Tuesday, September 16, 2014

Producer Prices Remained Stagnant in August

Producer prices held steady in August. The pace of growth slowed for the second consecutive month. Price growth in services was offset by the price decline in goods. Year-over-year growth increased slightly to 1.8%, but is still below the 2.0% target of the Federal Reserve.

Prices for finished services increased 0.3% in August, driven largely by transportation and warehousing and other. Finished goods prices declined 0.3%, due to a 1.5% decline in energy prices. Gasoline prices continue to drop rapidly.

Prices at earlier stages of production showed similar patterns. Processed intermediate energy declined 1.7% and unprocessed intermediate energy dropped 4.9%. Total processed intermediate goods dropped by 0.3% and unprocessed intermediate goods sharply declined 3.3%.

Read the BLS report.

Monday, September 15, 2014

Industrial Production Declined in August

Industrial production declined by 0.1% in August, the first monthly decline since January. Two of the three major components increased, with the largest gains in utilities. However, the main index of the three components - manufacturing - declined, indicating a real decline in the headline index. The three-month annualized growth rate dropped to 1.8% in August from 4.1% in July, indicating softening data.

Manufacturing output declined 0.4%, the first month to decline since January. Manufacturing is up 3.6% from year ago levels. The high-tech sector was the main driver in August, growing 1.5%. Motor vehicles and parts dropped 7.6% over the month, following a massive 9.3% jump the month prior.

Mining grew 0.5%, following a 0.3% decline the previous month, continuing a volatile trend. Utilities improved 1.0%.

Read the Federal Reserve release.

Friday, September 12, 2014

Retail Sales Increased a Strong 0.6% in August

Retail sales improved 0.6% in August, the fastest monthly pace since April. August’s report included upward revisions to previous months. Automobile sales led the increase, growing 1.5% in August. Year-over-year growth was also strong, improving 5.0%, the strongest yearly growth since July 2013.

Excluding automobile and gasoline sales, retail sales grew 0.5% in August. Building materials also saw strong growth at 1.4%. The report was generally positive, indicative of a growing and strengthening economy. The growth for the remainder of the year should continue August’s trend.

Gasoline sales declined 0.8%, however gasoline sales tend to be volatile from one month to the next.

Read the Census report.

Thursday, September 11, 2014

Survey: Most Bank Customers Pay Little or No Fees

The majority of Americans—62 percent—pay nothing at all for bank services such as checking account maintenance and ATM access, according to a recent survey by the American Bankers Association. Most bank customers (74 percent) spend $3 or less in monthly fees—less than the cost of a gallon of gas.

“Banking services are a great value for consumers, and bank customers have more choices than ever before,” said Nessa Feddis, ABA’s senior vice president and deputy chief counsel for Consumer Protection and Payments. “Increasingly, consumers are finding that simple steps like having their paychecks directly deposited or using ATMs owned by their bank result in a free service that protects their money and makes it available 24/7.”

The annual survey of 1,000 U.S. adults was conducted for ABA by Ipsos Public Affairs, an independent market research firm, Aug. 7-12, 2014. ABA has conducted the survey annually since 1998.

Read the full release.

Tuesday, September 9, 2014

Small Business Optimism at Second Highest Level Since 2007

Small business optimism increased in August by 0.4 points to 96.1, the second highest level since October 2007. August’s gain was driven by increases in plans to make capital outlays and expectations that the economy will improve.

Financing continues to be the least cited concern holding back small business conditions, with 2% of respondents citing it as the single most important problem. Taxes remained the top spot rising 2% to 24%, followed by government requirement and red tape, which declined to 19%.

Six of the ten index components improved slightly, three components declined and one component, credit conditions, was unchanged. Expectations that the economy will improve increased 3 points, the second consecutive month of strong growth.

Expectations for higher real sales took the biggest hit, dropping 4 points to 6%. August was first month plans to increase employment declined, following a ten month positive gain.

Read the NFIB report.

Monday, September 8, 2014

Consumer Credit Posted Record Gains in July

Consumer credit increased $26.0 billion in July, a new monthly record. July saw a 9.7% annualized gain, the largest monthly annualized gain since 2011. July’s gains continue to be largely driven by non-revolving credit.

Revolving credit grew $5.4 billion. It’s well above the $1.8 billion growth from the month prior. Non-revolving credit grew by $20.6 billion, as consumers continue to finance large ticket items. The spike in consumer credit reveals that consumers are increasingly comfortable taking on higher debt levels.

Read the Federal Reserve release.

CBO: Climbing Interest Rate, Large Effect on Federal Debt

Federal debt held by the public will reach about $12.8 trillion by the end of this fiscal year, an amount that equals 74% of the nation’s total output (GDP) this year, according to CBO projections. If current laws remain unchanged, CBO projects that the debt will reach $20.6 trillion, or 77% of GDP in 2024.

Furthermore, with the interest rate set to rise, the interest payments on the debt will increase from $231 billion in 2014, or 1.3% of GDP, to $799 billion in 2024, or 3.0% of GDP. The rising debt accounts for some of that increase, but much of it stems from CBO’s expectation that—largely owing to the improving economy—the average interest rate paid on that debt will more than double over the next 10 years, from 1.8% in 2014 to 3.9% in 2024.

Read more.