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Economy

Economic Data (USA)

Tuesday, May 26, 2020

Chicago Fed National Activity Index (CFNAI) for April 2020

The Federal Reserve Bank of Chicago released its National Activity Index (CFNAI) for April 2020:

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  • Actual (CFNAI): -16.74

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  • Previous Month (revised): -4.97
  • 3-Month Moving Average (CFNAI-MA3): -7.22
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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 - April 2020 Update
Chart: Chicago Fed National Activity Index with Business Cycles
April 2020 Update

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From Today's Report
"...Index Suggests Economic Growth Fell Substantially in April

Led by declines in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –16.74 in April from –4.97 in March. All four broad categories of indicators used to construct the index made negative contributions in April, and all four categories decreased from March. The index’s three-month moving average, CFNAI-MA3, decreased to –7.22 in April from –1.69 in March. Following a period of economic expansion, an increasing likelihood of a recession has historically been associated with a CFNAI-MA3 value below –0.70..
."

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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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Thursday, May 21, 2020

Philadelphia Fed Business Outlook Survey for May 2020

Earlier today, the Federal Reserve Bank of Philadelphia released its diffuse index of current manufacturing conditions for this month (May 2020):

Predicted: -40.0
Actual: -43.1

The "actual" figure above is an index of current manufacturing conditions within the Federal Reserve's Third District, which includes eastern Pennsylvania, all of Delaware and the southern half of New Jersey. Any figure below zero implies that manufacturing in the region is contracting, while a figure above zero implies expansion.

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.
 
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Chart: Philadelphia Fed Current and Future General Activities Indexes - May 2020
Chart: Philadelphia Fed Current and Future General Activities Indexes - May 2020

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  • Last month, the actual figure was -56.6

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For a national perspective of manufacturing conditions, check out the Institute of Supply Management's Purchasing Manager's Index (PMI).



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Leading Economic Index for April 2020

The Conference Board® released its Leading Economic Index® (LEI) for April 2020 this morning:

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Index for April 2020: 98.8 (The baseline 100 score is associated with 2016 data.)

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Predicted: -6.0%
  • Actual: -4.449% (-4.6 points)

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  • LEI for March 2020: 103.4

  • LEI for February 2020: 111.7
     
  • LEI for January 2020: 111.9

  • LEI for December 2019: 111.4

  • LEI for November 2019: 111.6

  • LEI for October 2019: 111.4

  • LEI for September 2019: 111.6

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The yellow-highlighted percentage is the month-to-month change for the index.  The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

The LEI is a composite of 10 of the nation's economic data releases that's put together by The Conference Board. Statistically, the components listed below have shown a significant increase or decrease before national economic upturns or downturns:

  1. The Standard + Poor's 500 Index

  2. Average weekly claims for unemployment insurance

  3. Building permits for new private housing

  4. The interest rate spread between the yield on the benchmark 10-Year Treasury Note and Federal Funds

  5. ISM® Index of New Orders

  6. Manufacturer's new orders for consumer goods or materials

  7. Manufacturers' new orders, nondefense capital goods excluding aircraft orders

  8. Average weekly manufacturing hours

  9. Average consumer expectations for business conditions

  10. Leading Credit Index™

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Chart: Leading Economic Index - April 2020 Update
Chart: Leading Economic Index - April 2020 Update
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From Today's Report:

"...'In April, the US LEI continued on a downward trajectory, after posting the largest decline in its 60-year history in March,' said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. 'The erosion has been very widespread, except for stock prices and the interest rate spread which partially reflect the rapid and large response of the Federal Reserve to offset the pandemic’s impact and support financial conditions. The sharp declines in the LEI and CEI suggest that the U.S. economy is now in recession territory.'

'Business conditions may recover for some sectors and industries over the next few months,' added Bart van Ark, Chief Economist at The Conference Board, 'But, the breadth and depth of the decline in the LEI suggests that an imminent re-opening of some sectors does not imply a fast rebound for the economy at large.'..."

