Current-Cast® Report

• Real GDP increased at an annual rate of 2.1% in the fourth quarter of 2016, following a 3.5% increase in the previous quarter, according to the “third” estimate by the Bureau of Economic Analysis. In the “second” estimate, released a month ago, the increase in real GDP was 1.9%.
• Real gross domestic income (GDI) increased 1.0% in the fourth quarter, compared with an increase of 5.0% in the third quarter.
• The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.5% in the fourth quarter, compared with an increase of 4.3% in the third quarter
• The price index for gross domestic purchases increased 2.0% in the fourth quarter, following a 1.5% increase in the third quarter.
• Real GDP increased 1.6% in the year 2016, following an increase of 2.6% in 2015. The price index for gross domestic purchases increased 1.0% in 2016, compared with an increase of 0.4% in 2015.
• Corporate profits from current production increased $11.2 billion in the fourth quarter, after an increase of $117.8 billion in the previous quarter. For the year 2016, profits from current production decreased $2.3 billion, in contrast to a decrease of $64.0 billion in 2015.
• Personal income increased 0.4%, in February, following a 0.5% in the previous month. Personal consumption expenditures increased 0.1% in February, after increasing 0.2% in January. The price index for personal consumption expenditures increased 0.1% in February, following a 0.4% increase in the previous month. The price index excluding food and energy increased 0.2% in February, after a 0.3% increase in the previous month. The price index increased 2.1% from February 2016, while the index excluding food and energy increased 1.8%.
• State personal income grew on average 3.6% in 2016, after increasing 4.5% in 2015, according to the U.S. Bureau of Economic Analysis. Growth of state personal income ranged from negative 1.7% in Wyoming to positive 5.9% in Nevada.
• Private nonfarm business sector multifactor productivity decreased at a 0.2% annual rate in 2016, according to the U.S. Bureau of Labor Statistics. This 2016 decline reflected a 1.7% increase in output and a 1.9% increase in the combined inputs of capital and labor.
• The Pending Home Sales Index increased 5.5% to a reading of 112.3 in February, according to the National Association of Realtors. The index was 2.6% above February 2016 level.
• The S & P Corelogic Case-Shiller National U.S. Home Price Index for January indicates that home prices continued their rise across country over the last 12 months. The National index, seasonally adjusted, was up 0.6% in January, following a 0.7% increase in the previous month. The National index, not seasonally adjusted, was up 0.2% from the previous month, and was up 5.9% from January 2016. As of January 2017, average home prices were back at their June/July 2006 peaks.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving lower. 30-year fixed-rate mortgage averaged 4.14% for the week ending March 30, down from last week when it averaged 4.23%. A year ago at this time, the 30-year fixed-rate averaged 3.71%. 15-year fixed-rate mortgage averaged 3.39%, down from last week when it averaged 3.44%. A year ago at this time, the 15-year fixed-rate averaged 2.98%.
• Mortgage applications decreased 0.8% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 24th.
• The advance figure for initial claims for unemployment insurance decreased 3 thousand to 258 thousand in the week ending March 25. The 4-week moving average was 254.25 thousand, an increase of 7.75 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment during the week ending March 18 was 2,052 thousand, an increase of 65 thousand from the previous week’s revised level.
• The Conference Board’s consumer confidence index, which had increased in February, surged in March. The Index increased to 125.6 in March, from 116.1 in February. The expectations index increased from 103.9 to 113.8, while the present situation index increased from 134.4 to 143.1.
• The Thomson Reuters/University of Michigan Index of Consumer Sentiment edged up to 96.9 in March, from 96.3 in February. The Index was 91.0 in March of 2016.

