Current-Cast® Report

• New orders for manufactured durable goods in December increased 1.2%, following a 1.0% increase in the previous month. Shipments increased 0.8%, following a 1.0% increase in November. New orders increased 8.1% in the year 2018, and shipments increased 7.3%.
• Wholesale trade, information, and finance and insurance were the leading contributors to the increase in U.S. economic growth in the third quarter of 2019, according to the Bureau of Economic Analysis. Nineteen of 22 industry groups contributed to the overall 3.4% increase in real GDP in the third quarter.
• January existing home sales were down 1.2% from the previous month, and were down 8.5% from January 2018, according to the National Association of Realtors. The median sales price of existing houses sold was $247.5 thousand, 2.8% above January 2018. There were 1.59 million existing homes for sale at the end of the month.  This represents a supply of 3.9 months at the current sales rate, compared to 3.4 in January of 2018.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed fixed mortgage rates continued on their downward pattern. 30-year fixed-rate mortgage averaged 4.35% for the week ending February 21, down from last week when it averaged 4.37%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.40%. 15-year fixed-rate mortgage averaged 3.78%, down from last week when it averaged 3.81%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.85%.
• Mortgage applications increased 3.6% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending February 15th.
• The advance figure for initial claims for unemployment insurance decreased 23 thousand to 216 thousand in the week ending February 16. The 4-week moving average was 235.75 thousand, an increase of 4 thousand from the previous week’s average.
• The Conference Board index of leading economic indicators decreased 0.1% in January, after holding steady in the previous month. Over the six-month span through January, the leading index increased 0.8% (about a 1.6% annual rate). The Conference Board coincident economic index increased 0.1% in January, following a 0.2% increase in the previous month. Over the six-month span through January, the coincident index increased 1.2% (about a 2.3% annual rate).

·       Advance estimates of retail and food services sales for December were down 1.2% from the previous month, but were up 2.3% from December 2017. Excluding motor vehicles and parts, retail sales decreased 1.4% from the previous month, but were up 2.2% from a year ago. Total sales for the 12 months of 2018 were up 5.0% from 2017.

·       Total manufacturing and trade sales decreased 0.3% in November, while inventories decreased 0.1%. Sales were up 4.2% from a year ago, and inventories were up 4.6% from November 2017. The total business inventories/sales ratio at the end of November was 1.35. The November 2017 ratio was also 1.35.

·       Total Industrial production decreased 0.6% in January, following a 0.1% increase in the previous month. The rate of capacity utilization for total industry was 78.2%, a level 1.6 percentage points below its 1972-2018 average, but 1.2 percentage points above its level in January 2018.

• The results of Freddie Mac’s Primary Mortgage Market Survey showed fixed-rate mortgages fell to the lowest levels since early 2018. 30-year fixed-rate mortgage averaged 4.37% for the week ending February 14^th, down from last week when it averaged 4.41%. A year ago, at this time, the 30-year fixed-rate mortgage averaged 4.38%. 15-year fixed-rate mortgage averaged 3.81% for the week ending February 14^th, down from last week when it averaged 3.84%. A year ago, at this time, the 15-year fixed-rate mortgage averaged 3.84%.

·       Mortgage applications decreased 3.7% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending February 8, 2019.

• The import price index decreased 0.5% in January, following a 1.0% decrease in the previous month. Import prices decreased 1.7% from January 2018 to January 2019. The export price index decreased 0.6% in January, the same decrease as in December. Export prices decreased 0.2% from January 2018 to January 2019.
• The producer price index for final demand (headline index) decreased 0.1% in January, the same decline as in the previous month. The index for final demand less foods, energy and trade increased 0.2%, after holding steady in the previous month. The producer price index for final demand increased 2.0% from January 2018, while the index for final demand less foods, energy, and trade increased 2.5%.
• The consumer price index (headline index) in January was unchanged for the third consecutive month. The core index, all items less food and energy, increased 0.2% in January for the fifth consecutive month. The consumer price index increased 1.6% for the 12-month period ending in January, while the core index rose 2.2%.
• Real average hourly earnings for all employees increased 0.2% from December to January. This result stems from a 0.1% increase in average hourly earnings combined with no change in the consumer price index for all urban consumers.
• The number of job openings reached a series high of 7.3 million on the last business day of December, according to the U.S. Bureau of Labor Statistics. Over the month, hires and separations were little changed at 5.9 million and 5.5 million, respectively.
• The advance figure for initial claims for unemployment insurance increased 4 thousand to 239 thousand in the week ending February 9. The 4-week moving average was 231.75 thousand, an increase of 6.75 thousand from the previous week’s revised average. This is the highest level for this average since January 27, 2018 when it was 234 thousand. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending February 2 was 1,773 thousand, an increase of 37 thousand from the previous week’s level of 1,736 thousand. The 4-week moving average was 1,750.25 thousand, an increase of 9 thousand from the previous week’s average of 1,741.25 thousand.

