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Archive for January, 2012
Economic Roundup: January 30, 2012
January 30, 2012
Ben Bernanke, chairman of the Federal Reserve, indicated last week that he expected to keep interest rates near zero through 2014, much longer than analysts had been anticipating. It’s hoped that the reduced rates will continue to nudge economic growth along and help ease the strains brought on by high unemployment and the depressed housing market. Bernanke did not rule out taking more decisive action to address unemployment but offered no plans at this time.
New real estate saw some downward activity in December, with sales of new single-family houses at an annual rate of 307,000 for the month, the Census Bureau reported last week. December’s performance was 2.2 percent below November’s revised rate of 314,000 and was 7.3 percent below December 2010′s estimate of 331,000.
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The drop in new sales performance could be attributed to continuing competition from existing home sales, which saw positive activity in December.
The median sales price of new homes sold in December was $210,300 and the average sales price was $266,000. The estimate of new homes for sale at the end of December was 157,000, representing a 6.1-month supply at the current sales rate. Looking at 2011 in total, an estimated 302,000 new homes were sold during the year, marking a 6.2 percent decline from 2010′s figure of 323,000.
The Leading Economic Index (LEI) for December increased 0.4 percent to 94.3 (a baseline of 100 was set in 2004), according to the Conference Board, which tabulates the index. The LEI is a composite of various pieces of economic data, such as unemployment, stock prices, real estate figures and manufacturing activity. December’s LEI followed a 0.2 percent increase in November and a 0.6 percent increase in October.
“The gain was widespread among the leading indicators, suggesting economic conditions should improve in early 2012,” said Ataman Ozyildirim, economist at the Conference Board. “However, the LEI gain in December was held back by negative contributions from the new Leading Credit Index — which indicates weak credit and financial conditions — and from consumer expectations for business and economic conditions.”
Turning to manufacturing, new orders for manufactured durable goods placed in December increased $6.2 billion to $214.5 billion, a 3 percent gain over November, the Census Bureau reported last week. Transportation was the big gainer, enjoying a $3 billion, or 5.5 percent, bump to $58.4 billion. Excluding transportation, new orders only increased 2.1 percent.
Shipments of manufactured durable goods in December increased $4.3 billion, or 2.1 percent, to $207.3 billion. Inventories of manufactured durable goods in December increased $1.2 billion, or 0.3 percent, to $370.1 billion, the highest level since the series was first published.
First-time claims for jobless benefits gained 21,000 during the week ending January 21, pushing the total to 377,000, in comparison from the previous week’s revised figure of 356,000, the Employment and Training Administration reported last week. The four-week moving average was 377,500, a decrease of 2,500 from the previous week’s revised average of 380,000.
The total number of unemployed workers covered by insurance for the week ending January 14 rose to 3,554,000, an increase of 88,000 from the preceding week’s revised level of 3,466,000, the Administration also reported. The four-week moving average was 3,569,000, a decrease of 15,750 from the preceding week’s revised average of 3,584,750.
This week sees a busy slate of economic announcements, starting today with December personal income and spending data from the Bureau of Economic Analysis. Tomorrow the Conference Board releases this month’s Consumer Confidence Scores. Wednesday sees the Census Bureau release December’s construction spending figures, as well as January car and truck sales from the auto manufacturers.
Moving toward the second half of the week, on Thursday, the Employment and Training Administration releases last week’s initial jobless claims, and the Bureau of Economic Analysis releases productivity scores for the fourth quarter of last year. This week’s news wraps up on Friday with payroll, earnings, average workweek and overall unemployment rate for January from the Bureau of Labor Statistics.
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Economic Roundup: January 23, 2012
January 23, 2012
Employment news was a headline maker last week with first-time claims for jobless benefits at their lowest level since April 2008, according to data from the Employment and Training Administration. Initial claims for the week ending January 14 dropped to 352,000, a whopping 50,000 claims down from the previous week’s revised figure of 402,000. The four-week moving average was 379,000, a decrease of 3,500 from the previous week’s revised average of 382,500.
