Gross Domestic Product (GDP): Second Estimate for Q3, 2019

Earlier this morning, the Commerce Department's Bureau of Economic Analysis (BEA) released its second estimate for U.S. Real Gross Domestic Product (GDP) for the third quarter of 2019:

Predicted: +1.9%
Actual: +2.1%

The yellow-highlighted percentage represents the first estimate of the quarter-to-quarter change for Real Gross Domestic Product for the entire United States.

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The GDP is a very broad measure of economic activity for the entire United States, covering all sectors of the economy. The Commerce Department defines real GDP as, "the output of goods and services produced by labor and property located in the United States."

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Chart: GDP - Q3 2019 - Second Estimate

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• Click here to view the full Commerce Department report (PDF).

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PCE Price Index + Personal Income + Consumer Spending Report for October 2019

The Commerce Department's Bureau of Economic Analysis (BEA) released its report on The PCE Price Index, Consumer Spending and Personal Income for October 2019:

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Consumer Spending (Personal Consumption Expenditures)
Predicted: +0.3%
Actual: +0.3%

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Personal Income
Predicted: +0.3%
Actual: Unchanged

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• Disposable Personal Income, Current Dollars:  -0.1%

• Disposable Personal Income, 2012 Chained* Dollars:  -0.3% 

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The above highlighted percentages represent the month-to-month change in Consumer Spending (aka Personal Consumption Expenditures), Personal Income and Disposable Personal Income for the entire United States.

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Personal Consumption Expenditures (PCE) Price Index
Predicted: +0.3%
Actual: +0.2%

• Change from 12 months previous: +1.3%

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Core PCE Price Index
( = PCE Price Index minus food and energy)
Predicted: +0.1%
Actual: +0.1%

• Change from 12 months previous: +1.6%

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The yellow-highlighted percentages represent the month-to-month change in the prices associated with domestic personal consumption.  The PCE Price Index is different from the Consumer Price Index (CPI) in that it is a very broad measure of the prices associated with domestic products and services, while the CPI measures a more limited fixed basket of goods and services.

The broad nature of the PCE Price Index is key to why it is the Federal Reserve's preferred measure of inflation.  The Federal Open Market Committee (FOMC) pays very close attention to it.

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The "predicted" figures are what economists were expecting, while the "actual" figures are the true or real figure.


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Chart: Disposable Personal Income and Real Consumer Spending
October 2019 Update

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• Click here to view the full Commerce Department report (PDF).
   

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* =  Chained dollars is a method of adjusting real dollar amounts for inflation over time, so as to allow comparison of figures from different years. The Commerce Department introduced the chained-dollar measure in 1996. Chained dollars generally reflect dollar figures computed with 2012 as the base year.

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Crude Oil Inventories Report for Week of November 22, 2019

The U.S. Crude Oil Inventories report for the week that ended on November 22, 2019 was released this morning:

-- Change from Last Week: +1,600,000 Barrels

-- Change from A Year Ago (Y/Y): +1,500,000 Barrels

-- Current U.S. Crude Oil Stocks: 452,000,000 Barrels

Diminishing crude oil inventories often translate to higher crude oil prices (and vice versa), but not always.

The report is produced by the U.S. Energy Information Administration (EIA).

• Click here for the full Week in Petroleum report.

• Click here for The Weekly Crude Oil Price

• Click here for A Crude Oil Price Chart

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Chicago Fed National Activity Index (CFNAI) for October 2019

The Federal Reserve Bank of Chicago released its National Activity Index (CFNAI) for October 2019:

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• Actual (CFNAI): -0.71

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• Previous Month (revised): -0.45

• 3-Month Moving Average (CFNAI-MA3): -0.31
  

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The CFNAI is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data:

• Production and income;
• Employment, unemployment, and hours;
• Personal consumption and housing; and
• Sales, orders, and inventories.

The "predicted" figure is what economists were expecting, while the yellow-highlighted figure is what was reported.

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Chart: Chicago Fed National Activity Index with Business Cycles
October 2019 Update

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From Today's Report 

"...Index Suggests Economic Growth Slowed Further In October

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.71 in October from –0.45 in September. Two of the four broad categories of indicators that make up the index decreased from September, and all four categories made negative contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, moved down to –0.31 in October from –0.21 in September..."

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Understanding The CFNAI:

A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.

Periods of economic expansion have historically been associated with values of the CFNAI-MA3 above -0.70 and the CFNAI Diffusion Index above -0.35. Conversely, periods of economic contraction have historically been associated with values of the CFNAI-MA3 below -0.70 and the CFNAI Diffusion Index below -0.35.

