Friday February 24 2017
US Consumer Sentiment Revised Up In February
University of Michigan | Joana Ferreira | joana.ferreira@tradingeconomics.com

The final reading of the University of Michigan's consumer sentiment for the United States came in at 96.3 in February 2017 compared to a preliminary figure of 95.7 and a final 98.5 in January. It was the weakest reading in three months, due to a drop in future expectations.

The gauge of future expectations declined to 86.5 from a preliminary of 85.7 and a final 90.3 in January. By contrast, the barometer for current economic conditions increased to 111.5 from a preliminary of 111.2 and 111.3 in January.

Americans expect the inflation rate to be 2.7 percent next year, down from earlier reported 2.8 percent but higher than 2.6 percent in January. Over the next 5 years, inflation is expected to be 2.5 percent, unchanged from the preliminary estimate but lower than 2.6 percent in January.




Friday February 24 2017
US New Home Sales Rise Less Than Expected
US Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Sales of new single-family houses in the United States went up 3.7 percent to a seasonally adjusted annual rate of 555,000 in January of 2017. It follows a downwardly revised 535,000 in the previous month, but lower than market expectations of 570,000.

Sales rose in the Northeast (15.8 percent to 44 thousand), the Midwest (14.8 percent to 70 thousand) and the South (4.3 percent to 290 thousand) but fell 4.4 percent in the West (to 151 thousand).  

The median sales price of new houses sold was $312,900 down from $316,200 in the previous month but up from $291,100 a year earlier. The average sales price was down to $360,900 from $378,900 in December and $365,600 a year earlier.

The stock of new houses for sale increased 3.5 percent to 265 thousand. This represents a supply of 5.7 months at the current sales rate.

Year-on-year, new home sales rose 5.5 percent.





Thursday February 23 2017
US Jobless Claims Rise More Than Expected
DOL | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 6 thousand to 244 thousand in the week ended February 18th 2017, from the previous week's downwardly revised level of 238 thousand and above market expectations of 241 thousand. Claims have been below 300 thousand for 103 straight weeks, the longest streak since 1970.

The 4-week moving average was 241,000, a decrease of 4,000 from the previous week's revised average. This is the lowest level for this average since July 21, 1973 when it was 239,500. The previous week's average was revised down by 250 from 245,250 to 245,000. 

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending February 11, unchanged from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending February 11 was 2,060,000, a decrease of 17,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,078,000 to 2,079,000. The 4-week moving average was 2,069,750, an decrease of 10,750 from the previous week's revised average. The previous week's average was revised up by 250 from 2,080,250 to 2,080,500.




Wednesday February 22 2017
Fed May Raise Rates Soon
Federal Reserve | Joana Taborda | joana.taborda@tradingeconomics.com

Many Fed officials said it might be appropriate to raise rates again fairly soon, depending on incoming data for labour market and inflation, minutes from FOMC meeting held on January 31-February 1 showed. However, policymakers emphasized uncertainty regarding fiscal policies and showed concerns over the dollar appreciation.

Extracts From the Minutes of the Federal Open Market Committee:

Participants generally indicated that their economic forecasts had changed little since the December FOMC meeting. They continued to anticipate that, with gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace, labor market conditions would strengthen somewhat further, and inflation would rise to 2 percent over the medium term. They also judged that near-term risks to the economic outlook appeared roughly balanced. Participants again emphasized their considerable uncertainty about the prospects for changes in fiscal and other government policies as well as about the timing and magnitude of the net effects of such changes on economic activity. In discussing the risks to the economic outlook, participants continued to view the possibility of more expansionary fiscal policy as having increased the upside risks to their economic forecasts, although some noted that several potential changes in government policies could pose downside risks. In addition, several viewed the downside risks from weaker economic activity abroad as having diminished somewhat. But several indicated that they continued to be concerned about the downside risks to economic activity associated with the possibility of additional appreciation of the foreign exchange value of the dollar or financial vulnerabilities in some foreign economies, together with the proximity of the federal funds rate to the effective lower bound. 

