Current-Cast® Report

• Real GDP increased at an annual rate of 2.9% in the fourth quarter of 2017, following a 3.2% 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 2.5%.
• Real gross domestic income (GDI) increased 0.9% in the fourth quarter, compared with an increase of 2.4% 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 1.9% in the fourth quarter, compared with an increase of 2.8% in the third quarter
• The price index for gross domestic purchases increased 2.5% in the fourth quarter, following a 1.7% increase in the third quarter. The personal consumption expenditures (PCE) price index increased 2.7%, compared with an increase of 1.5%. Excluding food and energy prices, the PCE price index increased 1.9%, compared with an increase of 1.3%.
• Real GDP increased 2.3% in the year 2017, following an increase of 1.5% in 2016. The price index for gross domestic purchases increased 1.8% in 2017, compared with an increase of 1.0% in 2016. The PCE price index increased 1.7%, compared with an increase of 1.2%. Excluding food and energy prices, the PCE price index increased 1.5%, compared with an increase of 1.8%.
• Current-dollar GDP increased 4.1%, or $766.1 billion, in 2017 to a level of $19,390.6 billion, compared with an increase of 2.8%, or $503.8 billion, in 2016
• Corporate profits from current production decreased $1.1 billion in the fourth quarter, after an increase of $90.2 billion in the previous quarter. For the year 2017, profits from current production increased $91.2 billion, in contrast to a decrease of $44.0 billion in 2016.
• Personal income increased 0.4%, in February, the same increase as in the previous month. Personal consumption expenditures increased 0.2% in February, the same increase as in the previous month. The price index for personal consumption expenditures increased 0.2% in February, following an increase of 0.4% 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 1.8% from February 2017, while the price index excluding food and energy increased 1.6%.
• Retail inventories for February were up 0.4% from January 2018, and were up 2.5% from February 2017.
• Wholesale inventories for February were up 1.1% from January 2018, and were up 5.7% from February 2017.
• In February international trade deficit was $75.4 billion, $0.1 billion more than the January figure. February exports were $136.5 billion, $2.9 billion more than January exports. January imports were $211.9 billion, $3.0 billion more than January imports.
• The Pending Home Sales Index increased 3.1% to a reading of 107.5 in February, according to the National Association of Realtors. The index was 4.1% below February 2017 level.
• The S & P Corelogic Case-Shiller National U.S. Home Price Index for January indicates that home prices continued their rise across the country over the last 12 months. The National index, seasonally adjusted, was up less than 0.1% in January, following a 0.3% increase in the previous month. The National index, not seasonally adjusted, and was up 6.2% from January 2017. As of January 2018, average home prices were 6.3% above their June/July 2006 peaks.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates holding largely steady for the week. 30-year fixed-rate mortgage averaged 4.44% for the week ending March 29, down from last week when it averaged 4.45%. A year ago at this time, the 30-year fixed-rate averaged 4.14%. 15-year fixed-rate mortgage averaged 3.90%, down from last week when it averaged 3.91%. A year ago at this time, the 15-year fixed-rate averaged 3.39%.
• Mortgage applications increased 4.8% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 23rd.
• The advance figure for initial claims for unemployment insurance decreased 12 thousand to 215 thousand in the week ending March 24. This is the lowest level for initial claims since January 27, 1973 when it was 214 thousand. The 4-week moving average was 224.5 thousand, a decrease of 0.5 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment during the week ending March 17 was 1,871 thousand, an increase of 35 thousand from the previous week’s revised level. The 4-week moving average was 1,861.5 thousand, a decrease of 12.75 thousand from the previous week’s revised average. This is the lowest level for this average since January 5, 1974 when it was 1,838.5 thousand.
• The Conference Board’s consumer confidence index, which had increased in February, decreased March. The Index decreased to 127.7 in March, from 130.0 in February. The expectations index decreased from 109.2 to 106.2, while the present situation index decreased from 161.2 to 159.9.
• The Chicago FED National Activity Index rose to 0.88 in February, from 0.02 in January. All four broad categories of indicators that make up the index increased from January. The index’s three-month moving average increased to 0.37 in February, from 0.16 in January.
• The Thomson Reuters/University of Michigan Index of Consumer Sentiment increased to 101.4 in March, from 99.7 in February. This was the highest level since 2004. The Current Conditions Index rose from 114.9 to 121.2, and set a new all-time peak. The Index of Consumer Expectations decreased to 88.8 in March, from 90.0 in February.

