The Economy at a Glance

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» Employment
Total U.S. nonfarm employment grew in March for the 42nd consecutive month as 192,000 jobs were created, similar to the 197,000 jobs that were created the previous month, and hovering just above the 182,000 average of the past 42 months. Additionally, job totals were revised upward for the previous two months by a combined 37,000. In March, the private sector expanded for the 49th consecutive month, adding 192,000 jobs, while the government sector was flat. The unemployment rate, which has fallen in six of the last nine months, was unchanged in March at 6.7 percent, only 0.1 percentage points above January’s 63-month low and 0.8 percentage points below its 7.5 percent rate of a year ago. Due to the 503,000 jobseekers that entered the labor force in March, the labor force participation rate edged up 0.2 percentage points to 63.2 percent, although it remained just 0.4 percentage points above a 36-year low. The number of planned job cuts plummeted in March by nearly 18 percent and has fallen in four of the last five months and declined more than 30 percent from a year ago. Notably, the first quarter of 2014 marked the fewest first-quarter job cuts in 19 years (since 1995).
Total nonfarm payroll employment expanded for the 42nd consecutive month, increasing by 192,000 in March, but decelerating slightly from the 197,000 jobs that were created the previous month. However, the job figures for January were revised upward from 129,000 to 144,000, while those from February were revised upward from 175,000 to 197,000. Job growth during the 42-month expansionary streak has averaged approximately 182,000 jobs per month. Economists believe that approximately 125,000 jobs must be created per month just to keep up with new workers entering the workforce. Led by job gains in professional and business services (+57,000), food services and drinking places (+30,000), health care (+19,000), and construction (+19,000), private-sector payroll employment increased for the 49th straight month, rising by 192,000 in March after gaining 188,000 the previous month. Approximately 8.9 million jobs have been created in the private sector over the last 49 months. Meanwhile, government employment has declined in 31 of the last 46 months, although was flat in March after adding 9,000 jobs the previous month. Over this 46-month period, government employment has fallen by about 1.1 million. The economy (both the private and government sectors) has recovered about 8.3 million of the 8.7 million total jobs lost between the start of the recession in December 2007 and February 2010.

Falling in six of the last nine months, the unemployment rate in March was unchanged at 6.7 percent from February and was just 0.1 percentage points above January’s 63-month low and 0.8 percentage points below its 7.5 percent rate of a year ago. The underemployment rate (a.k.a. U-6 unemployment rate), a measure of labor underutilization which accounts for part-time workers due to economic reasons as well as discouraged job seekers, edged up 0.1 percentage points in March to 12.7 percent after falling to a 64-month low and was down 1.1 percentage points from a year ago.

With the household survey showing that about 503,000 workers entered the labor force in March, the labor force participation rate, the share of working-age people in the labor force rose 0.2 percentage points in March to 63.2 percent, 0.4 percentage points above December’s 62.8 percent, which had matched the lowest level since Jimmy Carter was president about 36 years ago (March 1978) when the country was in the midst of stagflation. The aging of America, a modest jobs recovery from the last recession which has kept workers in school longer, and the rising number of workers on disability insurance are theories offered to explain the fall in the labor participation rate since it peaked at 67.3 percent in 2000.

The number of long-term unemployed (jobless for 27 weeks and over) fell to 3.7 million from 3.8 million, representing 35.8 percent of the unemployed population. Since April 2010, the number of long-term unemployed has fallen by about 3.0 million, and in the last year, by approximately 0.8 million.

The Labor Department reported that the average work week for production and nonsupervisory employees on private nonfarm payrolls jumped in March from a 38-month low of 33.4 hours to 33.7 hours, but it was down 0.1 hour from a year ago.

Challenger, Grey & Christmas reported a decrease in the number of planned job cuts by U.S. companies in March for the fourth time in the last five months. In March, planned jobs cuts declined 17.8 percent to 34,399 and were down a considerable 30.2 percent from its level of a year ago. Moreover, employers announced the fewest first-quarter job cuts (113,891 in Q1 2014) in 19 years (97,716 in Q1 1995) and the second lowest monthly total since January 2013. Last month’s total was the lowest in the month of February since 2000. The top job-cutting sector in March was health care, which announced plans to reduce payrolls by 5,768, bringing its year-to-date total to 10,984, which ranks fourth among all industries. “The first quarter typically experiences some of the heaviest job cutting of the year. Since we began tracking planned layoffs in 1989, the first quarter is only slightly lower than the fourth quarter when it comes to the pace of downsizing, with an average job-cut total of just over 205,000. Employers are well below that pace this year, suggesting that layoffs continue to decline in a recovery that is approaching its five-year anniversary…We continue to see downsizing in the health care sector, as hospitals adjust to lower Medicare reimbursements and cutbacks in Medicaid funding. There has also been a surge in job cuts among the workers hired to sign-up Americans for health insurance under the Affordable Care Act,” said John A. Challenger, CEO of Challenger, Gray & Christmas.