The administration also reported that the total number of insured unemployed workers during the week ending January 7 was 3,432,000, a decrease of 215,000 from the preceding week’s revised level of 3,647,000. The four-week moving average was 3,576,250, a decrease of 34,000 from the preceding week’s revised average of 3,610,250. All in all, while jobless claims tend to vary from week to week, they have been on a steady downward trend.
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In real estate news, existing home sales were on their third month of an upswing, reaching a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November. Existing-home sales are 3.6 percent higher than December 2010′s 4.45 million-unit level. Overall in 2011, existing-home sales rose 1.7 percent to 4.26 million, topping sales of 4.19 million in 2010.
Building permits issued during December for private housing dropped to an annual rate of 679,000, marking a 0.1 percent drop from November’s revised rate of 680,000, the Census Bureau reported last week. That said, December’s performance was 7.8 percent above December 2010′s estimated rate of 630,000. Permits for construction of single-family homes in December were at a rate of 444,000, which was 1.8 percent above November’s revised rate of 436,000.
Construction starts on private housing in December dropped to an annual rate of 657,000, which was 4.1 percent below November’s revised estimate of 685,000, but was 24.9 percent over December 2010′s rate of 526,000. Starts on single-family housing in December were at a rate of 470,000, which was 4.4 percent over November’s revised rate of 450,000.
Completed private housing construction in December hit an annual rate of 605,000, which was 9.2 percent over November’s revised estimate of 554,000 and 7.1 percent above December 2010′s rate of 565,000. Completions of single-family homes in December were at a rate of 448,000, which was 0.9 percent below November’s revised rate of 452,000. Overall, an estimated 583,900 housing units were completed in 2011. This was 10.4 percent below the 2010 figure of 651,700.
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in December, the Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3 percent before seasonal adjustment.
Similar to November’s CPI-U, the energy index declined in December and offset increases in other indexes. The gasoline index declined for the third month in a row and the household energy index declined as well. The food index rose in December, with the index for food at home moving up after declining last month.
The Bureau’s Producer Price Index for finished goods declined 0.1 percent in December. Prices for finished goods moved up 0.3 percent in November and fell 0.3 percent in October. At the earlier stages of processing, the index for intermediate goods decreased 0.5 percent in December, and crude goods prices moved down 1.1 percent.
The Federal Reserve reported last week that industrial production for December increased 0.4 percent after having fallen 0.3 percent in November. For the fourth quarter as a whole, industrial production rose at an annual rate of 3.1 percent, its 10th consecutive quarterly gain.
This week will see a relatively light financial calendar, starting late on Thursday with initial jobless claims for last week from the Employment and Training Administration. Also on Thursday, the Census Bureau will release durable goods orders for December, as well as new home sales for the month. Thursday finishes up with December’s leading economic indicators from The Conference Board.
The week closes out with the fourth quarter’s gross domestic product from the Bureau of Economic Analysis and the University of Michigan’s consumer sentiment findings for January.
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Economic Roundup: January 16, 2012
January 16, 2012
Consumer credit saw its largest growth since 2001 last November with a whopping 9.9 percent gain, according to the latest credit data released last week by the Federal Reserve. Overall credit gained $20.4 billion, with November’s overall debt surging to $2.47 trillion.
Revolving debt, such as credit cards, gained 8.5 percent to hit $798.3 billion, and non-revolving debt, such as student loans, increased 10.7 percent to hit $1.67 trillion, the Federal Reserve reported. The large jump in revolving debt could be the result of both holiday spending, and the fact that some banks were discussing — and a select few were implementing — new debit-card fees at that time, according to experts.
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While consumer credit was spiking, retail sales posted only slight gains in December. Following November’s 0.4 percent gain, U.S. retail and food services sales for December climbed 0.1 percent to $400.6 billion, the Census Bureau reported last week. That said, December’s performance was up 6.5 percent over December 2010. Total sales for the 12 months of 2011 were up 7.7 percent from 2010. Total sales for the October through December 2011 period were up 7.0 percent from the same period a year ago.
