Wednesday January 18 2017
US Industrial Output Rises The Most In Over 2 Years
Federal Reserve | Joana Ferreira |

Industrial production in the United States grew by 0.8 percent month-over-month in December 2016, following an upwardly revised 0.7 percent fall in November and better than market expectations of a 0.6 percent rise. It was the largest gain since November 2014, as utility output jumped 6.6 percent, its sharpest increase since December 1989.

Utilities output rebounded 6.6 percent, following an upwardly revised 4.6 percent contraction in the previous month, largely because of a return to more normal temperatures following unseasonably warm weather in November; the gain last month was the largest since December 1989. Also, manufacturing output expanded 0.2 percent, after falling by 0.1 percent in November but missing market consensus of a 0.4 percent increase.

Meanwhile, mining production showed no growth, after falling by a revised 0.7 percent in November. 

Compared to the same month of 2015, industrial output grew by 0.5 percent, boosted by utilities (+6.2 percent) and manufacturing (+0.2 percent) while mining fell (-2.8 percent).

Industrial production, however, fell 0.6 percent in the fourth quarter compared with the same period of 2015.

Capacity utilization for the industrial sector increased 0.6 percentage point in December to 75.5 percent, a rate that was 4.5 percentage points below its long-run (1972–2015) average.

Wednesday January 18 2017
US Inflation Rate at 2-1/2-Year High Of 2.1%
BLS | Joana Taborda |

Consumer prices in the United States increased 2.1 percent year-on-year in December 2016, following a 1.7 percent rise in November and matching market expectations. The inflation rate accelerated for the fifth consecutive month to the highest since June of 2014, boosted by gasoline and shelter cost.

Year-on-year, energy prices jumped 5.4 percent, following a 1.1 percent rise in November. Inflation accelerated for transportation services (2.8 percent from 2.5 percent in November) and was steady for shelter (3.6 percent) and medical care (3.9 percent). In addition, food prices declined at a slower 0.2 percent (-0.4 percent in November). 

Annual core inflation, which excludes food and energy, rose to 2.2 percent from 2.1 percent in the previous two months and matching expectations.  

On a monthly basis, consumer prices increased 0.3 percent, higher than 0.2 percent in November and also in line with forecasts, boosted by shelter (0.3 percent) and gasoline (3 percent). In contrast, food cost declined, offsetting an increase in the index for food away from home and leaving the overall food index unchanged for the sixth consecutive month. Excluding food and energy, prices rose 0.2 percent, the same as in November. Along with shelter, prices went up for motor vehicle insurance, medical care, education, airline fares, used cars and trucks and new vehicles but fell for apparel and communication. 

Friday January 13 2017
US Consumer Sentiment Falls Slightly In January
University of Michigan | Joana Taborda |

The preliminary reading of the University of Michigan's consumer sentiment for the United States edged down to 98.1 in January of 2017 from a 13-year high of 98.2 in the previous month and lower than market forecasts of 98.5. Future expectations declined and inflationary pressures jumped.

The gauge of future expectations fell to 88.9 from 89.5 in December while the barometer for current economic conditions rose to 112.5 from 111.9, reaching the highest since 2004.

Americans expect the inflation rate to be 2.6 percent next year, compared with 2.2 percent in December and 2.5 percent over the next 5 years, higher than 2.3 percent the previous month.

Friday January 13 2017
US Retail Sales Rise Less Than Expected
US Census Bureau | Joana Taborda |

Retail sales in the United States increased 0.6 percent month-over-month in December of 2016, following an upwardly revised 0.2 percent rise in November and below market expectations of a 0.7 percent gain. Sales of autos and gasoline rebounded. Considering the three months to December, retail sales went up 1.6 percent and for full 2016 sales rose 3.3 percent, higher than 2.3 percent in 2015.

7 out of 13 major retail categories showed gains in December, 1 was unchanged and 5 declined.

The biggest increases were recorded for motor vehicles and parts (2.4 percent vs -0.2 percent in November), gasoline statisons (2 percent vs 0 percent), nonstore retailers (1.3 percent vs 0.3 percent), furniture (0.5 percent vs 0 percent), building materials and garden equipment (0.5 percent vs 0.6 percent), health and personal care stores (0.3 percent, the same as in November) and sporting goods (0.2 percent vs -1.4 percent).

