Backlogs increased 2 percent over April levels as incoming orders were higher than shipments. Backlogs are now 40 percent higher than they were a year ago, down slightly from the 44 percent reported last month as shipments picked up some in May. It is somewhat good to see backlogs a bit higher. While some of this increase is likely the result of waiting on imports, we suspect that domestic manufacturers are happy to see them increase somewhat, so that production can be better planned.
Receivables and Inventories
Receivable levels increased 5 percent over April 2010, somewhat in line with the 4 percent increase in shipments. Receivables are only 2 percent higher than May 2009 levels, in spite of the 6 percent increase in year-to-date shipments. We have continued to be surprised at the low number of bad debts considering how bad business has been.
Inventories increased 4 percent over April levels and were 7 percent below May 2009 levels. May 2009 levels were 18 percent below May 2008 levels. The increase in inventory levels from April appears to be in line with the increase in orders and shipments. Most companies appear to continue to watch inventories, keeping them as low as possible, other than those with quick ship programs.
Factory and Warehouse Employees and Payrolls
The number of factory and warehouse employees was about the same as last month and was up 1 percent over May 2009. May 2009 employees were 20 percent lower than that of May 2008.
Payrolls increased 4 percent over April but were 19 percent higher than May 2009. May 2009 payrolls were 22 percent lower than May 2008. Year-to-date, payrolls are up 10 percent over the same period a year ago, when they were down 23 percent from the previous year.
It appears that most companies are working their employees more hours than they were a year ago, with the number of employees about flat, but payrolls significantly higher.
National
Consumer Confidence
The Conference Board Consumer Confidence Index
Lynn Franco, Director of The Conference Board Consumer Research Center said: faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook. Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers.
According to the report, consumersassessment of current conditions was more downbeat in July. Those saying conditions are
Leading Economic Indicators
The Conference Board Leading Economic Index
The Conference Board Coincident Economic Index (CEI) for the U.S. was unchanged in June, following a 0.5 percent increase in May, and a 0.3 percent increase in April. The Conference Board Lagging Economic Index
Housing
Existing-Home Sales
With the scheduled closing deadline for the home buyer tax credits, existing-home sales slowed in June but remained at relatively elevated levels, according to the National Association of Realtors.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.
Single-family home sales fell 5.6 percent to a seasonally adjusted annual rate of 4.70 million in June from a level of 4.98 million in May, but are 8.5 percent above the 4.33 million pace in June 2009. The median existing single-family home price was $184,200 in June, up 1.3 percent from a year ago.
Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.74 percent in June from 4.89 percent in May; the rate was 5.42 percent in June 2009.
The national median existing-home price for all housing types was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009.
Total housing inventory at the end of June rose 2.5 percent to 3.99 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.3-month supply in May.
Regionally, existing-home sales in the Northeast rose 7.9 percent in June and are 17.1 percent above June 2009. The median price in the Northeast was $244,300, down 1.2 percent from a year ago.
Existing-home sales in the Midwest dropped 7.5 percent in June but are 11.8 percent higher than a year ago. The median price in the Midwest was $155,900, down 0.1 percent from June 2009.
In the South, existing-home sales fell 6.5 percent in June but are 11.0 percent above June 2009. The median price in the South was $163,600, unchanged from a year ago.
Existing-home sales in the West dropped 9.3 percent in June but are 0.9 percent higher than a year ago. The median price in the West was $221,800, up 1.5 percent from June 2009.
New Residential Sales
Sales of new single-family houses in June 2010 were at a seasonally adjusted annual rate of 330,000, according to estimates by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 23.6 percent above the revised May rate of 267,000, but is 16.7 percent below the June 2009 estimate of 396,000.
The year over year decline was in all regions except the Northeast where sales were actually up 17 percent.
The median sales price of new houses sold in June 2010 was $213,400; the average sales price was $242,900. The seasonally adjusted estimate of new houses for sale at the end of June was 210,000. This represents a supply of 7.6 months at the current sales rate.
It should be noted that there are differences in new home sales versus existing-home sales reports. Existing home-sales are based on actual closings while new home sales are based on contracts entered into.
Housing Starts
According to the U.S. Census Bureau, privately-owned housing starts in June were at a seasonally adjusted annual rate of 549,000. This is 5.0 percent below the revised May estimate of 578,000 and is 5.8 percent below the June 2009 rate of 583,000. Single-family housing starts in June were at a rate of 454,000; this is 0.7 percent below the revised May figure of 457,000. Housing starts were down compared to a year ago in all regions except in the Northeast, where they were up 8.5 percent.
Retail Sales
The U.S. Census Bureau announced that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, decreased 0.5 percent from the previous month, but were 4.8 percent above June 2009. Total sales for the April through June 2010 period were up 6.8 percent from the same period a year ago.
Retail trade sales were down 0.6 percent from May 2010, but 5.0 percent above last year. Nonstore retailers sales were up 12.1 percent from June 2009 and gasoline stations sales were up 8.8 percent from last year.
June sales at furniture and home furnishings stores were down 1.1 percent on an adjusted basis from May 2010 but were up 1.7 percent from June 2009. For the first half of the year, sales at these stores were up 2.2 percent.
Consumer Prices
The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in June on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the index increased 1.1 percent before seasonal adjustment.
Similarly to April and May, the report indicated that a decline in the energy index caused the seasonally adjusted all items decrease in June. The index for energy decreased 2.9 percent in June, the same decline as in May, with a decline in the gasoline index accounting for most of the decrease. This more than offset an increase in the index for all items less food and energy, while the food index was unchanged for the second month in a row.
The index for all items less food and energy rose 0.2 percent in June after increasing 0.1 percent in May. A broad array of indexes posted increases, including shelter, apparel, used cars, medical care, tobacco, and recreation. These increases more than offset declines in the indexes for household furnishings and operations and for airline fares. The 12-month change in the index for all items less food and energy remained at 0.9 percent for the third month in a row.
Employment
According to the U.S. Bureau of Labor Statistics, total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 percent. The decline in payroll employment reflected a decrease (-225,000) in the number of temporary employees working on Census 2010. Private-sector payroll employment edged up by 83,000.
The number of unemployed persons was 14.6 million in June. In June, the number of long-term unemployed (those jobless for 27 weeks and over) was unchanged at 6.8 million. These individuals made up 45.5 percent of unemployed persons.
Durable Goods Orders and Factory Shipments
New orders for manufactured durable goods in June decreased 1.0 percent to $190.5 billion, according to the U.S. Census Bureau. This was the second consecutive monthly decrease and followed a 0.8 percent May decrease. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders decreased 0.7 percent.
Transportation equipment, down four of the last five months, had the largest decrease, $1.1 billion or 2.4 percent. This was due to nondefense aircraft and parts, which decreased $1.8 billion.
Shipments of manufactured durable goods in June, down two consecutive months, decreased $0.7 billion or 0.3 percent to $195.0 billion. This followed a 0.7 percent May decrease.
Computers and electronic products, down four of the last five months, had the largest decrease, $1.3 billion or 4.1 percent to $31.3 billion.
According to the Census Bureau, shipments of furniture and related products increased 3.0 percent and were down 0.4 percent year-to-date while orders were up 1.2 percent for the five months.