·      New orders for manufactured durable goods increased 3.1% in February, following a 3.5% decrease in the previous month. Shipments increased 0.9%, following a 0.5% increase in the previous month. Inventories increased 0.4%, the same increase as in the previous month. Year-to-date, new orders increased 9.1% from the same period a year ago, while shipments increased 7.8%.

·      The U.S. current account deficit increased to $128.2 billion in the fourth quarter of 2017 from $101.5 billion in the third quarter, according to the Bureau of Economic Analysis. The deficit increased to 2.5% of GDP in the final quarter of 2017, from 2.1% of GDP in the previous quarter. For the year 2017, the current account deficit was $466.2 billion, compared with $451.7 billion in 2016. The deficit was 2.4% of GDP in both 2017 and 2016.

·      State personal income grew on average 3.1% in 2017, after increasing 2.3% in 2016, according to the U.S. Bureau of Economic Analysis. Growth of state personal income ranged from negative 0.3% in North Dakota to positive 4.8% in Washington.

·      Private nonfarm business sector multifactor productivity increased 0.9% in 2017, following a 0.6% decrease in 2016, according to the U.S. Bureau of Labor Statistics. This 2017 increase reflected a 2.9% increase in output and a 2.0% increase in the combined inputs of capital and labor. Capital services grew by 2.2% and labor input grew by 1.9%.

·      February existing home sales increased 3.0% to an annualized rate of 5,540 thousand units, according to the National Association of Realtors. The February figure was 1.1% above the February 2017 figure. There were 1,590 thousand homes for sale at the end of the month. This represents a supply of 3.4 months at the current sales rate, compared to 3.8 in February of 2017. The median sales price of existing homes sold was $241.7 thousand, 5.9% above February 2017.

·      February new home sales decreased 0.6% to an annualized rate of 618 thousand units. The February figure was 0.5% above the February 2017 figure. There were 305 thousand homes for sale at the end of the month. This represents a supply of 5.9 months at the current sales rate, compared to 5.1 in February of 2017. The median sales price of new houses sold was $326.8 thousand, 9.7% above February 2017.

·      U.S. House prices rose 0.8% 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 7.3%.

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates inched up after falling for the first time in 2018 last week. 30-year fixed-rate mortgage averaged 4.45% for the week ending March 22, up from last week when it averaged 4.44%. A year ago at this time, the 30-year fixed-rate averaged 4.23%. 15-year fixed-rate mortgage averaged 3.91%, up from last week when it averaged 3.90%. A year ago at this time, the 15-year fixed-rate averaged 3.44%.

·      Mortgage applications decreased 1.1% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 16th.

·      The advance figure for initial claims for unemployment insurance increased 3 thousand to 229 thousand in the week ending March 17. The 4-week moving average was 223.75 thousand, an increase of 2.25 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending March 10 was 1,828 thousand, a decrease of 57 thousand from the previous week’s revised level. This is the lowest level for insured unemployment since December 29, 1973 when it was 1,805 thousand. The 4-week moving average was 1,880.5 thousand, a decrease of 11.75 thousand from the previous week’s revised average. This is the lowest level for this average since January 5, 1974 when it was 1,838.5 thousand.

·      Employer costs for employee compensation averaged $35.87 per hour worked in December 2017, according to the U.S. Bureau of Labor Statistics. Wages and salaries averaged $24.49 per hour worked and accounted for 68.3% of these costs, while benefit costs averaged $11.38 and accounted for 31.7%. Total employer compensation costs for private industry workers averaged $33.72 per hour worked in December 2017. Total employer compensation costs for state and local government workers averaged $49.19 per hour worked. 

