In August, US housing starts rose by 1.5% M/M to a total number of 598 000, exactly matching expectations. The increase was entirely based in the multi-family subindex (25.3% M/M), while the single family component dropped somewhat (-3.0% M/M). Building permits rose by 2.7% M/M in August to a total number of 579 000, slightly below the consensus estimate. Also here, the improvement was based in the multi-family component (15.8% M/M), while single families dropped marginally (- 0.2% M/M). Both housing under construction and housing completed dropped in August. The data provide further evidence that the US housing market is doing better, but the improvement is more remarkable in the market of new and existing homes.
In the week ended September 5, initial claims dropped by 12 000 from an upwardly revised 557 000 to 545 000, while the consensus was looking for a slight increase. The unexpected decline is an encouraging sign that the pace of deterioration in the labour market is slowing further, but the data might have been distorted by the Labour Day Holiday. Continuing claims, which are reported with an extra week lag, rose by 129 000 from an upwardly revised 6 101 000 to 6 230 000, significantly above market expectations.
In September, the Philadelphia Fed General business activity index surprised on the upside of expectations rising from 4.2 to 14.1, while an outcome of 8.0 was forecasted. The breakdown shows a more mixed and disappointing picture though with increases in shipments (8.2 from 0.6), average workweek (-3.9 from -6.3) and unfilled orders (-7.4 from -9.3), while new orders (3.3 from 4.2), delivery time (-8.9 from -7.0), inventories (-18.1 from 0.3) and number of employees (-14.3 from -12.9) deteriorated. Also the future conditions index retreated. Price indictors showed a mixed picture as prices paid extended their uptrend (14.9 from 10.0), while prices received (-10.6 from -1.5) fell further into negative territory. While we wouldn’t draw too many conclusions yet from the Philly survey, we will carefully scrutinize other surveys and the next Philly Fed for signs the sector might eventually face renewed problems.
EMU: trade surplus at highest level in at least 5years
In July, the euro zone seasonally adjusted trade surplus expanded from an upwardly revised €2.3B to €6.8B, while only a marginal expansion was expected. Looking at the details, exports rose by 4.1% M/M in July, while imports fell by 0.3% M/M. The euro zone trade surplus is now at its highest level since May 2004, making it increasingly likely that the euro area’s economy is growing in the third quarter, helped by net exports.
Other: UK retail sales unchanged in August
In August, UK retail sales stayed flat, while a marginal increase was forecasted. The previous figure was downwardly revised from 0.4% M/M to 0.2% M/M. Looking at the details, food stores rose by 0.7% M/M, while non-food stores dropped by 0.6% M/M. Weakness was especially based in textile, clothing and footwear, which might indicate that consumers are cutting back spending as unemployment rises.
In September, the CBI industrial trends survey showed a slight increase in total orders (-48. from -54) and also export orders (-46 from -48) and volume of output (-2 from -5) improved somewhat in September. Over the next quarter, only a small change in prices is expected with average prices at -4 (from -10). This is the 15th consecutive month that a negative total orders balance has been recorded and also expectations remain in negative territory.
