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The third quarter is closing with more of a fizzlethan a bang. Economic data look solid in some areasand soft in others.

Income and spending data for July and Augustimply downside risk for our forecast of 2.1 percent realGDP growth for the soon-to-be completed third quar-ter. Total personal income increased by 0.4 percent inAugust, the strongest gain since February. Real disposa-ble income was up 0.3 percent. Real consumer spendingincreased by 0.2 percent. Real consumer spendinggrowth for Q3 looks to be weak-to-moderate, in the vi-cinity of 1.5 percent on an annualized basis. Despitestrong car sales, real consumer spending for Q3 will beheld down by weak growth in spending on services,some of which was weather-related in July.

The third estimate of real GDP growth for the sec-

ond quarter was unchanged at a 2.5 percent annualizedrate. The U.S. economy had more momentum in Q2 thanoriginally expected, helping to buffer the drag from fiscaltightening and weak global demand.

New orders for durable goods increased slightly,by 0.1 percent in August. This followed a big 8.1 percentdecline in July. July orders were soured by weakness incomputers and communications equipment, and by adowndraft in commercial aircraft orders. The stability visi-ble in August is welcomed news, but it is less than a

normal bounce-back from a weak July. On a year-abasis, new orders for August were up 9.9 percent, so this looking reasonably strong. However, just looking at t

raw data we do see some flattening out of new orders 2012 and 2013. Sometimes that flattening out is a precusor to a pullback. Other times it can give way to a racceleration. Improving prospects for rest-of-world dmand next year, less drag from fiscal tightening, andmore solid household sector all augurs for a reacceleratioof capital spending. However, a dysfunctional federbudget process may keep consumer and business condence in check.

New home sales rebounded by 7.9 percent in Agust, after falling by 14.1 percent in July. The July dip mturn out to be an outlier but it also serves as a warninthat new home sales are more vulnerable to the hea

winds from rising mortgage rates than existing homsales. The months supply of new homes tightened up August to 5.0 months worth at the current sales pace.

Initial claims for unemployment insurance dcreased by 5,000 to hit 305,000 for the week ending Setember 21. Technical issues in processing claims in Califonia, which have contributed to lower claims in receweeks, have been resolved according to the Departmeof Labor. Claims in the neighborhood of 300,000 are cosistent with steadily improving labor market conditions.

SURVEY Last Actual COMERICA ECONOMICS COMMENTARY

Fed Funds Rate (Effective)

(after the FOMC meeting of 10/29-10/30)

0.08%

(Aug)

The fed funds rate will remain parked near zethrough 2014, unless FOMC policy changes. Confliing communications by committee members hafailed to firm up taper timing. There are two FOMmeetings left this year, Oct.29-30 and Dec. 17-18.late October taper looks more likely than DecembeHowever, nothing is certain at this point.

September Auto Sales (10/1, Tuesday)

Consensus: 16.0 mln

16.1 mln

(Aug)

Down to a 15.9 million unit rate. A little give back a

ter strong August sales reflecting confidence draini

budget battles in Washington.

September ISM MF Index (10/1, Tuesday)

Consensus: 55.2

55.7

(Aug)

Down to 55.0. Still comfortably above the break-ev50 mark.

August Construction Spending (10/1, Tuesday)

Consensus: 0.4 percent

0.6%

(Jul)

Up by 0.3 percent. Residential is in a holding patter

Stimulus-funded government projects are windi

down. Private commercial is stirring but still sleepy.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/economics.

Follow us on Twitter:@Comerica_Econ.The articles and opinions in t his publication are for general information only, are subject to change, and are not intended t o provide specific investment, legal, tax or other advice or recommendations. The information con

herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transbased on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neithauthors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sour

factual information.

September 27, 2013

7/27/2019 Cm a Econ Weekly 092713

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SURVEY Last Actual COMERICA ECONOMICS COMMENTARY

September ISM Non-MF Index (10/3, Thursday)

Consensus: 57.0

58.6

(Aug)

Down to 56.5. Retail spending may be dampen

by the political debate.

