All Posts By

Chad Moutray

Markit: Eurozone Manufacturing Activity Rose at Fastest Rate since April 2011

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The Markit Flash Eurozone Manufacturing PMI rose from 55.2 in January to 55.5 in February, its fastest rate since April 2011. As such, the continent’s economy continues to move in the right direction, with activity accelerating at a modest rate. The headline PMI has trended higher since bottoming at 51.2 one year ago. The underlying data were mostly higher in February. New orders (up from 56.0 to 56.1), output (up from 56.1 to 57.2) and exports (up from 55.2 to 55.5) each accelerated somewhat in the latest survey. Hiring growth (down from 55.0 to 54.6) also continued to be promising despite pulling back a little from its quickest pace in nearly six years. Likewise, respondents remained upbeat about future output (down from 66.9 to 66.3) even though that measure eased from its highest point since January 2014 in this release. Read More

Philly Fed: Manufacturing Activity Accelerated in February at Strongest Rate since November 1983

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The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded in February at its strongest rate since November 1983. The composite index of general business activity rose from 23.6 in January to 43.3 in February, with 48.2 percent of survey respondents suggesting that conditions had improved this month. Just 4.8 percent said that conditions had worsened. Other measures were also uplifting, including new orders (up from 26.0 to 38.0), shipments (up from 20.5 to 28.6) and the average employee workweek (up from 6.8 to 13.6). Growth in hiring (down from 12.8 to 11.1) continued to expand modestly despite some easing in the current release. Read More


Housing Starts Ease a Bit in January but Remain Mostly Encouraging

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The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts declined 2.6 percent in January, pulling back a bit after rebounding by 11.3 percent in December. New residential construction activity dropped from an annualized 1,279,000 in December to 1,246,000 in January. Another positive sign was the fact that housing starts have now exceeded 1.2 million in three of the past four months – a psychological threshold that we have struggled to maintain each time. Despite the easing in this report, housing market data remains mostly encouraging, up 10.5 percent over the past 12 months from 1,128,000 in January 2016. Indeed, much of the recent volatility has come from the multifamily segment, ranging from 271,000 units in September to 471,000 in December. In this release, multifamily starts decreased to 423,000 units, up 19.8 percent year-over-year from 353,000 units one year ago.

On the other hand, single-family housing starts have more consistently drifted higher, even with a slight lull in both November and December. Single-family starts rose from 808,000 in December to 823,000 in January. While this was lower than the 868,000 units started in October, its fastest pace since October 2007, the current data represent progress from 775,000 units in January 2016, a year-over-year gain of 6.2 percent. Read More

Consumer Prices Increased 2.5% Year-Over-Year in January, the Highest since March 2012

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The Bureau of Labor Statistics said that consumer prices rose 0.6 percent in January, its fastest month pace in more than four years. It was also the sixth straight monthly increase, with the larger figure in January due largely to higher energy costs, up 4.0 percent in this report. For its part, gasoline costs were up 7.6 percent in January, with a 20.3 percent gain over the past 12 months. At the same time, food prices edged up 0.1 percent in January, with a decline of 0.2 percent since January 2016. Overall, the consumer price index increased 2.5 percent year-over-year in January, up from 0.9 percent in July and the highest level since March 2012.

Core consumer prices were up 0.3 percent in January, its fastest rate in five months. There were higher prices for apparel, household furnishings, medical care new vehicles, transportation services and shelter, but used cars and trucks had slightly reduced prices in this release. Excluding food and energy costs, consumer prices have increased 2.3 percent over the past 12 months, up from 2.2 percent in the prior report. Even though core consumer price inflation has exceeded the Federal Reserve’s stated goal of 2 percent for 15 consecutive months, overall prices pressures remain modest and under control for now.