·       The February Empire State Manufacturing Survey indicated that business activity grew modestly in New York. The general business conditions index was 8.8 in February, compared with 3.9 in January.

• The Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary, for February was 95.5, up from 91.2 in January. The index was 99.7 in February of 2018. The current economic conditions component was 110.0 in early February, compared with 108.8 in January. The index of consumer expectations increased to 86.2 in February, from 79.9 in January.

• New orders for manufactured goods increased 0.6% in November, following a 2.1% decrease in October. Shipments decreased 0.6%, following a 0.1% decrease in October. Inventories, down following twenty‐four consecutive monthly increases, decreased 0.1%.This followed a 0.2% October increase.  The inventories‐to‐shipments ratio was 1.35, up from 1.34 in October. Year-to-date, new orders for manufactured goods increased 7.9% and shipments increased 7.3% from the same period in 2017.
• Sales of domestic cars increased 0.8% in January, while total light vehicle (cars and light trucks) sales decreased 5.1%. Total vehicle sales were 16.6 million units in January, at a seasonally adjusted annual rate, compared to 17.1 million in January 2018.
• In November international trade deficit was $49.3 billion, $6.4 billion less than the revised October figure. November exports were $209.9 billion, $1.3 billion less than October exports. November imports were $259.2 billion, $7.7 billion less than October imports. For Year-to-date, the goods and services deficit increased $51.9 billion, or 10.4%, from the same period in 2017. Exports increased $157.1 billion or 7.3%. Imports increased $208.9 billion or 7.9%.
• December consumer credit outstanding increased at an annual rate of 5.0%. Revolving credits increased 2.0%, while non-revolving credits increased 6.0%. The increase in consumer credit was 4.9% in the year 2018.
• Manufacturing sector labor productivity increased 1.3% during the fourth quarter of 2018, according to the U.S. Bureau of Labor Statistics, as output increased 2.3% and hours worked increased 1.0%.  From the fourth quarter of 2017 to the fourth quarter of 2018, manufacturing productivity increased 0.7%, reflecting a 2.8% increase in output and a 2.1% increase in hours worked. Annual average productivity increased 0.6% from 2017 to 2018.  The U.S. Bureau of Labor Statistics noted: “Due to the lapse in appropriations for some federal agencies providing source data, nonfarm business productivity and all unit labor costs data are not available for fourth quarter and annual average 2018. These data will be released in the future.”
• The advance figure for initial claims for unemployment insurance decreased 19 thousand to 234 thousand in the week ending February 2. The 4-week moving average was 224.75 thousand, an increase of 4.5 thousand from the previous week’s average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending January 26 was 1,736 thousand, a decrease of 42 thousand from the previous week’s revised level. The 4-week moving average was 1,741.25 thousand, an increase of 4.25 thousand from the previous week’s average.
• The results of Freddie Mac’s Primary Mortgage Market Survey showed 30-year fixed mortgage rate fell to a 10-month low. 30-year fixed-rate mortgage averaged 4.41% for the week ending February 7^th, down from last week when it averaged 4.46%. A year ago, at this time, the 30-year fixed-rate mortgage averaged 4.32%. 15-year fixed-rate mortgage averaged 3.84%, down from last week when it averaged 3.89%. A year ago, at this time, the 15-year fixed-rate mortgage averaged 3.77%.
• Mortgage applications decreased 2.5% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending February 1.

• In January, the Institute for Supply Management’s (ISM) non-manufacturing survey results indicated growth in the non-manufacturing business activity for the 108th consecutive month. In January, eleven non-manufacturing industries reported growth and seven industries reported contraction.

·      Total non-farm payroll employment increased 304 thousand in January, following an increase of 222 thousand in the previous month, according to the U.S. Bureau of Labor Statistics. Private-sector payrolls increased by 296 thousand in January, while government employment increased by 8 thousand. Job gains occurred in leisure and hospitality, construction, health care, and transportation and warehousing.

·      The unemployment rate rose by 0.1 percentage point to 4.0% in January, and the number of unemployed persons increased by 241 thousand to 6.535 million. A year earlier, the jobless rate was 4.1%, and the number of unemployed persons was 6.641 million

·      The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 54 thousand to 1.252 million and accounted for 19.3% of the unemployed. Over the year, the number of long-term unemployed declined by 176 thousand.

·      The labor force participation rate remained at 63.2% in January, up 0.5 percentage point over the year.

