Bill Losey’s Weekly Economic Update for February 20, 2012
Monday, February 20th, 2012
CONSUMER PRICES UP 0.2% for January
Major factors in this increase in the Consumer Price Index include a 0.9% rise in the price of clothing as well as rising rents and healthcare costs. Core CPI also rose 0.2% in January. The annualized inflation rate hit 2.3% last month, yet the Federal Reserve expects but a 1.6% gain in the CPI across 2012. Wholesale inflation ticked up 0.1% for January, with the core Producer Price Index up 0.4%.
RETAIL SALES FALL SHORT OF (HIGH) EXPECTATIONS
The Census Bureau reported a healthy 0.4% rise in U.S. retail purchases for January. However, economists polled by Dow Jones Newswires thought they would rise 0.9% for the month. Subtract a 1.1% decline in auto sales from the data, and retail sales were up 0.7% for January.
LEADING INDICATORS Hit 3½-YEAR PEAK
The Conference Board’s Leading Indicator Index rose 0.4% in January, with seven of ten indicators improving. (The most notable positive detected: a widening in the spread between short-term and long-term interest rates.) The …
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Bill Losey’s Weekly Economic Update for February 13, 2012
Monday, February 13th, 2012
While the $25+ billion settlement reached last week between five large mortgage servicers and 49 states was momentous, it may not help many borrowers in trouble. Only about 1 million of the estimated 11 million underwater homeowners will see relief as loans sold to Fannie Mae and Freddie Mac aren’t included in the deal. Much of the settlement money will go toward mortgage modification. Roughly 750,000 homeowners are slated to receive financial compensation from the accord (an average of about $2,000 per household). The lenders involved are JPMorgan Chase, Bank of America, Ally Financial, Citigroup and Wells Fargo; other banks could join them. (The state of Oklahoma forged its own agreement with the five lenders.)
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Bill Losey’s Weekly Economic Update for February 6, 2012
Monday, February 6th, 2012
JOBLESS RATE DOWN TO 8.3%
Are we seeing a trend here? The unemployment rate has now fallen 0.8% in the last six months. We haven’t seen a descent this sharp and swift since 1984. January hiring blew away forecasts: the Labor Department said the economy added 243,000 jobs last month, while economists polled by Briefing.com expected non-farm payrolls to grow by 155,000 positions. The labor force hasn’t grown so much in a month since last April, and the numbers are making analysts wonder if the Federal Reserve will tinker with interest rates months ahead of expectations.
HOUSEHOLDS SAVE FIRST, SPEND SECOND
Consumer spending was flat in December after gains of just 0.1% in November and October. More significantly, consumer incomes rose 0.5% for December and so did the personal savings rate. People essentially put the extra money in the bank. In related news, the federal government estimated 2011 GDP at 1.7%, about half of the economic growth seen in 2010.
BOTH ISM INDEXES RISE
The Institute for Supply Management’s closely …
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Bill Losey’s Weekly Economic Update for January 30, 2012
Monday, January 30th, 2012
ECONOMY GROWS 2.8% in Q4
While this is the best GDP reading since Q2 2010, the initial estimate from the Bureau of Economic Analysis still disappointed the markets. Many economists and investors were looking for growth of 3.0% or better. The majority of the growth actually came from increased inventories. Consumer spending rose 2.0% last quarter, with auto sales being the biggest factor. Durable goods orders did see 3.0% growth in December, putting them 45% above the recession low hit in April 2009.
DIPS IN New & PENDING HOME SALES
The number of signed home sale contracts fell 3.5% in December, according to the National Association of Realtors. Separately, a Census Bureau report showed that new home sales declined 2.2% in December.
MARQUEE sentiment INDEX at 11-MONTH PEAK
The Thomson Reuters/University of Michigan consumer sentiment index ended January at 75.0. This was way up from Decembers 69.9 mark, and it beat the 74.1 reading forecast by economists surveyed by Reuters.
PRECIOUS METALS GAIN ALLURE
At Fridays COMEX close, gold was +10.56% …
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Bill Losey’s Weekly Economic Update for January 23, 2012
Monday, January 23rd, 2012
NO CONSUMER INFLATION INCREASE IN DECEMBER.
For the second month in a row, the Labor Department reported no advance in its Consumer Price Index. Core CPI did rise 0.1% last month. Across 2011, consumer prices rose 3.0%; last year was the most inflationary year since 2007. As for wholesale inflation, the Producer Price Index declined 0.1% in December.
MORE HOMES MOVING ON THE MARKET
The National Association of Realtors announced a 5.0% increase in existing home sales for December, with a 4.6% gain in sales of single-family houses. For all of 2011, existing home sales improved by 1.7% as the median sale price declined 3.9%. One negative real estate signal last week: in December, housing starts fell by 4.1%.
FEWEST INITIAL JOBLESS CLAIMS IN FOUR YEARS
The Labor Department said initial applications for jobless benefits dropped by 50,000 to 352,000 in the week ending January 14. That is the lowest number of initial claims taken in any week since April 2008.
GOLD GAINS 2% IN Five DAYS
Its 2.04% weekly advance on …
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Bill Losey’s Weekly Economic Update for January 16, 2012
Monday, January 16th, 2012
After U.S. markets closed Friday, Standard & Poors downgraded a third of the European Union: it took France from AAA to AA+, cut ratings for Austria, Slovakia, Slovenia and Malta by a notch and booted the ratings of Italy, Portugal, Spain and Cyprus down two notches. S&P said the EUs debt reduction plan lacks sufficient size or scope. Additionally, EU talks on restructuring Greek debt fell apart Friday.
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Bill Losey’s Weekly Economic Update for January 9, 2012
Monday, January 9th, 2012
In December, the jobless rate declined for the fourth straight month to its lowest level since February 2009. The Labor Department announced that the economy added 200,000 net new jobs last month, topping the consensus forecast of analysts polled by Reuters who expected a gain of 155,000. Separately, payroll processing firm ADP reported private sector firms hiring 325,000 workers in December. Whether Decembers boost reflects a seasonal hiring boom or not, Labor Department data indicates that private sector payrolls expanded by an average of 132,000 jobs per month during the second half of 2011.
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Bill Losey’s Weekly Economic Update for January 2, 2012
Monday, January 2nd, 2012
STOCKS IN 2011: DJIA +5.5%, S&P 500 ENDS FLAT
The Dow Jones Industrial Average bucked a global trend and advanced in 2011. The index rose 11.95% in the fourth quarter, a move that separated it from a pack of overseas benchmarks that finished the year with double-digit percentage losses. In terms of price return, the S&P 500 recorded its smallest annual change since 1947 (see below). The S&Ps total return for 2011 was +2.11%. With all the fears about Europe and the Federal Reserve keeping interest rates incredibly low, long-term Treasuries had their best year since 2008 with a total return of 33%.
CONSUMER CONFIDENCE BAROMETER RISES
The Conference Board’s index of consumer confidence saw a big jump north in December, soaring 9.3 points to 64.5. Economists surveyed by Reuters had expected it to come in at 58.3.
HOME SALE PRICES DOWN, HOME SALE CONTRACTS UP
The good news? The National Association of Realtors said its pending home sales index reached a 19-month peak in November, moving to …
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Bill Losey’s Weekly Economic Update for December 26, 2011
Monday, December 26th, 2011
CONSUMERS FEELING MERRIER. Decembers final Thomson Reuters/University of Michigan consumer sentiment survey came in at 69.9 compared with Novembers final 64.1 mark. That also beat the 68.0 estimate forecast by economists Reuters had surveyed.
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Bill Losey’s Weekly Economic Update December 19, 2011
Monday, December 19th, 2011
JOBLESS CLAIMS FALL TO 3-YEAR LOW
Last Thursday, the Labor Department announced that 366,000 Americans filed initial jobless claims in the week ending December 10, the lowest weekly figure since March 2008. This was a drop of 19,000 from the preceding week and refuted the expectations of some economists. This may be a sign that the jobless rate, currently at 8.6%, could be poised to fall further.
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Bill Losey’s Weekly Economic Update for December 12, 2011
Monday, December 12th, 2011
Decembers initial University of Michigan consumer sentiment index is in, and the reading of 67.7 represents a six-month high. This is a 3.6% increase from the final November survey. The sub-index of consumer expectations (which some regard as an indicator of future consumer spending) improved from 55.4 to 61.1. In other positive news for households, retail gas prices hit a low unseen since February on December 5, according to the American Automobile Association, $3.27 was the national average for a gallon of regular unleaded.
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Bill Losey’s Weekly Economic Update for December 5, 2011
Monday, December 5th, 2011
JOBLESS RATE FALLS TO 8.6%
In November, U.S. unemployment hit its lowest level since March 2009. Novembers net job gain was 120,000. While the Bureau of Labor Statistics report showed that the majority of the new hires were made by retailers and temp agencies, this is still a sign of recovery. The underemployment rate fell to 15.6% from the prior 16.2%.
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Bill Losey’s Weekly Economic Update for November 28, 2011
Monday, November 28th, 2011
Personal spending advanced by just 0.1% in October, the smallest gain in four months, as measured by the Commerce Department. Hopefully a strong Black Friday and Cyber Monday will make November a different story. In better news, personal incomes rose 0.4% last month, the best month for that statistic since March. Americas savings rate increased 0.2% to 3.5%.
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Bill Losey’s Weekly Economic Update for November 21, 2011
Monday, November 21st, 2011
CONSUMER PRICES RETREAT IN OCTOBER – For the first month since June, consumer inflation decreased. The biggest influence on the 0.1% decline in the Consumer Price Index? Falling retail gasoline prices. New car prices also saw their biggest one-month drop in nearly two years. Core CPI rose 0.1% in October; annualized inflation lessened to 3.5% with annualized core CPI at 2.1%. Producer prices declined last month as well, going -0.3% after a +0.8% September showing; core PPI was flat in October.
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Bill Losey’s Weekly Economic Update for November 14, 2011
Monday, November 14th, 2011
Global investors seemed reassured at the end of last week by developments in the European Union. By Friday, Greek prime minister George Papandreou had stepped down; Italian prime minister Silvio Berlusconi’s resignation was at hand. Greek prime minister designate Lucas Papademos and a new coalition government will now be charged with implementing austerity cuts as Greece accepts the EU’s latest €130 billion aid package. Italy’s senate passed new economic reforms at the end of the week aimed at reducing its sovereign debt. Italy’s treasury was also able to sell €5 billion of one-year notes , albeit at 6.09% interest.
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Bill Losey’s Weekly Economic Update for November 7, 2011
Monday, November 7th, 2011
Economists surveyed by Bloomberg News had expected unemployment to stay at 9.1% in October, so this was a nice development. Still, this latest jobs report had something in common with its predecessors: underwhelming job growth. Non-farm payrolls expanded by 80,000 positions last month, but that fell short of the 95,000 new jobs envisioned in the consensus Bloomberg forecast. On the bright side, the percentage of underemployed Americans fell from 16.5% to 16.2% and the long-term unemployed (those out of work for at least 27 weeks) shrank to 42.4% of the jobless population, the lowest percentage since November 2010.
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Bill Losey’s Economic Update for October 31, 2011
Monday, October 31st, 2011
HOUSEHOLDS EARN & SAVE LESS, YET SPEND MORE
On Friday, Commerce Department data showed that personal incomes have declined in each of the past three months when adjusted for inflation. However, personal spending has increased in each of those months; it improved by 0.6% in September. The personal savings rate fell by 0.5% last month to 3.6%, a low unseen since December 2007.
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Bill Losey’s Weekly Economic Update for October 24, 2011
Monday, October 24th, 2011
ANNUALIZED INFLATION HITS 3.9%
So noted the Bureau of Labor Statistics last week. The Consumer Price Index rose 0.3% during the month of September, with core CPI rising 0.1%, the smallest such increase in six months. (Annualized core consumer inflation was at 2.0%.) The Producer Price Index climbed 0.8% for September after a flat August.
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Bill Losey’s Weekly Economic Update for October 17, 2011
Monday, October 17th, 2011
RETAIL SALES JUMP MOST IN 7 MONTHS
On Friday, the Commerce Department said overall U.S. retail spending improved 1.1% in September, with auto sales rising 3.6% for the month and department store sales up 1.1%. August retail sales – previously recorded as flat – were revised north to a 0.3% gain.
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Bill Losey’s Weekly Economic Update October 10, 2011
Monday, October 10th, 2011
HIRING IMPROVES…WITH A FOOTNOTE
Economists polled by MarketWatch had expected non-farm payrolls to increase by 59,000 for September. In a nice surprise, the economy added 103,000 jobs. However, 45,000 of those “hires” were actually striking Verizon employees returning to work. The unemployment rate remained at 9.1% for the third straight month. The Department of Labor revised the July and August jobs reports to include a cumulative 99,000 new hires.
