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» Employment
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The unemployment rate in December dipped to a 3-year low of 8.3 percent and improved for the fifth consecutive month; however, the improvement was in part due to a decrease in the labor force participation rate which fell to a 30-plus-year low. Total U.S. nonfarm employment grew in January for the 16th consecutive month with 243,000 new jobs, higher than the 203,000 jobs created in the previous month. January also marked the fastest rate of job growth in nine months and the third straight month that job growth has accelerated. The private sector expanded for the 23rd consecutive month, adding 257,000 jobs, while government contracted for the 15th straight month, cutting 14,000 jobs. Furthermore, weekly labor hours rose for the second consecutive month, climbing to a 45 month-high, and online recruitment activity increased for the 24th consecutive month. Conversely, mass layoffs and planned jobs cuts both rose following 3-month declines. |
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» Business Activity
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GDP increased at an annual rate of 2.8 percent in Q4, the third quarter in a row in which growth accelerated and the fastest rate of growth in the last six quarters. Q4 also marked the tenth consecutive quarter of growth following four straight quarterly contractions. Improvements in business activity have been widespread with industrial production increasing in 26 of the last 30 months and surging to a 40-month high in December, durable goods orders growing year-over-year for 25 straights months, and the service sector jumping to a 10-month high and expanding for 25 consecutive months. Furthermore, the Small Business Optimism Index inched up in December for the fourth consecutive month but still remained in recessionary territory. |
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» Consumer
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Consumer spending, representing roughly 70 percent of U.S. economic activity, has increased in 27 of the last 32 months. However, spending barely rose in October and November and was essentially flat in December. Retail sales increased in December but by just 0.1 percent, but they have risen in 15 of the last 17 months, while sales at discounters and department stores were boosted by steep promotions, growing year-over-year for the 29th consecutive month. After rebounding last month to an eight-month high, consumer sentiment, likely hurt by rising gasoline prices, declined in January and slipped below its year ago level. The Consumer Confidence Index, registering at just 61.1, remained well below 90.0, the level that is considered to be a healthy reading. |
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» Financial
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Major U.S. stock market indices rose in January for the second consecutive month. The Dow Jones Industrial index increased 3.4 percent in January and has risen in each of the last four months, while the S&P 500 increased 4.4 in January and has risen in three of the last four months. Ten-year treasury yields retreated in January for the eighth time in the last ten months. Historically low and downward trending yields likely reflect investors’ ongoing concerns about the strength of the economic recovery as well as the continued overhang and uncertainty from the European sovereign-debt issue. Although credit conditions continued to show some improvement in the fourth quarter as credit standards eased for small businesses for the sixth consecutive quarter (the longest streak in five years), demand for credit by small businesses actually weakened for the first time in four quarters. |
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» Housing
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New home sales fell slightly in December, while home prices ticked down for the third consecutive month, standing just 0.6 percent above its cyclical low and remaining mired at eight-and-a-half-year lows. Additionally, the number of building permits issued declined after jumping to a 20-month high, and 30-year mortgage rates continued their descent into record low territory. Conversely, existing home sales have risen three straight months and in five of the last seven thanks to attractive prices for long-term buyers, and they were above their pace of a year ago. |
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» Inflation
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The CPI was flat in December for the second consecutive month and saw its annualized rate drop from 3.4 to 3.0 percent, the lowest rate in nine months. The Core CPI (removing volatile prices of food and energy) rose by just 0.1 percent and remained at a tepid 2.2 percent on an annualized basis. Energy prices have picked up in recent months, however, with gasoline prices rising in two of the last four months and crude oil in five of the last nine. Still, despite the recent uptick in energy prices, receding annualized inflation, subdued 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 through 2014 for stimulating economic growth. The Baltic Dry Index (a barometer of shipping costs) plummeted in January to a 3-plus-year low after falling for the third consecutive month. |
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Employment
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Total nonfarm payroll employment expanded for the 16th consecutive month, increasing by 243,000 in January, higher than the 203,000 jobs created the previous month. Additionally, January also marked the fastest rate of job growth in nine months and the third straight month that job growth has accelerated. Job growth during the 16-month expansionary streak has averaged approximately 158,000 jobs per month. Economists believe that between 100,000 and 125,000 jobs need to be created per month just to keep up with new workers entering the workforce. Driven by job gains in professional and business services, leisure and hospitality, and manufacturing, private-sector payroll employment increased for the 23rd straight month, rising by 257,000 in January after an increase of 220,000 the previous month. Approximately 3.7 million jobs have been created in the private sector over the last 23 months. Meanwhile, government employment declined for the 15th consecutive month, falling by 14,000 jobs in January after losing 17,000 jobs the previous month. In December, the unemployment rate dropped for the fifth consecutive month, falling to 8.3 percent, down from 8.5 percent the previous month, marking a 3-year low. The labor force participation rate, however, dipped to a 30-plus-year low (since December 1981) of 63.7 percent. The number of long-term unemployed (jobless for 27 weeks and over) declined from 5.6 million to 5.5 million, representing 42.9 percent of the unemployed population.