• New orders for manufactured durable goods increased 1.7% in February, following a 2.3% increase in the previous month. Shipments increased 0.3%, following a 0.1% decrease in the previous month. New orders were up 1.5% from February 2016, while shipments were down 1.2%. Year-to-date, new orders increased 1.6% from the same period a year ago, while shipments increased 1.2%.
• The U.S. current account deficit decreased to $112.4 billion in the fourth quarter of 2016 from $116.0 billion in the third quarter, according to the Bureau of Economic Analysis. The deficit decreased to 2.4% of GDP in the final quarter of 2016, from 2.5% of GDP in the previous quarter. For the year 2016, the current account deficit was $481.2 billion, compared with $463.0 billion in 2015. The deficit was 2.6% of GDP in both 2015 and 2016.
• February existing home sales decreased 3.7% to an annualized rate of 5,480 thousand units, according to the National Association of Realtors. The February figure was 5.4% above the February 2016 figure. There were 1,750 thousand homes for sale at the end of the month. This represents a supply of 3.8 months at the current sales rate, compared to 4.3 in February of 2016. The median sales price of existing homes sold was $228.4 thousand, 7.7% above February 2016.
• February new home sales increased 6.1% to an annualized rate of 592 thousand units. The February figure was 12.8% above the February 2016 figure. The median sales price of new houses sold was $296.2 thousand, 4.9% below February 2016.
• U.S. House prices held steady in January, following a 0.4% increase in the previous month, according to the Federal Housing Finance Agency’s (FHFA). For the 12 months ending in January, U.S. prices rose 5.7%.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving lower. 30-year fixed-rate mortgage averaged 4.23% for the week ending March 23, down from last week when it averaged 4.30%. A year ago at this time, the 30-year fixed-rate averaged 3.71%.
• Mortgage applications decreased 2.7% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 17th.
• The advance figure for initial claims for unemployment insurance increased 15 thousand to 258 thousand in the week ending March 18. The 4-week moving average was 240 thousand, an increase of a thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment during the week ending March 11 was 2,000 thousand, a decrease of 39 thousand from the previous week’s revised level.
• The Chicago FED National Activity Index increased to positive 0.34 in February, from negative 0.02 in January. The index’s three-month moving average improved to 0.25 in February, from 0.07 in January.
• The Chicago FED National Financial Conditions Index held steady at negative 0.78 in the week ending March 17. The risk sub-index edged down from the previous week, while the credit and leverage sub-indexes ticked up and the nonfinancial leverage sub-index was unchanged. A year ago, the Index was negative 0.66.

·      Advance estimates of retail and food services sales for February were up 0.1% from January, and were up 5.7% from February 2016. Excluding motor vehicle & parts, sales were up 0.2% from the previous month, and were up 5.7% from a year ago. Year-to-date, retail sales and food services were up 3.7% from the same period of 2016.

·      Total manufacturing and trade sales for January were up 0.2% from the previous month, and were up 6.4% from January 2016. Total business inventories were up 0.3% from the previous month, and were up 2.3% from a year ago. The inventories/sales ratio was 1.35, compared with 1.41 in January of 2016.

·      Total Industrial production held steady in February, after decreasing 0.1% in the previous month. Total Industrial production was up 0.3% from February 2016. The capacity utilization rate was 75.4 in February, 4.5 percentage points below the average for the 1972-2016 period.

·      Housing starts in February were 1,275 thousand, up 3.0% from the previous month and were up 6.2% from a year ago. Building permits in February were 1,213 thousand units, down 6.2% from January, but were up 4.4% from February 2016.

·      The housing market index of National Association of Home Builders (NAHB) and Wells Fargo increased to 71 in March, from 65 in February. The index was 55 in March of 2016, and 67 in January 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving higher. 30-year fixed-rate mortgage averaged 4.30% for the week ending March 16, up from last week when it averaged 4.21%. A year ago at this time, the 30-year fixed-rate averaged 3.73%. 15-year fixed-rate mortgage averaged 3.50% for the week ending March 16, up from last week when it averaged 3.42%. A year ago at this time, the 15-year fixed-rate averaged 2.99%.

·      Mortgage applications decreased 3.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 10th.

·      The producer price index for final demand (headline index) increased 0.3% in February, following an increase of 0.6% in the previous month. The index for final demand less foods, energy, and trade increased 0.3%, following an increase of 0.2% in the previous month. The producer price index for final demand (headline index) was up 2.2% from February 2016 to February 2017, while the index for final demand less foods, energy, and trade was up 1.8%. The index for processed goods for intermediate demand increased 0.4% in February, while the index for unprocessed goods for intermediate demand decreased 0.2%. The index for services for intermediate demand increased 0.5%, following a 0.3% increase in the previous month.

·      The consumer price index (headline index), which surged 0.6% in January, increased 0.1% in February. The core index increased 0.2%, following a 0.3% increase as in the previous month. The consumer price index increased 2.7% for the 12-month period ending in February, while the core index rose 2.2%.

