Current-Cast® Report

·      Real GDP increased at an annual rate of 2.6% in the fourth quarter of 2016, after increasing 3.2% in the previous quarter, according to the “advance” estimate released by the Bureau of Economic Analysis. Real final sales of domestic product increased 3.2%, following a 2.4% increase in the previous quarter.

·      The price index for gross domestic purchases increased 2.5% in the fourth quarter, compared to an increase of 1.7% in the previous quarter.  The price index for personal consumption expenditures (PCE) increased 2.8%, compared with an increase of 1.5% in the previous quarter. Excluding food and energy prices, the PCE price index increased 1.9%, compared with an increase of 1.3% in the previous quarter.

·      Real GDP increased 2.3% in the year 2017, compared with an increase of 1.5% in 2016. The price index for gross domestic purchases increased 1.8% in 2017, compared to an increase of 1.0% in 2016. Current-dollar GDP increased 4.1% in 2017 to a level of $19,386.8 billion, compared with an increase of 2.8% in 2016.

·      Real gross domestic product (GDP) increased in every state and the District of Columbia in the third quarter of 2017, according to the U.S. Bureau of Economic Analysis.  Real GDP by state growth in the third quarter ranged from 5.7% in Delaware to 0.5% in South Dakota.

·      New orders for manufactured durable goods increased 2.9% in December, while shipments increased 0.6%, according to the U.S. Census Bureau. New orders in the year 2017 were up 5.8% from 2016, while shipments were up 4.1%.

·      Retail inventories for December, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $620.4 billion, up 0.2% from November 2017, and were up 2.2% from December 2016.

·      Wholesale inventories for December, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $611.4 billion, up 0.2% from November 2017, and were up 3.3% from December 2016.

·      The international trade deficit was $71.6 billion in December, up $1.6 billion from $70.0 billion in November, according to the U.S. Census Bureau. Exports of goods for December were $137.6 billion, $3.6 billion more than November exports. Imports of goods for December were $209.2 billion, $5.2 billion more than November imports.

·      December existing home sales decreased 3.6% to an annualized rate of 5.57 million units, according to the National Association of Realtors. The December figure was 1.1 % above the December 2016 figure. The median sales price of existing houses sold was $246.8 thousand, 5.8% above December 2016. The housing inventory at the end of December dropped 11.4% to 1.48 million existing homes for sale. Sales were at 5.51 million units for the year 2017, the highest since 2006.

·      December new home sales decreased 9.3% to an annualized rate of 625 thousand units. The December figure was 14.1% above the December 2016 figure.  The median sales price of new houses sold was $335.4 thousand, 2.6% above December 2016. Sales were 608 thousand units in the year 2017, 8.3% above the previous year.

·      U.S. House prices rose 0.4% on a seasonally adjusted basis from October to November, after increasing 0.6% in the previous period, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. For the 12 months ending in November, U.S. prices rose 6.5%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed fixed mortgage rates moving higher for the third consecutive week. The 30-year fixed mortgage rate averaged 4.15% for the week ending January 25, up from last week when it averaged 4.04%. A year ago at this time, the 30-year fixed-rate averaged 4.19%.

·      Mortgage applications increased 4.5% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending January 19,2018.

·      The advance figure for initial claims for unemployment insurance increased by 17 thousand to 233 thousand in the week ending January 20. The 4-week moving average was 240 thousand, a decrease of 3.5 thousand from the previous week’s revised average.

·      The Conference Board index of leading economic indicators increased 0.6% in December, following a 0.5% increase in the previous month. Over the last six months of 2017, the index grew 3.1% (about 6.3% annual rate), faster than the growth of 2.6% (about 5.2% annual rate) over the first half of the year. The Conference Board coincident economic index increased 0.3% in December, after a 0.1% increase in November. The coincident index rose 1.2% (about 2.4% annual rate) during the last six months of 2017, slightly faster than the growth of 0.9% (about 1.8% annual rate) over the first half of the year.

·      The Chicago FED National Activity Index increased to 0.27 in December, from 0.11 in November. The index’s three-month moving average was 0.42, compared with 0.43 in November.

·      Total Industrial production increased 0.9% in December, following a 0.1% decline in the previous month. The index was 3.6% above the level in December 2016. The manufacturing index was up 0.1% in December, while the index for utilities was up 5.6%. The index for mining was up 1.6% in December. Total Industrial production for the year 2017 was up 1.8% from the previous year.

·      The rate of capacity utilization for total industry was 77.9% in December, compared with 77.2 in November, and 79.9 as the average of the 1972-2016 period.