September Nonfarm Payrolls (10/4, Friday)

Consensus: +178 k

+169 k

(Aug)

Up by 175,000. Unemployment insurance claim

look good at 305,000. There could be an upside su

prise.

September Manufacturing Payrolls (10/4, Friday)

Consensus: +5 k

+14 k

(Aug)

Up by 8,000. Auto makers are increasing produ

tion. We see more evidence of good fundament

for U.S. manufacturing.

September Unemployment Rate (10/4, Friday)

Consensus: 7.3 percent

7.3%

(Aug)

Unchanged at 7.3 percent. Even with decent j

growth we could see a bounce back in the lab

force that freezes the unemployment rate.

Subscribe to Comerica Economics publications at http://www.comerica.com/econsubscribe. Archives available at http://www.comerica.com/economics.The articles and opinions in t his publication are for general information only, are subject to change, and are not intended t o provide specific investment, legal, tax or other advice or recommendations. The information conherein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any trans

based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neithauthors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sourfactual information.

Chart of the Week

(600)

(400)

(200)

0

200

400600

J '13 F M A M J J A

Civilian labor force: Total, (Ths. SA) for United States

A Labor Force Bounce in September Would Mean No

Improvement in the Unemployment Rate

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MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

23 24

CASE-SHILLER HPI COMP-20

(SA)

Richmond Fed Survey

Consumer Confidence

25

NEW HOME SALES

(ths-SAAR)

ADV DURABLE GOODS

Total Ex-Transp

26

UNEMPLOYMENT CLAIMS

(ths)

GROSS DOMESTIC PRODUCT

Real GDP Price Index

Pending Home Sales

INCOME and SPENDING

Income Spending

U of M Consumer

Sentiment (Final)

30

Chicago PMI

Texas Mfg Index

October 1

AUTO SALES

(mln-SAAR)

CONSTRUCTION SPENDING

ISM MFG INDEX

2 3

ISM NON-MFG INDEX EMPLOYMENT REPORT

U. Rate Jobs (ths)

7

Consumer Debt

8

TRADE BALANCE

(bln)

NFIB

JOLTS

9

FOMC Minutes

10

PRODUCER PRICE INDE

Total Core

RETAIL SALES

Total Ex-Autos

Inventories

U of M Consumer

Sentiment (Prelim)

14 15

Empire State Survey

16

CONSUMER PRICE INDEX

Total Core

Beige Book

17

HOUSING

(ths.)

Starts Permits

IND PROD CAP UTIL

Philly Fed Survey

LEADING INDICATORS

September/ October 2013

Jun

Jul

Aug

15.9

15.8

16.1

May

Jun

Jul

2.0%

0.0%

0.6%

Jun

Jul

Aug

50.9

55.4

55.7

Jun

Jul

Aug

52.2

56.0

58.6

Jun

Jul

Aug

7.6%

7.4%

7.3%

+172

+104

+169

May

Jun

Jul

-$43.7

-$34.5

-$39.1

Jun

Jul

Aug

0.8%

0.0%

0.3%

0.2%

0.1%

0.0%

Jun

Jul

Aug

0.6%

0.4%

0.2%

0.1%

0.6%

0.1%

Jun

Jul

Aug

0.1%

0.0%

0.4%

77.8%

77.6%

77.8%

Jun

Jul

Aug

0.5%

0.2%

0.1%

0.2%

0.2%

0.1%

Jun

Jul

Aug

835

883

891

918

954

918

Jun

Jul

Aug

0.0%

0.5%

0.7%

Apr

Jun

Jul

156.8

158.2

159.2

Jun

Jul

Aug

454

390

421

Jun

Jul

Aug

3.9%

-8.1%

0.1%

0.1%

-0.5%

-0.1%

Jun

346

336

355

348

344

Jul

358

336

345

328

Aug

335

322

337

333

323

Sep

294

310

305

12Q4

13Q1

13Q2

0.1%

1.1%

2.5%

1.4%

1.7%

0.6%

Jun

Jul

Aug

0.3%

0.2%

0.4%

0.6%

0.2%

0.3%