PMI: Modest US Manufacturing Growth Rate Ticked Up In July

Manufacturing activity picked up a bit this month, according to July’s flash estimate of the sector’s purchasing managers’ index (PMI). The sentiment benchmark inched up to 53.8 after June’s 53.6 reading—a 20-month low. Any value above the neutral 50 mark represents growth. Today’s update still shows this cyclically sensitive sector in a relative funk compared with last year’s pace. Yet it’s also clear that the early data for this month suggests that manufacturing remains firmly in an expansion mode, albeit at a subdued rate.
Continue reading →

Q2:2015 US GDP Estimate: +1.9% | 24 July 2015

Next week’s “advance” GDP report (due on July 30) for the second quarter is projected to show that the US economy increased 1.9% (seasonally adjusted annual rate),  based on The Capital Spectator’s average estimate for several econometric-based forecasts. Today’s updated average forecast, which is slightly above last month’s Q2 estimate, marks a rebound after Q1’s 0.2% decline.
Continue reading →

Early US Macro Clues For July Look Encouraging

There’s precious little hard data at this point for profiling the US economy in July, but the preliminary numbers so far suggest that growth will prevail and the manufacturing sector’s recent weakness will give way to a modestly stronger trend. We’ll know more when we see today’s flash July data for the US manufacturing purchasing managers index (PMI), scheduled for release at 9:45 am eastern–the consensus forecast sees the moderate growth rate in June ticking up slightly, according to Econoday.com. Meanwhile, the available July figures at the moment imply that the stronger pace of growth in June will carry over into this month.
Continue reading →

Chicago Fed: US Growth Returns To Historical Trend Rate

The Chicago Fed National Activity Index’s three-month average (CFNAI-MA3) increased to -0.01 in June, reflecting US economic growth that’s effectively at the historical trend rate (i.e., a reading of zero). The rise marks the third consecutive month of modest improvement in economic output, according to this metric in today’s report from the Chicago Fed. The revised data for last month “suggests that growth in national economic activity was very close to its historical trend,” the bank noted in a press release.
Continue reading →

Recent Data Points To A Rebounding US Housing Market

The housing market continue to show signs of recovery after a soft first quarter. The latest hint: yesterday’s better-than-expected rise in existing home sales. Purchases advanced at the strongest pace in over eight years, reaching a new post-recession seasonally adjusted high of 5.49 million units in June. The update follows last week’s bullish news that new residential construction in June is close to a post-recession high while sentiment in the home-building industry this month is near a ten-year high.
Continue reading →

Chicago Fed Nat’l Activity Index: June 2015 Preview

The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to rise fractionally in the June update that’s scheduled for tomorrow (July 23), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for -0.12 is slightly above the -0.16 reading for May, which reflects a below-average pace of economic growth for the US relative to the historical trend. Only negative values below -0.70 indicate an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for June as a guide, CFNAI’s three-month average is expected to reflect an expansion that’s below the historical trend rate but still well above the tipping point that marks the start of a new recession.
Continue reading →

Treasury Market Continues To Anticipate A Near-Term Rate Hike

Soft pricing in raw materials will likely delay a Fed rate hike for the US, opines Michael Hewson, chief market analyst at CMC Markets UK. “Given that weak commodity prices are likely to prompt a ripple-out disinflationary effect, it is hard to see how the Fed would even consider hiking rates against such a weak backdrop,” he told CNBC on Monday. But St. Louis Fed President James Bullard said this week that there’s “more than a 50% probability right now” that the central bank will raise the target rate at the monetary policy meeting scheduled for September 16-17.
Continue reading →