·      Finance and insurance, durable goods manufacturing, and information services were the leading contributors to the increase in U.S. economic growth in the third quarter of 2017, according to the Bureau of Economic Analysis. 18 of 22 industry groups contributed to the overall increase in real GDP in the third quarter.

·      Housing starts in December were down 8.2% from the previous month, and were down 6.0% from December 2016. The total number of starts for the year 2017 was up 2.4% from the previous year.  Building permits were down 0.1% from the previous month, but were up 2.8% from a year ago. Building permits for the year 2017 was up 4.7% from the previous year.

·      The housing market index of National Association of Home Builders (NAHB) and Wells Fargo decreased 2 points to 72 in January 2018, from 74 in the previous month. The Index was 67 in January of 2017.

·      The results of Freddie Mac’s Primary Mortgage Market Survey of January 18th showed average fixed mortgage rates rising for the second consecutive week. 30-year fixed rate mortgage averaged 4.04% for the week ending January 18^th, up from last week when it averaged 3.99%. A year ago at this time, the 30-year fixed rate averaged 4.09%. 15-year fixed rate mortgage averaged 3.49%, up from last week when it averaged 3.44%. A year ago at this time, the 15-year fixed rate averaged 3.34%.

·      Mortgage applications increased 4.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending January 12th.

·      The advance figure for initial claims for unemployment insurance decreased 41 thousand to 220 thousand in the week ending January 13. This is the lowest level for initial claims since February 24, 1973 when it was 218 thousand. The 4-week moving average was 244.50 thousand, a decrease of 6.25 thousand from the previous week’s average.

·      The FED’s “Beige Book” indicated that overall economic activity continued to expand across all regions from late November through the end of the year.

·      The January 2018 Empire State Manufacturing Survey indicated that business activity continued to grow at a solid clip in New York State.

·      The Philadelphia FED’s manufacturing business outlook survey for January 2018 reported that economic growth continued in the region.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary, decreased to 94.4 in January, from 95.9 in December. The Index was 98.5 a year ago. The Current Economic Conditions Index decreased from 113.8 to 109.2, while the Index of Consumer Expectations inched up from 84.3 to 84.8.

• Advance estimates of retail and food services sales for December were up 0.4% from November, and were up 5.4% from December 2016.  Total sales for the year 2017 were up 4.2% from the year 2016.
• Total manufacturing and trade sales for November were up 1.2% from October, and were up 7.9% from November 2016. Inventories were up 0.4% from the previous month, and were up 3.2% from a year ago. The total business inventories/sales ratio at the end of November was 1.33, compared with 1.40 a year ago.
• Sales of merchant wholesalers in November were up 1.5% from the previous month, and were up 9.8% from the November 2016 level. Total inventories were up 0.8% from October, and were up 4.0% from November 2016.
• The federal government budget ran a deficit of $23.2 billion in December, after a deficit of $138.5 billion in the previous month. The cumulative deficit for the first three months of the fiscal year 2018 was $225.0 billion, compared with the deficit of $209.8 billion for the first three months of the previous fiscal year.
• November consumer credit outstanding increased at an annual rate of 8.75% to $3,827.2 billion. Revolving credit increased at an annual rate of 13.25%, while non-revolving credit increased 7.25%.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed fixed mortgage rates rising across the board. The 30-year fixed mortgage rate averaged 3.99% for the week ending January 11, up from last week when it averaged 3.95%. A year ago at this time, the 30-year fixed rate averaged 4.12%. The 15-year fixed mortgage rate averaged 3.44%, up from last week when it averaged 3.38%. A year ago at this time, the 30-year fixed rate averaged 3.37%.
• Mortgage applications increased 8.3% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending January 5, 2018.
• The import price index in December was up 0.1% from November, and was up 3.0% from December of 2016. The export price index was down 0.1% from November, but was up 2.6% from December of 2016.
• The producer price index for final demand (headline index) decreased 0.1% in December, following a 0.4% increase in the previous month, according to the U.S. Bureau of Labor Statistics. The core index, final demand less foods and energy, decreased 0.1% in December, after a 0.3% increase in the previous month. The headline index increased 2.6% from December 2016 to December 2017, while the core index increased 2.3%.
• The consumer price index (headline index) rose 0.1% in December, following a 0.4% increase in the previous month. The core index, all items less food and energy, increased 0.3%, following a 0.1% increase in the previous month. The consumer price index increased 2.1% for the 12-month period ending in December, while the core index rose 1.8%.
• Real average hourly earnings for all employees increased 0.2% from November to December. This result stems from a 0.3% 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 increased by 11 thousand to 261 thousand in the week ending January 6. The 4-week moving average was 250.75 thousand, an increase of 9 thousand from the previous week’s unrevised average.
• The number of job openings was little changed at 5.9 million on the last business day of November, according to the U.S. Bureau of Labor Statistics. Over the month, hires and separations were also little changed at 5.5 million and 5.2 million, respectively.
• The labor Market Conditions Index constructed by the Kansas City Federal Reserve was 0.44 in December, compared with 0.51 in November, and 0.28 in December of 2016.