In contrast, sales were flat for clothing (0 percent in November) and fell for miscellaneous stores (-1 percent vs 0 percent), food services and drinking places (-0.8 percent vs 1.2 percent), electronics and appliances (-0.5 percent vs 0.1 percent), general merchandise stores (-0.5 percent vs 0.1 percent) and food and beverages (-0.3 percent vs 0 percent). 

The so-called core retail sales that exclude automobiles, gasoline, building materials and food services and correspond most closely with the consumer spending component of gross domestic product, rose 0.2 percent after being flat in November.

Year-on-year, retail sales increased by 4.1 percent.

Thursday January 12 2017
US Posts $28 Billion Budget Deficit in December
US Treasury | Joana Taborda |

The US government posted a $28 billion budget deficit in December of 2016, a 94.4 percent increase from a $14.4 billion gap the same month of the previous year and slightly above market expectations of a $25 billion gap. Receipts slumped 8.9 percent to $319 billion and outlays fell 4.7 percent to $347 billion.

In December, individual income taxes accounted for $140 billion of total recipts, social security and other payroll taxes for $87 billion, corporate income taxes for $73 billion and other taxes and duties for the remaining $20 billion. Regarding outlays, other accounted for $143 billion, social security for $77 billion, defense for $57 billion, Medicare for $46 billion and interest on debt for $24 billion. 

When adjusting for calendar adjustments, the December 2016 deficit was $5 billion compared with a $27 billion surplus in the same month of 2015.

The fiscal 2017 year-to-date deficit was $208 billion compared with $161 billion in the same period of fiscal 2016.

Thursday January 12 2017
US Jobless Claims Lower Than Expected At 247K
DOL | Joana Taborda |

The number of Americans filing for unemployment benefits increased by 10 thousand to 247 thousand in the week ended January 7th 2017, below market expectations of 255 thousand. It is the 97th consecutive week of initial claims below 300,000, the longest streak since 1970. Yet, the 4-week moving average that removes week-to-week volatility fell by 1.75 thousand to 256.5 thousand.

Claims for the prior week were revised up by 2,000d to 237,000 and the previous week's average was revised up by 1,500 from 256,750 to 258,250.

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending December 31, unchanged from the previous week's unrevised rate.

Continuing jobless claims fell by 29,000 to 2,087during the week ending December 31. The previous week's level was revised up 4,000 from 2,112,000 to 2,116,000. The 4-week moving average was 2,086,750, an increase of 16,500 from the previous week's revised average. The previous week's average was revised up by 3,250 from 2,067,000 to 2,070,250. 

Friday January 06 2017
US Trade Gap At 9-Month High In November
BEA | Yekaterina Guchshina |

The trade gap in the United States increased by $2.9 billion to $45.2 billion in November of 2016, from a downwardly revised $42.4 billion in October and above market expectations of $42.5 billion shortfall. It was the biggest trade deficit since February. Exports fell 0.2 percent, due to lower shipments of civilian aircraft. In contrast, imports rose 1.1 percent and reached the highest level in 15 months, driven by crude oil purchases.

The goods deficit widened by $3.4 billion to $66.6 billion and the services surplus rose by $0.5 billion to $21.4 billion.

Total exports of goods and services declined 0.2 percent to $186.33 billion. Sales of goods decreased $0.7 billion to $122.4 billion in November: capital goods decreased $1.8 billion, to their lowest level since September 2011; civilian aircraft declined $1.3 billion while industrial supplies and materials increased $1.5 billion. Exports of services increased $0.3 billion to $63.5 billion, with financial services rose $0.2 billion and travel edged up  $0.1 billion.

Total imports rose 1.1 percent to $231.0 billion, the highest level since August 2015. Imports of goods increased $2.7 billion to $189 billion: industrial supplies and materials increased $2.2 billion and crude oil went up $0.9 billion. Imports of services fell $0.3 billion to $42.1 billion: transport decreased $0.4 billion and travel decreased $0.2 billion.

Year-to-date, the goods and services deficit decreased $4.9 billion, or 1.1 percent, from the same period in 2015. Exports shrank $56.6 billion or 2.7 percent. Imports decreased $61.4 billion or 2.4 percent.