The Labor Department reported that the average work week for production and nonsupervisory employees on private nonfarm payrolls rose by 0.1 hour in January to 33.8 hours, its highest level over the last 45 months (since April 2008). Year-over-year, weekly hours increased by 0.4 hour from 33.4 hours.
In January, Challenger, Grey & Christmas reported that U.S. companies announced an increase in the number of planned job cuts, a trend reversal following three consecutive months of declining job cuts. In January, planned jobs cuts jumped 28.0 percent to 53,486, up from 41,785 the previous month and 38.9 percent above the level of a year ago. Leading the way were financial firms and retailers, which announced layoffs totaling 7,611 and 12,426, respectively, while for the second consecutive month, the government sector saw relatively few job cut announcements, with these employers announcing just 3,021 layoffs. A surge in job cuts at the start of the year is not unusual, the report said. January is historically the heaviest month of cuts, averaging 101,084 layoffs between 1993 and 2001. CEO of Challenger, Gray & Christmas said: “This year marks the sixth consecutive year and the eleventh out of the last thirteen in which January job cuts surpassed the December total. Of course, it is far too early to say whether we will continue to see low job-cut figures in government. It is highly unlikely, considering that many cities and states continue to struggle with budget deficits. And, then there is the federal level of government, which remains under intense pressure to cut costs. As a result, we expect government layoffs to be heavy again this year.”
Mass layoff actions, at least 50 employees from a single employer, increased slightly after falling for the previous three months. In December, mass layoffs edged up 4.0 percent to 1,384 from 1,331 the previous month but were 6.7 percent lower than the 1,483 figure of a year ago. Layoff levels stood only 7.6 percent above March’s four-plus-year low (since September 2007) of 1,286.
The Monster Employment Index, which represents employer online recruitment activity in the 28 largest U.S. metro markets, slipped in January for the third consecutive month, falling 7 points that month and 18 points over the last three months after climbing to a 37-month high in October. Still, the Index has risen in seven of the last 12 months and has experienced positive year-over-year growth (up 9.0 percent in January) for 24 consecutive months. Online recruitment is characteristically muted during the early portion of January following the holiday season. Transportation and warehousing, retail, and wholesale remained strong growth markets generally maintaining steady trends. Public administration remained the weakest trending sector and was the only industry to register negative annual growth. Manufacturing eased, recording only single-digit growth for the first time since February 2011.
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Business Activity
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According to the advance estimate, real gross domestic product or GDP, (the output of goods and services produced by the U.S.) increased at an annual rate of 2.8 percent in the fourth quarter of 2011, the third straight quarter in which growth accelerated (Q3 GDP increased 1.8 percent) and the fastest rate of growth over the last six quarters. The most recent quarter also marked the tenth consecutive quarter of growth during following four consecutive quarterly contractions. The acceleration in real GDP in the fourth quarter primarily reflected an upturn in private inventory investment as well as accelerations in personal consumption expenditures (PCE) and in residential fixed investment that were partly offset by a deceleration in nonresidential fixed investment, a downturn in federal government spending, an acceleration in imports, and a larger decrease in state and local government spending.
The Industrial Production Index surged to a 40-month high (since August 2008), rising 0.4 points in December and increasing in 26 of the last 30 months since bottoming at 83.5 in June 2009.
New orders for manufactured durable goods rose for the fifth time in the last six months, increasing in December by $6.3 billion, or 3.0 percent to $214.3 billion and were up a robust 16.9 percent from a year ago, marking the 25th consecutive month of year-over-year increase. Excluding the volatile transportation component (aircraft orders), durable goods orders increased 2.1 percent in December and was up in each of the last four months.
