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Chinese Manufacturing Shifted to a Marginal Expansion in February

The HSBC Flash China Manufacturing PMI shifted to a marginal expansion in February, improving slightly after contracting for two straight months. The headline index increased from 49.7 in January to 50.1 in February. The underlying data were mixed. New orders (down from 50.8 to 50.4) and output (up from 50.1 to 50.8) grew slowly for the month, even as the pace of sales slipped a bit. At the same time, new export orders (down from 51.1 to 47.1) and employment (up from 49.1 to 49.3) declined on net. Export sales, in particularly, deteriorated to their lowest level since August 2013, which was disappointing. The index for hiring, which has contracted now for 24 consecutive months, increased to a 7-month high, with the pace of the decline decreasing. Final PMI data will be come out on Monday, March 2.    (continue reading…)

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Conference Board: Consumer Confidence Pulled Back in February

The Conference Board said that consumer sentiment fell sharply in February. The Consumer Confidence Index declined from a revised 103.8 in January to 96.4 in February. The January figure had been originally reported to be 102.9, and it was the highest point for this measure since August 2007. The decrease in attitudes in this report in February mirrored similar drops in perceptions in the most recent University of Michigan and National Federation of Independent Business surveys. Still, the depth of the pullback in February was larger than expected, and it suggests that the American public remains more anxious than desired. (continue reading…)

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Richmond Fed: Manufacturing Activity Stagnated in February

The Richmond Federal Reserve Bank said that manufacturing activity stagnated in February, ending 10 straight months of expansion in the district. The composite index of general business conditions declined from 6 in January to zero in February, its lowest level since contracting in March 2014. Indeed, many of the underlying measures slipped into negative territory in February. This included new orders (down from 4 to -2), shipments (down from 10 to -1), capacity utilization (down from 9 to -4) and the average workweek (down from 8 to -6). As such, manufacturers clearly pulled back in a number of areas for the month, likely due to global slowness, a stronger dollar and reduced commodity prices. (continue reading…)

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Dallas Fed: Manufacturing Activity Contracted in February for Second Straight Month

The Dallas Federal Reserve Bank said that manufacturing activity contracted in its district for the second straight month. The composite index of general business conditions fell from -4.4 in January to -11.2 in February, its lowest level since April 2013. Reduced crude oil prices have had negative ripple effects throughout the Texas economy, and indeed, many of the sample comments reflected weaker demand throughout the energy supply chain. Beyond energy-related softness, other challenges noted in the comments included the West Coast ports slowdown, a stronger U.S. dollar, increased health insurance costs and regulatory burdens. (continue reading…)

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Monday Economic Report – February 23, 2015

Here is the summary for this week’s Monday Economic Report: 

In the minutes of its January 27–28 meeting, the Federal Open Market Committee (FOMC) provided a nuanced view of the economic outlook. Participants noted that “economic activity had been expanding at a solid pace,” and they were mostly optimistic about the “prospects for further improvement in 2015.” Yet, the FOMC also pointed to some significant headwinds in the U.S. economy, including sluggish global growth, a stronger U.S. dollar, federal government sequestration and reduced crude oil prices. Regarding the latter, the Federal Reserve said that it was concerned that “persistently low energy prices might prompt a larger retrenchment of employment [and capital investment] in these industries.” (continue reading…)

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Markit: European Manufacturing Activity Improved in February Ever-So-Slightly

The Markit Flash Eurozone Manufacturing PMI edged ever-so-slightly higher, up from 51.0 in January to 51.1 in February. This suggests very modest growth in manufacturing activity in February, with better data for new orders (up from 50.6 to 50.9), output (up from 52.1 to 52.2) and exports (up from 50.7 to 51.8). Hiring in the Flash Eurozone Composite PMI, which includes all segments of the economy, rose to its highest level since August 2011, but this was primarily in the service sector. Indeed, for manufacturers, the pace of employment growth was unchanged in February at 50.6. (continue reading…)

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Philly Fed: Manufacturing Activity Expanded at a Slightly Slower Pace in February

The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded at a slightly slower pace in February than in January. The composite index of general business activity declined from 6.3 to 5.2. Overall activity was softer in both January and February than in prior months, with the headline index averaging 21.5 over the 10-month period from March through December. Nonetheless, the Manufacturing Business Outlook Survey continues to reflect mostly positive attitudes about the economy, with 55.0 percent of respondents suggesting that demand had increased so far in 2015 relative to the last quarter of 2014. (continue reading…)

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Producer Prices Fell 0.8 Percent in January

The Bureau of Labor Statistics said that producer prices for final demand goods and services declined 0.8 percent in January, falling for the fifth time in the past six months. Looking just at final demand goods, producer prices plummeted in January, down 2.1 percent and off for the seventh consecutive month. Reduced energy prices have contributed to the sharp decline in producer prices, with final demand energy goods down 10.3 percent in January alone. Indeed, West Texas intermediate crude sold for an average of $47.22 a barrel in January, down from the monthly average of $59.29 in December. (continue reading…)

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Housing Starts and Permits Pulled Back a Little in January

The Census Bureau and the U.S. Department of Housing and Urban Development said that residential construction activity pulled back a little in January. New housing starts declined from an annualized 1,087,000 in December to 1,065,000 in January. The good news was that starts have exceeded one million for five straight months, averaging 1,057,400 over that time period. Yet, the numbers for January were also somewhat softer than expected. (continue reading…)

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Manufacturing Production Edged Marginally Higher in January

Manufacturing production edged marginally higher in January, up 0.2 percent, according to the Federal Reserve Board. This represented an improvement from being flat in December, and yet, these data also suggest that output in the sector has been quite soft in both December and January. On the positive side, manufacturing production has risen a whopping 5.6 percent over the past 12 months.  Of course, sharply reduced output in January 2014 due to a number of winter storms helped to buoy this year-over-year figure. Still, the year-over-year pace last month was 4.3 percent, illustrating decent growth in manufacturing output last year overall. (continue reading…)

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