US - Economic Data & News 01 (May 08 - Jul 08)

[millionairemind]

U.S. May ISM manufacturing index 49.6% vs 48.6% in April

By Greg Robb
Last update: 10:03 a.m. EDT June 2, 2008Print RSS Disable Live Quotes

WASHINGTON (MarketWatch) - The nation's manufacturers continued to cut back production in May, but at a slower rate than over the past three months, the Institute for Supply Management reported Monday. The ISM index inched higher to 49.6% in May from 48.6% in April. This is the fourth straight month the index has been below 50%. The size of the rise was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to inch higher to 48.7%. Readings below 50% indicate contraction. The index was last over 50% in January. Economists say export industries are keeping the sector from weakening significantly.

[kennynah]

so, apparently, the mkt players are not impressed, judging from the drop in all indexes...after the release of the above ISM Data

the excuse, this figure came in line with expectations and becos this is still <50, indicating that the US economy is still in the doldrums.

in addition....this is what Morgan Stanley had to say about this other US Econ Data that was released at the same time as ISM Data above. however, it is also clear that this talk-talk company is not strong enough to make a effing difference to the market sentiment at all


02 Jun 2008 14:58 GMT

US DATA REACT: From MS: "Construction spending in April (-0.4%)
fell much less than we expected on another surprising surge in private
nonresidential spending, and there were modest net upward revisions to
prior months led by somewhat less weakness in residential activity.
Incorporating these results, we boosted our Q2 GDP forecast to -0.6%
from -1.0% largely on a much stronger trajectory for business investment
in structures. We also see Q1 being revised up a bit further to +1.0%
from +0.9%."

[millionairemind]

Bernanke Optimism on Growth, Inflation Dashed by Surge in Oil
By Scott Lanman and Craig Torres

June 3 (Bloomberg) -- As Federal Reserve Chairman Ben S. Bernanke prepares to deliver his first economic address in two months, the central bank's optimism that inflation is abating and growth will start to pick up has been dashed by the unexpected surge in oil prices.

The 13 percent jump in crude oil since policy makers last met in April is eroding the potential benefit to the economy from more than $100 billion in federal tax rebates. At the same time, soaring energy costs have spurred an increase in inflation expectations that's getting the attention of Fed officials.

The delay in the economic rebound, coupled with the worsening price outlook, indicates the Fed will keep its benchmark interest rate unchanged after 3.25 percentage points of reductions since September.

``They're pretty firmly on hold,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York. ``It's just bad news for the economy to have the Fed's hands tied here by the higher energy prices at a time when there's still plenty of risks in the outlook.''

Officials said after their April meeting that inflation will ``moderate in coming quarters'' and the seven interest-rate cuts since September will revive the economy.

Bernanke, 54, is scheduled to speak via satellite to the International Monetary Conference after 9 a.m. Washington time. He will participate in a panel with European Central Bank President Jean-Claude Trichet, Bank of Japan Governor Masaaki Shirakawa and Bank of Spain Governor Miguel Fernandez Ordonez.

First Since April

The chairman's last full speech on the economic outlook came April 2 in testimony before Congress's Joint Economic Committee. He said at the time that ``monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year.''

Soaring oil costs, which officials consider to be a function of supply and demand rather than speculation or the result of lower interest rates, may reduce the likely rebound in growth in the second half. Crude oil has climbed 93 percent in the past year, reaching a record $135.09 a barrel on May 22.

That has also pushed gasoline prices to unprecedented levels, damaging the outlook for consumer spending that's already been hit by a slump in home values.

The house-price drop may not be over with declines likely to continue into next year, former Fed chief Alan Greenspan has said. Values are down 17 percent from their July 2006 peak, according to the Standard & Poor's/Case-Shiller index of prices in 20 major metropolitan areas.

Congressional Bills

Bernanke told lawmakers April 2 he supports congressional efforts to ``address'' the housing crisis. He has stopped short of endorsing any specific legislation, and hasn't advocated a second fiscal stimulus plan after the $168 billion package enacted in February. Democratic and Republican senators last month approved a bill offering $300 billion of federal mortgage insurance to help stem foreclosures.

House prices may be the most important variable for the economy because of their impact on consumer spending and financial markets, economists have said.

The U.S. economy grew at an annualized 0.9 percent pace in the first quarter, capping the weakest six-month performance in five years, government figures showed last week.

Yesterday, Atlanta Fed President Dennis Lockhart said the U.S. economy is poised for a ``gradual'' recovery after a slow first half, with inflation likely to moderate from ``uncomfortable'' levels.

`Balanced' Risks

Minutes of the Federal Open Market Committee's April 29-30 meeting indicated policy makers judged that risks were more closely ``balanced'' between weaker growth and faster inflation.