·      Real average hourly earnings for all employees increased 0.1% from January to February. This result stems from a 0.2% increase in average hourly earnings combined with a 0.1% increase in the consumer price index for all urban consumers.

·      The advance figure for initial claims for unemployment insurance decreased 7 thousand to 241 thousand in the week ending March 11. The 4-week moving average was 237.25 thousand, an increase of 0.75 thousand from the previous week’s unrevised average. The advance number for seasonally adjusted insured unemployment during the week ending March 4 was 2,030 thousand, a decrease of 30 thousand from the previous week’s revised level.

·      There were 5.6 million job openings on the last business day of January, an increase of 87 thousand from December, according to the U.S. Bureau of Labor Statistics. Hires edged up to 5.4 million, while separations inched up to 5.3 million.

·      Unemployment rates were significantly lower in January in five states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Six states had notable jobless rate decreases from a year earlier and 44 states and the District of Columbia had no significant change. Over the year, nonfarm payroll employment increased in 28 states, decreased in 2 states, and virtually unchanged in 20 states and the District of Columbia.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary, for March increased to 97.6, from 96.3 in February. The index was 91.0 a year ago.

·      The March Empire State Manufacturing Survey indicated that business activity continued to grow at a solid pace in New York. The general business conditions index was 16.4 in March, compared with 18.7 in February and 6.5 in January. The index was negative 1.5 in March of 2016.

·      The Philadelphia FED manufacturing business outlook survey for March reported that business activity continued to expand. The indicator for general activity was 32.8 in March, compared with 43.3 in February and 23.6 in January. The index was 10.6 in March of 2016.

·      The Conference Board index of leading economic indicators increased 0.6% in February for the third consecutive month. The coincident index increased 0.3% in February, following a 0.1% increase in January.

·      The Federal Open Market Committee decided to raise the target range for the federal funds rate to 0.75% to 1.00%. “The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

• Total non-farm payroll employment rose 235 thousand in February, following an increase of 238 thousand in the previous month. Private-sector payrolls increased by 227 thousand in the month, while government employment increased by 8 thousand.
• The unemployment rate decreased to 4.7% in February, from 4.8% in January.
• The average workweek held steady at 34.4 hours, and average hourly earnings increased by 6 cents to $26.09.  Over the past 12 months, average hourly earnings were up 2.8%.
• The advance figure for initial claims for unemployment insurance increased 20 thousand to 243 thousand in the week ending March 4. The 4-week moving average was 236.5 thousand, an increase of 2.25 thousand from the previous week’s average.
• Fourth quarter productivity increased 1.3% (seasonally adjusted annual rate) in the non-farm business sector, following a 3.3% increase in the previous period. Hourly compensation increased 3.0%, while unit labor costs increased 1.7%. From the fourth quarter of 2015 to the fourth quarter of 2016, productivity increased 1.0%, reflecting increases in output and hours worked of 2.2% and 1.2%, respectively.
• New orders for manufactured goods increased 1.2% in January, while shipments increased 0.2%. New orders were up six of the last seven months, and shipments were up ten of the last eleven months.
• Sales of merchant wholesalers in January were down 0.1% from December, while inventories were down 0.2%.
• In January international trade deficit was $48.5 billion, $5.2 billion more than the revised December figure.
• The import price index increased 0.2% in February, following a 0.6% increase in the previous month. The export price index increased 0.3% in February, following a 0.2% increase in the previous month. The import price index increased 4.6% from February 2016, while export prices increased 3.1%.
• January consumer credit outstanding increased at an annual rate of 2.8% to $3,773.5 billion. Revolving credits decreased at an annual rate of 4.6%, while non-revolving credits increased 5.5%.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving higher. 30-year fixed-rate mortgage averaged 4.21% for the week ending March 9, 2017, up from last week when it averaged 4.10%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.68%.
• Mortgage applications increased 3.3% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 3rd.