Economic Indicators 
» Business Activity
After expanding at the fastest pace in seven quarters during Q3, GDP growth in Q4 decelerated to a rate of 2.6 percent but has remained in positive territory for 12 consecutive quarters. Unlike Q3 where growth was driven by a huge buildup of inventories, Q4 had stronger growth in consumer spending (3.3 versus 2.0 percent), which comprises 70 percent of the economy, and stronger growth in business investment (5.7 versus 4.8 percent). Moreover, if not for the government shutdown during October, which contributed to a 12.8 percent decline in federal spending, it is believed GDP growth would have topped 3.6 percent in Q4. Improvements in business activity have been widespread as industrial production hovered near a record high and has increased in 44 of the last 56 months, the service sector has expanded 50 straight months, and durable goods orders increased year-over-year in February for the 45th time in the last 50 months. Furthermore, the Small Business Optimism Index advanced for the fourth time in the last five months, although it continued to flounder at levels that have been historically associated with recessions and periods of sub-par growth.
According to the second estimate, real gross domestic product or GDP (the output of goods and services produced within the U.S.) expanded at an annual rate of 2.6 percent in the fourth quarter, after rising in the previous quarter by 4.1 percent, which had marked the fastest pace of growth in seven quarters. Additionally, GDP has expanded 12 consecutive quarters. Encouragingly, unlike the previous quarter, during which growth was driven by a huge buildup of inventories for products no one had yet bought, this quarter had much better growth in consumer spending, which makes up 70 percent of the economy. Consumer spending rose at a 3.3 percent annual clip, faster than the 2.0 percent seen in the third quarter, while business investment rose at a 5.7 percent annual clip, eclipsing the 4.8 percent pace in the third quarter. Government spending, which was curtailed by the federal shutdown in October, fell 5.2 percent. Without the 12.8 percent decline in federal spending, growth would have topped 3.6 percent.

The Industrial Production Index jumped to a record high for the third time in the last four month, increasing 0.6 points in February to 101.6 and was up 2.8 points from a year ago. Additionally, the Index has risen in 44 of the last 56 months since bottoming at 83.5 in June 2009.

New orders for manufactured durable goods rose for the first time in three months in February, advancing 2.2 percent sequentially, and was up just 0.1 percent from a year ago, marking the 45th year-over-year increase in the last 50 months. Excluding the volatile transportation component (aircraft orders), durable goods orders increased for the fifth time in the last six months, rising 0.2 percent in February.

The service sector grew (exceeding 50 on the ISM Non-Manufacturing Index) for the 50th month in a row, with the pace of growth accelerating in March. In March, the Index increased 1.5 points to register at 53.1, although it was 1.4 points lower than its level of a year ago.

The Small Business Optimism Index advanced for the fourth time in five months, rising 2.0 points to 93.4, and was up 3.9 points from a year ago. The reading remained at a level that has been historically associated with recessions and periods of sub-par growth, remaining below its pre-recession average of 100 from 1973 through 2007, and failed once again to breach the 95 ceiling that has capped the Index during the recovery. NFIB Chief Economist said, “Overall, the March gain more or less reversed the February decline. While the Index still can’t seem to get above 95, we can be encouraged that the economy is at least crawling forward and not heading in reverse. The outlook for real sales gains accounted for about half of the improvement with inventory satisfaction and inventory investment plans accounting for most of the rest. However, throughout this recovery we’ve seen these types of increases only to have them go nowhere. As long as Washington continues to ignore policies that could restore the middle class, job creation will continue to be sub-par.”


