Economic Notes

Utah Unemployment Claims: -1,182
Finally some good news! June initial upemployment claims down from peak of 14,934 to 13,752.

Global Business Confidence
Businesses are growing steadily less dour. Global business sentiment improved last week to its best level since last October. Confidence remains consistent with a continued global recession, but the downturn is moderating. Businesses are notably more optimistic regarding the outlook toward year's end; expectations regarding the outlook are as strong as they have been since summer 2007 when the financial crisis began. However, hiring and investment remain soft, as does pricing.

Treasury International Capital Flows -$44.2 B
Net long-term TIC flows in April slowed to $11.2 billion from $55.4 billion in March as private foreign investors reduced their net holdings of corporate bonds and foreign official institutions reduced their net holdings of government agency bonds. Foreign investors are still buying up U.S. Treasury bonds and notes, with net purchases still resilient.

FOMC Monetary Policy: 0.0-0.25 percent
The Federal Open Market Committee announced no change to monetary policy following its meeting. The announcement said that the committee expects to keep the fed funds rate target in the 0 percent to 0.25 percent range "for an extended period." The remarks on current economic conditions were modestly more optimistic; the statement said that "the pace of economic contraction is slowing."

GDP: -5.49 percent
The contraction in real GDP in the first quarter was revised slightly downward in the final report, to 5.5 percent at an annualized rate, from 5.7 percent previously. There was a downward revision to imports, which boosted GDP, and an upward revision to investment in inventories. These were somewhat offset by downward revisions to exports and consumer spending on services. The recession continues, but the rate of contraction in the second quarter should be much slower.

Jobless Claims: +15,000
Initial claims for unemployment benefits increased by 15,000 to 627,000 for the week ending June 20, though the figure was probably inflated by recent domestic automaker troubles. Continuing claims increased by 29,000 to 6.738 million for the week ending June 13, a smaller increase than has been the norm for much of this year.

Mass Layoffs: +239,938
The number of layoffs involving at least 50 workers from a single establishment in May was 2,933 compared with 2,712, in April. The layoffs involved 312,880 workers, compared with 271,226 in April. All numbers are seasonally adjusted. Mass layoffs reached a new record high and suggest that there is significant weakness in labor markets.

NAHB Housing Market Index -6.3 percent
The NAHB housing market indicator came in below expectations for June, scoring a 15 compared with the May level of 16, a 6.3 percent drop. Although both the present single-family sales and prospective buyer traffic components held level between May and June, there was a slight drop in the expected six-month sales component, most likely caused by the jump in mortgage interest rates over the past months. It is thus possible that the increase in interest rates is already starting to sap confidence in prospects of a housing market recovery.

New-Home Sales (C25): -0.6 percent
Sales of new homes fell in May compared with April. The surprisingly low 342,000 annualized units is 0.6% below the April reading. Furthermore, the Census Bureau revised down April sales by 2.3 percent. Months of inventory fell slightly to 10.2 months. The median sale price is down by 3.4 percent y/y. Demand for new homes remains stuck near a historic bottom.

Existing-Home Sales +2.4 percent
Spring sales of existing homes indicate that the housing market is stabilizing, with sales rising 2.4% in May. Running at an annualized 4.77 million units, the pace of resales remains within the 4.5 million to 4.9 million range that they have been in since last October. The months of inventory fell to 9.6. The decline in the median existing-house price deepened, however, to fall by 16.8 percent from one year ago. The end to the foreclosure moratoriums is likely reaccelerating the decline in price.

MBA Mortgage Applications Survey: +6.6 percent
With both parts of the MBA mortgage applications rising for the week ending June 19, the market index increased 6.6 percent to 548.2. After four weeks of large declines, the refinance index grew 5.9 percent, finishing the week at 2,116.3. The purchase index finished the week at 280.3, up 7.3 percent from the week before.

FHFA Purchase-Only House Price Index: -6.8
The FHFA purchase-only house price index declined by 0.1 percent from March to April and is down by 6.8% compared with April 2008. Performance across the different census divisions was mixed, with the Mountain division seeing a substantial increase, while the West South Central region recorded a decline of 0.7 percent from March to April, the first time in the past year that it has had the largest monthly price decline. Overall, the market for houses in the conforming loan range seems to be stabilizing, with prices down only 0.3 percent in the first four months of 2009.

Chain Store Sales Snapshot 0.0 percent
Chain store sales were virtually unchanged in the week ending June 20, although the ICSC sales index is trending downward. Sales were 0.9 percent below their year-ago level, an improvement from the previous week, but poor by recent standards. The ICSC blamed wetter than normal weather and rising gasoline prices for the poor performance and indicated customer traffic was mixed to low during the week.

Durable Goods (Advance):+ 1.8 percent
New orders for manufactured durable goods rose 1.8 percent in May, matching April's increase. Orders excluding transportation rose 1.1 percent, and orders for core capital goods were up 4.8 percent-the largest increase since September 2004. Shipments fell 2.1 percent-the 10th consecutive month of decline. Shipments of core capital goods were up 0.3 percent, though-the first increase since December.

Oil and Gas Inventories: -3.8BB
Crude oil inventories fell by 3.8 million barrels during the week ending June 19, according to the Energy Information Administration, below expectations of a 1 million barrel build. Gasoline inventories rose by 3.9 million barrels, well above expectations of a 1 million barrel build. Distillate inventories rose by 2.1 million barrels, also surpassing expectations. Refinery operating capacity rose from 85.9 percent to 87.1 percent. Total domestic petroleum demand plummeted. This mixed report points to lower oil prices.

Weekly Natural Gas Storage Report: +94.00 bcf
Working gas in underground storage rose by 94 billion cubic feet during the week ending June 19. The consensus estimate was for an increase of 100 bcf.

Source: Economy.com