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

·      In January, average hourly earnings of all employees on private nonfarm payrolls increased by 3 cents to $27.56. Over the past 12 months, average hourly earnings were up 3.2%.

·      The Employment Cost Index for total compensation rose 0.7%, seasonally adjusted, for the 3-month period ending December 2018, following a 0.8% increase for the 3–month period ending September 2018. Compensation costs increased 2.9% for the 12-month period ending December 2018. Wages and salaries increased 3.1% for the 12-month period ending in December 2018 and increased 2.5% for the 12-month period ending in December 2017. Benefit costs increased 2.8% for the 12-month period ending in December 2018. In December 2017, the increase was 2.5%. Compensation costs for state and local government workers increased 2.6% for the 12-month period ending in December 2018, while compensation costs for private industry workers increased 3.0%.

·      Unemployment rates were lower in December than a year earlier in 250 of the 388 metropolitan areas, higher in 116 areas, and unchanged in 22 areas, according to the U.S. Bureau of Labor Statistics reported today. A total of 89 areas had jobless rates of less than 3.0% and 3 areas had rates of at least 10.0%. Nonfarm payroll employment increased over the year in 61 metropolitan areas and was essentially unchanged in 327 areas.

·      From March 2018 to June 2018, gross job gains from opening and expanding private-sector establishments were 7.6 million, an increase of 233 thousand jobs from the previous quarter, according the U.S. Bureau of Labor Statistics. Over this period, gross job losses from closing and contracting private-sector establishments were 7.2 million, an increase of 536 thousand jobs from the previous quarter. The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 437 thousand jobs in the private sector during the second quarter of 2018.

·      The advance figure for initial claims for unemployment insurance increased by 53 thousand to 253 thousand in the week ending January 26. This is the highest level for initial claims since September 30, 2017 when it was 254 thousand. The 4-week moving average was 220.25 thousand, an increase of 5 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending January 19 was 1,782 thousand, an increase of 69 thousand from the previous week’s unrevised level of 1,713 thousand. This is the highest level for insured unemployment since April 28, 2018 when it was 1,794 thousand. The 4-week moving average was 1,737.75 thousand, an increase of 8 thousand from the previous week’s unrevised average of 1,729.75 thousand. This is the highest level for this average since August 4, 2018 when it was 1,729 thousand. 

·      November 2018 sales of merchant wholesalers were down 0.6% from the previous month, but were up 4.0% from the November 2017 level. Inventories of merchant wholesalers were up 0.3% from the previous month, and were up 6.5% from a year ago. The November inventories/sales ratio for merchant wholesalers was 1.29, compared with 1.26 in November 2017.

·      Construction spending during November 2018 was estimated at a seasonally adjusted annual rate of $1,299.9 billion, 0.8% above the revised October estimate. The November figure is 3.4% above the November 2017 figure. During the first eleven months of this year, construction spending was 4.5% above the spending during the same period in 2017.  Private Construction increased 1.3% in November, while public construction decreased 0.9%.  

·      November new home sales increased 16.9% to an annualized rate of 657 thousand units. The November figure was 7.7% below the November 2017 figure.  The median sales price of new houses sold was $302.4 thousand, 11.9% below November 2017.  

·      The results of Freddie Mac’s Primary Mortgage Market Survey showed fixed mortgage rates moving slightly higher after weeks of moderating. The 30-year fixed mortgage rate averaged 4.46% for the week ending January 31, up from last week when it averaged 4.45%. A year ago at this time, the 30-year fixed-rate averaged 4.22%. The 15-year fixed mortgage rate averaged 3.89% for the week ending January 31, up from last week when it averaged 3.88%. A year ago at this time, the 30-year fixed-rate averaged 3.68%.

·      Mortgage applications decreased 3.0% from a week earlier week, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending January 25, 2019.

·      The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector expanded in January, and the overall economy grew for the 117th consecutive month.

·      The Chicago FED National Activity Index increased to 0.27 in December, from 0.21 in November. The index’s three-month moving average was 0.16, compared with 0.12 in November.

·      The Conference Board’s consumer confidence index decreased in January. The Index now stands at 120.2 (1985=100), down from 126.6 in December. The Present Situation Index declined slightly, from 169.9 to 169.6. The Expectations Index decreased from 97.7 last month to 87.3 this month.

·      The Thomson Reuters/University of Michigan Index of Consumer Sentiment for January was 91.2, down from 98.3 in December. The Current Economic Conditions Index decreased from 116.1 in December to 108.8 in January, while the Index of Consumer Expectations decreased from 87.0 to 79.9.

·      The Federal Open Market Committee decided to keep its target for the federal funds rate at 2.25% to 2.50%. The Committee indicated that labor market conditions continued to strengthen and economic activity continued to expand at a solid rate. The Committee stated that “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”