·       The Conference Board index of leading economic indicators increased 0.6% in February, following a 0.8% increase in the previous month. In the six-month period ending February 2018, the leading economic index increased 4.0% (about an 8.2% annual rate), faster than the growth of 2.4% during the previous six months. Furthermore, the strengths among the leading indicators remained very widespread. The coincident index increased 0.3% in February, following a 0.1% increase in January. The coincident economic index rose 1.5% (about a 3.0% annual rate) for the six-month period ending February 2018, almost twice the growth of 0.8% for the previous six months.

·      The Federal Open Market Committee decided to raise the target range for the federal funds rate to 1.50% to 1.75%. “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.”

• Advance estimates of retail and food services sales for February were down 0.1% from January, but were up 4.0% from February 2017. Excluding motor vehicle & parts, sales were up 0.2% from the previous month, and were up 4.4% from a year ago. Year-to-date, retail sales and food services were up 4.7% from the same period of 2017.
• Total manufacturing and trade sales for January were down 0.2% from the previous month, but were up 5.7% from January 2017. Total business inventories were up 0.6% from the previous month, and were up 3.7% from a year ago. The inventories/sales ratio was 1.34, compared with 1.37 in January of 2017.
• Total Industrial production increased 1.1% in February, after decreasing 0.3% in the previous month. Total Industrial production was up 4.4% from February 2017. The capacity utilization rate was 78.1 in February, 1.7 percentage points below the average for the 1972-2017 period.
• Housing starts in February were 1,236 thousand, down 7.0% from the previous month and were down 4.0% from a year ago. Building permits in February were 1,298 thousand units, down 5.7% from January, but were up 6.5% from February 2017.
• The housing market index of National Association of Home Builders (NAHB) and Wells Fargo decreased to 70 in March, from 71 in February. The index was 71 in March of 2017, and 72 in January 2018.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates dropping after nine consecutive weeks of increases. 30-year fixed-rate mortgage averaged 4.44% for the week ending March 15, down from last week when it averaged 4.46%. A year ago at this time, the 30-year fixed-rate averaged 4.30%. 15-year fixed-rate mortgage averaged 3.90%, down from last week when it averaged 3.94%. A year ago at this time, the 15-year fixed-rate averaged 3.50%.
• Mortgage applications increased 0.9% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 9th.
• The federal budget had a deficit of $215.2 billion in February, compared with a surplus of $49.2 billion in January and a deficit of $192.0 billion in February of 2017. The cumulative deficit for the first five months of the fiscal year 2018 was $391.0 billion, compared with a deficit of $350.6 billion during the same period of the previous fiscal year.
• The import price index increased 0.4% in February, following a 0.8% increase in the previous month. The export price index increased 0.2% in February, following a 0.8% increase in the previous month. The import price index increased 2.5% from February 2017, while export prices increased 3.3%.
• The producer price index for final demand (headline index) increased 0.2% in February, following an increase of 0.4% in the previous month. The index for final demand less foods, energy, and trade increased 0.4%, the same increase as in the previous month. The producer price index for final demand (headline index) was up 2.8% from February 2017 to February 2018, while the index for final demand less foods, energy, and trade was up 2.7%. The index for processed goods for intermediate demand increased 0.7% in February, while the index for unprocessed goods for intermediate demand decreased 2.8%. The index for services for intermediate demand increased 0.5%, following a 0.1% increase in the previous month.
• The consumer price index (headline index) increased 0.2% in February, following a 0.5% increase in January. The core index increased 0.2%, following a 0.3% increase as in the previous month. The consumer price index increased 2.2% for the 12-month period ending in February, while the core index rose 1.8%.
• Real average hourly earnings for all employees were unchanged from January to February. This result stems from a 0.1% increase in average hourly earnings offset by a 0.2% increase in the consumer price index for all urban consumers.
• The advance figure for initial claims for unemployment insurance decreased 4 thousand to 226 thousand in the week ending March 10. The 4-week moving average was 221.5 thousand, a decrease of 0.75 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending March 3 was 1,879 thousand, an increase of 4 thousand from the previous week’s revised level. The 4-week moving average was 1890.75 thousand, a decrease of 17.25 thousand from the previous week’s revised average.
• There were 6.3 million job openings on the last business day of January, according to the U.S. Bureau of Labor Statistics. Over the month, hires and separations little changed at 5.6 million and 5.4 million, respectively.
• Unemployment rates were lower in January in six states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Sixteen states had jobless rate decreases from a year earlier and 34 states and the District of Columbia had little or no change. Over the year, nonfarm payroll employment increased in 3 states, decreased in 1 state, and essentially unchanged in 46 states and the District of Columbia.
• Unemployment rates were lower in January than a year earlier in 337 of the 388 metropolitan areas, higher in 39 areas, and unchanged in 12 areas, according to the U.S. Bureau of Labor Statistics. Nonfarm payroll employment increased over the year in 295 metropolitan areas, decreased in 78 areas, and was unchanged in 15 areas.
• 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 22.5 in March, compared with 13.1 in February.

