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Archive for December, 2016
 
Economic Advisor: December 28, 2016
December 28, 2016


 

Retail sales saw slight gains ahead of the holidays, while housing starts experienced a predictable drop after hitting a nine-year high, and layoffs were down.

Retail Sales

Retail sales for November notched up to $465.5 billion, a slight gain of 0.1 percent over October, and 3.8 percent higher than November 2015, the Census Bureau reported last week. While posting a gain, November’s sales were slightly below market expectations of a 0.3 percent gain for the start of the holiday shopping season.

Key retail growth segments included food services and drinking establishments, which grew 0.8 percent; furniture and home furnishing stores, which gained 0.7 percent; gas stations, which notched up 0.3 percent; and building material and garden equipment and supplies stores, which increased 0.3 percent.

Main economists commented that December could see a larger holiday spike, and particularly among non-store retailers.

“On a year-ago basis, total retail sales were up 3.8 percent in November, indicating that this will be a good year for holiday sales,” PNC Financial Services Group Deputy Chief Economist Gus Faucher wrote in a public statement. “However, gains for traditional retailers will be much weaker due to the increasing reach of online sales.”

Housing Starts

After seeing a nine-year high in October, starts on construction of private housing in November dropped to an annual rate of 1.09 million, which was a whopping 18.7 percent below October’s rate of 1.34 million, which was the highest monthly rate in nine years, according to last week’s report from the Census Bureau.

Compared annually, November’s pace was 6.9 percent below November 2015’s rate of 1.17 million. While the overall monthly figure was a sizable drop, starts on single-family homes fell 4.1 percent from October to a rate of 828,000 in November.

Construction permits for home construction issued in November dropped to an annual rate of 1.2 million, which was 4.7 percent below October’s rate of 1.26 million, and was 6.6 percent below the November 2015’s pace of 1.28 million. Meanwhile, permits issued for single-family homes in November notched up to a rate of 778,000, which was 0.5 percent higher than October’s rate of 774,000.

“The trends in the single-family data still appear to be moving higher over time, which is a favorable signal regarding upcoming single-family construction activity,” JPMorgan Economist Daniel Silver told the Reuters news service.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending December 10 dropped to 254,000, a decline of 4,000 claims from the preceding week’s total of 258,000, the Employment and Training Administration reported last week.

This was slightly below market expectations of 256,000 initial claims, and marked the 93rd straight week that initial claims have fallen below 300,000, a mark that economists consider indicative of a growing job market. This has been the longest such streak since 1970.

The four-week moving average — considered a more accurate gauge of layoffs — totaled 257,750 claims, a gain of 5,250 from the prior week’s average of 252,500.

This week we can expect:

  • Wednesday — Existing home sales for November from the National Association of Realtors.
  • Thursday — Third quarter GDP, third estimate, and personal incomes and spending for November from the Bureau of Economic Analysis; initial jobless claims for last week from the Employment and Training Administration; durable goods orders for November from the Census Bureau; leading economic indicators for November from The Conference Board.
  • Friday — New home sales for November from the Census Bureau; consumer sentiment for December from the University of Michigan Survey of Consumers.

Posted in Economic Advisor



Economic Advisor: December 22, 2016
December 22, 2016


 

Retail sales saw slight gains ahead of the holidays, while housing starts experienced a predictable drop after hitting a nine-year high, and layoffs were down.

Retail Sales

Retail sales for November notched up to $465.5 billion, a slight gain of 0.1 percent over October, and 3.8 percent higher than November 2015, the Census Bureau reported last week. While posting a gain, November’s sales were slightly below market expectations of a 0.3 percent gain for the start of the holiday shopping season.

Key retail growth segments included food services and drinking establishments, which grew 0.8 percent; furniture and home furnishing stores, which gained 0.7 percent; gas stations, which notched up 0.3 percent; and building material and garden equipment and supplies stores, which increased 0.3 percent.

Main economists commented that December could see a larger holiday spike, and particularly among non-store retailers.

“On a year-ago basis, total retail sales were up 3.8 percent in November, indicating that this will be a good year for holiday sales,” PNC Financial Services Group Deputy Chief Economist Gus Faucher wrote in a public statement. “However, gains for traditional retailers will be much weaker due to the increasing reach of online sales.”

Housing Starts

After seeing a nine-year high in October, starts on construction of private housing in November dropped to an annual rate of 1.09 million, which was a whopping 18.7 percent below October’s rate of 1.34 million, which was the highest monthly rate in nine years, according to last week’s report from the Census Bureau.

Compared annually, November’s pace was 6.9 percent below November 2015’s rate of 1.17 million. While the overall monthly figure was a sizable drop, starts on single-family homes fell 4.1 percent from October to a rate of 828,000 in November.

Construction permits for home construction issued in November dropped to an annual rate of 1.2 million, which was 4.7 percent below October’s rate of 1.26 million, and was 6.6 percent below the November 2015’s pace of 1.28 million. Meanwhile, permits issued for single-family homes in November notched up to a rate of 778,000, which was 0.5 percent higher than October’s rate of 774,000.

“The trends in the single-family data still appear to be moving higher over time, which is a favorable signal regarding upcoming single-family construction activity,” JPMorgan Economist Daniel Silver told the Reuters news service.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending December 10 dropped to 254,000, a decline of 4,000 claims from the preceding week’s total of 258,000, the Employment and Training Administration reported last week.

This was slightly below market expectations of 256,000 initial claims, and marked the 93rd straight week that initial claims have fallen below 300,000, a mark that economists consider indicative of a growing job market. This has been the longest such streak since 1970.

The four-week moving average — considered a more accurate gauge of layoffs — totaled 257,750 claims, a gain of 5,250 from the prior week’s average of 252,500.