Economic Indicators 
» Consumer
Consumer spending, representing roughly 70 percent of U.S. economic activity, rose for the 10th consecutive month in February as Americans increased their demand for utilities to keep warm during an unusually cold winter. Retail sales, which account for 30 percent of consumer spending, rebounded in February after falling the previous two months and have risen in 11 of the last 15 months and 1.5 percent from a year ago. Motor vehicle sales and furniture stores showed increases in sales last month after struggling the previous two months due to frigid temperatures across many parts of the country. Boosted by the discount sector, the Thomson Reuters Same Store Sales Index advanced year-over-year in March for the 55th consecutive month, and growth accelerated from a pace that had hit a 12-month low one month ago. Furthermore, the Consumer Confidence Index jumped to a six-plus year high (highest since January 2008), as consumers were moderately more upbeat about future job prospects and the overall economy; however, with the Index registering at 82.3, it remained below the 90.0 level that is considered to be a healthy reading.
Consumer spending, up in 53 of the last 58 months, accelerated for the second consecutive month and rose for the 10th month in a row. In February, consumer spending grew 0.3 percent, after rising the previous month by 0.2 percent. The spending increases would have been even weaker except for a surge in spending on utility bills as Americans tried to keep warm during an unusually cold spell. In February, spending on durable goods actually dropped. Tepid growth in consumer spending in recent months has been attributed in part to severe winter weather.

Personal income, a key pillar of consumer spending, rose in February for the 11th time in the last 13 months, increasing by 0.3 percent for the second straight month. Furthermore, it has risen in 44 of the last 52 months and 3.1 percent year-over-year. Personal income continues to be supported by government transfers for health-care payments as many Americans are now entitled to subsidies to offset health insurance costs. The saving rate edged up slightly in February to 4.3 percent of after-tax income compared to January, when the saving rate was 4.2 percent.

U.S. retail and food services sales, up sequentially in 11 of the last 15 months and 31 of the last 42, increased in February, rising 0.3 percent after declining 0.6 percent the previous month. Additionally, retail sales were up 1.5 percent from a year ago and have sustained year-over-year increases for 52 consecutive months. The rebound in retail sales signaled strength in consumer spending despite extreme weather around the country last month. Motor vehicle sales, building materials stores, and furniture stores all showed increases in sales last month. Restaurant sales also increased after two months of declines. Sales, however, fell at electronics retailers and grocery stores. The hard winter likely forced some households to shift some spending from goods to services, such as paying heating bills. Meanwhile, spending on big ticket items such as home appliances was likely delayed

For the 55th consecutive month, the Thomson Reuters Same Store Sales (SSS) Index increased year-over-year, and it accelerated in March from the slowest rate of year-over-year growth in 12 months. The Index advanced at a 2.7 percent clip in March following a 1.8 percent rise in the previous month. Three percent year-over-year growth generally indicates health among U.S. consumers, and the Index has grown at least as much in 28 of the last 41 months. Although 56 percent of the retailers beat their estimates, several retailers blamed the shift of the Easter holiday for slow March sales. The Discount sector posted the strongest result, growing 4.8 percent year-over-year, while the Apparel sector registered the weakest result, shrinking 3.8 percent year-over-year.

Rising in three of the last four months, the Conference Board Consumer Confidence Index jumped to a six-plus year high (highest since January 2008), advancing in March by 4.0 points to 82.3, and was up a notable 20.4 points from a year ago. A reading of 90 generally indicates a healthy economy, but despite recent gains the Index hasn't reached that level since the recession began in December 2007. The Present Situation Index actually edged down to 80.4 from 81.0, while the Expectations Index increased to 83.5 from 76.5. Director of Economic Indicators at The Conference Board said, “Consumer confidence improved in March, as expectations for the short-term outlook bounced back from February’s decline. While consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth. The Present Situation index, which had been on an upward trend for the past four months, was relatively unchanged in March. Overall, consumers expect the economy to continue improving and believe it may even pick up a little steam in the months ahead.”