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Bill Losey’s Weekly Economic Update for October 3, 2011
Monday, October 3rd, 2011
AMERICANS SPEND A BIT MORE, EARN A BIT LESS
In August, personal spending improved by 0.2% while personal incomes retreated by 0.1%. This was the first monthly decline in household incomes since October 2009; July’s household earnings gain was revised down to 0.1%…
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Bill Losey’s Weekly Economic Update for September 26, 2011
Monday, September 26th, 2011
INVESTORS SEEK CASH, WATCH POLICY MOVES
Stocks tumbled last week as Wall Street shrugged off news of the Federal Reserve’s move to direct $400 billion into longer-term Treasuries and wondered if Europe’s debt troubles might trigger a recession. At mid-week, the Federal Reserve and International Monetary Fund managing director Christine LaGarde both noted “downside risks” to the U.S. and world economies. Thursday night, finance ministers and central bank governors from the Group of 20 pledged they would make a “strong and coordinated international response to address the renewed challenges facing the global economy” – a welcome declaration, yet the S&P 500 still slipped more than 6% on the week…
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Bill Losey’s Weekly Economic Update for September 19, 2011
Monday, September 19th, 2011
CPI, PPI TELL DIFFERENT STORIES: According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.4% in August – and annualized inflation came in at 3.8%, the highest rate in nearly three years. Annualized core inflation was +2.0% given a 0.2% rise in core CPI last month. On the other hand, producer prices showed the smallest annual gain since March: in August, they were up 6.5% year-over-year, compared to a 7.3% differential in May. The overall Producer Price Index was flat last month; core PPI went +0.1%.
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Bill Losey’s Weekly Economic Update for September 12, 2011
Monday, September 12th, 2011
WILL CONGRESS PASS THE $447 BILLION JOBS PLAN?
Thursday, President Obama challenged Congress to swiftly approve the American Jobs Act – a plan that would cut the payroll tax for workers and businesses to 3.1% in 2012 and offer tax credits as large as $4,000 to companies hiring people out of work for more than 6 months. If passed, the AJA would also pour about $80 billion into public works projects and extend long-term jobless benefits. A written response from House Speaker John Boehner (R-OH) and three other key Republican leaders noted that the plan will be quickly considered, but cited a need to “find common ground” and an assumption that the bill was not “an all-or-nothing proposition.”
ISM SERVICES INDEX TOPS FORECASTS
Economists polled by Bloomberg News thought that the Institute for Supply Management’s non-manufacturing index would fall to 51.o in August. Instead, it bettered the 52.7 reading from July. The 53.3 August reading indicates some expansion in the industries that account for roughly 90% of the …
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Bill Losey’s Weekly Economic Update for September 5, 2011
Tuesday, September 6th, 2011
NO JOB GAINS IN AUGUST
In August, nonfarm payroll employment totaled 131.1 million – as it did in July. The Labor Department measured no job growth in the economy for the first time since September 2010. Additionally, employers reduced the average work week slightly to 34.2 hours. The unemployment rate remained at 9.1% last month.
CONSUMER SPENDING IMPROVES BY 0.8%
This hugely encouraging July figure from the Commerce Department trounced forecasts and represented the best month for the statistic since February. Personal incomes improved by 0.3% in July; the personal savings rate hit a four-month low.
PENDING HOME SALES DOWN, HOME PRICES UP
The National Association of Realtors announced pending home sales had declined by 1.3% in July following three months of gains. The number of sales contracts was still 14.4% better than a year before. July’s Case-Shiller Home Price Index was notable for indicating a 3.6% 2Q gain in home prices, though the index was still down 5.9% year-over-year.
MANUFACTURERS SIGNAL MINOR EXPANSION
The Institute for Supply Management’s August purchasing manufacturers …
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Bill Losey’s Weekly Economic Update for Aug. 29, 2011
Monday, August 29th, 2011
COULD SEPTEMBER BRING ANOTHER STIMULUS?
Could we see a QE3? Maybe. While Federal Reserve Chairman Ben Bernanke made no mention of a plan to aid the economy at last week’s Fed symposium in Wyoming, he did refer to “a range of tools that could be used to provide additional monetary stimulus” and noted that the Fed “will continue to consider those and other pertinent issues… at our meeting in September.” September’s FOMC meeting has now been lengthened to 2 days; make of that what you will. Bernanke said he expects improved GDP in the second half of 2011 and core inflation under 2%.
NEW HOME SALES DECLINE, BUT HOME PRICES GO UP
The Census Bureau announced a 0.7% drop in new home sales in July; sales were up 6.8% from a year ago. The average sale price was $272,300, with 6.6 months of inventory on the market. Overall U.S. home prices rose 0.9% in June, …
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Bill Losey’s Weekly Economic Update for August 22, 2011
Tuesday, August 23rd, 2011
RISING GAS PRICES KEY FACTOR IN INFLATION SPIKE
The federal government’s Consumer Price Index recorded a 0.5% inflation increase for July. Gasoline prices rose 4.7% during the month; food prices rose 0.4%. Core CPI advanced 0.2%. Producer prices rose as well – the Labor Department’s July Producer Price Index posted a 0.2% increase, with core PPI up 0.4%. Economists surveyed by Reuters had expected gains of just 0.2% in overall CPI and 0.1% in overall PPI for the month.
EXISTING HOME SALES DECLINE IN JULY
The National Association of Realtors noted a 3.5% fall in residential resales for July. While the rate of existing home sales hit an 8-month low last month, sales in July were still up 21% from a year ago (the federal homebuying credit expired in July 2010). The median sale price was $174,400, down 4.4% from a year ago.
$1,800 GOLD IS HERE; OIL MOVES LOWER
Gold settled at $1,852.20 per ounce on …
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Bill Losey’s Weekly Economic Update for Aug. 15, 2011
Monday, August 15th, 2011
Americans BUY MORE IN JULY
According to the Commerce Department, U.S. retail purchases increased by 0.5% in July for the best month-over-month gain since March. That doesn’t seem to spell recession; if anything, it attests to the resilience of consumer spending. Additionally, business inventories grew by 0.3% in June as wholesale stockpiles grew 0.6%.
CONSUMER CONFIDENCE WANES
The initial August Reuters/University of Michigan consumer sentiment survey showed a major plummet. While economists polled by MarketWatch had expected a reading of 61.0, the gauge hit 54.9 – its lowest level since May 1980.
Gold GAINS $91 IN A WEEK
It wasn’t a typical week, and the precious metal soared in COMEX trading. Across August 8-12, gold advanced $91.40 – even with Friday’s $8.60 loss. It was the biggest weekly dollar gain for gold since September 15-19, 2008. A +5.54% week took prices to $1,740.20 per ounce at Friday’s close. As for oil, it lost 1.73% on …
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Bill Losey’s Weekly Economic Update for Aug. 8, 2011
Monday, August 8th, 2011
PRIVATE SECTOR ADDS 150,000+ NEW JOBS
America’s jobless rate ticked down to 9.1% in July as private sector payrolls expanded by a better-than-anticipated 154,000 positions, 81,000 of which were in the health care, retail and manufacturing industries. On the downside, Labor Department data showed that 156,000 people stopped looking for work last month; 6.2 million people have been out of work for six months or longer.
A SILVER LINING IN JUNE’S CONSUMER SPENDING
Basic Commerce Department data shows that personal spending fell 0.2% in June as personal incomes rose just 0.1%. Factor in inflation, and the story differs. Real disposable income increased 0.3% in June for the best advance since May 2010, and inflation-adjusted consumer spending was merely flat for the month.
ISM BAROMETERS INDICATE MODEST GROWTH
The Institute for Supply Management’s latest manufacturing and service sector PMIs didn’t exactly thrill Wall Street. ISM’s manufacturing index declined 4.4% to 50.9 for July, showing a …
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Bill Losey’s Weekly Economic Update for Aug. 1, 2011
Tuesday, August 2nd, 2011
A HINT OF COMPROMISE, A SIGN OF WEAKNESS
The weekend arrived with the House narrowly passing a Republican debt-reduction bill – the “two-step” bill linked to a balanced budget amendment, proposing a $917 billion cut in federal spending. Though doomed in the Senate, the vote on the bill opened a door to negotiation that may lead to passage of a compromise measure by the August 2 deadline. (At a Friday press briefing, Democratic officials said that Congress could possibly approve a 2-day extension of the cutoff date.) Meanwhile, the Commerce Department announced that the economy grew just 1.3% in the second quarter; economists polled by Reuters had forecast GDP of +1.8%.
MIXED CONSUMER CONFIDENCE READINGS
The final July Reuters/University of Michigan consumer sentiment survey came in at 63.7, the lowest reading since March 2009. However, the Conference Board’s July survey came in 1.9 points higher than June at 59.5.
GOLD & OIL GO IN DIFFERENT …
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Bill Losey’s Weekly Economic Update for July 25, 2011
Monday, July 25th, 2011
CRUNCH TIME ON CAPITOL HILL
After the defeat of the “Cut, Cap and Balance” bill in the Senate Friday, President Obama and House Speaker John Boehner (R-OH) were left to work on a deficit reduction plan with a projected $3 trillion cut in federal spending. Discussions stalled Friday, and Congress was not in session over the weekend. While Obama seeks tax increases as part of any accord, Congressional sources told Reuters that they may be tossed out of the deal. Any new bill will likely have to pass this week in the House in order to exit the Senate before the Treasury Department’s August 2 deadline. Overseas, the European Union approved a $157 billion bailout package for Greece that could also bring significant debt relief to Portugal and Ireland.
LESS HOMEBUYING, MORE HOMEBUILDING
Existing home sales declined by 0.8% in June, according to the National Association of Realtors. They were down 8.8% from a year …
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Bill Losey’s Weekly Economic Update for July 18, 2011
Monday, July 18th, 2011
DEBT ISSUES DOMINATE THE HEADLINES
Friday, President Obama reassured the media that Democrats and Republicans had “enough time” to “create a package that solves the deficit and debt.” While Congress needs to hike the debt cap by $2.4 trillion to enable federal borrowing through the end of 2012, Republican leaders want an equivalent federal spending cut linked to such a move. This week, House Republicans intend to vote on a plan to accomplish both goals, reliant on a constitutional amendment requiring a balanced federal budget. House Minority Leader Nancy Pelosi (D-CA) calls the measure “outrageous.” Another plan offered by Senate Minority Leader Mitch McConnell (R-KY) would give the President more autonomy to lift the debt cap. In Europe, Italy’s parliament passed austerity measures to cut $99 billion from that nation’s deficit by 2014.
CONSUMER PRICES RETREAT 0.2% IN JUNE
This marks the first dip in the Consumer Price Index in 12 months. The big reason? Gasoline prices fell 6.8% last month. Stripping out food and energy prices, core …
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Bill Losey’s Weekly Economic Update for July 11, 2011
Monday, July 11th, 2011
MINIMAL JOB CREATION IN JUNE
The Labor Department issued a disappointing unemployment report Friday. In June, non-farm payrolls expanded by just 18,000 jobs. (May’s net job gain was revised down from 54,000 to 25,000.) The unemployment rate was 9.2% in June; it has increased in each month since March.
SERVICE SECTOR GROWS FOR 19th STRAIGHT MONTH
The Institute for Supply Management’s June non-manufacturing index decreased to 53.3 from May’s 54.6 reading, falling a bit below the 54.0 consensus forecast of economists surveyed by Reuters. Prices paid by service-sector companies fell to their lowest level since August, a sign of reduced inflation pressure.
MORE CAPITAL INVESTMENT IN MAY
Factory orders increased by 0.8% in that month. The Commerce Department also noted a 1.6% improvement in non-defense capital goods orders, a 1.8% increase in non-defense capital goods shipments, and a 2.1% rise in demand for hard goods. Separately, the Federal Reserve estimated that factory output rose by 0.4% in May.
IMPRESSIVE WEEK FOR OIL & GOLD
Gold futures advanced 3.97% across July 5-8 to …
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Bill Losey’s Weekly Economic Update for July 5, 2011
Tuesday, July 5th, 2011
SOFT SPENDING DURING THE SOFT PATCH
After ten consecutive months of gains, personal spending was flat for May and actually retreated 0.1% when adjusted for inflation. Weak auto sales may have been the biggest influence. Economists polled by Reuters had projected a 0.1% gain in the indicator. The Commerce Department did note that personal incomes rose 0.3% for the second straight month. The personal consumption expenditures (PCE) price index showed a 2.5% year-over-year advance.