• The Philadelphia FED manufacturing business outlook survey for March reported that business activity continued to expand. The indicator for general activity was 22.3 in March, compared with 25.8 in February.
• The Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary, for March increased to 102.0, from 99.7 in February. The index was 96.9 a year ago.

• Total non-farm payroll employment rose 313 thousand in February, following an increase of 239 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 287 thousand in the month, while government employment increased by 26 thousand.  Job gains occurred in construction, retail trade, professional and business services, manufacturing, financial activities, and mining.
• In February, the unemployment rate was 4.1% for the fifth consecutive month, and the number of unemployed persons was essentially unchanged at 6.7 million.
• The labor force participation rate increased by 0.3 percentage point over the month to 63.0%, but changed little over the year.
• The average workweek increased by 0.1 hour to 34.5 hours, and average hourly earnings increased by 4 cents to $26.75.  Over the past 12 months, average hourly earnings were up 2.6%.
• The advance figure for initial claims for unemployment insurance increased 21 thousand to 231 thousand in the week ending March 3. The 4-week moving average was 222.5 thousand, an increase of 2 thousand from the previous week’s average.
• Fourth quarter productivity held steady in the non-farm business sector, following a 2.6% increase in the previous period. Hourly compensation increased 2.4%, while unit labor costs increased 2.5%. From the fourth quarter of 2016 to the fourth quarter of 2017, productivity increased 1.1%, reflecting increases in output and hours worked of 3.2% and 2.1%, respectively.
• New orders for manufactured goods decreased 1.4% in January, while shipments increased 0.6%. Year-to-date, New orders were up 8.4%, and shipments were up 8.0%.
• Sales of merchant wholesalers in January decreased 1.1% from December, while inventories increased 0.8%.  The January inventories/sales ratio was 1.26, compared with 1.28 in January 2017.
• In January international trade deficit was $56.6 billion, $2.7 billion more than the revised December figure. January exports were $200.9 billion, $2.7 billion less than December exports. January imports were $257.5 billion, down less than $0.1 billion from December imports.
• The net worth of households and nonprofits rose to $98.7 trillion during the fourth quarter of 2017, according to the Board of Governors of the Federal Reserve System.
• Domestic nonfinancial debt outstanding was $49.1 trillion at the end of the fourth quarter of 2017, of which household debt was $15.3 trillion, nonfinancial business debt was $14.3 trillion, and total government debt was $19.5 trillion.
• Household debt increased at an annual rate of 5.2% in the fourth quarter of 2017, while nonfinancial business debt rose at an annual rate of 3.7%. Federal government debt decreased 0.2% at a seasonally adjusted annual rate in the fourth quarter of 2017, while state and local government debt expanded at an annual rate of 4.2%.
• January consumer credit outstanding increased at an annual rate of 4.25% to $3,855.0 billion. Revolving credits decreased at an annual rate of 0.8%, while non-revolving credits increased 5.6%.

• The results of Freddie Mac’s Primary Mortgage Market Survey showed average fixed mortgage rates moving higher. 30-year fixed-rate mortgage averaged 4.46% for the week ending March 8, up from last week when it averaged 4.43%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.21%. 15-year fixed-rate mortgage averaged 3.94%, up from last week when it averaged 3.90%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.42%.
• Mortgage applications increased 0.3% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending March 2nd.
• In February, the Institute for Supply Management’s (ISM) non-manufacturing survey results indicated growth in the non-manufacturing business activity (exceeded 50.0%) for the 97th consecutive month. Sixteen non-manufacturing industries reported growth, and two industries reported contraction.
• The FED’s “Beige Book” indicated that economic activity expanded at a modest to moderate pace across all Districts in January and February.