Economic Indicators 
» Financial
Rallying in 13 of the previous 16 months and establishing record highs in nine of the last 11 months, major U.S. stock market indices rebounded in March for the second straight month after retreating in January at their sharpest rate since May 2012. During March, Federal Reserve Chair Janet Yellen alleviated concerns about a rate hike coming earlier than expected when she said in her first public speech since becoming Fed chair that the U.S. central bank's extraordinary commitment to boosting the economy would be needed for some time to come. The Dow Jones Industrial Index, up in 23 of the last 30 months, rallied 0.8 percent in March, while the S&P 500 index, up in 22 of the last 28 months, rallied 0.7 percent and hit a new record high intramonth. 10-year treasury yields edged up in March following a modest two-month retreat from a 17-month high (highest since July 2011), rising by 6 basis points in March to close the month at 2.72 percent. Yields remain historically low, likely reflecting the Federal Reserve’s bond purchase program (although it has been dialed back by $10 billion per month) as well as its near zero-interest rate policy, investors’ ongoing concerns about the strength of the economic recovery, modest inflation, and the continued overhang and uncertainty from the European sovereign-debt issue. Demand for credit was flat in Q4 for small businesses although has strengthened in nine of the last 12 quarters, while it slightly strengthened in Q4 for medium to large businesses and for the 10th time in the last 12 quarters. Credit standards for small businesses eased in Q4 for the 13th time in the last 14 quarters, while they eased for medium to large businesses in 15 of the last 16 quarters.
Rallying in 13 of the last 16 months and establishing record highs in nine of the last 11 months, major U.S. stock market indices rebounded for the second straight month in March after retreating in January at their sharpest rate since May 2012. During March, Federal Reserve Chair Janet Yellen alleviated concerns about a rate hike coming earlier than expected when she said in her first public speech since becoming Fed chair that the U.S. central bank's extraordinary commitment to boosting the economy would be needed for some time to come. Yellen earlier raised concerns by saying that the period between the end of the Fed's quantitative easing program and the first rate increase from the central bank could be six months, a faster timeline than many had anticipated. The Dow Jones Industrial Index (DJI) rallied 0.8 percent in March and was up in 23 of the last 30 months and 12.9 percent from a year ago. The S&P 500 Index, which hit a new record high intramonth, rallied 0.7 percent during the month and was up in 22 of the last 28 months and 19.3 percent from a year ago.

10-year treasury yields edged up in March following a modest two-month retreat from a 17-month high (highest since July 2011), rising by 6 basis points in March to close the month at 2.72 percent. Yields at the end of March hovered 132 basis points above the record low rate of 1.40 percent, which was established near the end of July 2012. Also, bond yields remain low by historical standards, reflecting the Federal Reserve’s monthly bond-purchase program ($65 billion of U.S. treasuries and mortgage-backed securities purchased in March before it drops to $55 billion in April) as well as its near zero-interest rate policy, investors’ ongoing concerns about the prospects for a strong economic recovery, subdued inflationary environment, and overhang and uncertainty from the European sovereign-debt issue. Amidst global uncertainly and turmoil, U.S. Treasuries remain the world’s favored refuge by investors.

In its last meeting, the Fed stated that it will maintain the target range for the federal funds rate at 0 to 1/4 percent for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2.0 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. The Fed has maintained the target range for the federal funds rate at 0 to 1/4 percent for 43 consecutive periods, which dates back to December 2008.

According to the Senior Loan Officer Survey, the net percentage of banks tightening credit standards for small businesses fell in Q4 2013 by 7.1 percent, marking the 13th time in the last 14 quarters that credit standards have eased for small businesses. The recent easing for small businesses has stood in strong contrast to the previous 14 quarters in which credit standards tightened in every quarter but one. Medium to large businesses have faced an easing of credit standards in 15 of the last 16 quarters with a net 8.3 percent facing an easing of credit standards in Q4 2013. Demand for credit by small businesses, however, was flat compared to the previous quarter although slightly improved for medium to large businesses. While there was no net change in demand for credit by small businesses in Q4, demand for credit in the previous quarter had experienced its largest jump (+24.3 percent) in eight years and has strengthened in nine of the last 12 quarters. Demand figures for medium to large businesses have improved in 10 of the last 12 quarters, strengthening 1.4 percent in Q4 2013, after increasing in the previous quarter by 15.3 percent. An easing of credit standards or rise in demand for credit by businesses may signal faster economic growth.


Economic Indicators 
» Housing
Home sales cooled in February with both existing home sales and new home sales falling from the previous month. Existing home sales dipped to a 20-month low after falling for the fifth time in six months and were down year-over-year for the fourth consecutive month following 29 straight months of year-over-year increases. Sales of new homes declined for the third time in the last four months, though down only one percent from a year ago. While home sales have benefited from steady job creation, rising rental rates, and historically low mortgage rates, issues related to limited inventory, higher home prices, and an abnormally cold winter have created headwinds for existing home sales in recent months. 30-year fixed rate mortgage rates have increased in 11 of the last 15 months but hover just 99 basis points above December 2012’s record low of 3.35 percent. Tight inventory over the last year has kept the month supply of existing homes for sale near January 2013’s seven-plus year low. Although home prices have declined marginally over the past three months, they have risen in 17 of the last 22 months and were up over 13 percent from a year ago. Still, they remained about 19 percent below their April 2006 peak.
Falling in five of the last six months, existing home sales dipped to 20-month low in February after soaring to nearly a six and a half year high (highest since March 2007) during the July to August period. In February, existing home sales dropped 0.4 percent to a seasonally adjusted annual rate of 4.60 million and were also 7.1 percent below the 4.95 million annual rate of a year ago. This marked the fourth consecutive month that sales were below year-ago levels after 29 consecutive months of year-over-year increases. The National Association of Realtors® (NAR) chief economist said, “We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago. Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”

Month’s supply of existing homes based on the current sales rate jumped for the second consecutive month after falling to a nine-month low but hovered only 20.9 percent above January 2013’s seven-plus year low (since May 2005 near the peak of the housing boom). Total housing inventory at the end of February rose 6.4 percent to 2.00 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up 6.1 percent from 4.9 months in January and up 13.0 percent from 4.6 months a year ago. Unsold inventory is 5.3 percent above a year ago but 50.5 percent below the record of 4.04 million in July 2007.