Those risks may now be more tipped toward inflation. Last week, the Reuters/University of Michigan consumer sentiment survey showed Americans projected prices would increase 3.4 percent over the next five years, a 13-year high.

``It is pretty clear that the Federal Reserve has interest rates about as low as they need to go,'' Marvin Goodfriend, a former Richmond Fed policy adviser who is now at the Tepper School of Business at Carnegie Mellon University in Pittsburgh, said in a Bloomberg Radio interview.

Bernanke may be asked today about the central bank's commitment to lend to investment banks, after Vice Chairman Donald Kohn last week indicated the Fed was open to keeping a temporary program.

Fed officials are starting to engage Congress on longer- term options for any direct loans to the firms. The Fed started the Primary Dealer Credit Facility in March to prevent the type of run that nearly sent Bear Stearns Cos. to bankruptcy.

Securities Dealers

Discussions may address the kind of information and authority the Fed would need if it decides to keep the program. The Fed invoked emergency powers not used since the Great Depression, and under current laws must close the facility once markets normalize. On March 16, the central bank said the resource would remain open until at least September.

Legislation giving the Fed with new supervisory powers could take months to enact. In the interim, the Fed may request it keep investigators at the investment banks. The SEC and Fed are working on an information-sharing agreement, according to SEC spokesman John Nester.

To contact the reporter on this story: Scott Lanman in Washington at [email protected]

[millionairemind]

Bernanke Says Rate `Well Positioned,' Watching Dollar (Update2)
By Scott Lanman

June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke signaled he's done cutting interest rates for now and raised his biggest concerns yet about the inflationary effects of a dollar down 16 percent in the past year against the euro.

The Fed is working with the Treasury to ``carefully monitor developments in foreign exchange markets'' and is aware of the effect of the dollar's decline on inflation and price expectations, Bernanke said today in his first speech on the economic outlook in two months. In addition, interest rates are ``well positioned'' to promote growth and stable prices, he said.

The dollar climbed more than 1 cent against the euro and the price of gold dropped almost $14 after Bernanke's remarks. Policy makers lowered the benchmark rate 3.25 percentage points since September to 2 percent to alleviate the damage to the economy from the credit crisis and housing recession.

``I can't recall such a strong defense of the dollar from a Fed chairman,'' said Sophia Drossos, a currency strategist at Morgan Stanley in New York, who used to work at the New York Fed, where she helped manage the central bank's foreign-exchange holdings. ``The Fed is putting its marker down in letting the market know that a weaker dollar would be detrimental.''

Bernanke, 54, spoke via satellite to the International Monetary Conference in Barcelona, Spain. He is talking on a panel with European Central Bank President Jean-Claude Trichet, Bank of Japan Governor Masaaki Shirakawa and Bank of Spain Governor Miguel Fernandez Ordonez.

`Moderate Growth'

``For now, policy seems well positioned to promote moderate growth and price stability over time,'' Bernanke said. ``We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate.''

The remarks come as the central bank's optimism that inflation is abating and growth will start to pick up has been dashed by the unexpected surge in oil prices, which is eroding the potential benefit to the economy from more than $100 billion in federal tax rebates. The resulting increase in inflation expectations is also getting the attention of Fed officials.

The dollar strengthened to $1.5454 against the euro from $1.5607 today after weakening by 16 percent in the past year. Crude oil fell to $126.29 a barrel in New York at 9:59 a.m. from $127.98 in the minutes before Bernanke's comments were released at 9 a.m. Yields on Treasury securities rose, and U.S. stock indexes gained.

``We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations,'' Bernanke said. The Fed's commitment to price stability and maximum employment ``will be key factors ensuring that the dollar remains a strong and stable currency.''

Currency Policy

Bernanke and other Fed officials, when asked for their opinion on the dollar, tend to defer to the U.S. Treasury Department, which is responsible for the country's currency policy. The Fed chief meets weekly with Treasury Secretary Henry Paulson, who yesterday repeated his backing for a ``strong dollar.''

``I believe the long-term economic fundamentals will be reflected in our currency,'' Paulson said in Abu Dhabi.

Robert Eisenbeis, former head of research at the Atlanta Fed, said he reads the comments as saying that ``more rate cuts would hurt the dollar and that would have negative feedback effects to our inflation situation.''

``I don't read it as saying that intervention is on the horizon,'' said Eisenbeis, who is now chief monetary economist at Cumberland Advisors Inc.

Pare Rates

Minutes of the Federal Open Market Committee's April 29-30 meeting showed that Fed policy makers, out of concern for inflation, wouldn't pare rates further even with an economic contraction in the first half.

