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Heavy Equipment Financing
QUESTION:Where does the Fed post the minutes? I was expecting the minutes to be
posted here - http://www.federalreserve.gov/fomc/#calendars
But even this morning there is still no hyperlink in the calender for the
minutes. Is there another place at the Fed site where the minutes are
posted in a more timely fashion?
ANSWER: In the agenda for this meeting, it was reported that advices of the
election of Eric S. Rosengren as a member of the Federal Open Market
Committee had been received and that he had executed his oath of office.
By unanimous vote, the Federal Open Market Committee selected Brian F.
Madigan to serve as Secretary and Economist until the selection of a
successor at the first regularly scheduled meeting of the Committee in
2008.
The Manager of the System Open Market Account reported on recent
developments in foreign exchange markets. There were no open market
operations in foreign currencies for the System's account in the period
since the previous meeting. The Manager also reported on developments in
domestic financial markets and on System open market operations in
government securities and federal agency obligations during the period
since the previous meeting. By unanimous vote, the Committee ratified
these transactions.
The information reviewed at the August meeting suggested that economic
activity picked up in the second quarter from the slow pace in the first
quarter. On average, the economy expanded at a moderate pace during the
first half of the year despite the ongoing drag from the housing sector.
While the growth of consumer spending slowed in the second quarter from
its rapid pace in prior quarters, wages and salaries increased solidly
and household sentiment appeared supportive of further gains in spending.
Business fixed investment picked up in the second quarter after little
net change in the preceding two quarters. Inventories generally appeared
to be well aligned with sales at midyear. Overall inflation receded in
June because of a decline in energy prices, while the core personal
consumption expenditure (PCE) price index rose a bit less than its
average pace over the past year.
Private nonfarm payroll employment continued to increase at a healthy
pace; the rise in July was about equal to the average increase over the
first half of the year. Solid hiring in the service sector was partly
offset by declines in construction and manufacturing employment. Most of
the drop in construction employment occurred in jobs typically associated
with nonresidential construction. Both the average workweek and aggregate
hours ticked down in July. The unemployment rate edged up to 4.6 percent;
it had remained between 4.4 percent and 4.6 percent since September 2006.
Industrial production picked up in the second quarter after little net
change over the preceding two quarters. The increase was largely
attributable to a smaller drag from inventory liquidation and a modest
improvement in net exports. Manufacturing production rose solidly in the
second quarter because of substantial increases in the output of light
motor vehicles, other durable consumer goods, business equipment,
construction supplies, and materials. Production in high-tech industries
rose relatively modestly in comparison to its longer-run growth.
The growth of real consumer spending slowed considerably in the second
quarter after substantial increases earlier in the year. The deceleration
primarily reflected sharply slower growth in outlays for goods as
purchases of motor vehicles decreased noticeably. Although a spike in
energy prices eroded real income growth in the second quarter, there were
solid gains in wages and salaries. Despite continued softness in house
prices, household wealth moved markedly higher in the second quarter,
mostly reflecting rising equity prices.
Demand for housing in the second quarter was restrained by higher
interest rates and by tightening credit conditions in the subprime
mortgage market. Sales of new and existing homes in the second quarter
were down substantially from their average levels in the second half of
2006. In June, single-family housing starts held steady at their May
rate, although adjusted permit issuance slipped further. The combination
of decreased sales and unchanged production left inventories of new homes
for sale still elevated. House-price appreciation continued to slow, with
some measures again showing declines in home values.
Outlays for nonresidential construction rose rapidly in the second
quarter. Business spending on equipment and software, other than
transportation equipment, posted a solid increase after being flat, on
net, in the preceding two quarters. The rise was led by a rebound in
purchases of industrial machinery. Expenditures for computers, software,
and communications equipment grew moderately in the second quarter after
a brisk first-quarter increase. Spending on transportation equipment
again declined sharply. The drop was largely a continuation of the
payback from exceptionally strong purchases of heavy trucks in 2005 and
2006 in anticipation of tighter emissions standards on diesel engines.
New orders for medium and heavy trucks edged up in the second quarter,
though they remained at low levels, suggesting that the downturn in
business spending on motor vehicles may be ending.
Real nonfarm inventory investment was a roughly neutral influence on real
GDP growth in the second quarter after having held down the growth rate
by an average of 1 percentage point in the previous two quarters.
Businesses made considerable progress in reducing the apparent inventory
overhangs that had emerged at the end of 2006. In the motor vehicle
sector, low rates of assemblies in the first half of this year left
inventories of domestic light vehicles at the end of the second quarter
fairly well aligned with sales; however, inventories rose again in July
as production accelerated and sales remained weak. More broadly, the
number of purchasing managers who viewed their customers' inventory
levels as too high in July only slightly exceeded the number who saw them
as too low.
The U.S. international trade deficit widened in May, as a rise in imports
more than offset an increase in exports. Within imports, most categories
of goods recorded an increase, as did services. The value of oil imports
rose sharply, boosted by a jump in the price of imported oil. The
increase in exports was largely attributable to capital goods, including
aircraft, computers and semiconductors, and industrial supplies.
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