conclusively determined?” Rep. Ratcliffe asked.
Mr. Mueller replied: “I cannot but this is a unique situation.”
Rep. Ratcliffe proceeded to tear into his answer.
“Okay, well you can’t–time is short, I got five minutes, let’s leave it at you can’t find it because–I’ll tell you why, it doesn’t exist,” he said. “The special counsel’s job didn’t say you were to determine Trump’s innocence or to exonerate him.”
“It’s not in documents, it’s not in the Office of Legal Counsel opinion, any justice manual… Respectfully it was not the special counsel’s job to conclusively determine Trump’s innocence.”
Mr. Mueller also initially repeated a claim made at the May press conference, which he later walked back. He stated no charging determination was made by his office on obstruction of justice due to the opinion by the Office of Legal Counsel.
It holds a sitting President cannot be indicted.
Democrats have long held on to the claim to advance the impeachment narrative, though it took another blow at the hearings on Wednesday.
House Judiciary Democratic Rep. Ted Lieu, D-Calif., asked why he didn’t indict President Trump for potential acts of obstruction laid out in Volume II of the report. Mr. Mueller said that he didn’t indict because he couldn’t due to the OLC opinion.
“I’d like to ask you the reason, again, that you did not indict Donald Trump is because of OLC opinion stating that you cannot indict a sitting president, correct?” Rep. Lieu asked.
Mr. Mueller replied: “That is correct.”
However, in a meeting on March 5, Mr. Mueller told Attorney General William Barr and former Deputy Attorney General Rod Rosenstein the OLC opinion had no weight on the decision. Mr. Mueller again walked the claim back, asking to “correct the record” at the start of the Intelligence Committee hearing.
“I want to add one correction to my testimony this morning. I wanted to go back to one thing that was said this morning by Mr. Lieu— who said, and I quote, ‘You didn’t charge the president because of the [Office of Legal Counsel (OLC)] opinion.’ That is not the correct way to say it,” Mr. Mueller said.
“As we say in the report and as I said in the opening, we did not reach a determination as to whether the president committed a crime.”
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