ISM INDEX SURPRISES
Analysts thought the Institute for Supply Management’s factory index would decline in June. It didn’t. The index rose from May’s 53.5 mark to 55.3. The U.S. was the only nation in the world whose benchmark manufacturing PMI rose last month.
CONSUMER CONFIDENCE WANES
This was not surprising given recent headlines. The University of Michigan’s final June consumer sentiment poll slipped to 71.5 from May’s 74.3 reading, and the Conference Board’s June consumer confidence index also declined to 58.5 from last month’s revised 61.7 mark.
HOME PRICES, HOME SALE AGREEMENTS INCREASE
The National Association of …
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Bill Losey’s Weekly Economic Update for June 27, 2011
Monday, June 27th, 2011
PEAK HOMEBUYING SEASON, BUT FEWER HOME SALES
The National Association of Realtors reported a 3.8% dip in existing home sales in May, and the Census Bureau noted a 2.1% reduction in new home purchases last month. The good news? New home sales were up 13.5% from last May, with the average price of a new home up $1,400 to $266,400. However, existing home sales were down 15.3% from a year before while the median existing home price was down 4.6% across the past 12 months.
IEA RELEASE SHIFTS SENTIMENT IN OIL MARKET
Thursday, the International Energy Agency decided that major oil-producing countries should release oil from their reserves to address a global shortfall. The U.S. will supply half of the 60 million barrels from its Strategic Petroleum Reserve, with the balance coming from nations in Europe and Asia. On Friday, oil futures in Europe slipped about 8% and settled at a four-month low; U.S. oil futures lost only 2.4% on the week and settled at $91.16 a …
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Bill Losey’s Weekly Economic Update for June 20, 2011
Monday, June 20th, 2011
PRICES RISE, BUT INFLATION PRESSURE EASES
According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.2% in May, with core CPI up 0.3%. (Food prices rose 0.4% and energy prices rose 0.6% last month.) This is the tamest monthly increase in inflation since last November. In year-over-year terms, the CPI is up 3.6% over the past 12 months; core CPI advanced 1.5%. The BLS also reported less wholesale price inflation in May: the Producer Price Index rose 0.2% last month after climbs of 0.8% in April and 0.7% in March. The year-over-year PPI gain was 7.3% – the biggest in almost three years.
LEADING INDICATOR INDEX TURNS NORTH
The Conference Board’s index of leading economic indicators was up 0.8% for May, rebounding from a 0.4% retreat in March. Eight of the index’s ten indicators showed improvement last month.
CONSUMER SENTIMENT WAVERS
The preliminary June University of Michigan consumer sentiment survey came in at 71.8 last week, below the 74.0 that economists polled by Bloomberg had forecast and …
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Bill Losey’s Weekly Economic Update for June 13, 2011
Monday, June 13th, 2011
NEW BEIGE BOOK SHOWS GROWTH MODERATING
At last week’s International Monetary Conference, Federal Reserve Chairman Ben Bernanke conceded that the pace of the recovery had become “frustratingly slow.” While the Fed’s latest Beige Book showed solid economic growth in eight of 12 Fed districts (with growth accelerating in the Dallas region), growth had moderated in the Philadelphia, Atlanta, Chicago and New York districts. Broadly, the Fed snapshot revealed some slowdown in manufacturing but steady service sector expansion.
2-YEAR NOTES NOTCH 9-WEEK WIN STREAK
This hasn’t happened since February 2008. The yield on the 2-year Treasury fell to 0.40% and the yield on the 10-year note slipped to 2.97% Friday, even with the sunset for QE2 on the horizon. Friday, the Fed said it would end that bond-buying program by purchasing $50 billion in Treasuries by the end of the month.
MORTGAGE RATES EASE FOR EIGHTH STRAIGHT WEEK
Freddie Mac’s latest Primary Mortgage Market Survey estimates the average interest rate on a 30-year fixed-rate mortgage at 4.49%, compared to an average …
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Bill Losey’s Weekly Economic Report for June 6, 2011
Monday, June 6th, 2011
HIRING TAPERS OFF IN MAY
Wall Street braced itself Friday for a subpar jobs report, and that was what arrived. Non-farm payrolls grew by just 54,000 in May – and if McDonald’s hadn’t added 62,000 fast-food positions last month, net hiring would have been negative. Payrolls had expanded by an average of 220,000 positions a month in the previous three months of data. The unemployment rate ticked north to 9.1% in May; the percentage of people without a job for six months or longer rose to 45.1%, nearly a record.
ISM: SOME GOOD NEWS, SOME BAD NEWS
The Institute for Supply Management’s manufacturing sector index slipped a troubling 6.9% to 53.5 for May. However, ISM’s service sector PMI rose 1.8% in May to 54.6, and new orders increased by 4.1%. Expansion continues in both sectors.
YEAR-OVER-YEAR HOME PRICES RETREAT
The newly released March edition of the S&P/Case-Shiller Home Price Index found home prices across 20 metro …
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Bill Losey’s Weekly Economic Update for May 31, 2011
Tuesday, May 31st, 2011
CONSUMER SPENDING SLOWS IN APRIL
Personal spending and personal incomes both increased by 0.4% last month – but the inflation-adjusted gains were minimal or non-existent. With inflation factored in, personal spending rose by 0.1% in April while personal incomes were flat. These latest numbers out of the Commerce Department aren’t very inspiring, especially since April’s small gains can be attributed to higher gas and food prices. However, many economists believe things will pick up in coming months, assuming gas prices moderate and more jobs appear.
EXPECTATIONS IMPROVE IN KEY CONFIDENCE POLL
The final May consumer sentiment survey is in from the University of Michigan. At 74.3, it shows a nice rebound from the final 69.8 mark for April. It also surpassed the 72.5 reading forecast by economists polled by MarketWatch. The 2011 high for the survey – 77.5 – was recorded in February before gas prices soared.
MIXED NEWS FROM THE REAL ESTATE SECTOR
The Census …
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Bill Losey’s Weekly Economic Update for May 23, 2011
Wednesday, May 25th, 2011
HOME SALES, HOUSING STARTS SLIP
Existing home sales decreased 0.9% in April, according to the National Association of Realtors. Annually, sales were off 12.9% from the pace of April 2010 (back when the homebuyer tax credit was in effect). The national median existing home price last month was $163,700, 5.0% below where it was a year before. The inventory of unsold residences increased to a 9.2-month supply, up from an 8.3-month supply in March. A new release from the Commerce Department said housing starts declined by 10.6% in April; building permits decreased by 4.0% last month.
CONFERENCE BOARD LEI INDEX DECLINES
The CB’s Leading Economic Index retreated in April for only the second time since March 2009. The 0.3% slip came after the index rose 0.7% in March and 0.9% in February. On the bright side, the CB’s coincident (i.e., current) economic index improved for the third straight month in April.
GOLD GETS BACK ABOVE $1,500; GAS …
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Bill Losey’s Weekly Economic Update for May 16, 2011
Tuesday, May 17th, 2011
INFLATION SPRINGS AHEAD
Consumer inflation increased by 0.4% in April after rising 0.5% in March. (You can cite food and energy costs – gasoline prices rose 3.3% alone last month.) Annualized inflation is the real story here: the federal government’s Consumer Price Index has advanced 3.2% in the past 12 months. That is the biggest annual gain since October 2008. As for wholesale inflation, the Producer Price Index was up 0.8% for April; it showed an annual increase of 6.8% (the most since September 2008).
GAINS IN RETAIL SALES, CONSUMER SENTIMENT
The Census Bureau announced that retail sales were up 0.5% in April; it also revised the March gain from 0.4% to 0.9%. The University of Michigan’s preliminary April consumer sentiment survey came in at 72.4, better than the 70.0 forecast by economists polled by Reuters and the final April reading of 69.8.
KEY COMMODITIES BOUNCE BACK
Last week, there was a bit of a rebound in …
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Bill Losey’s Weekly Economic Update for May 9, 2011
Monday, May 9th, 2011
HIRING IMPROVES IN APRIL
The Labor Department’s latest jobs report contained some good news: the private sector added 268,000 new jobs last month, and overall non-farm payrolls increased by 244,000 in April. The private sector hasn’t seen this much month-over-month job creation since February 2006, and the net gain of 244,000 jobs was the best since June 2010. The unemployment rate went up to 9.0% in April, but Wall Street rallied Friday after the report was released.
PMI INDEX STRONG; SERVICE SECTOR INDEX SLIPS
Last week, the Institute for Supply Management released its April reports on the manufacturing and service sectors. While the manufacturing index came in at 60.4 – down slightly from March’s 61.2 – anything above 60 indicates a booming sector. The non-manufacturing index dropped to 52.8 from March’s 57.3 reading. Anything above 50 means growth, but the index hasn’t been this low in eight months.
GOLD, SILVER & OIL PULL BACK
Are commodities …
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Bill Losey’s Weekly Economic Update for May 2, 2011
Thursday, May 5th, 2011
CONSUMER SPENDING INCREASES 0.6%
This March gain wasn’t that surprising in light of rising food and energy costs. (The Commerce Department just revised February’s gain to 0.9%). Disposable incomes were up by 0.1% in March while the personal savings rate held steady at 5.5%. The Commerce Department also released its initial estimate of 1Q 2011 GDP Friday (+1.8%) and 1Q consumer spending (+2.7%).
CONSUMER CONFIDENCE REBOUNDS
The University of Michigan’s final April consumer sentiment survey came in at 69.8, up from March’s final reading of 67.5. The one-year inflation expectation was 4.6%, the same as last month. The Conference Board’s April consumer confidence poll came in at 65.4, better than the median projection of economists surveyed by Bloomberg. Both indices improved despite gas prices rising – AAA said a gallon of regular unleaded averaged $3.87 on April 27, the highest price since August 2008.
CASE-SHILLER INDEX WITHIN .01% OF DOUBLE-DIP
February’s Case-Shiller Home Price Index revealed …
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Bill Losey’s Weekly Economic Update for April 25, 2011
Monday, April 25th, 2011
HOME SALES, HOME STARTS IMPROVE IN MARCH
The National Association of Realtors announced that existing home sales were up 3.7% last month, about 1% higher than the rebound expected on Wall Street. (NAR noted that about 35% of these were cash sales.) In another positive development for the real estate market, the Commerce Department measured a 7.2% gain in housing starts and an 11.2% rise in construction permits for March.
GOLD at new high, DOLLAR TOUCHES 3-year low
Gold cracked the $1,500 ceiling last week. Prices reached $1,508.75 on Thursday before settling at $1,503.80 on the COMEX. Silver hit yet another 31-year high at $46.68 per ounce, with prices ending the week at $46.06. Meanwhile, the U.S. Dollar Index descended to 73.735 during the market day on Thursday, a low unseen since August 2008.
LEI index UP FOR NINTH STRAIGHT MONTH
The Conference Board’s index of leading economic indicators rose another 0.4% for March, complementing a revised …
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Bill Losey’s Weekly Economic Update for April 18, 2011
Tuesday, April 19th, 2011
INFLATION LIVES UP TO EXPECTATIONS
Economists polled by Briefing.com felt that the federal government’s Consumer Price Index would rise 0.5% in March, and it did. They thought core CPI would advance by 0.1% for the month; they also got that right. If this keeps up, America will be staring at 6% annualized inflation. Should we instead focus on the tiny core CPI increase that strips out food and energy prices? It is pretty hard to ignore energy costs given that the Producer Price Index rose by another 0.7% in March, with the wholesale price of gasoline rising 5.7%. The PPI has climbed 5.8% over the past 12 months. Economists and investors are wondering how much mind the Federal Reserve will pay to all this at its next FOMC meeting, scheduled for April 26-27.
KEY CONSUMER SENTIMENT INDEX IMPROVES
The initial April Thomson Reuters/University of Michigan consumer sentiment survey came in at 69.6, a 2.1% increase …
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Bill Losey’s Weekly Economic Update for April 11, 2011
Tuesday, April 12th, 2011
WALL STREET WATCHES BUDGET FIGHT
While journalists and political analysts worldwide pondered the effects of a federal government shutdown last week, Wall Street conducted business as usual. Any prolonged shutdown would test the stock market: while the Federal Reserve would not be forced into a hiatus, the majority of Treasury Department employees would be furloughed, and the Securities and Exchange Commission, Federal Trade Commission and Department of Justice could halt review of M&As, IPOs and new stock and bond issues. Still, much of the Street’s attention will be focused on the new earnings season this week. (For the record, stocks actually advanced about 5% during the three-week federal budget impasse of 1995-1996.)