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Existing Home Sales During April 2020

The Existing Home Sales report for April 2020 was released by The National Association of  Realtors® (NAR®) this morning:

Predicted: 4,325,000
Actual: 4,330,000

  •  Change from Previous Month: -17.837% (-940,000 homes)

  •  Change from One Year Previous: -17.208% (-900,000 homes)
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Inventory: 1,470,000 (4.1 months supply)

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The yellow-highlighted, "actual" figure above represents the preliminary, seasonally adjusted annualized sales count of existing homes, co-ops and condominiums for the indicated month. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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Median Price for A Used Home During April 2020: $286,800

Change from One Year Previous: +7.416% (+$19,800)

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Average Price for A Used Home During April 2020: $321,500

Change from One Year Previous: +5.41% (+$16,500)



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From Today's Report:


"...Existing-home sales dropped in April, continuing what is now a two-month skid in sales brought on by the coronavirus pandemic, according to the National Association of Realtors®. Each of the four major regions experienced a decline in month-over-month and year-over-year sales, with the West seeing the greatest dip in both categories.

'The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales,' said
Lawrence Yun, NAR’s chief economist. 'But the listings that are on the market are still attracting buyers and boosting home prices.'

April’s existing-home sales are the lowest level of sales since July 2010 (3.45 million) and the largest month-over-month drop since July 2010 (-22.5%.)

April’s national price increase marks 98 straight months of year-over-year gains.

'Record-low
mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen,' Yun said. 'Still, more listings and increased home construction will be needed to tame price growth.'

Properties typically remained on the market for 27 days in April, seasonally down from 29 days in March, but up from 24 days in April 2019. Fifty-six percent of homes sold in April 2020 were on the market for less than a month.

While virtually every sector of the American economy has been hit hard by this pandemic, our nation’s 1.4 million Realtors® have continued to show an undying commitment to their profession, their clients and America’s real estate industry,' said NAR President
Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif.

'As we find during any time of crisis, we have a tremendous opportunity to evolve and emerge stronger and more efficient,' Malta continued. 'Having renewed our focus on new, innovative ways to serve American consumers, I am confident the real estate sector and our nation’s Realtors® are uniquely positioned to lead America’s economic recovery.'.
.."

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New Unemployment Insurance Claims for The Week of May 16, 2020

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on May 16, 2020:

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Predicted: 2,400,000

  • Actual: 2,438,000
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The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 2,687,000
  • 4-Week Moving Average: 3,042,000

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From This Morning's Report:

"...The COVID-19 virus continues to impact the number of initial claims and insured unemployment. This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims..."

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Wednesday, May 20, 2020

Crude Oil Inventories Report for Week of May 15, 2020

Crude Oil Inventories
Crude Oil Inventories

The U.S. Crude Oil Inventories report for the week that ended on May 15, 2020 was released this morning:

-- Change from Last Week: -5,000,000 Barrels

-- Change from A Year Ago (Y/Y): +49,700,000 Barrels

-- Current U.S. Crude Oil Stocks: 526,500,000 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).



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Tuesday, May 19, 2020

Housing Starts During April 2020

The U.S. Commerce Department this morning released its Housing Starts report for April 2020:

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Housing Starts:
Predicted: 968,000
Actual: 891,000

Change From Previous Month: -30.172% (-385,000 units)
Change From One Year Previous: -29.676% (-376,000 units)

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Building Permits:
Predicted: 1,033,000
Actual: 1,074,000

Change From Previous Month: -20.796% (-282,000 units)
Change From One Year Previous: -19.248% (-256,000 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 - April 2020 Update
Chart: Housing Starts - April 2020 Update

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Saturday, May 16, 2020

Import and Export Price Indexes for April 2020

The Labor Department's Bureau of Labor Statistics this morning released its report on U.S. Import and Export Price Indexes for April 2020:

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Import Prices
Predicted: -3.0%
Actual: -2.6%

Change From 12 Months Previous: -6.8%

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Export Prices
Predicted: -2.3%
Actual: -3.3%

Change From 12 Months Previous: -7.0%

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The above percentages, highlighted in yellow, represent the month-to-month change in prices for:

  • Imports: the cost of goods produced in other countries and sold in the United States.
  • Exports: the cost of goods produced in the USA and sold in other countries.