New home sales fell for the third time in the last four months, declining 3.3 percent in February to an annual rate of 440,000 and were down 1.1 percent year-over-year. Still, February’s annual rate was just 5.6 percent below last April’s 58-month high and 58.3 percent above August 2010’s record low annual rate (since 1963) of 278,000. The number of building permits issued for new housing units rebounded in February following a three-month retreat from a 65-month high (highest since June 2008), increasing 7.3 percent to an annual rate of 1,014,000, and were up 6.5 percent from a year ago.

Since sagging to its cyclical low of 134.07 in March 2012, the S&P/Case-Shiller Home Price Index has advanced in 17 of the last 22 months, although it edged down in January for the third straight month, down 0.1 percent to 165.50 from 165.63 but was up 13.2 percent year-over-year. Still, the Index was 19.2 percent below its April 2006 peak and remained mired at nine-plus year levels (since June 2004).

Average monthly rates on a 30-year fixed rate mortgage have rallied in 11 of the last 15 months, rising 4 basis points in March to 4.34 percent. 30-year mortgage rates were 77 basis points higher than a year ago and 99 basis points higher than when they bottomed out at a record low rate (since 1971) of 3.35 percent in November and December of 2013. A record low had been established 14 times over the last 40 months and in 13 of the last 31 months. Since 1971, the 30-year fixed rate has been below 4.0 percent in only 17 months, and those have all been in the past 27 months.


Economic Indicators 
» Inflation
The Consumer Price Index (CPI) rose a slight 0.1 percent on a monthly basis for the second consecutive month with price gains in grocery store food items driving the majority of the CPI increase in February. The annual rate dipped from 1.6 to 1.1 percent, only 0.1 percentage points above last October’s four-year low and below the Fed’s 2.0 percent target rate that is considered to be moderate. The Core CPI (removing volatile prices of food and energy) rose by a marginal 0.1 percent on a monthly basis for the third straight month and held steady on an annual basis at 1.6 percent, matching a 33-month low. In March, energy prices were mixed as gasoline prices increased for the fourth time in the last five months, while crude oil prices cooled for the fifth time in the last seven months. Stable energy prices, subdued annual CPI, tame core inflation, and below normal utilization rates for physical capital should continue to temper inflationary concerns, enabling the Fed to keep interest rates at historically low levels for some time to stimulate economic growth. The Baltic Dry Index (a barometer of ocean freight shipping costs) rallied for the sixth time in the last eight months and has surged nearly 50 percent from a year ago.
The Consumer Price Index (CPI) rose a slight 0.1 percent on a monthly basis in February for the second consecutive month. An increase in the food index accounted for more than half of the increase in February. The food index rose 0.4 percent in February, driven by a 0.5 percent increase in the index for food at home, with four of the six major grocery store food group indexes increasing. The index for meats, poultry, fish, and eggs rose 1.2 percent while the indexes for dairy and related products and other food at home saw more modest increases of 0.7 percent and 0.2 percent, respectively. On an annual basis, the Index dipped from 1.6 percent to 1.1 percent, well below the Fed’s 2.0 percent inflation target and just 0.1 percentage points above October’s four-year low. The Core CPI Index, which removes the effects of volatile food and energy prices, increased by a marginal 0.1 percent for the third straight month, while the annual rate held steady at 1.6 percent, matching a 33-month low. An increase of 0.2 percent in the shelter index was the major contributor to the monthly rise.

The Producer Price Index (PPI) declined by a modest 0.1 percent on a monthly basis in February after rising by 0.2 percent the previous month. Over 80 percent of the February decrease in the index for final demand services (down 0.3 percent) can be attributed to margins for apparel, footwear, and accessories retailing, which fell 9.3 percent. On an annual basis, the Index fell from 1.2 percent to 0.9 percent, just 0.4 percentage points above last April’s 42-month low and well below the cyclical peak of 7.1 percent that was reached in July 2011.