ISM SERVICE SECTOR INDEX DESCENDS TO 57.3
The Institute for Supply Management’s February non-manufacturing index came in at 59.7; the March edition is 2.4% lower, and ISM’s survey estimated a 7.2% decline in business activity/production for the month and a 4.0% increase …
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Bill Losey’s Weekly Economic Update for April 4, 2011
Tuesday, April 5th, 2011
JOBLESS RATE DOWN 1% SINCE NOVEMBER
In March, the nation’s jobless rate declined to 8.8%. That is the lowest level of unemployment since April 2009 and represents a 1.0% reduction in unemployment in the last four months. The Labor Department said the economy added 216,000 jobs in March, 78,000 in the category of professional and business services.
CONSUMER SPENDING UP 0.7%
Personal spending increased for the eighth month in a row in February, but Commerce Department data showed that much of the gain went to pay for higher food and energy costs. The Personal Consumption Index (PCE) advanced 0.4% for the month. So the inflation-adjusted gain in personal spending was 0.3%. Wages rose by 0.3% in February.
ISM: MANUFACTURING GROWTH MODERATES The March PMI index from the Institute for Supply Management showed a slight reduction in the pace of the sector’s growth: it came in at 61.2 versus February’s 61.4 mark. However, the index has recorded …
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Bill Losey’s Weekly Economic Update for Mar. 28, 2011
Monday, March 28th, 2011
4Q GDP REVISED UPWARD
The Commerce Department’s final estimate of 4Q 2010 GDP is +3.1%, an improvement from the previous estimate of +2.8%. The revision reflects increased consumer spending, exports and business investment during the quarter – and with this alteration, the Bureau of Economic Analysis now puts U.S. GDP at +2.9% for 2010. Compare that to the -2.6% economic output of 2009.
WHEN DOES THE REAL ESTATE RECOVERY BEGIN? By the looks of February’s home sales figures, recovery may not begin for a while. New home sales slipped 16.9% last month according to the Census Bureau, and were 28.0% under year-ago levels. The National Association of Realtors said existing home sales fell by 9.6% last month; the median sales price for a single-family home was $157,000 (-5.2% from a year ago) with distressed homes making up 39% of the market (up 4% from a year ago). While monthly home sales figures are …
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Bill Losey’s Weekly Economic Update for Mar. 21, 2011
Monday, March 21st, 2011
INFLATION PICKS UP
The Labor Department announced that the Consumer Price Index advanced 0.5% in February, following 0.4% advances in January and December. Energy prices climbed 3.4% in February and food prices rose 0.8%, the biggest monthly increase since July 2008. Annualized inflation now stands at 2.1% – a full percentage point higher than it was last November. The Producer Price Index climbed by 1.6% last month, the biggest monthly leap since June 2009; this puts annualized PPI at 5.6%. However, core CPI and core PPI did not advance so dramatically. In fact, core CPI and core PPI were both just +0.2% in February.
LEADING INDICATOR INDEX ADVANCES
The Conference Board index of leading indicators improved by 0.8% for February, which was below the 1.0% advance forecast by economists polled by Reuters but much better than the 0.1% gain for the previous month. The Conference Board’s report called the recent jump in food and energy …
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Bill Losey’s Weekly Economic Update for Mar. 14, 2011
Monday, March 14th, 2011
BEST RETAIL SALES NUMBERS IN 4 MONTHS
The Census Bureau says that retail sales climbed 1.0% in February. That matched the median forecast of economists polled by Bloomberg News. Department store sales improved by 1.0% last month and restaurant sales improved by 1.2% (the best monthly gain in that category in a year). Auto sales saw a 2.3% gain in February. Overall U.S. retail sales were up 8.9% from a year before.
LOWEST CONSUMER SENTIMENT IN 5 MONTHS
Sometimes economic releases seem completely contradictory. While retail sales have improved, consumer sentiment has dipped – at least according to the University of Michigan’s initial March survey, which came in at 68.2, way below the final February mark of 77.5. Soaring gas prices would seem to be a factor. The index had been making progress back toward its 2002-2007 average reading of 89.
ROUGH GOING FOR OIL & GOLD FUTURES
Last week’s run from risk sent the …
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Bill Losey’s Weekly Economic Update for March 7, 2011
Monday, March 7th, 2011
JOBS REPORT (NEARLY) LIVES UP TO EXPECTATIONS
Wall Street had high hopes for the February unemployment report. Would it show that more than 200,000 new jobs had been created? Well, it came close – the data revealed 192,000 net new jobs, the best increase in nearly a year. The jobless rate ticked down to 8.9% last month, and the number of underemployed Americans (those either without work or working part-time) dropped to 15.9% from 16.1% in January. On the downside, the Labor Department data showed that just 64.2% of the working-age population was either employed or seeking employment last month. You have to go back to 1985 to find a labor force participation rate that low.
WAGES UP 1.0% IN JANUARY
The payroll tax holiday promoted a dramatic increase in personal incomes last month. Additionally, the Commerce Department said that the personal savings rate improved by 0.4% in January to 5.8%. Yet personal spending …
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Bill Losey’s Weekly Economic Update for Feb. 28th, 2011
Monday, February 28th, 2011
STRIKING IMPROVEMENT IN CONSUMER SENTIMENT
Consumer sentiment is really rebounding – at least by the measure of the country’s two most respected polls. The final February Thomson Reuters/University of Michigan consumer sentiment survey came in at 77.5, leaping north from January’s 74.2 mark to the highest reading in 37 months. The Conference Board’s consumer confidence index climbed all the way to 70.4 this month (it was at 64.8 in January) and its gauge of future expectations hit its most optimistic level since December 2006.
REAL ESTATE MARKET WEATHERS CHILLY JANUARY
According to the Census Bureau, new home sales slipped 12.6% last month. Yet the National Association of Realtors reported that residential resales improved by 2.7% in January, the fifth increase in the past six months. Existing homes have apparently become a bit less expensive: the December Case-Shiller home price index came out last week and showed prices slipping 1.0% from November across 20 metro …
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Bill Losey’s Weekly Economic Update for Feb. 21, 2011
Monday, February 21st, 2011
INFLATION UP 0.4% FOR SECOND STRAIGHT MONTH
The federal government’s Consumer Price Index hasn’t seen back-to-back increases of this magnitude since June-July 2008. As overall CPI rose 0.4% in January, core CPI rose 0.2% – the biggest increase in that indicator in 15 months. In addition, the Labor Department’s Producer Price Index climbed 0.8% for January.
CONFERENCE BOARD LEI TICKS UP 0.1%
January brought a tiny increase in the Conference Board’s Leading Indicator Index. New manufacturing orders, consumer expectations and low interest rates were the indicators pushing the index into positive territory.
RETAIL SALES, INDUSTRIAL OUTPUT DISAPPOINT
Blame the weather, not the shopper: the Commerce Department said retail sales were up 0.3% for January, underneath the 0.5% gain forecast by economists surveyed by Bloomberg News. On the upside, retail sales posted their seventh straight monthly gain. The weather also may have been a factor in the 0.1% retreat in U.S. industrial production last month. The Federal …
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Bill Losey’s Weekly Economic Update for Feb. 14, 2011
Monday, February 14th, 2011
AN END IN SIGHT FOR FANNIE & FREDDIE
Friday, the Obama administration presented a plan to wind down Fannie Mae and Freddie Mac by 2018, with Treasury Secretary Timothy Geithner citing “very broad consensus” that the government should play “a much smaller role” in the housing market. So what will replace them? The plan puts three options before Congress. In one option, the government would leave the mortgage market save for the VHA, FHA and other existing agencies. Two other options would set up “re-insurance” programs. A limited version would guarantee private mortgages only in economic or real estate downturns; another would provide a backstop for mortgage investments already guaranteed by private insurers. All three options would pave the way for higher mortgage costs. The Treasury and HUD have also suggested phasing in a short-term requirement for borrowers as Fannie and Freddie are unwound: homebuyers would have to put 10% down for …
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Bill Losey’s Weekly Economic Update for Feb. 7, 2011
Monday, February 7th, 2011
A JOBS REPORT MUCH LIKE THE LAST ONE
Unemployment fell dramatically in January: the Labor Department reported a second straight .4% monthly drop, resulting in the largest two-month reduction of the jobless rate since 1958. While the decrease puts unemployment at 9.0% (the lowest figure since April 2009), just 36,000 net new jobs were created. The implication: due to the weather or discouragement, many job seekers didn’t look for work. “The thumbprints of the weather were all over this report,” Bank of America Merrill Lynch economist Neil Dutta told the Associated Press. “We know the job market is recovering.”
CONSUMER SPENDING IMPROVES 0.7% IN DECEMBER
This beat the 0.5% gain forecast by economists polled by Reuters – and it was the sixth straight positive month for the indicator. The Commerce Department also noted that personal wages increased 0.4% in December. The core Personal Consumption Expenditures price index (PCE) was flat for the month; in 2010, …
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Bill Losey’s Weekly Economic Update for Jan. 31st, 2011
Monday, January 31st, 2011
4Q GDP: +3.2%
The preliminary estimate from the Bureau of Economic Analysis certainly beats the +2.6% mark from 3Q 2010. A deeper look into the BEA report reveals both personal consumption and nonresidential fixed investment improving by a healthy 4.4% last quarter; inventory accumulation slowed as well.
HUGE JUMP IN NEW HOME SALES
The pace of new home sales improved by 17.5% last month, according to the Census Bureau. In year-over-year terms, sales were down 7.6% while sale prices were 9.1% better. For the record, fewer new homes were built in 2010 than in any year since the government started keeping records in 1963. In other housing news, the National Association of Realtors reported that pending home sales were up for the fifth time in the last six months in December (+2.0%), and Freddie Mac reported that the average interest rate on a 30-year conventional mortgage has risen to 4.80%.
DISSIMILAR FINDINGS FROM CONFIDENCE POLLS
While …
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Bill Losey’s Weekly Economic Update for Jan. 24, 2010
Monday, January 24th, 2011
TIME FOR OPTIMISM IN THE HOUSING MARKET?
Existing home sales have improved in five of the past six months. In December, they rose 12.3%. While December’s sales pace was still 2.9% below year-ago levels, the National Association of Realtors also noted that the glut of unsold homes had been reduced to 8.1 months of supply compared to 9.5 months’ worth in November. The median existing home sale price fell 1.0% last month to $168,800.
LEI INDEX SHOWS MORE IMPROVMENT
The Conference Board’s Leading Economic Indicators index rose 1.0% in December. Pair that with its 1.1% ascent in November and you have the two best months since it rose 1.4% in March. The building permits indicator showed the most improvement.
HOUSING STARTS DOWN, PERMITS WAY UP
Government data seems to affirm one of the findings of the Conference Board index. The Census Bureau just reported a 16.7% increase in building permits in December (the best month in that …
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Bill Losey’s Weekly Economic Update for Jan. 17, 2011
Monday, January 17th, 2011
CONSUMER & PRODUCER PRICES RISE
The U.S. inflation rate hit an 18-month peak in December: the federal government’s Consumer Price Index advanced 0.5%. Pump prices were a big factor in that gain: gasoline grew 8.5% more expensive last month. However, core CPI (minus food and energy prices) only rose 0.1% for the month, and consumers experienced just 1.5% inflation across 2010. The Producer Price Index went 1.1% higher in December, and energy costs were responsible for most of the gain. Core PPI (again, minus food and energy prices) was just +0.2% for December. Wholesale prices rose 4.0% in 2010.
ENCOURAGING RETAIL SALES FIGURES RELEASED
The Commerce Department announced a 0.6% gain in retail sales for December. While this was smaller than the 0.8% advance forecast by economists polled by MarketWatch, the increase wrapped up a positive year for the indicator. Retail sales have now improved for sixth months in a row, and 2010 was …
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Bill’s Weekly Economic Update for Jan. 10, 2011
Monday, January 10th, 2011
HOW DO WE INTERPRET THIS JOBS REPORT?
America’s unemployment rate fell four-tenths of a point in December to 9.4%. On the surface, that sounds great – after all, that is the biggest one-month drop in the jobless rate in 12 years. Beneath the surface, it wasn’t so great. Labor Department figures show that 453,000 people dropped off the unemployment rolls last month, yet only 103,000 people found new non-farm jobs. So perhaps the dip in the jobless rate mostly reflects job seekers giving up the hunt. In contrast to federal data, ADP’s new payrolls report indicates 297,000 new private sector jobs for December.