The decision to lower the main rate by a quarter point was a ``close call'' for most FOMC members, the minutes said. The reduction capped off 2.25 percentage points of reductions this year, including cuts of 0.75 point in January and in March. Traders expect the Fed to leave the overnight interbank lending rate at 2 percent through October.

``We have eased monetary policy substantially and proactively,'' Bernanke said.

In his last comprehensive speech on the economic outlook, Bernanke said, ``monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year.'' He made the remarks on April 2 during congressional testimony to the Joint Economic Committee.

`Remain Strained'

Today, Bernanke said financial-market conditions ``remain strained,'' and consumers face ``significant headwinds'' from declining home prices, a weaker labor market, stricter lending standards and higher energy costs.

A Commerce Department report last week showed that the U.S. economy grew more than previously estimated in the first quarter as Americans shunned imports and exports climbed to a record. The 0.9 percent gain at an annual pace in gross domestic product compares with an advance estimate of 0.6 percent.

The second quarter is ``likely to be relatively weak,'' Bernanke said, leaving out his mention in the April speech of a possible contraction. The second half may have ``somewhat better economic conditions,'' and growth may pick up further in 2009, he said.

House prices may be an especially strong force in the economy because of their influence on consumer spending and financial markets. Investors already anticipate some further declines in prices. Foreclosure filings increased 65 percent in April from a year earlier, RealtyTrac Inc., an Irvine, California-based seller of default data, reported last month.

`Growth Risks'

``Until the housing market, and particularly house prices, shows clearer signs of stabilization, growth risks will remain to the downside,'' Bernanke said. ``Recent increases in oil prices pose additional downside risks to growth.''

Soaring oil costs, which officials deem to be a result of supply and demand rather than speculation or reduced interest rates, may impede a possible rebound in growth in the second half.

Crude oil has climbed 93 percent in the past year, reaching a record $135.09 a barrel on May 22. Gasoline prices have also hit a record, impairing spending by consumers who are already buffeted by a slump in home values.

``The possibility that commodity prices will continue to rise is an important risk to the inflation forecast,'' Bernanke said. Higher public inflation expectations are also a ``significant upside risk'' to prices and may ``ultimately become self-confirming,'' he said.

In April, Fed policy makers revised up their projections for total consumer price gains this year by a full percentage point to a range of 3.1 percent to 3.4 percent. Food prices rose 5.1 percent in the year ended April, the most since December 1990, the Labor Department said.

[kennynah]

First Quarter Productivity Growth Exceeds Previous Estimate
6/4/2008 8:48 AM ET

(RTTNews) - Labor productivity in the first quarter increased by more than previously estimated, according to a report release by the Department of Labor on Wednesday, with the upward revision slightly exceeding economists' expectations.

The report showed that productivity increased by 2.6 percent in the first quarter compared to the previously reported 2.2 percent increase. Economists had been expecting productivity growth to be revised up to 2.5 percent.

The bigger than expected upward revision came as output growth during the quarter was revised up to 0.7 percent from 0.4 percent, while the drop in hours worked was unrevised at 1.8 percent.

At the same time, the Labor Department noted that manufacturing productivity growth was slower than previously reported, as output was revised down by more than hours. The report showed that manufacturing productivity still increased by 3.6 percent.

Additionally, the report showed that unit labor costs increased by 2.2 percent in the first quarter, unrevised from the previously reported increase.

The report showed that the increase in hourly compensation was downwardly revised to 4.4 percent from the previous estimate of 4.9 percent growth.

While the stronger than expected productivity growth may offset some of the recent concerns about the strength of the economy, the data may be viewed as old news.

04 Jun 2008 12:16 GMT
U.S. DATA: ADP April employement revised to +13k from +10k.

[kennynah]

04 Jun 2008 14:00 GMT


BULLET: US DATA: May nonmfg ISM 51.7 vs 52.0. Shows growth...
US DATA: May nonmfg ISM 51.7 vs 52.0. Shows growth.

[kennynah]

Mortgage Applications Hit 6-Year Low
6/4/2008 11:05 AM ET

(RTTNews) - Mortgage application volume continued to fall during the week of May 30, according to the Mortgage Bankers Association's weekly applications survey.

Applications declined 15.3 percent, as fewer consumers sought out new loans and refinanced mortgages. That brought the mortgage applications to their lowest rate in six years, due in part to a 26 percent drop in the refinancing gauge.

The Market Composite Index was 502.3, a significant decline from the 593.3 in the previous week. The numbers were adjusted to account for the Memorial Day holiday. On an unadjusted basis, the decline was greater - down 24.2 percent on a week to week basis and 20.3 percent on a year over year basis.