Together, these indexes offer insight into the status of inflation in the United States, and for the global economy as well. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.


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Chart: Import Price Index - April 2020 Update
Chart: Import Price Index - April 2020 Update

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Chart: Export Price Index - April 2020 Update
Chart: Export Price Index - April 2020 Update

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Friday, May 15, 2020

Industrial Production + Manufacturing + Capacity Utilization During April 2020

The Industrial Production, Manufacturing and Capacity Utilization numbers for April 2020 were released by the Federal Reserve this morning:

Industrial Production:
Predicted: -11.5%
Actual: -11.2%

Manufacturing:
Predicted: -11.4%
Actual: -13.7%

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: 64.1%
Actual: 64.9

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:

"...Total industrial production fell 11.2 percent in April for its largest monthly drop in the 101-year history of the index, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to slow or suspend operations throughout the month. Manufacturing output dropped 13.7 percent, its largest decline on record, as all major industries posted decreases. The output of motor vehicles and parts fell more than 70 percent; production elsewhere in manufacturing dropped 10.3 percent. The indexes for utilities and mining decreased 0.9 percent and 6.1 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.0 percent lower in April than it was a year earlier. Capacity utilization for the industrial sector decreased 8.3 percentage points to 64.9 percent in April, a rate that is 14.9 percentage points below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.

In addition to the regular revisions that reflect incoming data, the industrial production indexes for March were revised to incorporate data on initial claims for unemployment insurance by employees who had worked in the industrial sector. The methods used to construct the estimates are described on the Federal Reserve Board's website at www.federalreserve.gov/releases/g17/g17_technical_qa.htm#covid2020ui.
.."

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Job Openings and Labor Turnover Survey (JOLTS) for March 2020

The Job Openings and Labor Turnover Survey (JOLTS*) for March 2020 was released by the Labor Department this morning:

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Job Openings

Predicted: 5,900,000
Actual:    6,191,000

  • Previous Month (revised): 7,004,000

  • One Year Previous: 7,364,000

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Hires: 5,206,000

Total Separations: 14,517,000

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The above, yellow-highlighted percentage represents the estimated number of job openings in the United States during the indicated month. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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From Today's Release:

"...The number of total separations increased by 8.9 million to a series high of 14.5 million in March, the U.S. Bureau of Labor Statistics reported today. Within separations, the quits rate fell to 1.8 percent and the layoffs and discharges rate increased to 7.5 percent. Job openings decreased to 6.2 million on the last business day of March. Over the month, hires declined to 5.2 million. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by four geographic regions..."

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Chart: Job Openings, Hires and Separations - March 2020 Update
Chart: Job Openings, Hires and Separations
March 2020 Update

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Here's How The Labor Department Defines Total Separations:

"Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm."

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U.S. Retail And Food Services Sales Report for April 2020

The Commerce Department this morning released advance estimates of U.S. Retail and Food Services Sales for April 2020:

Predicted: -11.2%
Actual: -16.45% (-$79,530,000,000)

The yellow-highlighted percentage above 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 April 2020: $403,946,000,000
  • Change From 12 Months Previous: -21.609% (-$111,350,000,000)

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Chart: Retail Sales - April 2020 Update
Chart: Retail Sales - April 2020 Update

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Thursday, May 14, 2020

New Unemployment Insurance Claims for The Week of May 9, 2020

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on May 9, 2020:

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Predicted: 2,500,000

  • Actual: 2,981,000
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The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 3,176,000
  • 4-Week Moving Average: 3,616,500

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From This Morning's Report:

"...The COVID-19 virus continues to impact the number of initial claims and insured unemployment. This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims..."