Friday January 06 2017
US Job Growth Slows in December
Anna |

Non Farm Payrolls in the US increased by 156 thousand in December of 2016, lower than upwardly revised 204 thousand in November and below market expectation of 178 thousand. Job growth occurred in health care and social assistance. Job growth totaled 2.2 million in 2016, less than the increase of 2.7 million in 2015.

The change in total nonfarm payroll employment for October was revised down from +142,000 to +135,000, and the change for November was revised up from +178,000 to +204,000. With these revisions, employment gains in October and November were 19,000 higher than previously reported. Over the past 3 months, job gains have averaged 165,000 per month.

Employment in health care rose by 43,000 in December, with most of the increase occurring in ambulatory health care services (+30,000) and hospitals (+11,000). Health care added an average of 35,000 jobs per month in 2016, roughly in line with the average monthly gain of 39,000 in 2015.

Social assistance added 20,000 jobs in December, reflecting job growth in individual and family services (+21,000). In 2016, social assistance added 92,000 jobs, down from an increase of 162,000 in 2015. 

Employment in food services and drinking places continued to trend up in December (+30,000). This industry added 247,000 jobs in 2016, fewer than the 359,000 jobs gained in 2015.

Employment also continued to trend up in transportation and warehousing in December (+15,000). Within the industry, employment expanded by 12,000 in couriers and messengers. In 2016, transportation and warehousing added 62,000 jobs, down from a gain of 110,000 jobs in 2015.

Employment in financial activities continued on an upward trend in December (+13,000). This is in line with the average monthly gains for the industry over the past 2 years.

In December, employment edged up in manufacturing (+17,000), with a gain of 15,000 in the durable goods component. However, since reaching a recent peak in January, manufacturing employment has declined by 63,000.

Employment in professional and business services was little changed in December (+15,000), following an increase of 65,000 in November. The industry added 522,000 jobs in 2016.

Employment in other major industries, including mining, construction, wholesale trade, retail trade, information, and government, changed little in December.

Friday January 06 2017
US Unemployment Rate Rises To 4.7% In December
BLS | Joana Ferreira |

US unemployment rate rose to 4.7 percent in December 2016 from a nine-year low of 4.6 percent in the previous month and in line with market expectations. The number of unemployed persons was nearly unchanged at 7.5 million while the labor force participation rate increased by 0.1 percentage point to 62.7 percent.

Among the major worker groups, the unemployment rates for adult men (4.4 percent), adult women (4.3 percent), teenagers (14.7 percent), Whites (4.3 percent), Blacks (7.8 percent), Asians (2.6 percent), and Hispanics (5.9 percent) showed little change in December. 

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.8 million in December and accounted for 24.2 percent of the unemployed. In 2016, the number of long-term unemployed declined by 263,000. 

The labor force participation rate, at 62.7 percent, changed little in December and was unchanged over the year. In December, the employment-population ratio was 59.7 percent for the third consecutive month; this measure showed little change, on net, in 2016.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers), at 5.6 million, was essentially unchanged in December but was down by 459,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In December, 1.7 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 426,000 discouraged workers in December, down by 237,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available to them. The remaining 1.3 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities.

Thursday January 05 2017
US Services Sector Growth Remains Strong: ISM
ISM | Joana Taborda |

The ISM Non-Manufacturing PMI index came in at 57.2 in December of 2016, the same as in the previous month and above market expectations of 56.6. It is the highest figure since October of 2015 as new orders increased while business activity and employment eased and price pressures went up.

The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.3 percentage point lower than the November reading of 61.7 percent, reflecting growth for the 89th consecutive month, at a slightly slower rate in December. 

The New Orders Index registered 61.6 percent, 4.6 percentage points higher than the reading of 57 percent in November. 

The Employment Index decreased 4.4 percentage points in December to 53.8 percent from the November reading of 58.2 percent. 

The Prices Index increased 0.7 percentage point from the November reading of 56.3 percent to 57 percent, indicating prices increased in December for the ninth consecutive month at a slightly faster rate. 

The 12 non-manufacturing industries reporting growth in December — listed in order — are: Mining; Retail Trade; Finance & Insurance; Information; Arts, Entertainment & Recreation; Construction; Other Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Accommodation & Food Services. The three industries reporting contraction in December are: Public Administration; Wholesale Trade; and Agriculture, Forestry, Fishing & Hunting.