(0) The CPI inflation number for January was flat, which was a bit less than the slight increase of +0.1% expected. However, the core inflation number—which excludes more volatile food and energy prices—gained +0.3% as opposed to an expected +0.2%. The difference was mainly due to an energy price decline in the headline figure, as well as marginal gains in apparel, tuition/child care and tobacco in the core number. Year-over-year, the headline inflation number was up +1.6% and core +1.9%. Similarly, the Producer Price Index for January rose +0.2% which was a tick below the expected +0.3% increase (and a year-over-year result of +1.4%). The core number rose by an identical amount, in line with expectations. Read more
Economic Notes for the Week of February 18th
(0) Retail sales on a headline level came in close to consensus, with a +0.1% gain for January. When sales ex-automobiles were removed, the growth bumped to +0.2%, which was a tenth of a percent better than expected. Lastly, the ‘core/control’ number (which attempts to normalize things by excluding cyclical autos, gasoline stations and building materials—per what the government uses in their GDP calculations) rose +0.1% for the month, which was lower than the forecast +0.3%. In the core figure, ‘misc.’ retailers such as office supply were down over two percent, while department stores were stronger by roughly a percentage point. Net-net, despite payroll tax hike effects, it appears this year has begun decently in the retail sales arena, albeit with relatively flat numbers.
Economic Notes for the Week of February 11th
It was a relatively light week from an economic standpoint.
(+) Non-manufacturing ISM for January was right at par with consensus, at a reading of 55.2 versus an expected 55.0. The look-ahead components of new orders and current business activity were weaker than in December, but remained in growth mode. The employment piece rose a bit as well. Additionally, anecdotal comments from the survey were generally positive, which was a welcome change considering overall business sentiment at year-end.
(-) Factory orders for December were a bit weaker than expected, up +1.8% versus a forecast +2.3%. Core capital goods were revised down slightly and inventory buildup was weaker than in prior months.
Economic Notes for the Week of January 28th
(-) Existing home sales for December fell by -1.0%, which ran contrary to an expected +1.2% gain, and obviously was a bit of a disappointment. Single family home sales dropped by -1.4%, which were offset somewhat by condo sales, which gained +1.7%. From a regional level, weakness in the Midwest (nearly -6%) and South overwhelmed gains in the Northeast and Western portions of the country. Net-net, a choppy report, but not entirely surprisingly considering the time of year we’re in.
(0) The FHFA home price index, that takes into account prices of homes with Fannie Mae/Freddie Mac mortgages, gained +0.6% for November, which just fell short of consensus by a tenth of a percent. The Pacific and Mountain regions experienced gains near two percent, and drove the broader upward movement. The more critical measure, year-over-year price movement, registered a gain of +5.6%, making 2012 the first positive year in six years.
(-) New home sales for December were lower than expected in December, falling -7.3% month-over-month, which ran counter to an expected consensus gain of +2.1%. Some of this difference was due to some revisions for November (the gain for which was boosted from +4.5% to over +9%), but the volatility is typical of this series and this time of year. Year-over-year, sales are up +9%, which is positive.
The new home sales story has been a positive one, and may very well contribute meaningfully to U.S. GDP in 2013—inching further towards normal after plodding along at very low levels for years coincident with the financial crisis. In fact, it could add up to a large percentage of the total GPP number—which, in the slow growth period we’re in, is meaningful. There are other effects as well, such as indirect demand for household goods and a general improvement in the ‘wealth effect’ that helps consumers feel richer and better able to spend (since their homes are worth more). Read more
Economic Notes for the Week of January 21st
(+) Housing starts for December were dramatically higher, with a gain of +12.1% relative to an expected +3.3% improvement. By way of differentiation, single-family starts were up +8.1% while mufti family continued its trend higher, growing over +20%, and the growth was seen in all areas of the country. December building permits, on the other hand, were ‘disappointing’ to the extent that the gain was +0.3% lagged the consensus +0.5% figure. These were led by gains in single-family permits, as opposed to multi-family.
(+) Retail sales numbers were better than anticipated, with a gain of +0.5% for December versus an expected +0.2% result. As usual, the embedded sub-categories added more color, but didn’t change the result much. The sales ‘ex-autos’ figure was a similar +0.3%, a shade above expected, while the ‘core/control’ group that excludes volatile autos, gasoline and building materials gained +0.6%—double what was expected (partially due to a gasoline price drop). What we can take from all this is that more substantive elements like health and personal care components performed well, when all cyclical components removed.
(-) Business inventories rose a bit for November, but largely in line with expectations, at +0.3%. This was a slower rate of accumulation than in the prior quarter, so a small negative in terms of overall growth measurement prospects. Read more
Economic Notes for January 2nd 2013
The last week of the year is traditionally one of the lightest, so we’re featuring an abbreviated economic report this week.
(+) New home sales gained +4.4% for November to 377k units, which beat analyst predictions of +3.3% growth. Over the year, this metric is up +15%, which is in line with other positive housing metrics.
(+) Pending home sales jumped +1.7% for November month-over-month, which beat the estimate of +1.0%. The Northeast and West regions were responsible for the majority of the gains, while the South and Midwest ended up with flat results. These figures are right in line with a trend of positive housing data.
(+) The Case-Shiller home price index for October rose +0.7%, which bested the forecasted +0.5% gain and moved to a +4.3% gain year-over-year (the index has risen almost every month this year). This index keeps beating expectations—led by over +1% showings in Las Vegas, San Diego and Atlanta during the month, while Chicago and Boston posted slight declines. The only negative is that it’s old news—over a month old by the time we see the results. Read more