by Calculated Risk on 9/04/2014 12:25:00 PM

Earlier the Department of Commerce reported:

[T]otal July exports of $198.0 billion and imports of $238.6 billion resulted in a goods and services deficit of $40.5 billion, down from $40.8 billion in June, revised. July exports were $1.8 billion more than June exports of $196.2 billion. July imports were $1.6 billion more than June imports of $237.0 billion.

The trade deficit was smaller than the consensus forecast of $42.7 billion and the deficit was revised down for Q1 and Q2.

The first graph shows the monthly U.S. exports and imports in dollars through July 2014.

Click on graph for larger image.

Imports and exports increased in July.  

Exports are 19% above the pre-recession peak and up 4% compared to July 2013; imports are about 3% above the pre-recession peak, and up about 4% compared to July 2013. 

The second graph shows the U.S. trade deficit, with and without petroleum, through June.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil imports averaged $97.81 in July, up from $96.41 in June, and down up $97.07 in July 2013.  The petroleum deficit has generally been declining and is the major reason the overall deficit has declined since early 2012.

The trade deficit with China increased to $30.9 billion in July, from $30.1 billion in July 2013.

The trade deficit was revised down (exports up, imports down) for the previous six months.

by Calculated Risk on 9/04/2014 10:00:00 AM

The August ISM Non-manufacturing index was at 59.6%, up from 58.7% in July. The employment index increased in August to 57.1%, up from 56.0% in July. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: August 2014 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in August for the 55th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee. "The NMI® registered 59.6 percent in August, 0.9 percentage point higher than the July reading of 58.7 percent. This represents continued growth in the Non-Manufacturing sector. The August reading of 59.6 percent is the highest for the composite index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 65 percent, which is 2.6 percentage points higher than the July reading of 62.4 percent, reflecting growth for the 61st consecutive month at a faster rate. This is the highest reading for the index since December of 2004 when the index also registered 65 percent. The New Orders Index registered 63.8 percent, 1.1 percentage points lower than the reading of 64.9 percent registered in July. The Employment Index increased 1.1 percentage points to 57.1 percent from the July reading of 56 percent and indicates growth for the sixth consecutive month. The Prices Index decreased 3.2 percentage points from the July reading of 60.9 percent to 57.7 percent, indicating prices increased at a slower rate in August when compared to July. According to the NMI®, 15 non-manufacturing industries reported growth in August. Respondents' comments vary by business and industry. The majority of the comments reflect continued optimism in regards to business conditions. Some respondents indicate that there may be some tapering off in the recent strong rate of growth in the non-manufacturing sector."
emphasis added

Click on graph for larger image.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was solidly above the consensus forecast of 57.1% and suggests faster expansion in August than in July.

The NMI was at the highest level since its inception.  New orders was strong - and employment was up solidly.

by Calculated Risk on 9/04/2014 08:33:00 AM

The DOL reports:

In the week ending August 30, the advance figure for seasonally adjusted initial claims was 302,000, an increase of 4,000 from the previous week's unrevised level of 298,000. The 4-week moving average was 302,750, an increase of 3,000 from the previous week's unrevised average of 299,750.

There were no special factors impacting this week's initial claims.

The previous week was unrevised at 298,000.

The following graph shows the 4-week moving average of weekly claims since January 1971.

Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 302,750.

This was close to the consensus forecast of 305,000.

by Calculated Risk on 9/04/2014 08:15:00 AM

From ADP:

Private sector employment increased by 204,000 jobs from July to August according to the August ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
...
Mark Zandi, chief economist of Moody’s Analytics, said, "Steady as she goes in the job market. Businesses continue to hire at a solid pace. Job gains are broad based across industries and company sizes. At the current pace of job growth the economy will return to full employment by the end of 2016.”

This was below the consensus forecast for 213,000 private sector jobs added in the ADP report. 

The BLS report for August will be released on Friday.

by Calculated Risk on 9/03/2014 08:31:00 PM

From the WSJ: Small Firms Poised to Spend More on Plants, Equipment

Among 798 small private firms with less than $20 million in revenue, for instance, 51% said in August that they planned to increase their capital outlays in the next 12 months.

That is ... up from 42% a year ago, according to the survey by The Wall Street Journal and Vistage International, a San Diego executive-advisory group.

August marked the first month since June 2012, when the monthly survey began, that owners of small firms who planned to spend more on fixed investments outnumbered those who planned to hold steady or cut back.

This survey has only been conducted for a couple of years, but this is a positive sign. On credit, the Federal Reserve's July Senior Loan Officer survey indicated some pickup in small firm demand for loans, and slightly easier lending standards.

Thursday:
• At 7:45 AM ET, Press conference following the Governing Council meeting of the ECB in Frankfurt with Mario Draghi. Here is the ECB website and press conference page.

• At 8:15 AM, the ADP Employment Report for August. This report is for private payrolls only (no government). The consensus is for 213,000 payroll jobs added in August, down from 218,000 in July.

• At 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 305 thousand from 298 thousand.

• Also at 8:30 AM, the Trade Balance report for July from the Census Bureau. The consensus is for the U.S. trade deficit to be at $42.7 billion in July from $41.5 billion in June.

• At 10:00 AM, the ISM non-Manufacturing Index for August. The consensus is for a reading of 57.1, down from 58.7 in July. Note: Above 50 indicates expansion.