ISM FINDS CONTINUING EXPANSION
The Institute for Supply Management’s twin purchasing manager index surveys came out last week. Its manufacturing PMI came in at 57.0 for December, while its service sector PMI came in at 57.1. New orders were up 5.3% in the service sector survey with business activity/production increasing …
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Bill Losey’s Weekly Economic Update for Jan 3. 2011
Monday, January 3rd, 2011
MAJOR INDICES POST DOUBLE-DIGIT GAINS IN 2010
For the second year in a row, bulls ruled Wall Street. When the closing bell sounded on December 31, the S&P 500 was at 1,257.64, having gained 12.78% for 2010. The Dow finished 2010 at 11,577.51, representing an 11.02% year-over-year advance. The NASDAQ wrapped up 2010 at 2,652.87, posting a 16.91% yearly gain. The Russell 2000 also had a terrific year, finishing +25.31% after going +7.79% for December.
FEWER INITIAL CLAIMS … AND LESS CONFIDENCE?
While the University of Michigan’s final December consumer sentiment survey showed consumer confidence at a 6-month peak, the Conference Board’s December poll declined to a 52.5 reading. Perhaps as RBS Securities Inc. economist Omair Sharif noted at Bloomberg.com, “we should watch what consumers do and not what they say.” Here’s a development that might improve consumer sentiment: weekly jobless claims dropped to a 2-year low in the week that ended Christmas Day. The …
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Bill Losey’s Weekly Economic Update for Dec. 27th, 2010
Monday, December 27th, 2010
SPENDING & WAGES UP, SAVINGS RATE TICKS DOWN
Last week, the Commerce Department reported a 0.4% gain in personal spending and a 0.3% gain in personal incomes for November. The personal savings rate edged down 0.1% to 5.3% last month. In combination, those numbers hint at the possibility of stronger retail sales this holiday season – although durable goods orders fell 1.3% for November, much more than the 0.5% dip forecast by economists polled by Bloomberg News.
NEW & EXISTING HOME SALES IMPROVE
Existing home sales were up by 5.6% in November, according to the National Association of Realtors. One reason why: the median home price was $170,600 last month. Still, 2010 is on pace to be the poorest year for residential resales since 1997. At the current pace, 9.5 months worth of unsold inventory remains on the market. The Census Bureau reported a 5.5% improvement in new home purchases for November, with the sales …
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Bill Losey’s Weekly Economic Update for Dec. 20th, 2010
Monday, December 20th, 2010
OBAMA SIGNS TAX DEAL INTO LAW
President Obama signed the 2010 Tax Relief Act into law on December 17 after overwhelming passage in the House and Senate. The Bush-era tax cuts are thereby extended. Through 2012, the federal income tax tops out at 35% and taxes on dividends and capital gains top out at 15%. Next year, the estate tax returns at 35% with a $5 million dollar exemption, effectively permitting couples to pass estates as large as $10 million to heirs; tax-free charitable IRA donations also come back in 2011. Employee payroll taxes will drop from 6.2% to 4.2% next year.
A POSITIVE SIGNAL FOR THE FUTURE
The Conference Board’s leading economic indicators index (designed to be a gauge of economic momentum or lack thereof) jumped by 1.1% in November – the biggest gain in eight months. This follows a revised 0.4% advance in the index for October.
PRODUCER PRICES OUTPACE CONSUMER PRICES
Consumer prices inched up 0.1% in November according to the Labor Department’s Consumer …
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Bill Losey’s Weekly Economic Update for Dec. 13th, 2010
Monday, December 13th, 2010
CAPITOL HILL COMPROMISE MEETS FLAK
House Democrats chanted “just say no” prior to a symbolic vote Thursday against the tax deal worked out between the White House and Republicans – a deal some Democrats see as a sellout. The accord would preserve the Bush-era income tax cuts for two more years, restore the estate tax at 35% with a $5 million exemption, cut payroll taxes by 2% for 2011 and extend unemployment insurance through the end of next year. Late last week, an addition was made to the agreement – an extension of incentives for wind and solar energy developers through the end of 2011.
OIL & GOLD FALL … GASOLINE PRICES RISE
Gold lost $21.10 last week to close at $1,384.30 per ounce Friday on the COMEX, while oil lost $1.40 across five days to conclude the week at $87.79 a barrel on the NYMEX. Retail gasoline prices just climbed to levels unseen since …
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Bill Losey’s Weekly Economic Report for Dec. 6, 2010
Monday, December 6th, 2010
JOBLESS RATE INCREASES BY 0.2%
Unemployment hit 9.8% last month. The latest Bureau of Labor Statistics report said the economy only created 39,000 new jobs in November; economists expected three times that. After all, ADP reported 93,000 new positions in the private sector last Wednesday, and the revised government estimate for October showed the economy adding 172,000 jobs in that month. Labor Department figures indicate that the unemployed and underemployed now make up around 17% of the population.
SECOND POLL GAUGES CONFIDENCE AT 5-MONTH HIGH
The Conference Board’s consumer confidence index rose to 54.1 for November, reaching a peak unseen since June (which is exactly what happened last week with the University of Michigan’s consumer poll). Sub-indices measuring employment expectations and income expectations also improved.
SOME GOOD NEWS FROM THE REAL ESTATE SECTOR
Pending home sales increased by 10.4% in October, according to the National Association of Realtors. This would seem to suggest …
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Bill Losey’s Weekly Economic Update for Nov. 29th, 2010
Monday, November 29th, 2010
CONSUMERS SPEND, BUT FED REVISES ITS FORECAST
The latest Commerce Department data shows consumer spending at +0.4% for October and +2.8% for 3Q 2010. Personal incomes rose by 0.5% last month, and the federal government revised its 3Q economic growth estimate north to +2.5%. Still, the FOMC minutes from November 3 weren’t encouraging: the Federal Reserve thinks unemployment could stay above 9% in 2011, and it feels inflation could remain below 2% until 2013. The Fed’s GDP forecast for 2010 was revised down to the range of 2.4-2.5%, which is hardly what is needed to reduce joblessness.
DEMAND LAGS IN HOUSING MARKET
Will that demand increase by next spring? Hopefully. Existing home sales were down 2.2% in October according to the National Association of Realtors. The Census Bureau said new home sales slipped by 8.1% last month, with the average price of a new home falling by a shocking 14.0%. Only 23,000 …
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Bill Losey’s Weekly Economic Update for Nov. 22, 2010
Monday, November 22nd, 2010
NO RISE IN CORE CPI OR CORE PPI IN OCTOBER
Last month, the Consumer Price Index rose 0.2% with core CPI flat for the third month in a row. Core CPI has advanced at a crawl in the past 12 months: just 0.6% compared to a Federal Reserve annualized target of 2.0%. Producer prices rose 0.4% last month, duplicating their August and September increase. Yet core producer prices fell 0.6%.
HOUSING STARTS SLIP, MORTGAGE RATES JUMP
The Commerce Department announced an 11.7% slump in new residential construction starts for the month of October, and a 1.9% slip from year-ago levels. A drop in apartment and condo construction accounted for most of the October decline. Last week, Freddie Mac said that the average rate on a 30-year conventional home loan had jumped to 4.39% from 4.17% a week prior. The average rate for …
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Bill Losey’s Weekly Economic Update for Nov. 15th, 2010
Monday, November 15th, 2010
A BIT OF OPTIMISM AMONG CONSUMERS
The initial November Thomson Reuters/University of Michigan consumer sentiment survey was released Friday. The index rose to 69.3, surpassing the 69.0 forecast by economists polled by Reuters. (Last month’s final reading was 67.7.) On average, respondents expected inflation of 3.0% across the next 12 months, compared to 2.7% in last month’s survey. Will this public perception give retailers a signal to subtly raise prices?
WILD WEEK FOR GOLD & OIL
Oil futures hit a 25-month peak last week, and then fell $2.93 on Friday (and $1.97 on the week) to a Friday close of $84.88 per barrel on the NYMEX. Oil lost 2.27% last week for its worst week since mid-September. After cracking the $1,400 ceiling last week, gold fell $37.70 on Friday; it was down 2.28% on the week and settled at $1,365.40 per ounce Friday on the Comex.
WHITE HOUSE EYES SAVINGS; USPS CALLS FOR HELP
A White House deficit commission has proposed $200 billion in spending cuts by …
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Bill Losey’s Weekly Economic Update for Nov. 8, 2010
Monday, November 8th, 2010
FIRST NET JOB GAIN SINCE MAY
Economists polled by Dow Jones Newswires thought non-farm payrolls would increase by about 60,000 for October. In a pleasant surprise, the economy added 151,000 jobs instead. While the jobless rate remained at 9.6% for October, Labor Department data showed the economy adding jobs for the first time in five months – a development implying moderate growth instead of a “double dip” recession.
TWO MORE SIGNALS OF EXPANSION
The Institute for Supply Management released its October assessments of the manufacturing and service sectors last week, and both ISM indices showed improvement. The manufacturing index climbed to 56.9 from 54.4 and the service sector index improved to 54.3 from September’s 53.2 reading.
CONSUMERS SPEND A BIT MORE
September’s personal spending gain wasn’t that impressive – just 0.2%. Economists surveyed by Bloomberg had forecast a 0.4% increase in for the month. The Commerce Department data also showed a 0.1% decrease in personal income, the first such reduction since July 2009.
PENDING …
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Bill Losey’s Weekly Economic Update for Nov. 1, 2010
Monday, November 1st, 2010
WALL STREET AWAITS QE2, CONSIDERS 3Q GDP
Yes, QE2 – that is the media nickname for the expected second round of quantitative easing from the Federal Reserve, a move which could boost long-term bond prices and lower long-term interest rates. Will the Fed buy more than $500 billion in Treasuries? Or less? The Wall Street Journal says the purchases will amount to “a few hundred billion dollars over several months.” The Fed will reveal its plans on Wednesday at the end of its November policy meeting. Meanwhile, the initial third quarter GDP reading is in: +2.0%. The good news: consumer spending in 3Q 2010 was the strongest in four years. The bad news: a 2.0% gain in GDP isn’t strong enough to reduce unemployment.
HOME SALES PICK UP
Existing home sales improved 10.0% in September – the biggest one-month leap since the National Association of Realtors began keeping track of monthly sales volume. The median price was still 2.4% below year-ago levels. New home sales rose …
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Bill Losey’s Weekly Economic Update for October 25, 1010
Monday, October 25th, 2010
FED & CONFERENCE BOARD SEE MODEST GROWTH
The Federal Reserve’s latest Beige Book came out last week, and 8 of the 12 regional Fed banks reported economic expansion in the anecdotal survey covering September and early October. The survey found that while hiring demand “remained limited”, gains in manufacturing and retail spending were occurring in most regions. The Conference Board’s September Leading Indicators Index offered a slightly less encouraging picture – the gauge advanced for a third consecutive month, rising 0.3%, but just 5 of the 10 components of the index posted gains.
HOUSING STARTS RISE SLIGHTLY
A nice surprise: Commerce Department data showed a 0.3% advance in housing starts for September. Analysts were not expecting a third straight monthly increase. Is it a sign of stability in the real estate market? Economists hope so, though the pace of housing starts is still very weak in historical terms.
INDUSTRIAL OUTPUT DISAPPOINTS
It had been a year since the Federal Reserve announced a monthly decline in …
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Bill Losey’s Weekly Economic Update for Oct. 18, 2010
Monday, October 18th, 2010
CPI UP JUST 0.1%, PPI ADVANCES 0.4%
In September, consumer prices barely increased – in fact, the core Consumer Price Index was flat for the second month in a row. According to the Labor Department, core CPI has risen only 0.8% in the last 12 months – core inflation hasn’t been so tame since 1961. With the economy so sluggish, retailers clearly need to keep their prices low to see if they can promote any demand. Producer prices increased for the third straight month, with the core PPI rising 0.1% for September. The core PPI is up 1.6% over the past 12 months, and the overall PPI has advanced 4.0% in that period.
CONSUMER SENTIMENT SLIPS A BIT
October’s preliminary University of Michigan/Reuters consumer sentiment index is in, and it shows a mild decline. Analysts weren’t expecting the index to move south, but it went to 67.9 from the final 68.2 September reading.
RETAIL SALES UP BY 0.6% FOR SEPTEMBER
On Friday, the Commerce Department reported the second …
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Bill Losey’s Weekly Economic Report for Oct. 11, 2010
Monday, October 11th, 2010
JOBS REPORT COULD PROMPT FED RESPONSE
The U.S. economy shed 95,000 non-farming jobs in September – mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.
PENDING HOME SALES UP 4.3% FOR AUGUST
The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.
SERVICE SECTOR GROWTH RATE INCREASES
The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.
