Check out our Bonneville Research Website!

www.BonnevilleResearch.com

Utah Labor Market Indicators - June 2008 (May/Apr/Mar/Feb/Jan 08)

• Global Business Confidence
• There has been no appreciable change in global business confidence since late May. Sentiment remains weak and is consistent with a global economy that is barely growing. The U.S., Europe and Japan are contracting moderately, but Asia continues to experience growth that is near its potential and South American growth is just below potential. As has been the case since the financial shock first hit one year ago, the most negative responses are to the broad questions concerning present conditions and the outlook. Pricing pressures remain disconcertingly high

• ABC News/Washington Post Consumer Comfort Index
• Consumer confidence was unchanged for the second consecutive week. According to the ABC News/Washington Post consumer comfort index, sentiment stayed at -41 in the week ending July 20. Although stabilizing above its May lows, the index remains at a level indicating an economic downturn. Consumers remained pessimistic, despite a drop in energy prices over the week.

• US Risk of Recession
• The Moody's Economy.com probability of recession inched slightly lower to 40% in June, compared to May's 43%. Incoming data suggest that the downturn is not worsening, but a growth recession is developing. Layoffs are accelerating and consumer confidence is at a multidecade low, which points toward a more gradual recovery. Financial market conditions weakened in the month and housing is still searching for a bottom. Meanwhile, stimulus checks are providing a temporary lift to spending.

• The Conference Board Leading Indicators
• The Conference Board index of leading indicators fell 0.1% in June, following a downwardly revised 0.2% decline in May. If not for a rush to obtain residential building permits in June ahead of a change in building codes in July, the leading index would have fallen further. The index is consistent with mild contraction in the economy.

• California Manufacturing Survey
• The California Manufacturing Survey registered a slight decline in the second quarter, falling to 50.3 from 50.5 in the previous quarter. This indicates that the state's manufacturing has stagnated. Particularly worrisome was the large decline in the employment index, which reflects growing weakness in the state's labor market.

• Durable Goods (Advance)
• ew orders for durable manufactured goods rose 0.8% in June, defying expectations for a decline of similar magnitude. A fall in aircraft orders pulled down the top-line number-excluding transportation, orders were up 2%, including a 1.4% increase in core capital goods. Shipments rose 0.5%. Both unfilled orders and inventories increased over the month by 0.9% and 0.5%, respectively.

• Mass Layoffs
• The number of layoffs involving at least 50 workers from a single establishment in June was 1,643, compared with 1,626 in May. They involved 165,697 workers, compared with 171,387 in May. All numbers are seasonally adjusted. Persistent weakness in the labor market is propping up mass layoffs, but they are significantly lower than levels reached during the 2001 recession.

• Jobless Claims
• Initial claims have now more than reversed the large drop of two weeks ago, increasing 34,000 to 406,000. Claims now are at their highest since the end of March. The labor market remains fragile, as this number indicates that businesses are still finding it necessary to lay off workers at an elevated pace.

• OFHEO Purchase-Only House Price Index
• The OFHEO Purchase-Only House Price Index fell by 0.3% from April to May, confirming that the U.S. housing market has not yet reached bottom but that prices are declining more slowly compared to March and April. The decline in house prices was led by the South Atlantic division. By contrast, the Pacific region overall may have started a recovery with a 0.3% gain. The Middle Atlantic and East North Central divisions recorded very slight price gains, the West North Central division recorded no change, and the other regions recorded lower house prices.

• New-Home Sales (C25)
• Activity in the new-home market is trending downward, with the Census Bureau reporting a -0.6% m/m decrease in new-home sales in June. However, the bureau revised upward the monthly sales figures back to March, and thus June sales were stronger than expected at 530,000 annualized units. The median new-home price declined slightly in June, compared to a year ago. Months of inventory are declining compared to May. Months on the market, however, is rising.

• Existing-Home Sales
• Weakness continues to characterize the housing market. Existing-home sales declined in June by 2.6% m/m, according to the National Association of Realtors. Sales declined to 4.86 million annualized units. Inventories are rising and the months of inventory are about flat at 11. The median existing- home price is declining, with a year-over-year drop of 6.1%, but not as severely as earlier this year.

• MBA Mortgage Applications Survey
• The MBA market composite indices finished lower for the week ending July 18 as contract rates increased sharply. The market index finished down by 6.2% for the week. This result combines a poor showing by both of the component indices. The purchase index fell by 6.7% for the week while the refinance index fell by 5.6%. All in all, the market performed badly this week and will push forward the time when a bottom forms in housing credit demand.

• Chain Store Sales
• Chain store sales increased a slight 0.1% in the week ending July 19 according to the ICSC, the fourth consecutive small gain. Year-over-year growth rose to 2.5%, the strongest growth of the year, though still weak. Warm temperatures, clearance sales, and slightly lower gasoline prices reportedly lifted sales.

• Natural Gas Storage Report
• Working gas in underground storage rose by 84 billion cubic feet during the week ending July 18, in line with expectations. At 2,396 bcf, inventories were 347 bcf lower than a year ago and 22 bcf below the five-year average for this time of year.

• Oil and Gas Inventories
• Crude oil inventories fell by 1.6 million barrels for the week ending July 18, according to the Energy Information Administration, surpassing expectations of a 0.7 million barrel decline. Gasoline inventories rose by 2.9 million barrels, surpassing estimates of a small decline. Distillate supplies rose by a robust 2.4 million barrels, in line with expectations. Refinery operating capacity fell sharply to 87.1% from 89.5%. Total domestic petroleum demand fell. This report is mixed, but should exert upward pressure on prices.

Source: Economy.com 2008