The capacity utilization rate, effectively the employment rate of physical capital in the manufacturing, mining, and utilities industries, rose for the first time in three months, advancing by 0.3 percentage points to 78.8 percent and was just 0.1 percentage points below last November’s 66-month high. Although the capacity utilization rate has risen in 36 of the last 56 months, and was 0.7 percentage points higher than prior year, it remained below the long-term average (from 1972-2013) of 80.1 percent; and thus, is not stoking near-term concerns of inflation.

Energy prices were mixed in March as gasoline prices increased for the fourth time in the last five months, while crude oil prices cooled for the fifth time in the last seven months. Gasoline prices rose 2.8 percent in March but were down 1.7 percent from a year ago, while crude oil prices fell 2.1 percent in March but were up 4.8 percent from a year ago. In the final week of March, WTI crude oil spot prices averaged $100.66 per barrel, and retail gasoline prices in the U.S. averaged $3.65 per gallon.

In March, the Euro strengthened against the U.S. dollar for the seventh time in the last nine months, up 0.5 percent, while the Pound weakened against the U.S. dollar for just the second time in the last 10 months, down 0.2 percent. Year-over-year, the Euro and Pound strengthened against the U.S. dollar, up 7.3 percent and 9.5 percent, respectively. At March close, 1 Euro yielded 1.38 U.S. dollars, and 1 Pound, 1.66 U.S. dollars.

After plummeting 51.3 percent in January from three-plus year highs, the Baltic Dry Index (BDI), which measures the daily average of prices in the spot market to ship raw materials in bulk, rebounded for the second consecutive month, rallying 8.3 percent in March. Moreover, the Index has risen in six of the last eight months and has soared 49.7 percent from a year ago.


Economic Indicators 
  Economic Indicators    Expand All  
 
      Indicator Latest Trend Date
» Employment
Unemployment Rate6.7%4/4

The unemployment rate for all civilian workers represents the number of unemployed as a percent of the civilian labor force. To qualify as unemployed, a worker must be actively searching as well as physically able to work, but unable to find employment in the previous 4 week period.


Underemployment Rate12.7%4/4

The U-6 unemployment rate is an alternative measure of labor underutilization to the widely referenced U-3, or official unemployment rate. The U-6 rate includes the total unemployed as counted in U-3, plus all persons marginally attached to the labor force (those who would like to and are able to work but have not looked for work in the past year), plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. 


Non-Farm Payrolls192K4/4

Nonfarm payroll employment is a monthly estimate of the number of paid employees working full-time or part-time in U.S. business and government agencies.  Trends in this figure are considered an indicator of strength and direction of the U.S. economy: increases indicate a growing economy and decreases point to a slowing or contracting economy.


Challenger, Gray, & Christmas - Layoffs Survey34K4/3

A monthly report published by outplacement firm Challenger, Gray, & Christmas on the number of announced large company layoffs. This report can help gauge the strength of the job market, which can be useful in gauging the strength of the overall economy.


Weekly Labor Hours33.74/4

Average weekly hours of production and nonsupervisory workers on private nonfarm payrolls is tracked monthly by the Bureau of Labor Statistics. A rise in weekly labor hours reflects an increase in labor utilization of those employed.


» Business Activity
Gross Domestic Product2.6%3/27

GDP is the broadest measure of economic activity. Reported quarterly, GDP growth is the percent change in annualized total economic output. The major elements measured by GDP include consumption, investment, net exports, government spending and inventories. One popular definition of a recession is two consecutive quarters of negative percentage change in GDP, although this is not a hard and fast rule.


Industrial Production101.63/17

The Industrial Production (IP) Index, which is tracked by the Federal Reserve Board, measures the real output of the manufacturing, mining, and electric and gas utilities industries. The reference or base period for the index is 2007 at a level of 100. These aforementioned sectors are highly sensitive to interest rates and consumer demand; and thus, industrial production can be an important indicator for forecasting future Gross Domestic Product (GDP) and economic performance.


Durable Goods Order0.1%4/2

Durable Goods Orders primarily measures business spending on products expected to last more than three years such as machinery and computer equipment. The year over year change in order levels is a gauge of future growth for the manufacturing industry and a predictor of GDP growth. A subset of the data, nondefense capital goods orders, is considered a good indicator of business investment spending.


ISM Non-Manufacturing Index53.14/3

This is a composite indicator of three factors (employment trends, prices and new orders) in industries outside of manufacturing such as agriculture, construction, transportation, and retail trade. An index value above 50 signals a favorable increase in these factors and a value below 50 signals an unfavorable decrease.