Retail Sales Have Grown Sharply Over the Past Year

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The Census Bureau said that retail sales rose 0.4 percent in January, extending the 1.0 percent gain seen in December. It was the fifth consecutive monthly increase in retail spending, illustrating once again that Americans have been willing to open their pocketbooks after being more cautious with their purchases at this time last year. Indeed, over the past 12 months, retail sales have jumped 5.6 percent, a healthy rebound from a year-over-year pace of just 2.2 percent in August. Motor vehicles and parts sales have been a relative bright spot of late, but the January data were held back somewhat by a 1.4 percent decline in auto sales. To be fair, this drop was likely a response to a larger-than-normal jump in December in motor vehicle purchases, up 3.2 percent. Excluding automobiles, retail sales rose 0.8 percent in January, with year-over-year growth of 5.3 percent. Read More

mfg production

Manufacturing Production Expanded for the Fourth Consecutive Month

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The Federal Reserve said that manufacturing production expanded for the fourth consecutive month. (To be fair, November’s increase was essentially stagnant, up 0.03 percent.) Output in the sector was up 0.2 percent in January, extending the 0.2 percent gain seen in December. The recent improvements suggest that manufacturers are beginning to recover from notable weaknesses over the past two years, with a strong dollar and global headwinds dampening overall activity. In that regard, manufacturing production grew just 0.3 percent year-over-year in January, highlighting the significant challenges seen over the past 12 months in growing production. Similarly, manufacturing capacity utilization edged up from 75.0 percent to 75.1 percent, which, despite some progress, continued to be below the 75.5 percent utilization rate observed one year ago. Read More

New York Fed: Manufacturing Activity Expanded at Fastest Pace since September 2014

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The Empire State Manufacturing Survey said that manufacturing activity expanded at the fastest pace since September 2014, rising for the fourth straight month in February. The composite index of general business conditions jumped from 6.5 in January to 18.7 in February, with nearly one-third reporting a better environment today than last month. There were also notable improvements in new orders (up from 3.1 to 13.5) and shipments (up from 7.3 to 18.2). Indeed, the percentage of respondents saying that their sales were higher rose from 29.1 percent to 36.3 percent in this survey.

While other measures had made progress in recent months, employment had lagged behind. In this release, however, that started to change. Indices for the number of employees (up from -1.7 to 2.0) and the average workweek (up from -4.2 to 4.1) each shifted into positive territory, with hiring expanding for the first time since May 2016. Hopefully, we will continue seeing stronger labor market data in the coming months, particularly if demand remains strong. Read More

NFIB: Small Business Owners Remained Very Upbeat in January

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The National Federation of Independent Business (NFIB) said that sentiment among small business owners remained at a 12-year high in January. The Small Business Optimism Index edged up from 105.8 in December to 105.9 in January, with both at levels not seen since December 2004. Respondents have responded quite positively in the aftermath of the election, hoping that the new Administration will bring about needed changes on the tax and regulatory front. Along those lines, the percentage of respondents suggesting that the next three months would be a “good time to expand” has risen from 11 percent in November to 23 percent in December to 25 percent in January, its fastest pace since the Great Recession. In addition, the percentage expecting sales to increase over the next three months remained elevated, but eased in this report from 31 percent in December, its largest level since October 2005, to 29 percent in January. Read More


Producer Prices Jumped Significantly in January, Boosted by Higher Energy Costs

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Producer prices jumped 0.6 percent in January, its fastest monthly pace of growth since September 2012. For manufacturers, producer prices for final demand goods accelerated in the latest report, up 1.0 percent and increasing for the fifth straight month. This largely reflected a significant rise in energy costs, up 4.7 percent. In particular, gasoline prices were up 14.5 percent for producers in January, which was also coincidently the year-over-year growth rate.  At the same time, food prices were unchanged in January. Higher costs for dairy products, eggs, grains, pork and shortening and cooking oils were offset by lower prices for beef and veal, chickens, confectionary end products, fish and pasta products, among others. Despite the flat month, food prices have dropped 2.2 percent since January 2016. Read More


Manufacturing Job Openings Ticked Higher in December

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The Bureau of Labor Statistics said that manufacturing job openings ticked higher, up from 314,000 in November to 325,000 in December, a three-month high. Postings in the sector have trended lower since achieving an all-time high of 397,000 in April. On the positive side, this report will hopefully begin a movement in the right direction, and more importantly, job openings remain quite elevated overall, especially relative to net hiring. In 2016, job openings averaged 341,000 per month, up from 311,000 in 2015. In the December data, both durable (up from 181,000 to 183,000) and nondurable (up from 133,000 to 141,000) goods firms had more openings. Read More