The service sector grew (exceeding 50 on the ISM Non-Manufacturing Index) for the 25th month in a row and in 27 of the last 29 months following 11 consecutive months of decline. In January, the Index jumped to a 10-month high of 56.8, registering 4.2 points above the previous month but 2.6 points lower than a year ago.
The Small Business Optimism Index ticked up in December for the fourth month in a row, climbing to a 10-month high, following a 6-month decline. In December, the Index inched up once again by 1.8 points to 93.8 from 92.0 the previous month, but the total reading remained in recession territory. The Index is still 6 points below the pre-recession average and more than 10 points below the same point in the recovery from the 2001 recession. During the last recovery, the index often ran near or above 100, but it had not been at that level since April 2006. About half of last month’s gain was due to reduced concerns about business conditions six months ahead and improved expectations for real sales gains. The gains in the Index appear supportive of the view that economic growth will pick up in 2012, though the level of the Index is consistent with continued modest growth.
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Consumer
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Consumer spending, up in 27 of the last 32 months, was essentially flat in December after rising in each of the previous five months. In December, consumer spending decreased by $2.0 billion, or less than 0.1 percent. Furthermore, growth in spending had been sluggish in October and November, increasing by just 0.1 percent in each of those months. The stall in consumer spending indicates Americans took advantage of a gain in incomes to restore depleted savings (the savings rate rose to 4.0 from 3.5 percent the prior month), remaining focused on repairing finances. For all of 2011, consumer spending rose 2.2 percent after advancing 2.0 percent in 2010, marking the weakest two-year performance of any expansion since World War II. The weak end to the quarter heightens the risk that consumer spending may remain subdued this year, underscoring the Federal Reserve’s decision to leave interest rates low until 2014.
U.S. retail and food services sales, up in 15 of the last 17 months, increased by just 0.1 percent in December after rising by 0.4 percent the previous month and were up 6.5 percent from a year ago. U.S. retail sales in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods sold. Purchases excluding automobiles fell 0.2 percent, the first decline since May 2010.
For the 29th consecutive month, the Thomson Reuters Same Store Sales Index increased year-over-year, climbing a healthy 4.2 percent in January, following December’s solid 3.4 percent year-over-year growth. Retailers offered steep promotions to lure consumers into stores and move the remaining fall/winter inventory. January’s figure was within the two to five percent growth range that has prevailed since 2010. Three percent year-over-year growth generally indicates health among U.S. consumers, and the Index has grown at least as much in each of the last 10 months.
The Conference Board Consumer Confidence Index declined in January after jumping to an 8-month high in December. In January, the Index fell 3.7 points to 61.1 and was also down 3.7 points from a year ago. A reading of 90 generally indicates a healthy economy, but the Index hasn't reached that level since the last recession began in December 2007. The Present Situation Index declined to 38.4 from 46.5, while the Expectations Index edged down to 76.2 from 77.0 in December. Director of the Conference Board Consumer Research Center said: “Consumer Confidence retreated in January, after large back-to-back gains in the final two months of 2011. Consumers' assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month.”
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Financial
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In January, the U.S. stock market indices rallied for the second consecutive month. The DJI Index, which has risen over the last four months, increased 3.4 percent in January and was up 6.2 percent from a year ago. The S&P 500 Index, which has risen in three of the last four months, increased 4.4 percent in January and was up from 2.0 percent from a year ago. Despite recent gains in the indices, the DJI Index has risen in just four of the last nine months, while the S&P 500 Index has risen in just three of the last nine months.
Ten-year treasury yields retreated in January for the eighth time in the last ten months, closing the month at just 1.80 percent, down from last month’s close of 1.87 percent and just above the record low of 1.72 percent that was reached during the month of September. The general downward trend in yields (and thus higher bond prices) may reflect investors concerns about the prospects for a strong economic recovery as well as overhang and uncertainty from the European sovereign-debt issue. Traders fear that a default by Greece will unsettle lenders to other debt-saddled European nations and cause a wave of defaults. U.S. Treasuries have continued their claim as the world’s favored refuge from turmoil. 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 and continues to anticipate that economic conditions, including low rates of resource utilization and a subdued outlook for inflation over the medium run, are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The net percentage of banks easing credit standards for small businesses rose by 6.3 percent in Q4 2011, marking the sixth straight quarter that credit standards eased for small businesses. It has been five years (Q4 2006) since credit easing occurred in at least six consecutive quarters for small businesses. Medium to large businesses have faced credit easing over the last eight quarters with a net 5.9 percent facing an easing of credit standards in Q4 2011, following Q3’s rise of 21.8 percent, the fastest rate since Q2 2005. It has been over five years (Q3 2006) since credit easing occurred in at least eight straight quarters for medium to large businesses. On the other hand, demand for credit decreased for businesses of all sizes in Q4 2011. Banks reported a weakening in demand for credit by small businesses after it had strengthened the previous three quarters with the Senior Loan Officer Survey registering an 18.8 percent decline in Q4 2011. Demand figures for medium to large businesses also weakened after improving the previous three quarters, falling 15.7 percent, its sharpest drop since Q1 2010. An easing of credit standards or rise in demand for credit by businesses may signal faster economic growth.
