Haver Analytics
Haver Analytics
Global| Dec 23 2014

U.S. GDP Growth in Q3 Revised Up to Strongest Since 2003; Final Demand Strengthened

Summary

GDP growth last quarter was revised sharply higher to 5.0%, up from last month's estimate of 3.9% growth. The rise was the strongest since Q3 2003. Strengthened growth in final demand accounted for the revision. The gain exceeded the [...]

Kansas City Fed Factory Sector Activity Improves by Tom Moeller  December 19

GDP growth last quarter was revised sharply higher to 5.0%, up from last month's estimate of 3.9% growth. The rise was the strongest since Q3 2003. Strengthened growth in final demand accounted for the revision. The gain exceeded the 4.3% rise in the Action Economics Forecast Survey. So far this year, growth averaged 2.4%, held back by the 2.1% Q1 decline. 

Growth in domestic final demand was raised to 4.1% (2.7% y/y) from 3.2%. Consumer spending grew 3.2% (2.7% y/y), up from the 2.2% estimated earlier. The main source of the revision was a strengthened 2.5% rise (2.1 y/y) in services spending, up from 1.1% estimated last month. Health care spending, up 4.6% (2.8% y/y), accounted for most of the revision. Spending growth on recreation also was raised to 0.7% (-0.5% y/y) instead of declining 3.2%. Durable goods spending growth was increased to 9.2% (8.0% y/y) from 8.7% as motor vehicles purchases improved 11.2% (10.2% y/y), revised from 10.5%. Growth was down, however, from the 19.1% Q2 surge. Furniture & home furnishings spending growth was little-changed at 6.1% (5.9% y/y), though that was roughly half the Q2 increase. Purchases of nondurable goods also was increased to 2.5% (1.8% y/y) from 2.2%. Apparel spending slowed to a little-changed 1.2% rate (1.3% y/y). That compared to 5.6% Q2 growth. Gasoline purchases grew a slight 0.9% (-0.1% y/y) instead of falling marginally. 

Business investment growth also was strengthened to 8.9% (7.6% y/y) from 7.1%. Investment in intellectual property products gained 8.8% (5.6% y/y), changed from 6.4% estimated earlier. Spending on equipment grew at an improved 11.0% rate (8.7% y/y) led by a one-third rise (17.7% y/y) in transportation equipment. That was offset by a 6.9% decline (+1.0% y/y) in information processing equipment, earlier posted as -7.5%. Structures investment rose 4.8% (8.2% y/y), revised down from 6.4%. Residential investment advanced 3.3% (-0.7% y/y), not 2.7%. 

Government spending grew at a 4.4% rate, the quickest since Q2'09. Defense spending firmed at a 16.0% rate (-0.1% y/y), nondefense grew 0.4% (-1.5% y/y) and state & local buying rose an 1.1% (0.9% y/y), these figures were little-changed. 

The effect on growth from foreign trade was unrevised at 0.8 percentage points as exports rose 4.6% (3.8% y/y) and imports fell 0.9% (+3.4 y/y). The roughly neutral effect on economic growth from inventories also was little-revised.

Growth in corporate profits after tax was increased to 2.8% (5.1% y/y) from 1.7%. That still was down, however, from the 6.2% gain in Q2. So far this year profits have risen at an 8.2% annual rate after a 4.7% gain last year. Financial sector profits grew 3.6% (-8.2% y/y) and nonfinancial sector earnings rose 2.5% (5.8% y/y). Profits earned from the rest of the world gained a strengthened 4.2% (0.2% y/y).

The GDP price index increased at an unchanged 1.4% annual rate (1.6% y/y). The personal consumption index slowed to 1.2% (1.5% y/y) as durable goods prices fell 2.1% (-2.4% y/y). The service price index rose 1.8% (2.3% y/y), the weakest gain in two years. The nonresidential investment price index rose at a steady 1.1% rate (1.2% y/y) but the residential index jumped 7.2% (6.0% y/y).

The latest GDP figures can be found in Haver's USECON and USNA databases; USNA contains basically all of the Bureau of Economic Analysis' detail in the national accounts, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.