An increasing likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +0.70 more than two years into an economic expansion. Similarly, a substantial likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +1.00 more than two years into an economic expansion.

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• Click here to view the full Chicago Fed report
  
  
  
• Click here for The List of 85 Existing Monthly Indicators
  

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Housing Starts During October 2019

The U.S. Commerce Department this morning released its Housing Starts report for October 2019:

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Housing Starts:
Predicted: 1,320,000
Actual: 1,314,000

Change From Previous Month: +3.791% (+48,000 units)
Change From One Year Previous: +8.505% (+103,000 units)

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Building Permits:
Predicted: 1,378,000
Actual: 1,461,000

Change From Previous Month: +5.032% (+70,000 units)
Change From One Year Previous: +14.052% (+180,000 units)

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Housing Starts: The top, yellow-highlighted figure is a measure of initial construction of single and multi-family residential units in the United States for the indicated month. Seasonally adjusted annual rate. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

If you're wondering about the demand for new homes in the United States, or about the American residential construction industry in general, then you should pay attention to the monthly Housing Starts report. This report also offers insight into specific types of consumer spending: when housing starts are up, demand for the stuff that a consumer would purchase for a new home (large appliances, consumer electronics, furniture, etc.) tends to also rise -- and vice versa.

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Chart: Housing Starts - October 2019 Update

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• Click here to view the full Commerce Department report (PDF).

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U.S. Retail And Food Services Sales Report for October 2019

The Commerce Department this morning released advance estimates of U.S. Retail and Food Services Sales for October 2019:

Predicted: +0.2%
Actual: +0.263% (+$1,383,000,000)

The yellow-highlighted percentage represents the month-to-month change in total sales receipts for retailers that sell durable and non-durable goods, and retailers that provide food and beverage services.

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• Estimated Retail Sales During October 2019: $526,540,000,000

• Change From 12 Months Previous: +3.105% (+$15,855,000,000)

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Chart: Retail Sales - October 2019 Update

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• Click here to view the full Commerce Department report.
  
  

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Industrial Production + Manufacturing + Capacity Utilization During October 2019

The Industrial Production, Manufacturing and Capacity Utilization numbers for October 2019 were released by the Federal Reserve this morning:

Industrial Production:
Predicted: -0.4%
Actual: -0.8%

Manufacturing:
Predicted: -0.5%
Actual: -0.6%

The yellow-highlighted percentages represent the month-to-month change in manufacturing, and physical output from mining operations, utility plants and factories for the entire United States.

Capacity Utilization Rate:
Predicted: 77.2%
Actual: 76.7% 

The Capacity Utilization Rate represents the use of available resources at mining operations, utility plants and factories for the entire United States last month.

The "predicted" figures are what economists were expecting, while the "actual" is the true or real figure.

From today's report:

"...Industrial production fell 0.8 percent in October after declining 0.3 percent in September. Manufacturing production decreased 0.6 percent in October. Much of this decline was due to a drop of 7.1 percent in the output of motor vehicles and parts that resulted from a strike at a major manufacturer of motor vehicles. The decreases for total industrial production, manufacturing, and motor vehicles and parts were their largest since May 2018, April 2019, and January 2019, respectively.

Excluding motor vehicles and parts, the index for total industrial production moved down 0.5 percent, and the index for manufacturing edged down 0.1 percent. Mining production decreased 0.7 percent, while utilities output fell 2.6 percent.

At 108.7 percent of its 2012 average, total industrial production was 1.1 percent lower in October than it was a year earlier. Capacity utilization for the industrial sector decreased 0.8 percentage point in October to 76.7 percent, a rate that is 3.1 percentage points below its long-run (1972–2018) average..."

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• Click here to view the full Federal Reserve report

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Crude Oil Inventories Report for Week of November 8, 2019

The U.S. Crude Oil Inventories report for the week that ended on November 8, 2019 was released this morning:

-- Change from Last Week: +2,200,000 Barrels

-- Change from A Year Ago (Y/Y): +6,900,000 Barrels

-- Current U.S. Crude Oil Stocks: 449,000,000 Barrels

Diminishing crude oil inventories often translate to higher crude oil prices (and vice versa), but not always.

The report is produced by the U.S. Energy Information Administration (EIA).

• Click here for the full Week in Petroleum report.

