Economy Watch: Fed’s July Meeting Minutes; Architects are Busier

The Fed released the minutes of its July 29-30 meeting; and the American Institute of Architects reported indices pertaining to demand for design services.

The Federal Open Market Committee released the minutes of its July 29-30 meeting on Wednesday, striking a tone of mild optimism, in as much as the tone of the meeting was actually reflected by the minutes. For one thing, “participants generally agreed that labor market conditions and inflation had moved closer to the Committee’s longer-run objectives in recent months, and most anticipated that progress toward those goals would continue,” according to the minutes.

The question, then, is when will interest rates go up? Or rather, when will the Fed seriously think about raising rates, which have been so low for so long? The minutes offered a hint or two, but no hard-and-fast answer: “Many participants noted that if convergence toward the Committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated,” said the FOMC.

We’ll get around to it, in other words, but we’re still waiting for more information: “However, most participants indicated that any change in their expectations for the appropriate timing of the first increase in the federal funds rate would depend on further information on the trajectories of economic activity, the labor market, and inflation,” the minutes said.

Architects Now Busier

The last three months have shown steadily increasing demand for design services, according to the American Institute of Architects (AIA) on Wednesday. The organization’s Architecture Billings Index is now at its highest level since 2007, with the AIA reporting that the July index came in at 55.8, up noticeably from 53.5 in June.

Also, the AIA’s new projects inquiry index was 66.0 in July, following a very strong mark of 66.4 in June. As a leading economic indicator of construction activity, the AIA’s indexes reflect the roughly nine- to 12-month lead time between architecture billings and construction spending. The July scores reflect an increase in design activity, since any score above 50 indicates an increase in billings.

“Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well-positioned for continued growth in the coming months,” AIA Chief Economist Kermit Baker noted in a statement. “The key to a more widespread boost in design activity continues to be the institutional sector, which is starting to exhibit signs of life after languishing for the better part of the last five-plus years.”

Wall Street seemed to take the news from the Fed well on Wednesday, though tech stocks didn’t move much. The Dow Jones Industrial Average gained 59.54 points, or 0.35 percent, while the S&P 500 was up 0.25 percent. The Nasdaq dropped a scant 0.02 percent.