This week we can expect:

  • Wednesday — Existing home sales for November from the National Association of Realtors.
  • Thursday — Third quarter GDP, third estimate, and personal incomes and spending for November from the Bureau of Economic Analysis; initial jobless claims for last week from the Employment and Training Administration; durable goods orders for November from the Census Bureau; leading economic indicators for November from The Conference Board.
  • Friday — New home sales for November from the Census Bureau; consumer sentiment for December from the University of Michigan Survey of Consumers.

Posted in Economic Advisor



Economic Advisor: December 14, 2016
December 14, 2016


 

Consumer borrowing grew as reports indicated interest rates would increase. Meanwhile, layoffs shrank and wholesalers appeared to be preparing for increased orders.

Consumer Credit

Total consumer credit for October increased 5.2 percent from the previous month to hit $3.72 trillion, the Federal Reserve reported last week. The $16 billion gain over September was smaller than the $18.7 billion gain that the market had expected.

Revolving debt, such as credit cards, increased 2.9 percent to hit $981.3 billion in October. Non-revolving debt, such as student and car loans, increased 6 percent during the month, to reach $2.74 trillion for the month.

The news comes as the Federal Reserve was reported by many news outlets to be preparing to raise interest rates. The Federal Reserve’s monetary policy meeting runs through Wednesday, and is expected to yield a 0.25 percent gain.

Initial Jobless Claims

First time claims for unemployment benefits filed by the newly laid off during the week ending December 3 fell to 258,000, a sizable drop of 10,000 claims from the prior week’s total of 268,000, the Employment and Training Administration reported last week.

The four-week moving average — considered a more stable measure of layoffs — notched up to 252,500, a gain of 1,000 claims from the previous week’s average of 251,500.

This marked the 92nd straight week of initial jobless claims staying below 300,000, a threshold that economists consider indicative of a growing job market. This is the longest such streak since 1970.

Wholesale Sales and Inventories

Wholesalers’ inventories ticked down to $587.7 billion in October, which was 0.4 percent below September’s level, according to last week’s report from the Census Bureau. Compared to last year, total inventories for October were down 0.4 percent from October 2015.

Wholesale inventories are important because they indicate demand for goods from the retail market. Given that October’s decline in inventory was paired with a 1.4 percent increase in sales, with total sales hitting $452.2 billion for the month, most wholesale market watchers took this as a indicator that wholesalers were freeing up warehouse space for more orders.

Key sales categories included durable goods, which were up 1.1 percent in October; electrical and electronics, which grew 2.2 percent; sales of metals and minerals, except petroleum, which gained 2 percent; nondurable goods, which rose 1.6 percent; farm product raw materials, which shot up 8.3 percent; and petroleum and petroleum products, which gained 6.6 percent.

This week we can expect:

  • Monday — November budget from the Treasury Department.
  • Tuesday — Import and export prices for November from the Census Bureau.
  • Wednesday — Retail sales and business inventories for November from the Census Bureau; producer price index for November from the Bureau of Labor Statistics; industrial production and capacity utilization for November from the Federal Reserve.
  • Thursday —Consumer price index for November from the Bureau of Labor Statistics; initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Housing starts and building permits for November from the Census Bureau.

Posted in Economic Advisor



Economic Advisor: December 8, 2016
December 8, 2016


 

Unemployment enjoyed an unexpected drop, while layoffs increased, but remained in safe territory. Meanwhile, construction spending grew, particularly in the residential category.

Unemployment

The U.S economy added 178,000 jobs in November, pushing the unemployment rate down to 4.6 percent, according to last week’s report from the Bureau of Labor Statistics. This marked a 0.3 percent drop from the 4.9 percent unemployment rate of October, which the market had expected to continue into last month. The number of unemployed Americans declined from 387,000 to 7.4 million.

The number of people unemployed for 27 weeks or longer — the so-called long-term unemployed — saw barely any change, totaling 1.9 million, which accounted for 24.8 percent of the unemployed population. Over the past 12 months, long-term unemployment has ticked down by 198,000 people. November’s civilian labor force participation rate — the percentage of employable Americans either employed or looking for a job — saw little change at 62.7 percent.

The number of people involuntarily employed on a part-time basis in November for reasons such as that was the only work they could find or their hours had been cut totaled 5.7 million, which was similar to October. That said, the population of involuntary part-time workers was down by 416,000 for the year.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the recently laid off during the week ending November 26 jumped to 268,000, a gain of 17,000 claims from the previous week’s total of 251,000, the Employment and Training Administration reported.

The four-week moving average — considered a more stable measure of layoffs — ticked up to 251,500, a slight increase of 500 from the previous week’s average of 251,000.

This marked the 91st consecutive week of initial jobless claims below 300,000, a level that economists consider an indicator of a growing job market. That’s the longest streak since 1970.

Construction Spending

Construction spending for October notched up to an annual rate of $1.17 trillion, which was 0.5 percent over September’s pace of $1.16 trillion, the Census Bureau reported last week. Compared to last year, October’s total was 3.4 percent higher than October 2015’s rate of $1.13 trillion.

Spending on private construction for October dipped to an annual rate of $885.9 billion, which was 0.2 percent below September’s revised rate of $887.4 billion. However, spending on residential construction grew to an annual rate of $466.2 billion in October, which was 1.6 percent over September’s pace of $458.8 billion.

This week we can expect:

  • Tuesday — Third quarter productivity from the Bureau of Labor Statistics; October trade balance and October factory orders from the Census Bureau.
  • Wednesday — Consumer credit for October from the Federal Reserve.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Wholesale inventories for October from the Census Bureau.

Posted in Economic Advisor



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