U.S. Small Business Optimism Recovered

The National Association of Realtors reported that the July change in pending sales of existing homes reversed about half of the prior month's increase. The decline of 3.2% was larger than Consensus expectations for a 1.3% drop.

These figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.

The regional sales figures indicated that lower sales in the West, -10.6% m/m, accounted for much of the July decline following improvement earlier this year. Sales in the North east also fell by 7.5% and that reversed the improvement during the prior four months. Sales in the Midwest rose 2.8% but have moved sideways so far this year. Sales in the South remained unchanged versus June but year-to-date have shown some improvement.

The Realtors association indicated in an earlier report that the number of homes on the market & available for sale rose a not seasonally adjusted 3.9% (2.4% y/y) after a 0.3% uptick during June.

At the current sales rate there was an 11.2 months' supply of homes on the market versus an 8.9 months' average during all of last year, a 6.5 months' supply in 2006 and a 4.5 months' supply in 2005.

The median sales price of an existing single family home fell 1.3% (-7.7% y/y) during July and prices were down 8.0% from their peak in June of last year.

The pending home sales data are available in Haver's PREALTOR database and the number of homes on the market are in the REALTOR database.

The National Association of Realtors reported that the July change in pending sales of existing homes reversed about half of the prior month's increase. The decline of 3.2% was larger than Consensus expectations for a 1.3% drop.

These figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.

The regional sales figures indicated that lower sales in the West, -10.6% m/m, accounted for much of the July decline following improvement earlier this year. Sales in the North east also fell by 7.5% and that reversed the improvement during the prior four months. Sales in the Midwest rose 2.8% but have moved sideways so far this year. Sales in the South remained unchanged versus June but year-to-date have shown some improvement.

The Realtors association indicated in an earlier report that the number of homes on the market & available for sale rose a not seasonally adjusted 3.9% (2.4% y/y) after a 0.3% uptick during June.

At the current sales rate there was an 11.2 months' supply of homes on the market versus an 8.9 months' average during all of last year, a 6.5 months' supply in 2006 and a 4.5 months' supply in 2005.

The median sales price of an existing single family home fell 1.3% (-7.7% y/y) during July and prices were down 8.0% from their peak in June of last year.

The pending home sales data are available in Haver's PREALTOR database and the number of homes on the market are in the REALTOR database.

Germany's seasonally unadjusted current account fell 7.1 billion euros in July from June and 3.4 billion euros from July, 2007. In the GERMANY database, the monthly data on the current account are available only in seasonally unadjusted terms. In the G10 data base, however, the current account has been seasonally adjusted by Haver Analytics. On the seasonally adjusted basis the monthly decline in the current account was much smaller--3.0 billion euros.

Germany's balance on trade in goods is the largest component of its current account balance as can be seen in the first chart that compares the current account balance with the balance on trade in goods (both on an unadjusted basis). Frequently the surplus on trade in goods is larger than the current account surplus. The monthly balance on trade in goods and in exports and imports are available on both a seasonally adjusted and unadjusted basis in the GERMANY and G10 databases.

The balance on the seasonally adjusted trade in goods declined by 6.5 billion euros from 18.2 billion euro in June to 11.8 billion euro in July. Exports declined by 1.4 billion euros, and imports increased by 5.0 billion euros. Exports and imports are shown in the second chart. The data on the commodity classification of exports and imports and the origin of imports and destination of exports are not yet available. The decline in exports is easier to explain than the rise in imports. Foreign manufacturing orders (shown in the third chart) have been declining since late last year, presaging a decline in exports. Declining oil prices and lower economic activity, however, would seem to suggest lower, not higher imports. The explanation of the rise in imports will be apparent when the more complete balance of payments data become available some time next week.

UK industrial output weakness is hardly a surprise after the sharp break posted by the UK’s July PPI. Clearly, weakness is at work and it is having an impact on prices due to its severity. Manufacturing output continues to decline over 12 months; its rate of descent accelerates over ever shorter time spans. All major MFG output groups are showing declines even year-over-year. Consumer durables are off by 5.1%. Nondurables are off by 0.8%. Intermediate goods output is off by 2.4% and capital goods output is off by 1.4%. In addition each category is showing growth rates that are progressively weaker in pace from twelve months to six months to three months. The UK slowdown is quite broad-based and quite entrenched. Its progress in Q3 already points to a decline in the quarter that is well underway.