Chained 2009 $, %, AR Q3'14 (3rd Estimate) Q3'14 (2nd Estimate) Q3'14 (Advance Estimate) Q2'14 Q1'14 Q3 Y/Y 2013 2012 2011
Gross Domestic Product 5.0 3.9 3.5 4.6 -2.1 2.7 2.2 2.3 1.6
  Inventory Effect -0.0 -0.1 -0.6 1.4 -1.2 -0.1 0.0 0.1 -0.1
Final Sales 5.0 4.1 4.2 3.2 -1.0 2.8 2.2 2.2 1.7
  Foreign Trade Effect 0.8 0.8 1.3 -0.3 -1.7 0.1 0.3 0.1 0.0
Domestic Final Sales 4.1 3.2 2.7 3.4 0.7 2.7 1.9 2.1 1.7
Demand Components
Personal Consumption Expenditures 3.2 2.2 1.8 2.5 1.2 2.7 2.4 1.8 2.3
Business Fixed Investment 8.9 7.1 5.5 9.7 1.6 7.6 3.0 7.2 7.7
Residential Investment 3.3 2.7 1.9 8.8 -5.3 -0.7 11.9 13.5 0.5
Government Spending 4.4 4.2 4.6 1.7 -0.8 0.3 -2.0 -1.4 -3.0
Chain-Type Price Index
GDP      1.4 1.4 1.3 2.1 1.3 1.6 1.5 1.8 2.1
Personal Consumption Expenditures 1.2 1.3 1.2 2.3 1.4 1.5 1.2 1.8 2.5
 Less Food/Energy 1.4 1.4 1.4 2.0 1.2 1.5 1.3 1.8 1.5
 

U.S. Gasoline Prices Fall to Lowest Level Since 2009
by Tom Moeller  December 23, 2014

Gasoline prices remained on their downward trajectory last week, falling to an average $2.40 (-26.5% y/y), the lowest level since May, 2009. Prices have fallen from $3.69 per gallon averaged this past June and from $3.91 in May, 2011. Haver Analytics constructs factors adjusting for the seasonal variation in pump prices. The seasonally adjusted price declined to $2.68 per gallon.

WTI crude oil prices moved 8.7% lower last week to an average $55.81 per barrel (-43.0% y/y) from $61.14 during the prior week. Yesterday prices stabilized at $55.26. Prices were roughly one-half lower than their June peak of $107.52. The seasonally adjusted price generated by Haver declined to $59.20 per barrel last week. Brent crude oil prices fell to $59.68 last week (-45.8% y/y) and were $58.30 yesterday.

Natural gas prices were stable last week at $3.60 per mmbtu (-15.6% y/y) but ticked up to $3.04 yesterday.

The demand for all petroleum products gained 1.4% y/y in the week ended December 12 and gasoline demand rose 4.1% y/y. Inventories of crude oil and petroleum products increased an accelerated 2.9% y/y and gasoline inventories grew 0.7% y/y.

The energy price data are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY database. The daily figures are in DAILY and the petroleum demand and inventory figures are in OILWKLY.

Weekly Energy Prices 12/22/14 12/15/14 12/08/14 Y/Y% 2013 2012 2011 Retail Gasoline ($ per Gallon, Regular) 2.40 2.55 2.68 -26.5 3.51 3.62 3.52 Light Sweet Crude Oil, WTI ($ per bbl., WSJ) 55.81 61.14 67.18 -43.0 97.95 94.20 95.14 Natural Gas ($/mmbtu, LA, WSJ) 3.60 3.59 3.65 -15.6 3.73 2.75 3.99

 

U.S. FHFA Home Price Index Moves Higher
by Tom Moeller  December 23, 2014

The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) increased 0.6% in October (4.5% y/y) following an unrevised no-change during September. The increase left three-month growth at 4.5%, about where it's been since the Spring. Prices remained the strongest in the Pacific region, up 6.0% y/y, though recently growth eased. Home price inflation in the Mountain region eased to 5.1% y/y versus the April 2013 high of 14.2%. Downward momentum has stabilized, however, with three-month growth a positive 9.0%. In the West North Central region, the observation is the same. Prices rose 0.5% (3.8% y/y) and the three-month growth rate of 3.9% is improved from a -0.1% as of June. In the East North Central region, three-month growth picked up to 8.2%, its best in six months.