Small Business Optimism Index93.44/8

This is a monthly index based on a survey of small business owners regarding 10 factors including their future plans for hiring, capital investment, and inventory building, as well as their expectations for future sales, profits, economic trends and credit market conditions. It is a broad indicator of current business conditions in the small business sector.


» Consumer
Consumer Spending0.3%3/28

A measure of monthly goods and services purchased by household consumers. The dollar figure represents an annualized, seasonally adjusted level of consumption. The percent change from month to month indicates growth (if positive) or contraction (if negative) in household consumption – a major component of GDP.


Retail Sales1.5%3/13

An estimate of monthly sales for retail and food service firms, based on a random sample of 5,000 companies. The monthly figure is adjusted for seasonality and holiday/trading day differences, and we record the percentage change from the current month compared with the same month a year ago as indicator of trends in discretionary consumer spending.


Thomson Same Store Sales Index2.7%4/10

The monthly SSS index provides a snapshot of U.S. consumer spending relative to expectations ahead of the monthly comps reporting cycle. The index tracks 29 retailers across a variety of specialties, including discounters, department, apparel, teen/kids, and drug stores. Costco® currently has the strongest weighting in the index after Wal-Mart® ceased reporting monthly same store sales results in April 2009.


Personal Income0.3%3/28

A measure of income received from wages and salaries, dividends and interest, rental income, and other business sources. The percent change from month to month indicates growth (if positive) or contraction (if negative). Personal income, a key pillar of consumer spending, tends to display a rising trend during periods of economic expansion, and show a stagnant or slightly declining trend during recessionary times.


Consumer Confidence Index82.33/25

This index is based on a survey of households regarding current and future business and employment conditions, as well as expectations for future income. It indicates consumers’ level of optimism and can affect their likelihood to make purchases – a major component of GDP. A declining trend in this index may indicate a slowdown in consumer spending and a slowdown in economic growth.


» Financial
Dow Jones Industrial Average0.8%3/31

A blue-chip index containing 30 of some of the largest and most widely held stocks in America, representing approximately 25% of the total value of the U.S. stock market. The Dow Jones Industrial Average is one of the most popular indexes used to track the health of the U.S. equities market.


S&P 5000.7%3/31

An index containing 500 American stocks (primarily large cap) across a range of industries, representing approximately 75 percent of the total value of the U.S. stock market. The S&P 500 is the most widely watched index of large-cap U.S. stocks and is considered to be a bellwether for the U.S. economy.


13-Week Treasury Bills0.03%3/31

T-Bills are short term U.S. government issued securities that mature in one year or less from their issue date. They are considered to be a nearly credit risk-free investment given their negligible default risk.


10-Year Treasury Notes2.72%3/31

Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Usually, bond market investors are forward-looking and this means interest rates on Treasury securities will move in the direction of Fed policy with a lead. As a result, one is more likely to see rising interest rates on Treasury yields during an expansion (and falling yields during economic slowdowns) in advance of policy changes by the Federal Reserve. Generally, stock prices and bond yields (interest rates) move inverse of each other.


Federal Reserve Rates0.25%3/19

The Federal Open Market Committee consists of the seven Governors of the Federal Reserve Board and five Federal Reserve Bank presidents. The FOMC meets eight times a year in order to determine the near-term direction of monetary policy. These meetings occur roughly every six weeks and and can be one of the most influential events for the markets. The interest rate set by the Fed, the federal funds rate, serves as a benchmark for all other rates.


Tightening/(Easing) of Credit-7.1%2/3

The Senior Loan Officer Opinion Survey on Bank Lending Practices addresses changes in the supply of C&I (Commercial and Industrial) loans to businesses. The results reported are based on responses from 60 domestic banks and 24 U.S. branches and agencies of foreign banks. Positive percentages represent a net tightening of credit, while negative percentages represent a net easing. An increase in the net percentage of banks tightening credit standard reflects a decrease in the supply of credit available to businesses to finance business operations (payrolls and inventories) and expansion (plant/equipment and mergers/acquisitions); and thus, may signal slower economic growth.


Demand for Credit0.0%2/3

The Senior Loan Officer Opinion Survey on Bank Lending Practices addresses changes in the demand for C&I (Commercial and Industrial) loans to businesses. The results reported are based on responses from 60 domestic banks and 24 U.S. branches and agencies of foreign banks. Positive percentages represent a net strengthening of demand, while negative percentages represent a net weakening. A rise in demand for credit reflects an increase in financing needs for business operations (payrolls and inventories) and expansion (plant/equipment and mergers/acquisitions); and thus, may signal faster economic growth.