• Real GDP increased at an annual rate of 2.5% in the fourth quarter of 2017, after increasing 3.2% 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 2.6%.
• Real final sales of domestic product increased 3.3%, 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 increased 2.7%, compared with an increase of 1.5%. Excluding food and energy prices, the price index for personal consumption expenditures increased 1.9%, following an increase of 1.3% in the previous quarter.
• Real GDP increased 2.3% in 2017, compared with an increase of 1.5% in 2016. Current-dollar GDP increased 4.1%, or $761.7 billion, in 2017 to a level of $19,386.2 billion, compared with an increase of 2.8 percent, or $503.8 billion, in 2016.
• The price index for gross domestic purchases increased 1.8% in 2017, compared with an increase of 1.0% in 2016.
• Personal income increased 0.4% in January, the same increase as in the previous month. Personal consumption expenditures, which increased 0.4% in December, increased 0.2% in January. The price index for personal consumption expenditures increased 0.4% in January, while the core index increased 0.3%. The price index (headline index) was up 1.7% from January 2017, while the core index was up 1.5%.
• New orders for manufactured durable goods decreased 3.7% in January while shipments increased 0.2%. New orders increased 8.9% from January 2017, while shipments increased 8.2%. Inventories increased 0.3% in January.
• Retail inventories for January were up 0.8% from December 2017, and were up 2.4% from January 2017, according to the U.S. Census Bureau.
• Wholesale inventories for January were up 0.7% from December 2017, and were up 4.7% from January 2017.
• The international trade deficit of goods was $74.4 billion in January, up $2.1 billion from $72.3 billion in December. Exports of goods for January decreased $3.1 billion to $133.9 billion, and imports of goods decreased $0.9 billion to $208.3 billion.
• Sales of new single-family houses in January 2018 were at a seasonally adjusted annual rate of 593 thousand according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8% below the revised December rate and is 1.0% below the January 2017 estimate. The median sales price of new houses sold in January 2018 was $323 thousand, 2.5% increase from a year ago. The average sales price was $382.7 thousand, 7.0% increase from a year ago. The seasonally-adjusted estimate of new houses for sale at the end of January was 301 thousand. This represents a supply of 6.1 months at the current sales rate.
• The S & P Corelogic Case-Shiller National U.S. Home Price Index posted a 6.3% annual gain in December. The 10-city Composite index increased 6.0% from a year ago, while the 20-city composite index increased 6.3%.
• U.S. house prices rose 1.6% in the fourth quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.7% from the fourth quarter of 2016 to the fourth quarter of 2017. FHFA’s seasonally adjusted monthly index for December was up 0.3% from November.
• The Pending Home Sales Index, a leading indicator for the housing sector, decreased 4.7% to a reading of 104.6 in January, according to the National Association of Realtors. The index was 108.7 in January 2017.
• Mortgage applications increased 2.7% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending February 23rd.
• The advance figure for initial claims for unemployment insurance decreased 10 thousand to 210 thousand in the week ending February 24. This is the lowest level since December 6, 1969 when it was 202 thousand. The 4-week moving average was 220.5 thousand, a decrease of 5 thousand from the previous week’s revised average. This is the lowest level since December 27, 1969 when it was 219.75 thousand.
• In 2017, annual average unemployment rates decreased in 32 states and were little changed or unchanged in 18 states and the District of Columbia, according to the U.S. Bureau of Labor Statistics. Employment-population ratios increased in 12 states, decreased in 2 states, and little changed or were unchanged in 36 states and the District of Columbia.
• The Conference Board Consumer Confidence Index, which had increased modestly in January, increased in February. The Index now stands at 130.8 (1985=100), up from 124.3 in January. The Present Situation Index rose from 154.7 to 162.4, and the Expectations Index increased from 104.0 to 109.7.
• The Chicago Fed’s National Activity Index ticked down to 0.12 in January, from 0.14 in December.
• The Chicago Fed’s National Financial Conditions Index ticked up to negative 0.79 in the week ending February 23.