• Click here for The Weekly Crude Oil Price

• Click here for A Crude Oil Price Chart

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Crude Oil Inventories Report for Week of November 1, 2019

The U.S. Crude Oil Inventories report for the week that ended on November 1, 2019 was released this morning:

-- Change from Last Week: +7,900,000 Barrels

-- Change from A Year Ago (Y/Y): +15,000,000 Barrels

-- Current U.S. Crude Oil Stocks: 446,800,000 Barrels

Diminishing crude oil inventories often translate to higher crude oil prices (and vice versa), but not always.

The report is produced by the U.S. Energy Information Administration (EIA).

• Click here for the full Week in Petroleum report.

• Click here for The Weekly Crude Oil Price

• Click here for A Crude Oil Price Chart

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Employment Situation Report for October 2019

The Employment Situation Report for October 2019 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: +90,000
Actual: +128,000

U-3 Unemployment Rate (Headline)
Actual: 3.6%
Previous Month: 3.5%
12 Months Previous: 3.8%

U-6 Unemployment Rate*
Actual: 7.0%
Previous Month: 6.9%
12 Months Previous: 7.5%

Average Hourly Earnings (month-to-month change)
Predicted: +0.2%
Actual: +0.169% (+$0.04)

Average Hourly Earnings (year-on-year change)
Predicted: +3.0%
Actual: +3.493% (+$0.80)

Average Weekly Earnings (month-to-month change)
Actual: +0.169% (+$1.34)

Average Weekly Earnings (year-on-year change)
Actual: +3.186% (+$24.59)

Civilian Labor Force Participation Rate: 63.3%
Previous Month: 63.2%
12 Months Previous: 62.9%

Average Workweek
Predicted: 34.4 hours
Actual: 34.4 hours

Economist, academics, central bankers and investors pay very close attention to the monthly Employment Situation report as it offers penetrating insight as to the current and near-future state of the overall U.S. economy. If a) Americans are earning more money and b) the economy is creating new jobs, this typically translates to more money being pumped into the economy (and vice versa.)

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

From today's report:

"...The change in total nonfarm payroll employment for August was revised up by 51,000 from +168,000 to +219,000, and the change for September was revised up by 44,000 from +136,000 to +180,000. With these revisions, employment gains in August and September combined were 95,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 176,000 per month over the last 3 months..." [Establishment Survey Data]

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 * =  The U-6 Unemployment Rate is defined as:

"Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."

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• Click here to view the full Department of Labor report.

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ISM Manufacturing Index for October 2019

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for October 2019:

Predicted: 49.3%
Actual: 48.3% (+0.5 point month-on-month change)

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Previous month: 47.8%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"...Economic activity in the manufacturing sector contracted in October, and the overall economy grew for the 126th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

•     'Customer demand is down, and we are expecting a very soft fourth quarter, without much relief in sight for Q1. Suppliers report the continued rise in labor costs, which are ultimately reflected in the rising product costs.'
   (Computer + Electronic Products)

•     'The chemical manufacturing industry is depressed; demand across many markets globally is down, and pricing is as a result.'
   (Chemical Products)

•     'Automotive sales continue to decrease; however, trucks and SUVs are still providing decent revenue. Cautiously optimistic for the near term.'
   (Transportation Equipment)

•     'Economy is showing slight signs of weakening. The same business headwinds on trade, tariffs, and currency uncertainty are making the environment challenging.'
   (Food, Beverage + Tobacco Products)

•     'Been hearing from lots of my suppliers that their business is down and [they are] looking for more work in the metal processing [and] machining areas. We remain very busy.'
   (Fabricated Metal Products)

•     'Production demand is softening; some [of it is] due to seasonality, [but] much [is] due to customer order rate declining and dealer inventory stabilizing.'
   (Machinery)

•     'Business for thermoplastic resins is very strong, but margins continue to be under pressure due to tariffs and global economy uncertainty.'
   (Plastics + Rubber Products)

•     'Trade cost pressures continue to be a headwind in our business.'
   (Paper Products)

•     'Automotive related manufacturing is definitely slowing in the U.S. I think we are seeing the negative impacts of the tariff war with China and the unsigned [U.S.-Mexico-Canada Agreement] deal starting to hurt consumer confidence, especially on large purchases. Corporations are slowing orders/production accordingly."
   (Primary Metals)

•     'Our business levels have softened over the last three to five months, in the U.S. market [and] globally. Germany and China are both experiencing similar slowdowns. We are in the industrial industry, and the outlook appears to remain soft into Q1 of 2020.'
   (Electrical Equipment, Appliances + Components)

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ISM Manufacturing Index - 12 Month History
October 2019 Update

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• Click here to view the complete ISM report

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