TWO BIG BANKS HALT FORECLOSURES
Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank …
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Bill Losey’s Weekly Economic Update for Oct. 4, 2010
Monday, October 4th, 2010
CONSUMER SPENDING UP 0.4%
August personal spending beat the 0.3% gain forecast by economists polled by Bloomberg News. Personal income was up 0.5% for August, the biggest monthly gain of 2010. The “core” PCE price index (minus food and energy prices) rose just 0.1% in August, a signal of tame inflation. The personal savings rate ticked up to 5.8% from 5.7%.
MIXED RESULTS FROM CONSUMER POLLS
Early last week, the Conference Board’s consumer confidence index slumped to 48.2 for September, more than five points below forecasts. Yet a fresh Reuters/University of Michigan consumer sentiment survey surprised analysts Friday – that barometer came in at 68.2, above the consensus of 67.0 forecast by Bloomberg and improved from the previous 66.6 reading.
ISM: MANUFACTURING GROWS MODESTLY
The Institute for Supply Management released its September manufacturing index on Friday. The September reading – 54.4 – indicated further growth, but also the slowest pace of expansion in 10 months.
SURPRISE INCREASE IN CONSTRUCTION SPENDING
Analysts surveyed by Reuters felt …
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Bill Losey’s Weekly Economic Update For September 27, 2010
Monday, September 27th, 2010
EXISTING HOME SALES IMPROVE
The National Association of Realtors reported that existing home sales rose 7.6% in August, a rebound from July’s record low. Separately, the Commerce Department said new home sales were flat in August (and 28.9% below year-ago levels). The inventory of unsold new homes decreased 1.4% last month to 206,000 – the smallest number since August 1968.
MARKET SEES UPSIDE IN DURABLE GOODS DATA
Overall durable goods orders declined 1.3% in August, but that was better than the 1.4% drop forecast by economists polled by Briefing.com. Minus transportation orders, durable goods orders were up 2.0% last month, far better than the 0.5% rise analysts expected. That news helped fuel a 198-point DJIA rally on Friday.
ECONOMISTS SAY RECESSION DONE; BUFFETT SAYS NO
The National Bureau of Economic Research now says the “Great Recession” ended in June 2009. But Warren Buffett disagrees. Last week, the “oracle of Omaha” told CNBC: “I think we’re in a recession until real per capita GDP gets back …
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Bill Losey’s Weekly Economic Update for September 20, 2010
Monday, September 20th, 2010
CPI, PPI RISE MODESTLY
According to the Labor Department, the Consumer Price Index rose 0.3% in August while the Producer Price Index advanced 0.4%. You can chalk up the increase to energy prices, especially summer gasoline prices: consumer energy costs rose 2.3% last month, and energy costs for producers went up 2.2%. Yet core CPI was flat in August, while core PPI increased just 0.1%. Over the last 12 months of data, core CPI and core PPI have respectively risen 0.9% and 1.3%.
CONSUMER SENTIMENT SINKS TO 13-MONTH LOW
The final Reuters/University of Michigan consumer sentiment survey for September read 66.6, the lowest figure since August 2009 and way below the 70.0 forecast by economists polled by MarketWatch. The drop likely reflects consumer reaction to stock market and unemployment data earlier in the month.
SMALL BUSINESS JOBS BILL CLEARS SENATE
Last Wednesday, the Senate voted 61-38 in favor of a measure that would create a $30 billion fund to encourage small business loans …
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Bill Losey’s Weekly Economic Update for September 13, 2010
Monday, September 13th, 2010
OBAMA PROPOSES NEW TAX CREDITS
Last week, President Obama recommended three new tax measures to Congress and the American people – an extension of the Bush-era tax cuts for all but the wealthiest Americans, an immediate deduction for any capital investment that companies make during 2010 or 2011, and a permanent and expanded R&D credit for businesses. In response, Senate Minority Leader Mitch McConnell (R-KY) called it “a last-minute, cobbled-together stimulus bill” that would not improve a “complete lack of confidence” on Main Street in Democratic Party economic policy.
TRADE DEFICIT SHRINKS 14%
A report from the Commerce Department says that America’s trade deficit narrowed to $42.8 billion in July, $7 billion less than the June figure. This is a good sign for 3Q growth. It was the biggest month-over-month reduction since February 2009. The report also noted a 1.8% jump in exports, the best monthly gain seen in that category since August 2008.
WHOLESALE INVENTORIES GROW
Surpassing forecasts, wholesale stockpiles increased by 1.3% in …
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Bill Losey’s Weekly Economic Update for September 6, 2010
Tuesday, September 7th, 2010
JOBLESS RATE RISES, AND SO DO STOCKS
Friday, the Labor Department reported 9.6% unemployment in August. While that was no improvement from July’s 9.5% mark, there was some good news within the report – news that helped the Dow to a triple-digit Friday gain. First of all, the private sector hired 67,000 new workers – more than the 41,000 analysts expected. Economists polled by Briefing.com feared the report would show a net loss of 107,000 jobs; instead, that net reduction was just 54,000. Job losses for June and July were also revised downward by the Labor Department.
CONSUMER SPENDING UP 0.4%
Personal spending had been flat in June, so investors welcomed the change of pace in July. Personal income rose 0.2% in July, with private sector salaries and wages up 0.5%. The personal savings rate declined to 5.9% from June’s 6.2% mark, implying that more after-tax income had been spent.
ISM INDICES SIGNAL EXPANSION
The Institute for Supply Management’s manufacturing sector index went to 56.3 in …
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Bill Losey’s Weekly Economic Update For August 30, 2010
Monday, August 30th, 2010
BERNANKE REASSURES WALL STREET
At the annual Federal Reserve summer retreat at Jackson Hole, WY on Friday, Fed chairman Ben Bernanke said that the central bank “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.” Translation: we are ready to do what it takes to support the economy. Bernanke stated that the Fed still had plenty of tools to fight deflation, with buying more Treasuries a prime option. He did not mention buying private assets. The Dow rallied for a gain of 164.84 Friday.
BREATHTAKING DROP IN HOME SALES
In July, demand in the housing market is usually at its highest. So the July housing numbers were confounding even with the absence of taxpayer credits: new home sales down 12.4% from June, existing home sales down 27.2% from June. In year-over-year terms, the rate of new home purchases was 32.4% below July 2009 while sale prices were -4.8% from last year’s median. …
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Bill Losey’s Weekly Economic Update for August 23, 2010
Monday, August 23rd, 2010
A JUMP IN HOUSING STARTS
In a relatively light week of economic data, one of the notable items was a 1.7% rise in new home construction in July. Economists had expected only a 0.2% increase in that category. However, the Commerce Department said most of the gain came in multi-family housing. In contrast, single-family housing starts were down 4.2% for the month, with building permits down 3.1%.
GM WILL GO PUBLIC
General Motors has announced it will reenter the stock market. Last Wednesday, it filed an IPO registration with the Securities and Exchange Commission. One of the largest IPOs in history may come as soon as October, including common and preferred shares. This signals the end of “Government Motors”: the Treasury Department will now have the opportunity to reduce its 61% stake in the company. GM earned $1.3 billion in 2Q 2010 – its second straight quarter in the black.
LEADING INDICATORS TURN POSITIVE AGAIN
After a 0.3% slip in June and a 0.5% drop in …
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Bill Losey’s Weekly Economic Update for August 16, 2010
Monday, August 16th, 2010
GOOD NEWS: INFLATION IS BACK
The Consumer Price Index rose 0.3% for July – the largest monthly increase since August. The Labor Department’s report quelled deflation worries among economists and investors who feared the CPI would go negative for a fourth straight month. Energy prices rose 2.6% in July, while core CPI (minus food and energy prices) went up 0.1%. Across the last 12 months of data, core CPI has increased 0.9% and overall CPI has advanced 1.2% – the mildest inflation in 44 years.
RETAIL SALES IMPROVE
The Commerce Department estimated a 0.4% gain in retail sales for July – a nice turnaround after two months in the minus column. (A 1.6% rise in motor vehicle and motor vehicle parts purchases certainly helped.)
A SLIGHT RISE IN CONSUMER SENTIMENT
The middle of the month brings the latest University of Michigan/Reuters consumer sentiment survey. The preliminary August edition came in at 69.6, slightly better than the 69.0 consensus forecast of economists polled by Bloomberg News.
FED WILL …
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Bill Losey’s Weekly Economic Update for August 9, 2010
Monday, August 9th, 2010
UNEMPLOYMENT REMAINS AT 9.5%
The American economy added 71,000 jobs in July but lost 202,000 others (143,000 of those positions were short-term Census Bureau hires). The private sector added 630,000 jobs during the first seven months of 2010; that 90,000 per month is far short of the 150,000 per month that would be commensurate with population growth. The bright spot: economists had presumed the jobless rate would edge up to 9.6% in July.
ISM: MANUFACTURING & SERVICE SECTOR GROWING
The Institute for Supply Management’s service sector index rose to 54.3 for July, a nice surprise (economists polled by Bloomberg had forecast a dip to 53.0). The new orders and employment components of the service sector index both showed growth. ISM’s manufacturing index came in at 55.5 for July, beating a Briefing.com consensus forecast of 54.2. (However, the Commerce Department noted that factory orders declined by 1.2% in July following a 1.0% fall in June.)
SAVING OUTPACES SPENDING
Personal spending and personal incomes were both flat last month according …
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Bill Losey’s Weekly Economic Update for August 2, 2010
Tuesday, August 3rd, 2010
HOME SALES & HOME PRICES IMPROVE
The Commerce Department said new home purchases surged by 23.6% for June, bouncing back nicely from May’s historic retreat. The supply of new homes for sale diminished to 7.6 months worth, much improved from the 9.6 months worth of inventory estimated in May and much closer to the 6-month level of a healthy housing market. New home prices dropped only 0.6% from June 2009 to June 2010, the smallest year-over-year decrease since November 1987. Separately, the Standard & Poor’s/Case-Shiller home price index of 20 U.S. cities showed prices of existing homes rising 1.3% for May. Prices were also 4.6% higher than a year ago.
CONSUMER CONFIDENCE LAGS
The economic recovery is taking time – too much time for many Americans, according to the final July University of Michigan consumer sentiment survey and the July Conference Board poll. The Reuters/University of Michigan index came in at 67.8, way down from the final 76.0 of June. That is the lowest reading since November. …
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Bill Losey’s Weekly Economic Update for July 26, 2010
Monday, July 26th, 2010
Existing home sales fall … and mortgage rates fall further
The June existing home sales figures from the National Association of Realtors show a 5.1% drop from May, an effect from the closing of the deadline for federal homebuying credits. On the positive side, NAR reports that sales are up 9.8% from a year ago. Interest rates on conventional home loans hit a record low of 4.56% in Freddie Mac’s July 21 survey; average rates on 15-year FRMs also fell to a two-decade low of 4.03%.
Long-term jobless benefits extended
President Obama extended emergency unemployment benefits for about three million Americans Thursday, not long after the measure made it past strong opposition in the Senate. The program had ended in June; Obama’s signature extends it for six more months.
FDIC insurance permanently bumped up to $250,000
This is a byproduct of the financial reform bill. The current $250,000 FDIC insurance limit for banks and credit unions was set to expire in 2013. Incidentally, the $250,000 ceiling …
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Bill Losey’s Weekly Economic Update for July 19, 2010
Monday, July 19th, 2010
Consumer prices decrease a bit; consumer sentiment drops notably
In June, the Consumer Price Index fell for the third month in a row, heading south 0.1%. Analysts thought the June reading would be flat. The Labor Department noted that core CPI did rise 0.2% last month, largely due to rent costs increasing. The last time CPI went negative for three straight months was October-December 2008. Separately, the preliminary July Reuters/University of Michigan consumer sentiment index came in at 66.5 compared to 76.0 in June – analysts expected a number in the mid-seventies.
Dodd-Frank bill off to Obama’s desk
The Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act Thursday by a 60-39 vote, with President Obama’s signature expected next week. The legislation is intended to protect consumers in the financial arena and prevent a repeat of TARP. Detractors think it gives too much power to regulators and might even open the door for further bailouts. House Minority Leader John A. Boehner (R-OH) called it “killing …
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Bill Losey’s Weekly Economic Update for July 12, 2010
Monday, July 12th, 2010
Service sector grows; pace of expansion moderates
Last week, the Institute for Supply Management reported its June non-manufacturing index at 53.8. The index had come in at 55.4 in March, April and May. So we are still seeing growth in the service sector, just at a slightly slower rate. Economists polled by MarketWatch were expecting a 54.5 reading. The 53.8 is the lowest mark since February, but the index has been above 50 (indicating growth) all year.