In discussing the outlook for monetary policy over the period ahead, many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the Committee's maximum-employment and inflation objectives increased. A few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the Committee greater flexibility in responding to subsequent changes in economic conditions. Several judged that the risk of a sizable undershooting of the longer-run normal unemployment rate was high, particularly if economic growth was faster than currently expected. If that situation developed, the Committee might need to raise the federal funds rate more quickly than most participants currently anticipated to limit the buildup of inflationary pressures. However, with inflation still short of the Committee's objective and inflation expectations remaining low, a few others continued to see downside risks to inflation or anticipated only a gradual return of inflation to the 2 percent objective as the labor market strengthened further. A couple of participants expressed concern that the Committee's communications about a gradual pace of policy firming might be misunderstood as a commitment to only one or two rate hikes per year and stressed the importance of communicating that policy will respond to the evolving economic outlook as appropriate to achieve the Committee's objectives. Participants also generally agreed that the Committee should begin discussions at upcoming meetings about the economic conditions that could warrant changes in the existing policy of reinvesting proceeds from maturing Treasury securities and principal payments from agency debt and mortgage-backed securities, as well as how those changes would be implemented and communicated.




Tuesday February 21 2017
US Factory Activity Growth Slows: Markit
Markit | Joana Taborda | joana.taborda@tradingeconomics.com

The Flash Markit US Manufacturing PMI decreased to 54.3 in February of 2017 from a near 2-year high of 55 in January. Figures came below market expectations of 55.3, mainly due to softer output and new order growth.

Despite a slowdown since January, the latest survey indicated that new order growth remained faster than at any other time since March 2015. This was driven by strong sales to domestic clients, which helped offset weaker growth in export markets during February. A number of manufacturers commented on greater demand from energy sector clients.

Meanwhile, manufacturers signaled that input cost inflation was at its highest level since September 2014. This was linked to increased prices for a range of raw materials, particularly metals and oilrelated inputs. However, factory gate price inflation was only marginal and slipped to a three-month low in February, thereby suggesting a continued squeeze on operating margins. 




Thursday February 16 2017
US Housing Starts Decline 2.6% In January
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the United States went down 2.6 percent from the previous month to a seasonally adjusted annualized rate of 1246 thousand in January of 2017, following an upwardly revised 1279 thousand in the previous month and due to a fall in the multi-family segment. Figures beat market expectations of 1222 thousand. Building permits rose 4.6 percent to a one-year high of 1285 thousand, also better than forecasts of 1230 thousand.

The volatile multi-family segment declined 7.9 percent to 421 thousand while single-family housing starts, the largest segment of the market, rose 1.9 percent to 823 thousand. Starts declined in the Midwest (-17.9 percent to 188 thousamd) and the West (-41.3 percent to 225 thousand) but went up in the Northeast (55.4 percent to 143 tousand) and the South (20 percent to 690 thousand).

Building permits reached the highest since November of 2015. Figures for the previous month were revised up to 1228 thousand. Permits for the multi-family segment jumped 23.5 percent to 446 thousand, offsetting a 2.7 percent fall in the single-family segment (to 808 thousand) and a 16.2 percent drop in structures with 2 to 4 units (to 31 thousand). Permits rose in the Northeast (29.6 percent to 149 thousand), the South (9.9 percent to 642 thousand) and the Midwest (5.3 percent to 198 thousand) but fell 13.2 percent in the West (to 296 thousand). 

Year-on-year, housing starts rose 10.5 percent and building permits went up 8.2 percent. 





Thursday February 16 2017
US Jobless Claims Rise Less Than Expected
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 5 thousand to 239 thousand in the week ended February 11th 2017, from the previous week's unrevised level of 234 thousand and below market expectations of 245 thousand.

Claims have now been below 300,000, the level associated with a healthy labor market, for 102 consecutive weeks. It was the longest stretch since 1970.