•  Total non-farm payroll employment increased 148 thousand in December, following an increase of 252 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 146 thousand in December, while government employment increased by 2 thousand. In 2017, payroll employment growth totaled 2.1 million, compared with a gain of 2.2 million in 2016.

  ·      The unemployment rate held steady at 4.1% in December. The unemployment rate was 4.7% in December 2016.

  ·      The number of unemployed decreased by 40 thousand to 6.576 million. Over the year, the number of unemployed was down by 926 thousand. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.5 million and accounted for 22.9% of the unemployed. Over the year, the number of long-term unemployed declined by 354 thousand.

  ·      The labor force participation rate remained at 62.7% in December, unchanged over the year.

  ·      The average workweek of all employees on private nonfarm payrolls was unchanged at 34.5 hours in December.

  ·      In December, average hourly earnings of all employees on private nonfarm payrolls increased by 9 cents to $26.63. Over the past 12 months, average hourly earnings were up 2.5%.

  ·      Unemployment rates were lower in November than a year earlier in 304 of the 388 metropolitan areas, higher in 67 areas, and unchanged in 17 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 313 metropolitan areas, decreased in 70 areas, and was unchanged in 5 areas.

  ·      The advance figure for initial claims for unemployment insurance increased 4 thousand to 250 thousand in the week ending December 30. The 4-week moving average was 241.75 thousand, an increase of 3.5 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending December 23 was 1,914 thousand, a decrease of 37 thousand from the previous week’s revised level. The 4-week moving average was 1,922.5 thousand, an increase of 0.75 thousand from the previous week’s revised average.

  ·      Sales of domestic cars decreased 4.8% in December, while total light vehicle (cars and light trucks) sales increased 2.1%. Total vehicle sales were 17.8 million units in December, at a seasonally adjusted annual rate, compared to 17.4 million in the previous month, and 18.1 million in December of 2016. Sales of domestic cars decreased 10.3% to 4.6 million for the year 2017, while total vehicle sales decreased 1.9% to 17.1 million.

  ·      New orders for manufactured goods increased 1.3% in November, while shipments increased 1.2%. Year-to-date, new orders were up 5.8% from the same period in 2016, while shipments were up 5.2%. Inventories in November were up 0.4% from the previous month, and were up 0.6% from a year ago.

  ·      In November, international trade deficit was $50.5 billion, $1.6 billion more than the revised October figure. November exports were $200.2 billion, $4.4 billion more than October exports. November imports were $250.7 billion, $6.0 billion more than October imports. The cumulative trade deficit for the first eleven months of 2017 was $513.6 billion, compared with a cumulative deficit of $460.2 billion during the first eleven months of 2016 (11.6% increase).

  ·      Construction spending in November was up 0.8% from the previous month, and was up 2.4% from November 2016. Private construction increased 1.0%, while public construction increased 0.2%.

  ·      The results of Freddie Mac’s Primary Mortgage Market Survey of January 4th showed that average mortgage rates dropping to stat the year. 30-year fixed-rate mortgage averaged 3.95% for the week ending January 4, 2018, down from last week when it averaged 3.99%. A year ago at this time, the 30-year fixed rate averaged 4.20%. 15-year fixed-rate mortgage averaged 3.38%, down from last week when it averaged 3.44%. A year ago at this time, the 30-year fixed rate averaged 3.44%.

  ·      Mortgage applications decreased 2.8% from two weeks earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending December 29. 

  ·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in December, and the overall economy grew for the 103rd consecutive month.

  ·      In December, the Institute for Supply Management’s (ISM) non-manufacturing survey results indicated growth in the non-manufacturing business activity (exceeded 50.0%) for the 96th consecutive month. Fourteen non-manufacturing industries reported growth, and three industries reported contraction.

  ·      The Federal Reserve Bank Chicago’s National Financial Conditions Index (NFCI) held steady at negative 0.89 in the week ending December 29. Risk indicators contributed negative 0.40, credit indicators contributed negative 0.30, and leverage indicators contributed negative 0.17 to the index in the latest week.