Continuing unemployment claims reach a 9-month low
Thursday, the Labor Department announced that 4.41 million people were receiving jobless benefits after an initial week of aid during the week of June 26. That is the lowest such figure since November.
Sales up 3.1% over last year at major retailers
That’s what a Thomson Reuters survey of 28 big mall chains just found – June retail purchases at these shops were 3.1% better than in June 2009. The most notable year-over-year gain among the 28 store brands? Nordstrom’s, where sales were up …
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Bill Losey’s Weekly Economic Update for July 5, 2010
Tuesday, July 6th, 2010
Jobless rate drops to 9.5%
The Labor Department said 83,000 new jobs were created in the private sector in June, yet non-farm payrolls shrank by 125,000 positions (an effect of temporary U.S. Census workers being laid off). Still, the 0.2% drop in unemployment was considerably better than the 0.1% increase anticipated on Wall Street.
Gains in personal spending, personal income & personal savings
Consumer spending rose by 0.2% as incomes climbed 0.4% in May, the Commerce Department stated last week. The personal savings rate reached 4.0% in May, a high unseen since September 2009. So consumers are aiding the recovery, albeit cautiously.
$8K homebuyer tax credit is back
The real estate market got some relief Friday morning as President Obama signed an extension of the federal homebuyer tax credit ($8,000 for first-time home purchasers and $6,500 for existing homeowners who move). The credit is now extended until September 30.
Cheapest fixed-rate mortgages in decades
Right now, conventional home loans are almost as cheap as they were in the 1950s. …
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Bill Losey’s Weekly Economic Update for June 28, 2010
Monday, June 28th, 2010
Highest consumer confidence since January 2008
That is what the final University of Michigan/Reuters survey for June reveals. The index came in at 76.0, an improvement from the final 73.6 reading for May. (For the record, the survey has averaged 84.5 across the past ten years.) The poll’s index of consumer expectations (the “better or worse six months from now?” question) improved 1.0 points to 69.8.
Home sales swoon in May
New and existing home sales plunged dramatically last month as federal homebuying credits left the picture. Economists expected new home sales numbers would dip, but the 32.7% decline announced by the Commerce Department surprised Wall Street and the real estate industry. The National Association of Realtors stated that existing home sales were down 2.2% last month.
Durable goods orders fall, but corporate profits revised north
The Commerce Department noted an overall 1.1% decline in durable goods orders for May; minus transportation orders, there was actually a 0.9% gain in the category. It put 1Q GDP slightly lower …
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Bill Losey’s Weekly Economic Update for June 21, 2010
Monday, June 21st, 2010
Minor deflation takes pressure off the Fed. The Consumer Price Index retreated 0.2% for May, following a 0.1% decline in April. Energy prices fell 2.9% last month, leading the CPI downward. (Core CPI did advance 0.1% in May.) Across the last 12 months, the CPI has risen 2.0%, with core CPI up 0.9% – the smallest annual gains since 1966. While May’s wholesale prices were 5.3% above levels of a year ago, the Labor Department said that PPI fell 0.3% on the month, which was less than the 0.5% reduction forecast by economists polled by Reuters. Translation: the Federal Reserve has no compulsion to raise interest rates.
Will gold hit $1,300 this summer? The precious metal got a little closer to that psychologically significant benchmark on Friday. Gold settled at a new record close – $1,258.30 an ounce. Since the end of 2009, gold prices have gained almost 15%.
As tax credits expire, housing starts decelerate. In real estate, the year-over-year numbers often …
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Bill Losey’s Weekly Economic Update for June 14, 2010
Monday, June 14th, 2010
Retail sales down 1.2% in May. What happened? Perhaps consumers took a break after spending notably in March and April. Auto sales slipped 1.7%; hardware store sales fell 9.3%, possibly influenced by the expiration of homebuyer tax credits.
Consumer sentiment rises. Consumers may have bought less recently, but according to the University of Michigan/Reuters consumer sentiment poll, their confidence has increased. June’s preliminary reading was 75.5 – a rise from the final 73.6 May mark. The barometer of current economic conditions reached 82.9; it hasn’t been this high since March 2008.
Wholesale, business inventories increase. The Commerce Department reported 0.4% gains in both categories for April. Business inventories hit their highest level since last June; wholesale inventories were up for a fourth consecutive month.
Gold touches $1,250 level. The precious metal hit a new intraday peak last week ($1,254.50) and settled at $1,230.20 per ounce Friday. Gold gained 1.03% last week, and other metals did better: silver futures rose 5.39% and palladium futures were up …
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Bill Losey’s Weekly Economic Update for June 7, 2010
Monday, June 7th, 2010
Jobless rate ticks down 0.2%. The news didn’t impress Wall Street: while May’s unemployment rate fell to 9.7% and the economy added 431,000 jobs, 390,000 of them represented temporary U.S. Census Bureau hires. Still, the number was better than the 9.8% reading economists expected.
ISM: continuing expansion in key sectors. For the tenth straight month, the Institute for Supply Management’s manufacturing index showed growth, though May’s 59.7 reading came under April’s 60.4 mark. The Institute’s non-manufacturing index read 55.4 again for May; it has shown the service sector expanding for the last five months.
April sees rise in pending home sales. Spurred by the federal tax credit deadline, more buyers rushed to sign contracts. The National Association of Realtors reported its pending home sales index at 110.9 for April, a 6.0% gain from March and the highest reading since October.
Factory orders up 1.2%. The April increase reported by the Commerce Department was actually below the 1.8% gain forecast in a Reuters poll of economists; …
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Bill Losey’s Weekly Economic Update for May 31, 2010
Monday, May 31st, 2010
Personal spending flat for April. However, wages rose 0.4% and disposable personal incomes went up 0.5% (the biggest increase in almost a year). April was the first month since September in which consumer spending didn’t increase.
Home sales rise. Federal tax credits expired in April, and these numbers reflect it: the Commerce Department said new home sales were up 14.8% for the month (they were also 47.8% above April 2009 levels). The National Association of Realtors noted a 7.6% gain in existing home sales in April.
Sentiment indexes improve. The final University of Michigan/Reuters survey for May hit 73.6, up from a 72.2 reading in late April. The Conference Board’s consumer index hit 63.3, a level unseen since September 2008.
Durable goods orders rise 2.9%. The Commerce Department report showed transportation orders behind the April gain, which topped the 1.3% increase forecast by economists.
Hopefully, June will be better. The poorest month for equities since November 2008 finally ended. The DJIA closed May at 10,136.63. …
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Bill Losey’s Weekly Economic Update May 24, 2010
Tuesday, May 25th, 2010
Attention on Europe (and the Senate). The euro thankfully rose for three straight days last week, after hitting a four-year low after German chancellor Angela Merkel commented that the EU/IMF debt bailout had “done no more than buy time” to fix the crisis. Thursday evening, the Senate passed its version of the financial industry reform bill; the next step is reconciliation with the House version. Stocks were hit hard early in the week, but managed Friday gains; a late rally took the Dow north 125 points.
Consumer, producer prices retreat. This was surprising: the CPI declined 0.1% in April as energy prices fell by 1.4%. The PPI also decreased 0.1%. The Commerce Department reported a 0.9% year-over-year increase in the CPI, well below the Federal Reserve’s annual inflation target of 1.5-2.0%.
Indicators streak ends. The Conference Board’s index of leading indicators slipped 0.1% last month, the first dip since March 2009. Economists surveyed by Thomson Reuters had forecast a 0.2% increase.
Housing starts rise, permits …
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Bill Losey’s Weekly Economic Update for May 17, 2010
Monday, May 17th, 2010
Gold soars, euro slips, rumors plague EU. Wall Street watched Europe closely last week; investors initially loved the almost-trillion-dollar debt rescue plan from the International Monetary Fund and the European Union, but then wondered if its austerity measures would slow growth. The euro hit an 18-month low Friday as rumors floated that certain EU nations might ditch the currency. Gold, meanwhile, settled at $1,227.80 an ounce Friday – prices are up about 16% since early February.
Retail sales up 0.4% in April. This marks seven consecutive months of gains. Additionally, the Census Bureau said April 2010 retail sales figures were 8.8% improved from April 2009.
Reuters: a gain in consumer sentiment. In May’s preliminary Reuters/University of Michigan poll, the index read 73.3, better than April’s 72.2. The survey’s one-year inflation expectations index read 3.1%, the highest mark in 11 months.
Industrial output on the rise. On Friday, the Federal Reserve noted a 0.8% gain in industrial production for April. This follows up a 0.2% advance …
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Bill Losey’s Weekly Economic Update for May 10, 2010
Monday, May 10th, 2010
More jobs, more jobseekers. While U.S. firms added 290,000 jobs in April – the most in 49 months – the unemployment rate climbed to 9.9% last month. That reflected more Americans looking for work. Revised Labor Department figures show the economy adding an average of 143,000 jobs per month so far in 2010.
Consumer spending leaps 0.6%. Great news: March saw the biggest gain in that category in five months. The Bureau of Economic Analysis also reported a 0.3% gain in wages.
ISM indices show strength. The Institute for Supply Management’s manufacturing index rose to 60.4 in April from 59.6 in March, and its service sector index stayed at 55.4 in April. Both numbers signal growing sectors. Additionally, factory orders increased by 1.3% last month (this category has shown a gain in 11 out of the last 12 months).
Pending home sales up again. That makes it two months in a row of gains in this category: the National Association of Realtors said the number …
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Bill Losey’s Weekly Economic Update for May 3, 2010
Monday, May 3rd, 2010
Good solid growth. On Friday, the Commerce Department estimated 1Q GDP at +3.2%, marking the third positive quarter in a row. What drove the gain? Consumer spending was up 3.6% in the quarter, and business spending on equipment and software increased by 13.4%.
Year-over-year gain in home prices. That’s what the February S&P/Case-Shiller Home Price Index revealed. Across 20 cities, prices rose 0.6% from February 2009 levels. This is the first yearly advance recorded by the index since December 2006, though prices were down 0.9% from January.
The latest consumer barometers. One went north, another south: the final Reuters/University of Michigan consumer sentiment index for April dipped to 72.2, down from 73.6 in March but above the 71.0 forecast by analysts polled by Bloomberg News. The Conference Board’s April survey rose to 57.9 from March’s 52.3 – this is the best mark since September 2008.
Gold’s major gain. Across last week, gold prices climbed $27.00 to settle at $1,180.10 per ounce Friday. April was gold’s …
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Bill Losey’s Weekly Economic Update for April 26, 2010
Monday, April 26th, 2010
New home sales up … 26.9%? Yes. The stampede was on in March as buyers raced to qualify for expiring tax credits, leading to the greatest month-over-month jump in new home purchases since 1963. According to the Census Bureau, new home prices averaged $258,600, almost unchanged from 12 months ago.
Existing home sales also jump. National Association of Realtors data had residential resales up 6.8% for March. In year-over-year terms, sales were 16.1% improved.
Notable gain in PPI. In March, wholesale inflation increased by 0.7%, above the 0.4% forecast by economists. Labor Department figures showed core PPI (minus energy and food costs) up by 0.1%.
Durable goods orders down. They slipped by 1.3% last month according to the Commerce Department. The silver lining? With transportation orders taken out, the category was +2.8% in March.
(Further) indications of improvement. The Conference Board’s index of leading indicators went up 1.4% in March, the twelfth straight monthly gain. February’s gain was revised upward to 0.4%.
8 straight for …
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Bill Losey’s Weekly Economic Update for April 19, 2010
Monday, April 19th, 2010
A little less confidence. The preliminary April Reuters/University of Michigan consumer sentiment survey came in at 69.5, versus 73.6 at the end of March. Interestingly, the survey’s expectations index slipped to its lowest level in 13 months.
More minimal inflation. The Consumer Price Index advanced 0.1% in March; with food and energy prices factored out, core CPI was flat. Overall CPI increased by 2.3% during the past 12 months of data.
Car buying drives retail sales. A 6.7% rise in the demand for autos sent retail purchases 1.6% higher for March. That even beat the 1.3% gain forecast by economists polled by MarketWatch.
Manufacturing up 0.9% last month. So noted the Federal Reserve last week. Total industrial output rose 0.1% in March; economists surveyed by Dow Jones Newswires thought we would see a 0.8% gain.
Housing starts up 1.6% for March. Besides that statistic, the Commerce Department also announced some other good news: the 5.9% February slip in this category has been revised to a …
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Bill Losey’s Weekly Economic Update for April 12, 2010
Tuesday, April 13th, 2010
Did banks downplay risk levels? So contends a Wall Street Journal story, citing data from the Federal Reserve Bank of New York. It says that during the last five quarters, a total of 18 big banks reduced borrowing just before reporting debt levels to the public, then increased debt levels as the quarter progressed. The practice, while certainly legal, has prompted an SEC inquiry.