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Housing
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Existing home sales, which increased for the third consecutive month and in five of the last seven months, rose 5.0 percent in December to a seasonally adjusted annual rate of 4.61 million and were up 3.6 percent from a year-over-year. The National Association of Realtors® (NAR) chief economist said: “The pattern of home sales in recent months demonstrates a market in recovery. Record low mortgage interest rates, job growth, and bargain home prices are giving more consumers the confidence they need to enter the market.”
Months supply of existing homes based on current sales rate decreased for the fifth consecutive month, falling to a five-plus-year low (since April 2006). Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply at the current sales pace, down 13.9 percent from a 7.2-month supply in November and down 23.5 percent from an 8.1-month supply a year ago. Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels.
New home sales decreased in December after marginally rising in each of the previous three months and remain just 13.7 percent above February’s record low annual rate (since 1963) of 270,000. In December, new home sales edged down 2.2 percent to an annual rate of 307,000, below last month’s rate of 314,000, and were down 7.3 percent from a year ago. Building permits issued for new housing units declined slightly after jumping to a 20-month high (since March 2010), falling 1.3 percent in December to an annual rate of 671,000 but were 6.5 percent higher than the annual rate of 630,000 a year ago.
After rising slightly for five consecutive months from a recessionary low of 137.63, surpassing April 2009’s low of 139.26, the S&P/Case-Shiller Home Price Index ticked down for the third straight month in November. The Index fell in November by 1.6 percent to 138.49 from 140.27 the previous month and is down 3.7 percent year-over-year, hovering just 0.6 percent above its cyclical low and remaining entangled near eight-and-a-half-year lows.
Average monthly rates on a 30-year fixed rate mortgage, down six consecutive months and in eight of the last 10, slid in January to set yet another record low (since 1971) of 3.92 percent, surpassing the previously low set last month of 3.96 percent. A new record low has been established six times over the last 14 months and in each of the last five months. In January, average mortgage rates were 84 basis points lower than they were a year ago.
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Inflation
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The Consumer Price Index (CPI) was flat for the second straight month in December, while on an annualized basis it increased 3.0 percent, smaller than last month’s 3.4 percent and the lowest annualized rise in nine months (since last March). The energy index declined for the third month in a row and offset increases in the indexes for food and all items less food and energy. Gas prices were a key driver, falling 2.0 percent during December, and that was enough to make up for slight price hikes on food, medical services, and rents. The Core CPI Index, which removes the effects of volatile food and energy prices, rose in December by 0.1 percent, down slightly from last month’s 0.2 increase, while up a tame 2.2 percent for the second month in a row on an annualized basis. Driven by falling energy and food prices, the Producer Price Index (PPI) declined 0.1 percent in December after increasing the previous month by 0.3 percent, and was up 4.8 percent year-over-year, the lowest annualized rate in 11 months (since last January).
The capacity utilization rate, effectively the employment rate of physical capital in the manufacturing, mining, and utilities industries, ticked up in December and has risen in 24 of the last 30 months. In December, the capacity utilization rate rose 0.3 percentage points to 78.1 percent and is 2.3 percentage points higher than prior year. Still, the utilization rate remained comfortably below the long-term average of 80.4 percent and is not stoking near-term concerns of inflation.
Following a vigorous eight-month rally from September 2010 to April 2011, energy prices cooled from their highs but have picked up the pace in recent months. In January, crude oil prices rose 1.6 percent and were up 15.4 percent from a year ago, with prices rising in five of the last nine months. Gasoline prices rose a more substantial 5.5 percent in January and were up 10.9 percent from a year ago, with prices rising in two of the last four months. At January close, crude oil was commanding near $99.35 per barrel, and gasoline, near $3.50 per gallon.