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Wednesday, May 13, 2020

Crude Oil Inventories Report for Week of May 8, 2020

Crude Oil Inventories
Crude Oil Inventories

The U.S. Crude Oil Inventories report for the week that ended on May 8, 2020 was released this morning:

-- Change from Last Week: -700,000 Barrels

-- Change from A Year Ago (Y/Y): +59,400,000 Barrels

-- Current U.S. Crude Oil Stocks: 531,500,000 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).


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Tuesday, May 12, 2020

Consumer Price Index (CPI) for April 2020

Earlier this morning, the Labor Department's Bureau of Labor Statistics released the Consumer Price Index (CPI) for April 2020:

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Predicted: -0.8%
Actual: -0.8%

  • Change From 12 Months Previous: +0.3%

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Below is the CPI when food and energy are removed, also known as core CPI:

Predicted: -0.2%
Actual: -0.4%

  • Change From 12 Months Previous: +1.4%

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The above, yellow-highlighted figures represent the seasonally adjusted, month-to-month change in prices for a specific group of goods and services that consumers buy, and is, therefore, a very important part of the overall inflation picture for the country.

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

General categories that constitute the CPI are:

  • Healthcare
  • Housing
  • Clothing
  • Communications
  • Education
  • Transportation
  • Food and Beverages
  • Recreation
  • Miscellaneous Goods and Services (grooming expenses, etc.)

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From Today's Report:

"...A 20.6-percent decline in the gasoline index was the largest contributor to the monthly decrease in the seasonally adjusted all items index, but the indexes for apparel, motor vehicle insurance, airline fares, and lodging away from home all fell sharply as well. In contrast, food indexes rose in April, with the index for food at home posting its largest monthly increase since February 1974. The energy index declined mostly due to the decrease in the gasoline index, though some energy component indexes rose.

The index for all items less food and energy fell 0.4 percent in April, the largest monthly decline in the history of the series, which dates to 1957. Along with the indexes mentioned above, the indexes for used cars and trucks and recreation also declined. The indexes for rent, owners’ equivalent rent, medical care, and household furnishings and operations all increased in April.

The all items index increased 0.3 percent for the 12 months ending April, the smallest 12-month increase since October 2015. The index for all items less food and energy increased 1.4 percent over the last 12 months, its smallest increase since April 2011. The energy index fell 17.7 percent over the last year. In contrast, the food index rose 3.5 percent over the last 12 months, its largest 12-month increase since February 2012..."

 
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Chart: Consumer Price Index (CPI) - April 2020 Update
Chart: Consumer Price Index (CPI) - April 2020 Update

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Friday, May 08, 2020

Employment Situation Report for April 2020

The Employment Situation Report for April 2020 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: -20,000,000
Actual: -20,500,000


U-3 Unemployment Rate (Headline)
Actual: 14.7%
Previous Month: 4.4%
12 Months Previous: 3.6%

U-6 Unemployment Rate*
Actual: 22.8%
Previous Month: 8.7%
12 Months Previous: 7.3%

Average Hourly Earnings (month-to-month change)
Predicted: +0.5%
Actual: +4.319% (+$1.04)

Average Hourly Earnings (year-on-year change)
Predicted: +3.0%
Actual: +7.673% (+$1.79)

Average Weekly Earnings (month-to-month change)
Actual: +4.632% (+$37.25)


Average Weekly Earnings (year-on-year change)
Actual: +7.034% (+$55.30)

Civilian Labor Force Participation Rate: 60.2%
Previous Month: 62.7%
12 Months Previous: 62.8%

Average Workweek
Predicted: 34.2 hours
Actual: 34.2 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.

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Chart: U-3 (Headline) Unemployment Rate - April 2020 Update
Chart: U-3 (Headline) Unemployment Rate - April 2020 Update
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Chart: Nonfarm Payroll Employment - April 2020 Update
Chart: Nonfarm Payroll Employment - April 2020 Update
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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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Thursday, May 07, 2020

New Unemployment Insurance Claims for The Week of May 2, 2020

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on May 2, 2020:

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Predicted: 3,000,000

  • Actual: 3,169,000
====================

The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 3,846,000
  • 4-Week Moving Average: 4,173,500

====================

From This Morning's Report:

"...The COVID-19 virus continues to impact the number of initial claims and insured unemployment. This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims..."