Inventories beat expectations. Wholesale inventories, that is. The Commerce Department said they increased by 0.6% for February, a hint that first quarter GDP might prove stronger than presumed. Economists had predicted a 0.4 gain.
Superb week for metals. As the EU moved to aid Greece, metals responded to the news with gains. Across last week, gold prices rose 3.18% to $1,161.90 an ounce. Silver gained 2.58%, copper 0.17%, platinum 3.19% and palladium 4.53% during those five trading days. Earlier in the week, concerns about a Greece default sent the 10-year note yield above 4% for the first time in ten months …
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Bill Losey’s Weekly Economic Update for April 5, 2010
Monday, April 5th, 2010
Job growth at last. Employers added 162,000 jobs in March, the biggest gain in three years. While some of the increase reflected temporary hires for the U.S. Census, private payrolls swelled by 123,000 last month. The jobless rate was 9.7% in March, exactly where it had been in January and February.
Consumer spending up by 0.3%. February’s gain was in line with the forecast of economists. Wages were flat last month after a 0.1% increase in January.
Is consumer confidence flat, or rising? Two polls tell two stories. The Conference Board’s March Consumer Confidence Index hit 52.5, up from 46.4 in February. In contrast, the March Reuters survey remained at 73.6, unchanged from February.
Factory orders up 0.6%. The February number represented the tenth gain in the last 11 months. Excluding the defense category, the gain was 1.0%.
Home prices inch higher. The January S&P/Case-Shiller home price index (of 20 major real estate markets) showed prices up 0.3% for January and down just 0.7% from …
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Bill Losey’s Weekly Economic Update for March 29, 2010
Tuesday, March 30th, 2010
Reforms become law. President Obama signed his long-envisioned health care reforms into law on March 23, and he will sign the amendments to the bill into law on March 30. Most of the major changes will take effect in 2014, when health insurance will become compulsory for nearly all Americans. New taxes will help fund the reforms. The Congressional Budget Office estimates that the modifications will cut the federal deficit by $118 billion by 2020.
Home sales still underwhelming. Existing home sales dipped 0.6% for February while new home sales slipped 2.2% to another all-time low (although data only goes back to 1964). Any positives in the new Commerce Department report? Yes. The median sale price of new homes was about 5% above where it was a year ago.
A gain in durable goods orders. The 0.5% rise in February was accompanied by news that durable goods inventories increased by 0.3%, the best such gain since December 2008.
USDI surges north. When the U.S. Dollar …
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Bill Losey’s Weekly Economic Update for March 22, 2010
Monday, March 22nd, 2010
Inflation? What inflation? Inflationary pressures remain weak in this subdued recovery. The Consumer Price Index was flat in February; core CPI rose 0.1%. CPI only advanced 2.1% over the last 12 months of data. Core CPI rose 1.3% in that period, the smallest year-over-year gain in six years. The Federal Reserve forecasts core CPI advancing 1.2% for all of 2010.
PPI drops in February. Producer prices decreased by 0.6% last month after a 1.4% rise in January; core PPI advanced 0.1%. Industrial production managed to rise 0.1% even with February’s rough weather.
Tiny LEI gain. Another 0.1% advance here: the Conference Board’s Leading Economic Index was positive for the eleventh straight month in February.
Snow stalls housing starts. They fell 5.9% last month, according to the Commerce Department. Yet February housing starts and building permits were respectively 0.2% and 11.3% above year-ago levels.
Oil drops, gold gains. Oil futures fell 0.69% across last week to close at $80.68 a barrel on the NYMEX Friday. Gold, …
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Bill Losey’s Weekly Economic Update for March 15, 2010
Thursday, March 18th, 2010
Good news at the cash register. Commerce Department data showed retail purchases up by 0.3% in February despite all the snow, sleet and rain, and 3.9% above where they were a year earlier. Most retail sales sectors had month-over-month increases.
Signs of rising demand. Business sales increased by 0.6% in January (business inventories were flat). January 2010 business sales were 6.8% better than a year before. Other Commerce Department data shows wholesale sales jumping by 1.3% in January and wholesale stockpiles decreasing by 0.2%.
Consumer confidence wavers. The preliminary Reuters/University of Michigan consumer sentiment survey is in for March. The index reads 72.5, down from a final 73.6 in February. However, things have improved notably from March 2009 when the gauge stood at 57.3.
Gold & oil retreat. Gold had its poorest week since mid-January as prices dipped 2.93% last week to settle at $1,101.50 Friday on the COMEX. Oil fared better, losing just 0.32% across five days. Oil futures were $81.24 a barrel at …
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Bill Losey’s Weekly Economic Update for March 8, 2010
Monday, March 8th, 2010
9.7% and holding. The Labor Department reported only 36,000 net job losses last month, so the jobless rate was flat for February. Economists had widely assumed the unemployment rate would inch upward due to winter weather affecting construction and retail industries.
Major boost in factory orders. They rose 1.7% in January, according to Commerce Department data. This is the best number in four months and follows a 1.5% advance for December.
Pending home sales sink. What does the 7.6% fall for January indicate? It would seem to signal that the extended tax credits have become less magnetic to buyers. Let’s hope sales hold up this spring as the Fed ceases its purchases of mortgage-linked securities.
Gold, copper, oil go higher. Copper prices rose 4.10% last week to $0.134/lb. Gold gained $16.50 last week (1.48%) to settle at $1,134.80 an ounce Friday. Crude futures rose $1.84 last week (2.31%) to $81.50 per barrel on the NYMEX at Friday’s close.
March of the bulls? Wall Street was …
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Bill Losey’s Weekly Economic Update for March 1, 2010
Monday, March 1st, 2010
Stocks log best month since November. The S&P 500 rose 2.85% last month even with worries over Greece, China and the U.S. housing and job markets. The S&P had its best February in 12 years.
4Q GDP revised to 5.9%. That tops the initial 5.7% estimate from the Commerce Department. It means 4Q 2009 was the strongest quarter since 3Q 2003.
Home sales in deep freeze. The January numbers were very poor: -7.2% for residential resales, -11.2% for new homes. However, existing home sales were 11.5% above where they had been a year before.
Case-Shiller index: home prices rising. The widely watched 20-city home price index posted its seventh straight monthly gain in December. Prices increased in 15 of the index’s 20 metro areas.
Durable goods orders up 3.0%. The January figure from the Commerce Department was hugely positive. Yet with transportation orders factored out, durable goods orders were down 0.6%.
Less confidence last month? The February Conference Board index of consumer confidence fell to …
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Bill Losey’s Weekly Economic Update for February 22, 2010
Monday, February 22nd, 2010
Fed bumps discount rate up to 0.75%. The exit strategy had to get rolling at some point, yet the Federal Reserve’s Thursday decision to raise the federal funds discount rate came sooner than many analysts expected. Yet the move did not prompt the big selloff some traders had predicted. Stocks posted tiny gains Friday after new CPI data was released.
Inflation remains tame. Core CPI fell by 0.1% in January, in the first monthly decline since 1982. Overall CPI rose 0.2% for the fifth straight month. From January 2009 to January 2010, CPI rose 2.6% with core CPI up 1.6%.
PPI soars. Producer prices, on the other hand, rose 1.4% for January, spiked by a double-digit increase in costs of gasoline and heating oil. Core PPI advanced by 0.3% last month.
Good news on housing & factory output. The Commerce Department had housing starts up 2.8% in January. Industrial production rose by 1.0% last month, powered by a gain of almost 5% in the auto …
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Bill Losey’s Weekly Economic Update for February 15, 2010
Monday, February 15th, 2010
Retail sales increase. Friday, the Census Bureau estimated retail sales up 0.5% for January, with a 4.7% year-over-year gain from January 2009. The half-percent gain topped the +0.3% forecast of economists polled by Briefing.com.
How are things off the sales floor? According to the Commerce Department, wholesale inventories shrank by 0.8% in December. Factory inventories were reduced by 0.1%, and retail stockpiles stayed flat (so to speak). U.S. companies had 1.26 months supply of goods on hand, the lowest figure since June 2008. You can hear factories humming.
Consumer sentiment declines a bit. February’s preliminary Reuters/University of Michigan index of sentiment came in at 73.7. Late last month, the index was at 74.4. On the other hand, it was down at 56.3 one year ago. The gauge of current economic conditions hit 84.1, the highest mark in 23 months.
A quick check on gold, copper & oil. They all advanced last week. Gold gained $37.30 over five days to close Friday at $1,089.50 an ounce …
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Bill Losey’s Weekly Economic Update for February 8, 2010
Monday, February 8th, 2010
Jobless rate falls to 9.7%. The January statistic from the Labor Department was encouraging – a 0.3% drop from December. Bizarrely, there was no job growth even with that sizable decline – payrolls slimmed by about 20,000 positions last month. Revised federal figures showed a gain of 64,000 jobs for November and a loss of 150,000 in December.
ISM index hits 5½-year high. The Institute for Supply Management’s manufacturing index rose to 58.4 in January, a peak unseen since August 2004. Economists surveyed by Reuters thought it would come in at 55.5. As for ISM’s service sector gauge, it read 50.5 for January, showing growth.
Spending, wages & savings rate rise. The Bureau of Economic Analysis said that consumer spending went up 0.2% in December. Wages rose 0.4% (the sixth straight monthly increase) and the personal savings rate went north to 4.8%.
Factory orders up 1.0%. So indicates December data from the Commerce Department. This was the eighth monthly gain in the last nine. Economists …
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Bill Losey’s Weekly Economic Update for February 1, 2010
Tuesday, February 2nd, 2010
4Q GDP: 5.7%: That is the preliminary reading from the Commerce Department, and that is the best reading since 3Q 2003. Economists pointed out that much of the increase reflected companies rebuilding their inventories rather than personal spending.
Consumers think positive. The final University of Michigan/Reuters consumer sentiment index for January improved 1.6 points to 74.4. Economists polled by Briefing.com felt it would come in at 73.0.
New concerns about home sales. Both new and existing home sales retreated markedly in December with the threat of federal tax credits being pulled. Existing home sales fell by 16.7% in that month while new home sales slipped 7.6%. In annual terms, residential resales for 2009 were about 5% higher than 2008 totals. Just 373,000 new single-family homes were sold in 2009, the fewest since the government began tracking sales stats in 1963.
A $5K hiring rebate? Last week, President Obama pitched the idea of giving companies of all sizes a $5,000 credit to offset payroll taxes for …
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Bill Losey’s Weekly Economic Update for January 25, 2010
Monday, January 25th, 2010
“Volcker rule” worries Wall Street. Investors frowned last week as the President talked of rules that would bar banks and bank holding firms from getting involved in hedge funds or conducting proprietary trading operations. Crafted with input from former Federal Reserve chairman Paul Volcker and past SEC head William Donaldson, the new regulatory proposal is likely to face stiff opposition from Senate Republicans.
Big gain in leading indicators. The Conference Board’s index of leading indicators rose 1.1% in December, with November’s gain revised to 1.0% from 0.7%. The index, a forecast of future economic activity, rose 5.2% across the second half of 2009.
PPI up 0.2% for December. That gain was much smaller than November’s 1.8% jump. Core producer prices (minus food and energy) were flat last month.
Encouraging housing news. While new home construction decreased by 4.0% in December, housing starts were up 0.2% from a year before, marking the first year-over-year gain since March 2006. Building permits were up 10.9% in December.
30-year …
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Bill Losey’s Weekly Economic Update for Jan. 18, 2010
Monday, January 18th, 2010
How about a too-big-to-fail tax? Last week, President Obama proposed a Financial Crisis Responsibility Fee – a tax on the largest U.S. banks to help repay $117 billion in TARP losses. Would banks respond to this populist move with higher lending fees for customers? Or would executives and shareholders effectively bear the cost? One certainty: designated banks would have to pay the fee for 10 years or longer.
CPI slightly up, retail sales slip down. The Consumer Price Index inched north 0.1% in December. That puts it up 2.7% over the last 12 months, with core CPI up 1.8% in that span. Retail sales fell 0.3% last month, with the decline ranging across many sectors; economists polled by MarketWatch had expected a gain of 0.5%.
Cool consumer sentiment. The preliminary January Reuters/University of Michigan survey came in at 72.8. That was less than the 75.0 economists had hoped for, yet higher than the 72.5 December mark.
Industrial output up again. The Federal Reserve noted a …
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