• Real GDP increased at an annual rate of 1.9% in the fourth quarter of 2016, after increasing 3.5% in the previous quarter, according to the “second” estimate released by the Bureau of Economic Analysis. In the “advance” estimate, released about a month ago, the increase in real GDP also 1.9%.
• Real final sales of domestic product increased 0.9%, following a 3.0% increase in the previous quarter.
• The price index for gross domestic purchases increased 1.9% in the fourth quarter, compared to an increase of 1.5% in the previous quarter.  The price index for personal consumption expenditures increased 1.9%, compared with an increase of 1.5%. Excluding food and energy prices, the price index for personal consumption expenditures increased 1.2%, following an increase of 1.7% in the previous quarter.
• Real GDP increased 1.6% in 2016, compared with an increase of 2.6% in 2015. Current-dollar GDP increased 2.9%, or $529.0 billion, in 2016 to a level of $18,565.6 billion, compared with an increase of 3.7 percent, or $643.5 billion, in 2015.
• The price index for gross domestic purchases increased 1.0% in 2016, compared with an increase of 0.4% in 2015.
• Personal income increased 0.4% in January, following a 0.3% increase in the previous month. Personal consumption expenditures, which increased 0.5% in December, increased 0.2% in January. The price index for personal consumption expenditures increased 0.4% in January, while the core index increased 0.2%. The price index (headline index) was up 1.9% from January 2016, while the core index was up 1.7%.
• New orders for manufactured durable goods increased 1.8% in January while shipments decreased 0.1%.
• Retail inventories for January were up 0.8% from December 2016, and were up 4.0% from January 2016, according to the U.S. Census Bureau.
• Wholesale inventories for January were down 0.1% from December 2016, but were up 2.2% from January 2016.
• Sales of domestic cars decreased 10.3% in January, following a 1.5% increase in the previous month. Total light vehicle (cars and light trucks) sales decreased 4.6%, following a 3.4% increase in the previous month. Total light vehicle sales were 17.5 million units in January, at a seasonally adjusted annual rate, compared to 17.8 million in January of 2016.
• The international trade deficit of goods was $69.2 billion in January, up $4.9 billion from $64.4 billion in December. Exports of goods for January decreased $0.4 billion to $126.2 billion, and imports of goods increased $4.4 billion to $195.4 billion.
• January construction spending was down 1.0% from the previous month, but was up 3.1% from a year ago. Private construction increased 0.2% in January, while public construction decreased 5.0%.
• The S & P Corelogic Case-Shiller National U.S. Home Price Index posted a 5.8% annual gain in December, up from 5.6% last month and setting a 30-month high. The 10-city Composite index increased 4.9% from a year ago, while the 20-city composite index increased 5.6%.
• The Pending Home Sales Index, a leading indicator for the housing sector, decreased 2.8% to a reading of 106.4 in January, according to the National Association of Realtors. The index was 106.0 in January 2016.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving lower. 30-year fixed-rate mortgage averaged 4.10% for the week ending March 2, down from last week when it averaged 4.16%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.64%.
• Mortgage applications increased 5.8% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending February 24th.
• The advance figure for initial claims for unemployment insurance decreased 19 thousand to 223 thousand in the week ending February 25. This is the lowest level since March 31, 1973 when it was 222 thousand. The 4-week moving average was 234.25 thousand, a decrease of 6.25 thousand from the previous week’s revised average. This is the lowest level since April 14, 1973 when it was 232.75 thousand.
• Annual average unemployment rates decreased in 38 states and the District of Columbia, increased in 9 states, and were unchanged in 3 states in 2016, according to the U.S. Bureau of Labor Statistics. Employment-population ratios increased in 36 states and the District of Columbia, decreased in 12 states, and were unchanged in 2 states.
• The Conference Board Consumer Confidence Index, which had declined in January, increased in February. The Index now stands at 114.8 (1985=100), up from 111.6 in January. The Present Situation Index rose from 130.0 to 133.4, and the Expectations Index increased from 99.3 to 102.4.
• The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in February, and the overall economy grew for the 93rd consecutive month.
• The FED’s “Beige Book” indicated that overall economic activity expanded at a modest to moderate pace from early January through mid-February.
• The Chicago Fed’s National Financial Conditions Index, which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets and the banking systems, ticked up to negative 0.79 in the week ending February 24, from negative 0.8 in previous week. The risk, credit and leverage sub-indexes all ticked up from the previous week, while the nonfinancial leverage sub-index was unchanged. Positive values of the Index indicate financial conditions that are tighter than on average, while negative values indicate financial conditions that are looser than on average.