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Wednesday, May 06, 2020

Crude Oil Inventories Report for Week of May 1, 2020

Crude Oil Inventories
Crude Oil Inventories

The U.S. Crude Oil Inventories report for the week that ended on May 1, 2020 was released this morning:

-- Change from Last Week: +4,600,000 Barrels

-- Change from A Year Ago (Y/Y): +65,600,000 Barrels

-- Current U.S. Crude Oil Stocks: 532,200,000 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).



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ADP National Employment Report for April 2020

The ADP® National Employment Report® for April 2020 was released by The ADP Research Institute® this morning:


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Nonfarm Payrolls (month-to-month change)

Predicted: -20,000,000

  • Actual: -20,236,000

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Previous Month (revised): -149,000

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

From today's report:

"...'Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,' said Ahu Yildirmaz, co-head of the ADP Research Institute. 'Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey.'..."


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Chart: ADP National Employment Report - April 2020 Update
Chart: ADP National Employment Report - April 2020 Update

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About the ADP National Employment Report

The ADP National Employment Report is a monthly measure of the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of client companies served by ADP, a leading provider of human capital management solutions. The report, which measures nearly 26 million U.S. workers, is produced by the ADP Research Institute, a specialized group within the company that provides insights

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Tuesday, May 05, 2020

ISM Non-Manufacturing Index (NMI®) for April 2020

Earlier today, the Institute for Supply Management (ISM®) released their Non-Manufacturing Index (NMI®) for April 2020:

Predicted: 37.9%
  • Actual: 41.8%  (-10.7 points month-on-month change)

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Previous month: 52.5%

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The NMI is a reliable barometer of the U.S. services sector; above 50% implies expansion, while a reading below 50% implies that the services sector contracted.

Service Categories Include: Agriculture, Forestry, Fishing + Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation + Warehousing; Information; Finance + Insurance; Real Estate, Rental + Leasing; Professional, Scientific + Technical Services; Management of Companies + Support Services; Educational Services; Health Care + Social Assistance; Arts, Entertainment + Recreation; Accommodation + Food Services; Public Administration; and Other Services (services such as Equipment + Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning + Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services).

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From today' report:

"...Economic activity in the non-manufacturing sector contracted in April for the first time since December 2009, ending a 122-month period of growth, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®..."

============

Here's a sampling of comments made by survey participants:

  •     “General uncertainty over ramp-up timeline post COVID-19.”
     (Accommodation + Food Services)

  •     “The COVID-19 situation has created significant challenges for the agricultural sectors. Milk prices have declined 29 percent in a few weeks. Milk is being dumped on farms because of the loss of markets. Cattle prices are down 28 percent, pork prices down 24 percent, [and] all agriculture sectors are facing significant price declines. Our agriculture economy is challenged, with poultry, pork, and beef processing plants closed due to COVID-19 cases or impaired due to employees afraid to work side-by-side with other employees. Farmers cannot sell fat cattle locally due to processing plant shutdowns.”
     (Agriculture, Forestry, Fishing + Hunting)

  •     “COVID-19 pandemic has forced our business to close as of March 17, 2020. We do not have a re-opening date yet; our purchasing activity has been greatly reduced due to the current business environment.”
     (Arts, Entertainment + Recreation)

  •     “COVID-19 is altering the operation, supply chain and sales process of home-building. Stay-at-home orders have hampered business in residential construction. As ours has been deemed an essential industry, we continue to navigate changing guidelines and restrictions on a daily basis.”
     (Construction)

  •     “The university abruptly transitioned from students on campus to remote teaching for the spring quarter; however, the number of students registered for the quarter has remained consistent with previous years. Overall, activity dropped 17 percent compared to February and 31 percent compared to March 2019.”
     (Educational Services)