» Housing
Existing Home Sales4.60 mil3/20

This is an annualized, seasonally adjusted figure based on the number of existing home and condominium sale transactions that closed during the month. Month to month changes are considered a good measure of demand in the residential real-estate sector.


Existing Home Inventory5.2 mo.3/20

This is an annualized, seasonally adjusted figure based on the number of existing home and condominium sale transactions that closed during the month. Month to month percentage changes are considered a good indicator of activity trends in the housing market. The months supply figure represents the number of months required to sell all current existing home inventory at the current pace of sales activity. The lower this figure, the greater the need for new housing starts and construction activity.


S&P / Case-Shiller Home Price Index165.503/25

The S&P / Case-Shiller Index is a monthly index that tracks home price trends in 20 major markets across the country. Prices shown are not seasonally adjusted.


New Home Sales440K3/25

This is an annualized, seasonally adjusted figure based on the number of new single family home transaction commitments (e.g. sales for which an agreement was signed) during the month. The level of monthly sales is considered a good indicator of activity trends in housing. Together with existing home sales, trends in housing activity can act as a leading indicator for consumer purchases of household items such as appliances and furniture.


Building Permits1.0 mil3/26

The Building Permits Survey (BPS) produces estimates of the number of permits issued for new housing units each month. The level of permits issued, which is shown at a seasonally adjusted annualized rate, is considered a good leading indicator of future trends in housing.

 


30-Year Fixed Rate Mortgage4.34%3/31

The 30-year fixed rate loan is the most common loan in the lending markets, and the 30-year interest rate is a good measure for the availability of credit to eligible borrowers in the home lending market. Changes in the mortgage rate impact both the level of new and existing home sales with a few months of lag time.


» Inflation
Consumer Price Index1.1%3/18

The Consumer Price Index is a measure of the average price level of a fixed basket of goods and services purchased by consumers. The CPI is divided into two measures, with the ‘core’ rate excluding volatile food and energy costs. The year/year change in core CPI is seen by most economists as the best measure of the underlying inflation rate.


Producer Price Index0.9%3/14

The Producer Price Index measures a basket of finished goods purchased by businesses to sell to consumers. The PPI is used as an early indicator of inflation, since it gives some insight into the costs incurred by businesses to produce their goods and services. The most important indicator is the underlying core PPI number, which excludes volatile food and energy prices.


Capacity Utilization78.8%3/17

The Federal Reserve Board constructs estimates of capacity and capacity utilization for industries in manufacturing, mining, and electric and gas utilities. For a given industry, the capacity utilization rate is equal to an output index (seasonally adjusted) divided by a capacity index. Effectively, it is the employment rate for physical capital. When the economy is healthy, total capacity utilization should be near 80.0 percent. The long-term average rate from 1972 through 2013 is 80.1 percent. If it gets up close to 85 percent it is a serious sign that the economy is overheating and that inflation will soon be a very serious issue. Therefore, capacity utilization beyond a certain threshold may signal inflation is on the rise.


Fuel Prices2.8%3/31

The Energy Information Administration publishes a weekly survey of fuel prices gathered from a sampling of service stations across the country. The association also publishes weekly WTI crude oil spot prices per barrel.


Currency - Euro & Pound (GBP)0.5%3/31

The chart below shows the exchange rate of the U.S. Dollar with the Euro and British Pound. The vertical axis shows the number of U.S. dollars equal to one Euro and Pound. When the graph is falling, the dollar is strengthening, since it takes fewer dollars to purchase one euro. When the graph is rising, the dollar is weakening. The strength of the dollar is an important economic indicator as a strong dollar generally means bad news for American companies as their products will be more expensive in relation to foreign competitors, but good news for consumers as a stronger dollar results in lower prices for imported goods and services.


Baltic Dry Index (BDI)8.3%3/31

The Baltic Dry Index is a daily average of prices in the spot market to ship raw materials in bulk. It represents the cost paid by an end user to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The Baltic Exchange is similar to the New York Mercantile Exchange in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. This index can be used as an indicator of the direction of overall global economic activity because it measures the changing demand for shipping capacity (which is generally limited and increases very slowly over time); consequently, small changes in demand can lead to much larger changes in shipping rates. The BDI can also be a good indicator of the future direction of inflation.



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Disclaimer: The information being provided in the Economy at a Glance is an informational service of Insperity and is drawn from several governmental and other agencies. The information is provided as is and Insperity makes no representation regarding it or its accuracy.