The Chicago Fed National Activity Index: May 2015

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that the national economic activity remained weak in May with the index rising slightly to a level of -0.17 from a level of -0.19 in April while the three month moving average also improved slightly to a tepid level of -0.16.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

Existing Home Sales Report: May 2015

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for May showing strong sales with total home sales rising 5.1% since April and climbing 9.2% above the level seen in May 2014.

Single family home sales also increased with sales rising 5.6 from April but and climbing 9.7% above the level seen in May 2014 while the median selling price increased 8.6% above the level seen a year earlier.

Inventory of single family homes increased from April to 2.03 million units rising 1.5% above the level seen in May 2014 which, along with the sales pace, resulted in a monthly supply of 5.2 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.

New Residential Construction Report: May 2015

Today’s New Residential Construction Report showed mixed results with total permit activity increasing 11.8% since April while total starts declined 11.1% over the same period.

Single family housing permits, the most leading of indicators, increased 2.6% from April to 683K single family units (SAAR), and rose 9.1% above the level seen a year earlier but still remained well below levels seen at the peak in September 2005.

Employment Situation: Nonfarm Payrolls and Civilian Unemployment May 2015

Today's Employment Situation Report indicated that in May, net non-farm payrolls increased by a notable 280,000 jobs overall with the private non-farm payrolls sub-component adding 262,000 jobs while the civilian unemployment rate increased slightly to 5.5% over the same period.

Net private sector jobs increased 0.22% since last month climbing 2.53% above the level seen a year ago and climbing 3.52% above the peak level of employment seen in December 2007 prior to the Great Recession.

Employment Situation: Unemployment Duration May 2015

Today's employment situation report showed that conditions for the long term unemployed improved in May while still remaining distressed by historic standards.

Workers unemployed 27 weeks or more declined to 2.502 million or 28.6% of all unemployed workers while the median term of unemployment declined to 11.6 weeks and the average stay on unemployment declined to 30.7 weeks.

Employment Situation: Total Unemployment May 2015

Today's Employment Situation report showed that in May “total unemployment” including all marginally attached workers remained unchanged at 10.8% while the traditionally reported unemployment rate increased slightly to 5.5%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.