  •     “Due to increased loans from [the federal] stimulus package, [we are] seeing an increase in new business.”
     (Finance + Insurance)

  •     “COVID-19 has halted much of our standard work to procure items for our organization. It’s halted much of the world, except for health care. Distributors were woefully unprepared for the spread of this pandemic, and many health-care systems / providers depend on them for inventory planning and availability. Combine that with the global [surgical] gown recall just before the pandemic struck -- and isolation masks are created from the same material as isolation gowns -- and you had a perfect storm for chaos across the supply chain. It will be very hard for major medical distributors who did not manage their core customers well to recover from both the gown recall and the pandemic. It also provided some insight into whether or not the distributor partners were actually skilled at inventory planning and movement. I believe that the healthcare supply chain landscape will change dramatically after this.”
     (Health Care + Social Assistance)

  •     “The oil exploration sector is very weak, with the record low price of oil and the country’s shutdown due to the COVID-19 threat. We are hopeful for a bump in activity once the country starts to reopen.”
     (Management of Companies + Support Services)

  •     “New challenges working from home and getting inventory to the retail locations.”
     (Retail Trade)

  •     “As an essential business, we have remained open during the month. A significant number of our customers are closed (i.e. schools) and other have substantially reduced their buying (i.e. hotels, office building). Sales of janitorial, sanitation, and paper products [have] increased across all business lines, but other categories are greatly reduced. Overall, reduction in sales of 20 percent to 30 percent.”
     (Wholesale Trade)

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ISM Non-Manufacturing (Services) Index (NMI®) - 12 Month History  April 2020 Update
ISM Non-Manufacturing (Services) Index (NMI®) - 12 Month History

April 2020 Update

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Friday, May 01, 2020

ISM Manufacturing Index for April 2020

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for April 2020:

Predicted: 42.0%

  • Actual: 41.5% (-7.6 points month-on-month change)

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Previous month: 49.1%

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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 April, and the overall economy contracted after 131 consecutive months of expansion, 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:


  •     “Thirty-percent decrease for April due to COVID-19 impact on both customers and suppliers.”
     (Computer
    + Electronic Products)

  •     “Production stopped, other than to make hand sanitizer for those in need.”
     (Chemical Products)

  •     “COVID-19 has created a wave of activities, including vendors closing, vendors focusing only on the medical industry, employees not coming to work, delayed shipments from overseas, [and] etcetera.”
     (Transportation Equipment)

  •     “The food processing B2B space remains steady. We are weathering the storm. There is a fortunate increased need for packaged foods. Softening is showing through in some products that find their way into food service and lodging.”
     (Food, Beverage
    + Tobacco Products)

  •     “Our refinery is losing money making gasoline due to the falling demand.”
     (Petroleum
    + Coal Products)

  •     “We supply the construction industry in various ways, where the slowdown has been a bit slower than most industries. It is, however; beginning to impact our business, and we see more challenges on the horizon.”
     (Fabricated Metal Products)

  •     “The company I work for manufactures personal protective equipment [PPE], specifically N95 masks, face shields, as well as selling protective clothing and hand protection. In the area of PPE, our backlog has spiked to numbers we have never seen. While no doubt some of the backorders will be canceled, many of the orders are longer term commitments from [the] U.S. government.”
     (Apparel, Leather + Allied Products)

  •     “Our packaging business is starting to see signs of a slowdown in May after two strong months into COVID-19.”
     (Paper Products)

  •     “COVID-19 has destroyed our market and our company. Without a full recovery very soon, and some assistance, I fear for our ability to continue operations.”
     (Nonmetallic Mineral Products)

  •     “Dealing with the effects of coronavirus and having 65 percent of our operations down.”
     (Furniture
    + Related Products)

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ISM Manufacturing Index - 12 Month History - April 2020 Update
ISM Manufacturing Index - 12 Month History
April 2020 Update
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