After strengthening the previous two months against the Euro and Pound, the U.S. dollar weakened against the Euro and Pound, down 1.6 percent against each in January. Year-over-year, it strengthened against both, up 3.4 percent against the Euro and 1.0 percent against the Pound. At January close, 1 Euro yielded 1.32 US dollars, and 1 Pound, 1.57 US dollars.
The Baltic Dry Index (BDI), which measures the daily average of prices in the spot market to ship raw materials in bulk, retreated in January for the third straight month after rallying the previous three, plummeting 60.9 percent in January to close the month at just 680, the lowest level in over 3 years, and falling 38.6 percent year-over-year.
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| Economic Indicators |  Expand All |
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| Indicator |
Latest |
Trend |
Date |
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» Employment |
| Unemployment Rate | 8.3% |  | 2/3 |
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.
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| Non-Farm Payrolls | 243K |  | 2/3 |
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.
| Mass Layoffs | 1,384 |  | 1/25 |
The Mass Layoff Statistics (MLS) program is a federal-state program that tracks major job cutbacks by industry, using data from each state's unemployment insurance database.
| Challenger, Gray, & Christmas - Layoffs Survey | 53K | | 2/1 |
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 Hours | 33.8 | | 2/3 |
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.
| Monster Employment Index | 133 |  | 2/3 |
Monster collects job postings from 1,500 web sites (including Monster.com) and creates an index of job availability. In addition to providing insight on the general strength of the economy, this report gives a sense of how many jobs employers are trying to fill.
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» Business Activity |
| Gross Domestic Product | 2.8% | | 1/27 |
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 Production | 95.3 | | 1/18 |
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 Order | 16.9% | | 2/3 |
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 Index | 56.8 | | 2/3 |
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 Index | 93.8 | | 1/10 |
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.
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» Consumer |
| Consumer Spending | 0.0% |  | 1/31 |
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.
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| Retail Sales | 6.5% | | 1/12 |
An estimate of monthly sales for retail and food service firms, based on a random sample of 5000 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 Index | 4.2% | | 2/2 |
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.
| Consumer Confidence Index | 61.1 | | 1/31 |
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 in turn 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.
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» Financial |
| Dow Jones Industrial Average | 3.4% | | 1/31 |
An index of 30 of the largest and most widely held stocks in America. The Dow Jones Industrial Average is the most popular index used to track the health of the U.S. equities market.
| S&P 500 | 4.4% | | 1/31 |
An index containing 500 large cap and predominantly American stocks. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched index of large-cap US stocks. It is considered to be a bellwether for the US economy.
| 13-Week Treasury Bills | 0.05% | | 1/31 |
T-Bills are short term government issued securities that mature in one year or less from their issue date. They are considered a risk-free investment.
| 10-Year Treasury Notes | 1.80% | | 1/31 |
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 Rates | 0.25% | | 1/25 |
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 are the single most influential event 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 | -6.3% | | 1/30 |
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 55 domestic banks and 23 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 Credit | -18.8% | | 1/30 |
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 55 domestic banks and 23 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.
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» Housing |
| Existing Home Sales | 4.61 mil | | 1/20 |
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 real-estate sector.
| Existing Home Inventory | 6.2 mo. | | 1/20 |
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 Index | 138.49 | | 1/31 |
The S&P / Case-Shiller Index is a monthly index that tracks home price trends in 20 major markets across the country.
| New Home Sales | 307K | | 1/26 |
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.
| 30-Year Fixed Rate Mortgage | 3.92% | | 1/31 |
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 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.
| Building Permits | 671K | | 1/27 |
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 an annualized rate, is considered a good leading indicator of future trends in housing.
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» Inflation |
| Consumer Price Index | 3.0% | | 1/19 |
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 Index | 4.8% | | 1/18 |
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 Utilization | 78.1% | | 1/18 |
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 2010 is 80.4 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 Prices | 5.5% | | 1/31 |
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 oil prices per barrel.
| Currency - Euro & Pound (GBP) | 1.6% | | 1/31 |
The chart below shows the exchange rate of the US Dollar with the Euro. The vertical axis shows the number of US dollars equal to one Euro. 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) | -60.9% | | 1/31 |
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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