The 4-week moving average was 245,250, an increase of 500 from the previous week's revised average. The previous week's average was revised up by 500 from 244,250 to 244,750. 

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending February 4, unchanged from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending February 4 was 2,076,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,078,000 to 2,079,000. The 4-week moving average was 2,080,250, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 250 from 2,075,750 to 2,076,000.



Wednesday February 15 2017
US Industrial Output Falls Unexpectedly In January
Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com

US industrial production fell by 0.3 percent month-over-month in January 2017, following a downwardly revised 0.6 percent rise in the previous month and worse than market expectations of a 0.1 percent gain. Utilities output dropped sharply by 5.7 percent due to unseasonably warm weather while manufacturing production grew 0.2 percent, matching analysts' forecasts, and mining output rose 2.8 percent.

Utilities output contracted by 5.7 percent, following an upwardly revised 5.1 percent growth in the previous month, largely because unseasonably warm weather reduced the demand for heating. 

By contrast, manufacturing production moved up 0.2 percent, the same as in December and in line with expectations; and mining output jumped 2.8 percent after falling by 1.4 percent in the previous month.

Compared to the same month of 2016, industrial output showed no growth, as a sharp drop in utilities output (-2.6 percent) offset an increase in both manufacturing (0.3 percent) and mining (0.4 percent).

Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972-2016) average.




Wednesday February 15 2017
US Retail Sales Rise More Than Expected In January
US Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

Retail sales in the United States increased by 0.4 percent month-over-month in January 2017, following an upwardly revised 1 percent rise in December and above market expectations of a 0.1 percent gain. Higher sales at gasoline stations, restaurants and electronics and appliances stores offset a sharp drop in motor vehicle purchases.

11 out of 13 major retail categories showed gains in January while 2 declined.

The biggest increases were recorded at: Gasoline stations (2.3 percent from 3.2 percent in December); sporting goods, hobby, book and music stores (1.8 percent from -0.2 percent); food services and drinking places (1.4 percent from -1.1 percent); electronics and appliance stores (1.6 percent from -1.1 percent).

By contrast, sales of motor vehicles dropped 1.4 percent, the biggest decline in 10 months, after rising by 3.2 percent in December.

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 0.4 percent after an upwardly revised 0.4 percent gain in December.

Compared to January last year retail sales were up 5.6 percent. 




Wednesday February 15 2017
US Inflation Rate At Near 5-Year High Of 2.5%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the United States increased 2.5 percent year-on-year in January of 2017, following a 2.1 percent rise in December and above market expectations of 2.4 percent. The inflation rate accelerated for the sixth consecutive month to the highest since March of 2012, mainly boosted by gasoline prices.

Year-on-year, energy prices jumped 10.8 percent, following a 5.4 percent rise in December. In addition, inflation accelerated for transportation services (3.2 percent from 2.8 percent in December) but eased for shelter (3.5 percent from 3.6 percent) and medical care (3.6 percent from 3.9 percent). Meanwhile, food prices declined 0.2 percent, the same as in December. 

Annual core inflation, which excludes food and energy, rose to 2.3 percent from 2.2 percent in the previous month and beating expectations of 2.1 percent.

On a monthly basis, consumer prices increased 0.6 percent, higher than 0.3 percent in December and also above forecasts of 0.3 percent. It is the highest monthly rate since February of 2013. Energy prices increased 4 percent as gasoline jumped 7.8 percent, accounting for nearly half the increase in CPI. Food cost, which had been unchanged for 6 consecutive months, increased 0.1 percent. The food at home index was unchanged, while the index for food away from home rose 0.4 percent. Additional upward pressure came from prices of apparel, new vehicles, motor vehicle insurance, and airline fares all rising 0.8 percent or more. The shelter index went up 0.2 percent, a smaller increase than in recent months.

Excluding food and energy, prices rose 0.3 percent, above 0.2 percent in the previous two months and beating expectations of 0.2 percent.