The Refinance Index decreased 25.7 percent to 1496.1 from 2013.5 last week. Accordingly, 40.6 percent of mortgage activity took place through refinancing last week, down from 46.1 percent in the previous week. The conventional and government purchase indices also saw declines of 6.1 and 3.3 percent, respectively.

The adjustable-rate mortgage share of activity slipped further below 10 percent, down to 8.7 from 9.3 percent of total applications.

Interest rates increased for both 30-year and 15-year fixed-rate mortgages, although they increased with the one-year ARM. Interest rates increased from 5.96 percent to 6.17 percent on the 30-year fixed-rate, and from 5.49 percent to 5.7 percent for the 15-year fixed-rate.

The average contract interest rate ARM's decreased to 6.8 percent from 6.92 percent.

Decreased demand has plagued the housing market as investors wait for prices to bottom out. Until the supply overhang diminishes, it is likely that the real-estate slump will remain and continue to drag on the rest of the economy.

Tuesday, Federal Reserve Chairman Ben Bernanke discussed the impact of the housing slump. As far as overall economic growth is concerned, the Fed chairman remained cautiously optimistic, calling for some improvement in the second half of 2008 before growth picks up further in 2009. However, he added that growth risks remain to the downside.

[kennynah]

generally helped lift indexes for all of before lunch
**************************************

US Economic Round Up -- Service Sector Activity Rises While Mortgage Applications Drop
6/4/2008 12:39 PM ET

(RTTNews) - Wall Street was treated to a trio of key releases Wednesday morning, including some encouraging news on service sector activity and labor productivity. Any optimism may have been tempered by more data painting a dismal picture of the housing situation.

Service sector activity saw continued growth in the month of May, according to a report released by the Institute for Supply Management on Wednesday, although the pace of growth slowed modestly compared to the previous month.

The ISM said that its index of activity in the sector edged down to 51.7 in May from 52.0 in April, with a reading above 50 indicating growth in the sector. Economists had been expecting the index to fall to 51.0. The better-than-expected reading fueled speculation that the US economy has been able withstand inflationary pressures and the credit crisis.

Meanwhile, labor productivity in the first quarter increased by more than previously estimated, according to a report release by the Department of Labor on Wednesday, with the upward revision slightly exceeding economists' expectations.

The report showed that productivity increased by 2.6 percent in the first quarter compared to the previously reported 2.2 percent increase. Economists had been expecting productivity growth to be revised up to 2.5 percent.

It was the same old song from the housing sector on Wednesday. Mortgage application volume continued to fall during the week of May 30, according to the Mortgage Bankers Association's weekly applications survey.

Applications declined 15.3 percent, as fewer consumers sought out new loans and refinanced mortgages. That brought the mortgage applications to their lowest rate in six years, due in part to a 26 percent drop in the refinancing gauge.

Widely considered a prelude to Friday's pivotal government jobs report, the ADP released data showing that US private sector employers added 40,000 jobs in May, up from a revised 13,000 in April. Analysts were looking for employers to have cut 30,000 jobs.

[kennynah]

in actual fact, the figure should be "fell by 15K" as a result of an adjustment to previous reading...still it is good news...

dow futures did pop up in reaction..

*****************

Weekly Jobless Claims Fall To 357,000
6/5/2008 8:43 AM ET

(RTTNews) - Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended May 31st, showing that jobless claims for the week fell by 18,000 compared to an upwardly revised reading for the previous week.

The report showed that jobless claims fell to 357,000 from the previous week's revised figure of 375,000. Economists had been expecting jobless claims to come in unchanged compared to the 372,000 originally reported for the previous week.

[kennynah]

May Unemployment

5.5%

the details ...

06 Jun 2008 12:30 GMT
US DATA: May employ report is weak, with payrolls -49k and unemply rate +0.5 pt to 5.5% (highest since Oct 2004 and the biggest jump since Feb 1986).

Unemployment jump was across categories, but increased disproportionately among 16-24 yr-olds.

BLS said there were more job losers as well as a surge in new & returning jobseekers;

labor force and particip. rose - poss due to new young workers.

Apr-May payroll rev totaled -15k.

May payroll composition:
construction -34k, mfg -26k,
retail -27,100,
temp -30k,
transport -10,500;
credit -5,500;
health +33,900 and
govt +17k (mainly in local ed) were the pockets of strength.

[Details: Payrolls Prior AHE,yoy Agg Hrs Civ Unempl Rt/Unrnd]
May -49k ----- +3.5% 107.1 5.5% (5.492%)
Apr -28k -20k +3.4% 107.2 5.0% (4.953%)
Mar -88k -81k +3.6% 107.6 5.1% (5.083%)