ECONOMIC AND FINANCIAL HIGHLIGHTS

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Eustace Pitts
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1 ECONOMIC AND FINANCIAL HIGHLIGHTS DURABLE GOODS Orders and Shipments for Core Capital Goods 2 REAL ESTATE Pending Home Sales Index 3 S&P Case-Shiller Home Price Index 4 FHFA Home Price Index 5 Sales and Months Supply of New and Existing Homes 6-7 CONSUMER SECTOR Conference Board Consumer Confidence 8 INTEREST RATES Treasury Yields 9 European Bond Spreads 1 JUNE 27, 212

2 DURABLE GOODS New orders for core capital goods increased by 1.6 percent in May, while remaining roughly 1.5 percent above their year-ago level. Shipments of core capital goods edged up.4 percent in May, while remaining 5.7 percent above their year-ago level. New orders for machinery had the largest increase within core capital goods, rising 4.1 percent over April s level. Computers and related products had the secondlargest increase in orders, up 3.3 percent over the month Core Capital Goods *excluding aircraft and parts and defense, year-over-year % change New Orders Shipments New Orders for Core Capital, SA, Monthly % Change Jan Feb Mar Apr May Source: U.S. Census Bureau through May 212 2

3 REAL ESTATE Pending Home Sales Index The National Association of 21 = 1 14 Realtors reported that its pending home sales index rebounded in May up 5.9 percent from the April level and remained ahead of the 12 year-earlier level, up 13.3 percent Through May 212 Source: National Association of Realtors 3

4 REAL ESTATE Annual declines in the S&P/Case-Shiller 2-City Composite home price index continued to abate in April, down 1.9 percent S&P/Case-Shiller Home Price Indexes Year-over-Year percent change City Composite Index Atlanta Miami Tampa Source: Standard & Poor's, Fiserv and MacroMarkets LLC Through April 212 April 212 S&P/Case-Shiller Home Price Indexes SA NSA M/M (sa) M/M (nsa) Y/Y 2-City Composite: % 1.3% -1.9% 1-City Composite: % 1.3% -2.2% Atlanta: % 2.4% -17.% Miami: %.4% 3.2% Tampa: % 1.9%.8% 4

5 REAL ESTATE The Federal Housing Finance Agency reported that its U.S. purchase-only house price index increased.9 percent from March to April and rose 3 percent on a year-over-year basis FHFA Home Price Index Year-over-Year percent change Source: Federal Housing Finance Agency Through April 212 5

6 REAL ESTATE The U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that sales of new single-family homes increased 7.6 percent from April to May and exceeded the year-earlier level by nearly 2 percent. thousands, SAAR 1,6 1,4 1,2 1, 8 Sales and Months' Supply of New Single-Family Homes months, sa New Single-Family Homes Sold Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development Months' Supply Through May 212 6

7 REAL ESTATE The National Association of Realtors reported total existing home sales declined 1.5 percent from April to May but remained nearly 1 percent ahead of the yearearlier level. thousands, SAAR 7, 6, 5, Sales and Months' Supply of Existing Single-Family Homes months, nsa , 5 4 3, Source: National Association of Realtors Existing Single-Family Homes Sold Months' Supply Through May 212 7

8 CONSUMER SECTOR The Conference Board s Consumer Confidence Index declined in the June reading. On a six-month moving average basis, the consumer expectations component and the present economic situation were little changed Consumer Confidence from the Conference Board 1985=1, SA Overall Index: Jun 12=62 Consumer Expectations: Jun 12=72.3 Present Situation: Jun 12=46.6 Source: The Conference Board 6-month moving average 6-month moving average 6-month moving average through June ADDITIONAL DETAIL The consumer expectations index which is based on six-month-ahead projections for business conditions, jobs, and income decreased slightly, from 77.3 in May to 72.3 in June. The index based on questions about current business conditions and current job market conditions increased slightly from 44.9 in May to 46.6 in June. 8

9 INTEREST RATES Longer-dated U.S. Treasury yields declined sharply between the April and June FOMC meetings. The 3-year bond and 1-year note were lower by 41 and 33 basis points (bps), respectively, over that period. Rates are slightly lower over the past week and are currently at 2.69 percent and 1.62 percent. The two-year note has been relatively unchanged at.31 percent U.S. Treasury Yields daily, percent June FOMC.5. Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 1-mo 3-mo 2-yr 5-yr 1-yr 3-yr Source: Bloomberg through June 27, 212 9

10 INTEREST RATES European bond spreads (against German equivalents) continue to be elevated. Particularly worrisome are spreads of Spain and Italy. Spain s spread is now 533 bps, though it has declined nearly 2 bps over the past week. Italy s spread has risen 27 bps on the week, to 453 bps European Bond Spreads Basis points, 1-year bond spread to German bonds Italy Spain France UK Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Source: Bloomberg through June 26, 212 1

ECONOMIC AND FINANCIAL HIGHLIGHTS

ECONOMIC AND FINANCIAL HIGHLIGHTS HOUSING Mortgage Rates 2 Pending Home Sales 3 Home Prices 4 Construction Spending 5 Nonresidential Construction Spending 6 MANUFACTURING Purchasing Managers Index 7 New