Much improvement in prices is not in evidence, however, in other sections of the country. In the Middle Atlantic Region, prices slipped 0.1% in October (+0.8% y/y) and rose just 0.8% on a three-month basis, down from 7.6% in May. In New England, prices rose 0.2% but only 2.3% y/y. The three-month decline of 1.4% was the weakest showing since the Winter. In the West South Central region, a 0.2% price decline left y/y growth at a respectable 5.6% but the 5.1% three-month change half what it was this Winter. 

The FHFA house price index is a weighted repeat sales index. It measures average price changes in repeat sales or refinancings on the same properties. It is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single family properties are included. The FHFA data is available in Haver's USECON database.

FHFA U.S. House Price Index Purchase Only (SA %) Oct Sep Aug Y/Y 2013 2012 2011
Total 0.6 0.0 0.4 4.5 7.7 3.4 -4.0
  Pacific -0.3 0.4 0.7 6.0 16.5 4.9 -6.8
  West South Central -0.2 0.5 1.0 5.6 6.2 4.3 -1.1
  Mountain 0.7 0.0 1.5 5.1 12.7 8.1 -6.6
  East North Central 1.1 0.1 0.9 5.1 5.5 2.2 -3.6
  South Atlantic 1.5 -0.4 -0.4 4.8 8.2 4.0 -5.1
  West North Central 0.5 -0.1 0.6 3.8 5.0 3.4 -3.2
  East South Central 0.8 -0.1 1.0 3.8 4.5 2.5 -2.6
  New England 0.2 0.1 -0.6 2.3 4.0 -0.1 -2.2
  Middle Atlantic -0.1 0.1 0.3 0.8 2.9 0.0 -3.1


New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut.
Middle Atlantic: New York, New Jersey and Pennsylvania.
East North Central: Michigan, Wisconsin, Illinois, Indiana and Ohio.
West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri.
South Atlantic: Delaware, Maryland, D.C., Virginia, West Virginia, North Carolina, South Carolina, GA & FL
East South Central: Kentucky, Tennessee, Mississippi and Alabama.
West South Central: Oklahoma, Arkansas, Texas and Louisiana.
Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico.
Pacific: Hawaii, Alaska, Washington, Oregon and California.

 

U.S. New Home Sales Pull Back With Prices
by Tom Moeller  December 23, 2014

New home sales during November declined 1.6% to 438,000 (-1.6% y/y) from 445,000 in October, initially reported as 458,000. The latest figure matched expectations in the Action Economics Forecast Survey. These volume numbers are quoted at seasonally adjusted annual rates.

The median price for a new home declined 3.2% to $280,900 (+1.4% y/y) from $290,100, revised from $305,000. The average price of a new home declined 14.2% to $321,800 (-4.1% y/y) from $375,200, revised from $401,100.

Home sales fell through most the country. Sales in the Northeast declined 12.0% to 22,000 and were off by one-third y/y. Sales in the South fell 6.4% to 233,000 (-4.1% y/y) and sales in the Midwest declined 6.3% to 59,000 (+3.5% y/y). Sales in the West offset these setbacks with a 14.8% rise to 124,000 (10.7% y/y).

The inventory of unsold homes increased 1.4% to 213,000 (15.1% y/y), the highest level since June 2010 and up by nearly half from the 2012 low. The months' sales supply of new homes inched up m/m to 5.8 months versus last year's low of 3.9 months. The length of time to sell a new home was essentially stable m/m at 3.0 months, down from 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure from the Action Economics survey is available in the AS1REPNA database.

U.S. New Home Sales Nov Oct Sep Y/Y % 2013 2012 2011
Total SAAR, 000s 438 445 455 -1.6 430 368 306
Northeast 22 25 31 -12.0 31 29 21
Midwest 59 63 58 3.5 61 47 45
South 233 249 252 -4.1 233 196 168
West 124 108 114 10.7 106 97 72
Median Price (NSA, $) 280,900 290,100 263,500 1.4 265,092 242,108 224,317
  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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