Last week’s poor retail sales news was paired with a disappointing unemployment update, as initial jobless benefit claims for the week ending January 7 increased 24,000 to 399,000 from the previous week’s revised figure of 375,000, according to last week’s data from the Employment and Training Administration. The four-week moving average was 381,750, an increase of 7,750 from the previous week’s revised average of 374,000.
The total number of insured unemployed workers during the week ending December 31 increased 19,000 to 3,628,000 from the preceding week’s revised level of 3,609,000, the Administration also reported. The four-week moving average was 3,605,000, unchanged from the preceding week’s revised average.
In international trade, total November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, the Census Bureau and the Bureau of Economic Analysis reported last week. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.
This week’s slate of economic headlines kicks off in earnest Wednesday with producer prices for December from the Bureau of Labor Statistics, and industrial production and capacity utilization figures for December from the Federal Reserve.
Thursday, the Bureau of Labor Statistics follows with December consumer prices, and the Employment and Training Administration releases last week’s initial jobless claims figures. The Census Bureau will also release December housing construction permits and starts data. The week’s news wraps up on Friday with existing home sales for December from the National Association of REALTORS®.
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Economic Roundup: January 9, 2012
January 9, 2012
Unemployment numbers hit their lowest level since February 2009, coming in at 8.5% in December, according to the U.S. Labor Department. The Department also reported that nonfarm payrolls rose by 200,000 jobs in December, thanks to private companies.
November’s gains were revised down slightly but October’s were revised up. December was the 15th consecutive month in which the economy has added jobs. Labor Department data show the biggest gains in transportation and warehousing, retail, manufacturing, health care and food services, most of which may be related to the holiday season.
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Construction for November saw good news last week, increasing by 1.2 percent to hit an $807.1 billion annual rate, the Census Bureau reported. The November figure was 0.5 percent above the November 2010 estimate of $803.0 billion, and the monthly percentage growth beat analysts’ expectations by a whole percent.
Spending on private construction hit an annual rate of $522.3 billion in November, 1 percent above October’s revised rate of $517.3 billion. Residential construction increased to annual rate of $243.7 billion in November, a 2 percent gain over October’s revised rate of $238.9 billion.
Car and truck sales saw big movement in December, with U.S. auto makers selling 1.2 million cars and light trucks during the month, analysts at Autodata Corp. reported last week. This marked an 8.7 percent gain from December 2010, and in total, 2011′s tally of car and truck sales hit 12.8 million, a 10.3 percent gain over 2010. December also was the fourth consecutive month in which the sales pace rang in at more than 13 million units.
In manufacturing, new orders for manufactured goods in November increased by 1.8 percent to $8.2 billion following two consecutive monthly decreases, the Census Bureau reported last week. Transportation was a key growth sector, but without it new orders still increased 0.3 percent.
Shipments for manufacturers continued a six-month gain, increasing $0.1 billion to $455.0 billion. Unfilled orders, up 19 of the last 20 months, increased $11.1 billion or 1.3 percent to $898.3 billion. This put the unfilled orders-to-shipments ratio at 6.16, up from 6.07 in October.
Inventories, up 25 of the last 26 months, increased again in November by $2.8 billion, or 0.5 percent, to $609.8 billion — the highest level since the series was published in 1992. The historic gain put the inventories-to-shipments ratio at 1.34, up from 1.33 in October.
This week’s slate of financial news releases starts today with consumer credit data for November from the Federal Reserve. The Census Bureau follows tomorrow with the November wholesale inventories.
On Thursday, the Employment and Training Administration releases initial jobless claims for last week. Also on Thursday, the Census Bureau will release December retail sales data and business inventories.
The Bureau will follow that on Friday with November’s trade balance data and December’s export and import prices. The Treasury Department will finish up the week with the release of its December budget.
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